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[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]

 
                 THE HOMELAND SECURITY ADVISORY SYSTEM

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

                                HEARING

                               before the

                 SELECT COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                            FEBURARY 4, 2004

                               __________

                           Serial No. 108-35

                               __________

    Printed for the use of the Select Committee on Homeland Security

 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house

                               __________

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22-132                 WASHINGTON : 2005
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                 SELECT COMMITTEE ON HOMELAND SECURITY

                 Christopher Cox, California, Chairman

Jennifer Dunn, Washington            Jim Turner, Texas, Ranking Member
C.W. Bill Young, Florida             Bennie G. Thompson, Mississippi
Don Young, Alaska                    Loretta Sanchez, California
F. James Sensenbrenner, Jr.,         Edward J. Markey, Massachusetts
Wisconsin                            Norman D. Dicks, Washington
W.J. (Billy) Tauzin, Louisiana       Barney Frank, Massachusetts
David Dreier, California             Jane Harman, California
Duncan Hunter, California            Benjamin L. Cardin, Maryland
Harold Rogers, Kentucky              Louise McIntosh Slaughter, New 
Sherwood Boehlert, New York          York
Lamar S. Smith, Texas                Peter A. DeFazio, Oregon
Curt Weldon, Pennsylvania            Nita M. Lowey, New York
Christopher Shays, Connecticut       Robert E. Andrews, New Jersey
Porter J. Goss, Florida              Eleanor Holmes Norton, District of 
Dave Camp, Michigan                  Columbia
Lincoln Diaz-Balart, Florida         Zoe Lofgren, California
Bob Goodlatte, Virginia              Karen McCarthy, Missouri
Ernest J. Istook, Jr., Oklahoma      Sheila Jackson-Lee, Texas
Peter T. King, New York              Bill Pascrell, Jr., New Jersey
John Linder, Georgia                 Donna M. Christensen, U.S. Virgin 
John B. Shadegg, Arizona             Islands
Mark E. Souder, Indiana              Bob Etheridge, North Carolina
Mac Thornberry, Texas                Ken Lucas, Kentucky
Jim Gibbons, Nevada                  James R. Langevin, Rhode Island
Kay Granger, Texas                   Kendrick B. Meek, Florida
Pete Sessions, Texas
John E. Sweeney, New York

                      John Gannon, Chief of Staff
         Uttam Dhillon, Chief Counsel and Deputy Staff Director
                  Steven Cash, Democrat Staff Director
               David H. Schanzer, Democrat Staff Director
                    Michael S. Twinchek, Chief Clerk

                                  (ii)

                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable Christopher Cox, a Representative in Congress From 
  the State of California, and Chairman, Select Committee on 
  Homeland Security..............................................     1
The Honorable Jim Turner, a Representative in Congress From the 
  State of Texas, Ranking Member, Select Committee on Homeland 
  Security
  Oral Statement.................................................    22
  Prepared Statement.............................................     7
The Honorable Benjamin L. Cardin, a Representative in Congress 
  From the State of Maryland.....................................    36
The Honorable Donna M. Christensen, a Representative in Congress 
  From U.S. Virgin Islands.......................................    42
The Honorable Jennifer Dunn, a Representative in Congress From 
  the State of Washington........................................    33
The Honorable Kay Granger, a Representative in Congress From the 
  State of Texas.................................................    24
The Honorable Jane Harman, a Representative in Congress From the 
  State of California............................................    25
The Honorable Sheila Jackson-Lee, a Representative in Congress 
  From the State of Texas
  Oral Statement.................................................    46
  Prepared Statement.............................................     9
The Honorable Nita M. Lowey, a Representative in Congress From 
  the State of New York..........................................    44
The Honorable Edward J. Markey, a Representative in Congress From 
  the State of Massachusetts.....................................    31
The Honorable Loretta Sanchez, a Representative in Congress From 
  the State of California
  Prepared Statement.............................................     9
The Honorable John B. Shadegg, a Representative in Congress From 
  the State of Arizona
  Prepared Opening Statement.....................................     8
The Honorable Christopher Shays, a Representative in Congress 
  From the State Connecticut.....................................    38
The Honorable John E. Sweeney, a Representative in Congress From 
  the State of New York..........................................    28

                               WITNESSES

The Honorable James Loy, ADM, Deputy Secretary, Department of 
  Homeland Security
  Oral Statement.................................................    11
  Prepared Statement.............................................    14
Mr. John O. Brennan, Director, Terrorist Threat Integration 
  Center
  Oral Statement.................................................    17
  Prepared Statement.............................................    18

                                APPENDIX
                   Material Submitted for the Record

Responses and Questions from The Honorable Loretta Sanchez.......    63
Responses and Questions from The Minority Staff..................    64

               THE HOMELAND SECURITY ADVISORY SYSTEM

                              ----------                              

                      Wednesday, February 4, 2004

                          House of Representatives,
                     Select Committee on Homeland Security,
                                                    Washington, DC.
    The committee met, pursuant to call, at 12:38 p.m., in room 
2175, Rayburn House Office Building, Hon. Christopher Cox 
[chairman of the committee] presiding.
    Present: Representatives Cox, Dunn, Shays, Camp, Linder, 
Shadegg, Gibbons, Granger, Sweeney, Turner, Sanchez, Markey, 
Frank, Harman, Cardin, Slaughter, DeFazio, Lowey, Norton, 
McCarthy, Jackson-Lee, Pascrell, Christensen, Etheridge, and 
Lucas.
    Chairman Cox. [Presiding.] Good afternoon. A quorum being 
present, the Homeland Security Committee will come to order.
    This committee is meeting today to hear testimony on the 
Homeland Security Advisory System.
    I would like to thank the members in attendance, and thank 
both our distinguished witnesses--Admiral James Loy, the deputy 
secretary of Homeland Security, and John Brennan, director of 
the Terrorist Threat Integration Center--for their willingness 
to share their expertise with us.
    This marks Admiral Loy's first testimony before the 
Congress in his new capacity as deputy secretary of Homeland 
Security.
    Admiral Loy, we are honored to welcome you and look forward 
to working closely with you in guiding the department's 
progress, in meeting its Homeland Security Act mandate.
    John Brennan has been with us before, and we welcome you 
back.
    Since September 11, 2001, we have made dramatic, undeniable 
progress in securing the American territory. Everyone here 
agrees on that.
    The president and the Congress have joined forces to lead a 
fundamental transformation in the way the Federal Government 
views the national security and how it should relate to state 
and local governments, as well as to the private sector, in 
order to promote the security of the American people and our 
territory.
    The Department of Homeland Security is one important 
product of that dynamic policy reorientation. While the 
Terrorist Threat Integration Center was, like the Homeland 
Security Advisory System itself, called into existence without 
benefit of congressional action, the Congress are nevertheless 
delighted to note the constructive work it is doing in bringing 
together information and analysts to form a comprehensive 
picture of the terrorist threats we face.
    In fact, TTIC is doing such good work, we are inclined to 
think it might be best internalized in the department and made 
answerable to the secretary of homeland security. That, 
however, is discussion for another time.
    Today we want to get a better understanding of the Homeland 
Security Advisory System itself--our color-coded national 
warning system, it is purpose, how it actually works, and its 
potential, including how it could be improved.
    The system's color-coded warnings have become the primary 
means by which the Federal Government communicates directly to 
the public, its bottom-line judgment on the risk of terrorist 
attack at any given time.
    It is our inescapable reminder that the Nation is engaged 
in a global war on terror and that we ourselves may be at risk 
of attack.
    The president's directive establishing the system puts it 
plainly, ``The higher the threat condition, the greater the 
risk of a terrorist attack.''
    Adjusting the threat condition up or down is, in short, a 
very significant public statement to the American people by 
their government. As a result, we have learned that raising the 
national threat level can have direct implications, not only 
for personal safety, but also it may entail widespread changes 
in personal behavior, including travel and spending patterns, 
with corresponding if temporary effects on the nation's 
economy.
    Government and private sector entities, too, must take 
appropriate measures to increase their security posture every 
time the threat level is raised. And those measures are costly.
    I will get to that in a minute.
    They key point is that the reliability and timeliness of 
the advisory system's national threat warnings must be 
unquestioned.
    I want to stress at the outset the public nature of the 
color-coded warning system.
    The Homeland Security Act provides, in Section 201, that 
the department's Homeland Security Advisory System 
responsibilities include, ``Exercising primary responsibility 
for public advisories related to threats to homeland 
security''--that is Section 201(d)(7)(a) of the Homeland 
Security Act.
    I think it follows that what we use the system's public 
advisories--that is, its color-coded warnings--to say, we 
should be willing to say and to explain publicly. Because the 
Homeland Security Act goes on to note that the department's 
responsibilities have a second element that need not be public, 
the responsibility, ``in coordination with other agencies of 
the Federal Government to provide specific warning information 
and advice about appropriate protective measures and 
countermeasures to state and local government agencies and 
authorities to private sector, other entities and the 
public''--that is Section 201(d)(7)(b) of the act.
    So we need to make sure that we use the public threat 
advisory system to advise the American public of threats that 
are truly national in scope, or to warn of region or sector-
specific threats that we are able and willing to identify and 
discuss in public, including as a means of diverting or 
delaying potential attacks.
    That is to say, we should not be using the public color-
coded threat advisory system to warn of terrorist threats that 
are not national in scope if we are not willing to discuss them 
publicly. For them, we should be using the second element of 
the statutory provision I just quoted.
    That brings me back to the cost issue.
    Securing the homeland is expensive. Every national 
terrorist threat warning triggers a massive chain reaction 
throughout our society. Government officials at all levels, 
businesses of all sorts and sizes, as well as individual 
citizens are left with the fundamental question: What does code 
orange mean for me?
    The answer in the absence of specific guidance as to the 
nature, potential targets and likely timing of the threat has 
been a nationwide piling on of enhanced security measures, 
breaking state and local overtime budgets and redirecting their 
personnel from their other duties. If we can avoid or diminish 
that effect, we should, and soon.
    It is, after all, a fundamental part of the terrorist 
strategy to destroy our economy and our way of life. We must 
not, through our well-meaning efforts, give them any help.
    All across America, in our public and private institutions, 
we are spending considerable sums of money to enhance our 
security, and we must do it wisely.
    It is enormously intrusive and unnecessarily expensive to 
call a heightened state of alert across the Nation when hard 
intelligence shows that only certain parts of the country or 
certain sectors of our critical infrastructure are at increased 
risk.
    This committee will soon be marking up H.R. 3266, the 
Faster and Smarter Funding for First Responders Act, voted 
unanimously out of our Emergency Preparedness and Response 
Subcommittee late last year. That bill contains a provision 
that requires the secretary of homeland security to revise the 
advisory system so that warnings can be issued to the 
geographic regions or economic sectors which analysts believe 
are actually at risk.
    The case for such reform is in the numbers. Reports 
describing code-orange-related expenditures include, just by 
way of example, a January 23 Los Angeles Times article that 
cites LAX officials reporting that during the most recent rise 
to orange, their security costs amounted to more than $3.8 
million since December 21st; an Associated Press report that 
officials in New Orleans spent between $200,000 and $300,000 a 
week in police overtime because of the latest orange alert; a 
U.S. Conference of Mayors' survey that shows cities spent about 
$70 million per week in orange-alert-related expenses.
    Phoenix, for example, spent $154,000 on a weekly basis. Los 
Angeles spent $2.5 million each week. And New York City racked 
up $5 million each week in additional expenses.
    We cannot expect states and localities to sustain such 
unbudgeted expenditures indefinitely.
    To take a closer and more comprehensive look at the 
incremental costs incurred by Federal, state and local 
government agencies in responding to the last three code orange 
alerts, this committee made a bipartisan request for a GAO 
study. Initial findings reported to the committee last week 
show that state and local officials would like to receive more 
detailed guidance to help them determine what protective 
measures to take in response to orange alerts.
    They also want DHS to provide more information on region 
and industry-specific threats.
    They are right. Responding aimlessly over and over to a 
generalized warning draws down resources without any assurance 
of enhancing anyone's safety.
    It may over time actually contribute to a degradation of 
this nation's vigilance, so-called warning fatigue, and so 
diminish the utility of the Homeland Security Advisory System.
    There are encouraging signs. This week and late last month, 
I think we did a good job of identifying aircraft and routes 
our analysts believe were subject to heightened risk. 
Preventive measures were tailored to the apparent threat. In 
the process, DHS demonstrated its ability to use hard 
intelligence in directing a clear warning message only to where 
it was needed.
    Responsible suggestions for canceling flights enabled the 
airlines to respond effectively.
    Alerts to the public should, by contrast, be made only 
where they can be publicly explained or when the increased risk 
is truly national in its scope.
    Keeping the American people at a high level of anxiety is 
not a sustainable strategy. Throughout most of the heightened 
alert periods, including increasing the alert level from yellow 
to orange and back again, the public has been told at the same 
time to go about their normal everyday lives. The question 
remains: Why issue, then, a public threat advisory at all?
    Great Britain's national alert system, for example, 
communicates warnings only to law enforcement officials. The 
general population is never notified because causing alarms to 
the general population would be counterproductive.
    On the other hand, public alerts may serve to delay or 
deter terrorist attacks and may, therefore, enhance 
opportunities to prevent them.
    We must, in some, strike an appropriate balance between 
providing meaningful warning where hard intelligence warrants 
it and causing a senseless, unfocused nationwide response to 
unspecific threat alerts.
    I look forward to our witnesses' views on how best to 
strike that balance.
    The chair now recognizes Mr. Turner, the ranking Democratic 
member, for any statement he might have.
    Mr. Turner. Thank you, Mr. Chairman.
    Secretary Loy, let me congratulate you on your new position 
and thank you for appearing before our committee today.
    As deputy secretary, you have the critical role of managing 
that department. I guess you have most of the duties that 
Secretary Ridge has except maybe you do not have to go to all 
the press conferences.
    But we are pleased to have you.
    And, Mr. Brennan, welcome back to you.
    Both of you are here to talk about a subject that the 
chairman and I have both had a great deal of interest in: the 
Homeland Security Advisory System.
    I have been able to observe the threat alert system over 
the last two years and have been able to view it in light of 
the briefings that we receive regularly regarding the threat. 
And I think it gives us a unique perspective on the system, 
being able to compare the threat information with the raising 
of the alert at the various times that it has been raised in 
the last couple of years.
    And after thinking about ways we might change the system, 
and observing how I think the public has reacted over time to 
the warnings, it is my judgment that the color-coded system 
should be eliminated.
    The system that we have today we all know was created very 
quickly after September 11th. It was our government's first 
attempt to establish a national system to alert our citizens 
and our economic sectors about homeland security threats. And 
while the system may have served some initial purpose, I do not 
believe that the color codes are serving us well today.
    Americans understand that we are fighting a long war on 
terror, often fought in the shadows and without a clear 
understanding of when or where we might be attacked. Therefore, 
our intelligence, law enforcement and other security forces 
must remain vigilant all the time, not just when the color code 
is raised.
    Specific threat advisories can help target the vigilance of 
these law enforcement and security forces by increasing their 
security measure at certain places and during certain times 
when they receive specific information.
    And I think certain sectors of our economy, if given the 
direct and specific information, can make adjustments that are 
important.
    But the color-coded threat alert system that we have does 
not meet, in my judgment, our true security needs.
    First of all, I think that the color codes send very mixed 
messages. In December we raised the threat level to orange, and 
as the chairman said, we told the American people not to change 
their plans or take any specific actions to protect themselves. 
I think that leaves the public confused and somewhat agitated 
with a system that causes them alarm but gives them no specific 
guidance about what to do.
    Constantly raising and lowering this color-coded level is I 
think making the public numb to the ongoing threat of 
terrorism.
    People need to know that they should be constantly alert. 
We need a culture of awareness in this country to be alert to 
suspicious behavior that may be linked to terrorism.
    Second, I believe the color-coded system is not providing 
threat information to the people that need it in order to make 
and take decisive action.
    Our law enforcement, security and emergency personnel do 
not need a color; they just need the facts.
    And if the governors and the mayors of this country need to 
order additional security measures, they need credible, 
actionable intelligence from the Federal Government.
    The General Accounting Office and the Gilmore Commission 
both reported that state and local officials are not getting 
the specific information they need to do their jobs. They are 
looking for more help, for more information. It is a constant 
cry I hear every time that I travel into our communities.
    Our state and local officials need to know the details 
before causing public concern and being asked to spend scarce 
dollars on unnecessary security measures.
    In addition, I believe that the all-or-nothing nature of 
the current system fails to distinguish between areas and 
sectors of the economy that we believe are at heightened risk. 
When the threat level is raised, a wide range of Federal, 
state, local and private sector protection plans go into 
effect. Although the intelligence has not suggested that all 
sectors of our society are specifically threatened. State and 
local governments spend hundreds of thousands of dollars, 
perhaps millions, to defend against an unknown threat.
    Finally, I think we also need to consider whether the alert 
system is helping terrorists more than it is helping us. When 
we raise and lower the threat level, we are also telling Al-
Qa`2ida that we are strengthening our defenses. And then again, 
we tell them that we are lowering our guard when we lower the 
color.
    I think I agree with the chairman that we need to look at 
our system and question whether or not we are giving our 
enemies as much information as we are giving ourselves.
    Now, I recognize that the administration's in a very 
difficult dilemma here. Our intelligence agencies gather a lot 
of information, and very little of it relates to specific 
attack. And I can say, having received these intelligence 
briefings, that it is pretty clear to me that this general 
threat information is continuous and ongoing.
    I think we should have a level of security deployed around 
the country that is appropriate in light of the ongoing and the 
consistent threat of terrorism that we face.
    When we believe there is a greater risk of attack, those 
who are able to take specific action should be advised and 
should be given as much information as we possibly can share. 
But issuing general alerts does not serve a useful purpose and 
may well be counterproductive.
    Another point that I think is worthy of some consideration 
here, and that is that the very existence of this color-coded 
system really creates a no-win situation for the department. If 
the department fails to raise the level of alert and an attack 
occurs, you will be severely criticized. If, on the other hand, 
you raise the alert and nothing happens, people are quickly 
going to say you are crying wolf once again.
    And the political reality here is that the political 
pressure is always there for you to raise the alert level when 
threat information comes to you that indicates there may be 
some change.
    And so I think the political reality is that political 
pressure itself may cause an over utilization of the color-
coded system.
    So I think we would be much better off if we shared with 
the public and with the communities and geographic areas and 
sectors what we have specific threat information about. And if 
we have general information that is more specific and may 
affect the entire country, let's just share it and tell them 
what it is. But to simply go through the motions of talking 
about color codes to me is not the America that I think we want 
to know, nor is it giving us the information that we need to 
have.
    Thank you very much, Mr. Chairman.
    Chairman Cox. Thank you very much.
    Under committee rule three, members who were present in the 
first five minutes can make opening statements of three minutes 
or reserve their time for questioning.
    Does any member wish to make an opening statement?

  Prepared Statement of the Honorable Jim Turner, a Representative in 
Congress From the State of Texas, and Ranking Member, Select Committee 
                          on Homeland Security

    Thank you, Mr. Chairman.
    Secretary Loy, let me congratulate you on your new position. The 
Deputy Secretary in any department is the person who makes sure that 
things get done. In this department, you will have your hands full, and 
I am pleased to see that you are on the job.
    Mr. Brennan, welcome back. Thank you both for being here to discuss 
the Homeland Security Advisory System.
    I have been closely observing the threat alert system closely over 
the past two years and have received threat briefings when the level 
has been raised to orange. After thinking about possible changes that 
could be made to the system, and seeing how the general public has is 
reacting over time to the warnings, my judgment is that this system 
should be eliminated.
    The system we have today was created quickly after the September 
11, 2001 attacks. It was the government's first attempt to establish a 
national system to alert our citizens and our economic sectors about 
homeland security threats.
    While the system may have initially served a useful purpose, it is 
not serving us well now.
    Americans understand that we are fighting a long war on terror, 
often fought in the shadows, without a clear understanding of when or 
how we might be attacked. Therefore, our intelligence, law enforcement, 
and other security forces must remain vigilant, at all times. Specific 
threat advisories can help to target that vigilance, by increasing 
security measures in certain places and for certain sectors of the 
economy.
    But the color coded threat alert system we have doesn't meet these 
security needs.
    First, we send very mixed messages. In December, we raised the 
threat level to ORANGE, but told the American public not to change 
their plans or take any specific measures to protect themselves. This 
leaves the public confused and agitated with a system that causes them 
alarm but gives them no concrete guidance. Constantly raising and 
lowering the threat level is also making the public numb to the ongoing 
threat of terrorism. People need to know that they should be constantly 
alert to suspicious behavior that may be linked to terrorism.
    Second, the color coded system is not providing threat information 
to the people that need it in order to take decisive action.
    Our law enforcement, security, and emergency personnel don't need a 
color, they need the facts. If the governors and mayors of this country 
need to order additional security measures, they need credible, 
actionable intelligence from the federal government. However, as the 
GAO and Gilmore Commission have reported, state and local officials are 
not getting the specific information they need to do their jobs. They 
are looking for more help from the Department. Our state and local 
officials need to know the details before causing public concern and 
spending scarce dollars on unnecessary security measures.
    In addition, the all-or-nothing nature of the current system fails 
to distinguish between areas and sectors of the economy that we believe 
are at a heightened risk. When the threat level is raised, a wide range 
of federal, state, local, and private sector protection plans go into 
effect, although the intelligence has not suggested that all sectors of 
our society are specifically threatened. State and local governments 
spend hundreds of thousands of dollars--perhaps millions--to defend 
against an amorphous threat.
    Finally, we also need to consider whether the alert system is 
helping the terrorists more than it is helping us. When we raise and 
lower the threat level, we are also telling Al-Qa`ida when we are 
strengthening our defenses, and then again when we are lowering our 
guard. I agree with the Chairman that this alert system may present a 
roadmap, broadcasting our vulnerabilities to those who would do us 
harm.
    I recognize that the Administration faces a difficult dilemma. Our 
intelligence agencies gather a great deal of information, and very 
little of it relates to a specific attack. We should have a level of 
security deployed around the country that is appropriate in light of 
the ongoing, consistent threat of terrorism that we face. When we 
believe there is greater risk of attack, those who are able to take 
specific action should be advised. But issuing general alerts does not 
serve a useful purpose and may well be counterproductive.
    I urge our witnesses and the Department to reform the threat alert 
system. We need to create a system that is flexible, gets actionable 
information quickly to the people that need to take action, and 
underscores the need for our citizens to remain vigilant in the face of 
the threats we face.
    Thank you, Mr. Chairman, for calling this hearing. I look forward 
to the testimony of our witnesses today.

    Prepared Opening Statement of The Honorable John B. Shadegg, a 
          Representative in Congress from the State of Arizona

    I commend Chairman Cox for holding this important hearing and look 
forward to the testimony of Admiral Loy.
    Today we wi11 learn about the steps the Department is taking to 
improve the Homeland Security Advisory System. It is safe to say that 
overall homeland security in general has improved since 9/11. 
Awareness, intelligence sharing, and investment in our first responders 
have all increased. Likewise, states, localities, police and fire 
departments are becoming more comfortable with what it means to move 
from yellow to orange on the Homeland Security Advisory System.
    At the same time, there is room for improvement. As you know, my 
Subcommittee passed the Smarter Faster Funding for First Responders 
bill on November 20th. That legislation would encourage the Department 
to make the warnings more specific, by including geographic information 
and a- description of what kind of industry or business is threatened. 
I applaud the Chairman and the Ranking Member for supporting that 
legislation. I believe that it is a step in the right direction, and I 
look forward to seeing it pass full committee as soon as possible.
    I am still concerned, however, that we have not fully explained to 
the American people what moving from yellow to orange on the Homeland 
Security Advisory System means. Does that mean that they should fill up 
their gas tank, or buy reserve water, or give blood?
    As the brave men and women on Flight 93 proved, Americans are ready 
and willing to join the fight against terrorism, but they need more 
tangible information about what they can do. Leveraging the support of 
the American public is critical to our future success. I applaud 
efforts like ready.gov and the citizens corps, but as the Department 
continues to refine the Homeland Security Advisory System, I strongly 
encourage a focus on what citizens can do.

    Prepared Opening Statement of The Honorable Loretta Sanchez, a 
        Representative in Congress From the State of California

    Thank you, Mr. Chairman. I'd like to start by welcoming our 
witnesses and thanking you both for being here.
    Today, we're here to talk about the Homeland Security Advisory 
System. It is my hope that you are going to report to us that this 
system has proven to be ineffective that you have instead come up with 
a far improved method to keep our citizens safe and calm.
    The mission of the Department is to protect the public from 
terrorists. And I am. quite sure it was not the intention of the 
Department to create a system that keeps us at an elevated state of 
alert at all times.
    There are three main areas that are a source of concern for me that 
I'm hoping I will hear you address today in terms of the alert system 
as it stands today.
    Those three topics are: (1) the WAY in which we obtain intelligence 
on terrorist activity; (2) the way we disseminate that information to 
the public-and in particular to law enforcement; and (3) the 
expectations of the public once they receive that information.
    I've talked with several people in the law enforcement community 
across California about these issues and the various breakdowns in each 
area, and it would appear that we still have some real changes to make.
    On the issue of intelligence, one only needs to read the papers 
lately to have real doubts about the quality of the information we are 
receiving. I'm hoping that Mr. Brennen can speak further about this 
issue. Have we been successful in our intelligence gathering? Are there 
areas in which we can make improvements?
    As for dissemination of information once we identify threats, I'm 
told there are real breakdowns in this area, particularly as it relates 
to the law enforcement community.
    I'd be willing to bet that every member on this panel has heard a 
complaint from local law enforcement that they've gotten a million 
calls from citizens asking what they should do because the threat level 
was raised to orange. Then the there are the obvious questions that 
follow from those law enforcement officers, "Why wasn't I notified? Why 
do I have to find out by CNN or a citizen's phone call?"
    I am confident that you have some ideas on how we can better 
communicate with our First Responders.
    Finally, the warning itself is far too broad and there is no 
suggested action to be taken.
    It is unfair, even cruel, to tell the public: ``You are in more 
danger than you were yesterday. We have information that you may be 
attacked. This means someone is trying to kill you. What should you do 
about it? Nothing really. Go about your normal routine, just be a 
little extra afraid.''
    I believe we can do better than saying: ``We think that somewhere 
in this huge country there might be a terrorist attack.'' How can we 
expect the public to have any confidence in our ability to protect 
them? More importantly, how do we expect them to feel safe?
    I am interested in digging deeper into these issues, and I am 
hopeful that you have some ideas about some real changes with regards 
to the alert system that should replace this one, a tool that will 
really help protect the public. Thank you, Mr. Chairman.

       Prepared Statement of The Honorable Sheila Jackson-Lee, a 
         Representative for in Congress From the State of Texas

    Chairman Cox, Ranking Member Turner, I thank you for your efforts 
and energy in providing today's distinguished witnesses and for 
organizing this important hearing on the Homeland Security Advisory 
System. The alert system is of considerable controversy, and the 
testimony and analysis that will go on record today will allow us to 
improve the system. Thank you also to Admiral James Loy and to Mr. John 
Brennan for their time and testimony.
    I join my colleague the Ranking Member Turner in his criticism of 
the Homeland Security Advisory System (HSAS). Philosophically, it does 
no more than incite fear and anxiety for American citizens. A true 
``advisory system'' would do just that-advise citizens rather than send 
them into a frenzy. Since the HSAS's inception on March 12, 2002, I 
have advocated the need for a system of relevant and concise 
instructions for citizens-information that is truly useful in the event 
of a threatening situation.
    On December 31, 2003, I held a Homeland Security Taskforce Meeting 
in Houston, Texas and met with personnel from the Houston Police 
Department, School District Police Department, Fire Department, Mental 
Health Mental Retardation of Harris County, Office of Emergency 
Management, Health Department, Airport System, and the Houston chapter 
of the American Red Cross; members of the local branches of the Federal 
Bureau of Investigation (FBI) and the Drug Enforcement Agency (DEA); 
and the local academic and church communities to discuss the viability 
of Houston's threat assessment systems with respect to homeland 
security. As a Member of this Committee as well as Ranking Member of 
the House Judiciary Subcommittee on Immigration and Border Control, it 
was critical that I bring back to my fellow Committee members an urgent 
initiative to analyze and improve the interoperability and 
functionality of our local and national First Responder corps. This 
improvement initiative begins with a threat advisory system that 
actually gives intelligent and articulable information that first 
responders can use in such an instance.
    Among the issues that we discussed on December 31st were whether 
the funding levels, equipment availability, depth of personnel, and 
degree of interoperability between local, state, and federal systems 
are adequate to facilitate timely emergency response. Overall, some of 
the responses given were that intelligence-sharing has generally 
improved; however, other important aspects clearly require immediate 
attention. Monies that were promised back in 2001 by the federal 
government have not been received; more hospital beds and medical 
equipment are needed; and the first responder staff and equipment 
levels must be increased.
    The orange alert issued on December 21st signified a `high' risk of 
terror threat. With an improved and more comprehensive advisory system, 
our local hubs perhaps would have already been prepared! The issues 
underscored in that Taskforce meeting are of grave importance in a city 
such as Houston, the fourth largest city in the nation. We are the home 
to many critical sites such as ports of entry, power grids, major 
medical centers, and central business facilities that need to have 
adequate training, a sufficient number of personnel, necessary 
equipment, and adequate funding in the event that DHS issues a high 
alert as we have today. Clearly, we in Congress must hold oversight 
hearings as to the degree of threat assessment operability and 
interoperability of our cities? first responder systems and whether our 
communities across the nation are prepared in addition to today's 
matter-more focused on the alert system itself.
    Relative to suggested improvements to the system that will make it 
more effective, the Houston Chapter of the American Red Cross offered 
the following alert language to replace the ``orange threat level'' 
indication:

Individuals
         Review your Personal Disaster Plan.
         Ensure your Disaster Supplies Kit is stocked and 
        ready.
         Develop alternate routes to and from work or school 
        and practice them.
         Exercise caution when traveling.
         Have shelter-in-place materials on hand and review the 
        procedure in Terrorism: Preparing for the Unexpected, a Red 
        Cross brochure.

Families
         Review Family Disaster Plan with all family members
         Check items in your Disaster Supplies Kit and replace 
        items that are outdated.
         If not known to you, contact your child's school to 
        determine their emergency notification and evacuation plans.
         Ensure the emergency communication plan is understood 
        and practiced by all family members.
         Discuss children's fears concerning possible terrorist 
        attacks.

Neighborhoods
         Check on neighbors who are elderly or have special 
        needs to ensure they are okay.
         Review their disaster plan with them.
         If a need is announced, contact nearest blood 
        collection agency and offer to organize a neighborhood blood 
        drive.

Schools
         Review the school's emergency plan that was developed 
        using the Red Cross Emergency Guide for Business and Industry.
         Ensure all emergency supplies are stocked and ready.
          Offer Masters of Disaster ``Facing Fear: Helping Young People 
        Deal with Terrorism and Tragic Events'' lessons in grades K-12.
         Prepare to handle inquiries from anxious parents and 
        media.

Businesses
         Review the emergency plans, including continuity of 
        operations and media materials on hand.
         Ensure that the emergency communication plan is 
        updated and includes the purchase of needed emergency equipment 
        as detailed in the Red Cross Emergency Management Guide for 
        Business and Industry.
         Determine any need to restrict access to the business 
        or provide private security firm support/reinforcement.
         Contact vendors/suppliers to confirm their emergency 
        response plan procedures.
    I advocate an advisory system very similar to that which the 
American Red Cross presents. Because the alerts would be so narrowly 
focused, they would not cost cities, states, and municipalities the 
extraneous amount of emergency preparedness dollars that they struggle 
to produce to respond.
    Mr. Chairman and Ranking Member, for the above reasons, I recommend 
restructuring of the Homeland Security Advisory System. Thank you for 
assembling this meeting.
    Hearing no requests, the chair is pleased to again welcome Admiral 
Loy.
    Thank you again for being with us this afternoon, and thank you for 
your written testimony, which we have provided to the members in 
advance.
    We would be pleased if you would take five minutes to summarize 
your testimony.

 STATEMENT OF THE HONORABLE JAMES LOY, ADM, DEPUTY SECRETARY, 
                DEPARTMENT OF HOMELAND SECURITY

    Admiral Loy. Thank you, Mr. Chairman.
    Good morning, Mr. Turner.
    I would like to thank you as well as the other members of 
the committee for providing the chance to talk about the 
Homeland Security Advisory System.
    First, let me publicly thank my colleague, John Brennan, 
sitting next door. Since I arrived on the scene at DHS in early 
December, I think I have spent more time with John than I have 
with my family.
    TTIC's charter is to be the coordination point for the 
sharing of information related to terrorist threats for the 
intelligence community. In our day, every day at DHS starts 
with a TTIC review of current threat analysis. If it is about 
the terrorist threat, it goes to TTIC from any point now on the 
intelligence community compass, including some very new ones, 
like state, local and private sector information provided to 
them from DHS.
    Armed with this all-source array, TTIC offers the analytic 
product for those of us charged with operational 
responsibility.
    TTIC, like DHS, is an evolving organization, getting better 
at its job every day.
    John and his team have done an exceptional job in starting 
up the center and meeting the charter in the law. They have 
become a key cog in the business of securing our homeland.
    On March 11th, 2002, President Bush created the Homeland 
Security Advisory System, as the chairman said, as a tool to 
improve coordination and communication among all levels of 
government, the private sector and the American public in the 
fight against terrorism.
    The advisory system is binding on all Federal agencies 
except the Department of Defense. And it is encourage for state 
and local governments and the private sector; 55 of the 56 
states and territories have adopted it.
    During periods of heightened concern, the framework 
provides the ability to change the threat condition on a 
national level while also affording the opportunity to target 
communications to particular geographic regions, industry 
sectors or other affected entities.
    The latitude provided by HSPD-3 allows the department to 
address unforeseen situations and continue to refine the 
advisory system as the need arises. This flexibility is 
critical to the success of the advisory system and essential to 
its effective implementation as both the chairman and the 
ranking member have commented.
    With the creation of the department on March 1st, 2003, the 
advisory system has evolved into a framework that married the 
analytical assets of the intelligence community with the 
department's unique responsibility in IAIP, that directorate, 
to assess the nation's vulnerabilities and implement protective 
measures.
    The system in its various dimensions continues to evolve. 
And I believe we have reached a threshold in that evolution 
where the system serves the Nation well.
    When all the rhetoric is lifted, it is simply a tool in the 
system we have designed to secure our homeland. As part of a 
system that includes other tools and can be used selectively 
itself, the HSAS has demonstrated its utility on several 
occasions.
    This evolution to date has revealed three basic ways, I 
believe, to use the system.
    First, as a universal baseline, and as a universal 
adjusting tool, when and where the entire nation is alerted to 
a changed threat circumstance requiring across-the-board 
upgrades or downgrades of security activity.
    Second, surgically, where the threat conditions can be 
changed geographically, by economic sector, or even by a 
combination of both, and if the first use is blunt, and 
certainly it is, this use is more sophisticated and it requires 
a more evolved system as exhibited in the just-passed December-
January holiday period.
    Third, using communication channels developed over the 
year, we now make adjustments within the existing threat 
condition to regions or sectors without a threat condition 
change at all.
    All of these approaches are keyed to the best judgments we 
can make on the threat itself. It is a threat-based risk-
managed system. It demands new and different thinking and 
judgment than has ever been necessary before.
    We are getting better at it daily, and we look forward to 
working with the committee to work even better ideas into the 
HSAS framework.
    We recognize that a decision to change the threat condition 
has significant economic, physical and psychological impacts on 
the nation. Therefore, decisions are taken by the secretary 
only after serious consultation with key colleagues around the 
Homeland Security Council table.
    All the players at that table are now familiar with the 
range of actions the secretary has available to him. And in the 
final analysis, the HSAS is simply a communication tool.
    We have developed other products to fill out that tool kit. 
Each can be used to inform a broad or narrow audience, 
depending on the threat. They range from information bulletins 
to advisories to conference calls to executive visits. And such 
products have enabled DHS to use the advisory system in a more 
targeted and flexible manner.
    And as a result of this refined ability to target specific 
information with specific actions and prevention measures, the 
threshold for recommending changes to the threat condition has 
actually become more finely calibrated.
    This evolution is best illustrated by the most recent 
threat period, the change over the December 2003 holiday 
window. At that time the threat condition was raised from 
yellow to orange based on a substantial increase in the volume 
of threat-related reports from credible sources across the 
board. These were the most specific threat reports that we have 
seen thus far.
    When the threat condition was lowered on January 9th, DHS 
recommended that several industry sectors and geographic 
locales continue on a heightened alert status. And in this 
case, DHS utilized the HSAS communications tools to provide 
specific recommendations to particular industry sectors and for 
particular geographic areas in response to the specificity that 
we saw in the threat stream.
    For the first time since the creation of the system, the 
department lowered the national threat level but recommended 
maintaining targeted protections for particular industries or 
geographical locales.
    We are simply getting better at the decisionmaking required 
to meet our mission. In the end, it is about finding and 
building a flexible, effective system and then making good 
judgments and taking good decisions in the best interest of the 
American people.
    Mr. Chairman, I had the pleasure of hearing your staff 
director in your absence and Mr. Turner at a dinner event 
Monday night. Each spoke about our common work together. It was 
almost uncanny how both gentlemen seemed to articulate loud and 
clear the thoughts and discussions we have every day in the 
department.
    They spoke about focus and sacrifice across the board for 
this country and its citizens and strategic planning. They 
spoke about how the threat continues unabated and how we must 
be both offensive to rout out the enemy where he is to be found 
and equally aggressive in protecting our homeland. They spoke 
of building partnerships here and abroad and investing in 
technology as one of the keys to our eventual success--and they 
were on target on all counts.
    Mr. Chairman, this is very hard work, as you have 
committed. We have immensely dedicated people doing it. And I 
am proud of the efforts invested in the work accomplished thus 
far, but we also have very far to go and much more to do. And 
we must hold on to a sense of urgency about getting that work 
done.
    We at DHS are appreciative of your help, your ideas and 
your role as our conscience in this business.
    This is my 44th year of public service, and the work I am 
immersed in with my colleagues has never been important to our 
country. We will get it done and we will get it done well. We 
will be on time and we will on budget. We will be innovative 
and we will be creative.
    And we are trying hard not to be held back by the 
bureaucratic baggage of the past.
    The American public deserves our very best effort and they 
will be getting nothing less.
    Thank you sir, and I look forward to your questions.
    [The statement of Admiral Loy follows:]

             Prepared Statement of The Honorable James Loy

    Good morning, Mr. Chairman and Congressman Turner. I would like to 
thank you, as well as the other members of the committee, for providing 
this opportunity for me to join my colleague from TTIC, John Brennan, 
to discuss the Homeland Security Advisory System.
    On March 11, 2002, President Bush created the Homeland Security 
Advisory System (``HSAS'' or ``advisory system'') as a tool to improve 
coordination and communication among all levels of government, the 
private sector and the American public in the fight against terrorism. 
The advisory system is binding on the executive branch, and suggested, 
although voluntary, for State, local, territorial and tribal 
governments, and the private sector.
    The system, created by Homeland Security Presidential Directive-3 
(HSPD-3) and now, pursuant to the Homeland Security Act of 2002 , 
administered by the Department of Homeland Security (``DHS'' or ``the 
Department'') identifies a flexible framework for communicating, 
addressing and mitigating terrorist threats to the nation utilizing a 
threat-based, risk-managed system. During periods of heightened 
concern, the framework provides the ability to change the Threat 
Condition on a national level, but also affords the opportunity to 
target communications to particular geographic locales, industry 
sectors or other affected entities. The latitude provided by HSPD-3 
allows the Department to address unforeseen situations and continue to 
refine the Advisory System as the need arises. This flexibility is 
critical to the success of the Advisory System and essential to its 
effective implementation.
    With the creation of the Department on March 1, 2003, the advisory 
system evolved into a framework that married the analytical assets of 
the Intelligence Community (which includes DHS) with the Department's 
unique responsibility to assess the nation's vulnerabilities and 
implement protective measures. Since its creation on March 11, 2002, 
the HSAS Threat Condition has been changed on five separate occasions. 
In each instance, the condition was raised from Yellow to Orange, but 
the circumstances surrounding each decision to elevate the Threat 
Condition varied.
    We recognize that a decision to change the Threat Condition has 
significant economic, physical and psychological impacts on the nation. 
Therefore, decisions made by the Secretary, in consultation with the 
Assistant to the President for Homeland Security to change the Threat 
Condition are made only after careful consideration and close 
coordination with other Federal agency heads, including other members 
of the Homeland Security Council. Let me take this opportunity to 
provide some insight into the decision making process.
    In the regular course of business, the Intelligence Community 
constantly reviews available threat information. When that information 
provides sufficient indication of a plan to execute a terrorist attack, 
the source and origin of the intelligence are further analyzed to 
determine the specificity and credibility of the information. It is 
only when the information received is both specific and credible that 
the Department takes appropriate action under the advisory system. Even 
then, the Threat Condition is not automatically raised to the next 
higher level. The Secretary has a range of actions available to him. 
These actions range from the issuance of advisories or bulletins up to 
a determination to change the Threat Condition.
    There are instances when the volume and credibility of the 
intelligence reaches a level that the Department believes it should 
notify the public of the increased risk and the actions professionals 
are taking in response to the threat. Although this is a subjective 
standard, this concept was demonstrated when DHS elevated the Threat 
Condition from Yellow to Orange for Operation Liberty Shield. The 
decision to change the Threat Condition was based on intelligence 
reporting indicating Al-Qa`ida's desire to attack the US in response to 
the US-led military campaign in Iraq. As you are aware, in this 
instance during a time of war, DHS recommended nationwide protective 
measures during a time of war.
    Since then Advisory System has evolved as more specific threat 
information has become available and the Department's ability to 
communicate threat information and protective actions to those affected 
improved. One example of this evolution is the development of specific, 
audience-tailored communications tools to address specific threats and 
provide measures to be taken in response to threats or vulnerabilities. 
These products have enabled the Department to implement the advisory 
system in a more practical and flexible manner. In fact, since March 
11, 2002, the protective posture of our nation has increased based on 
our refined ability to respond to specific information with targeted 
actions and prevention measures. As a result, today's Threat Condition 
Yellow is yesterday's Orange, effectively raising the threshold for 
changing the Threat Condition.
    This evolution is best illustrated by the most recent Threat 
Condition change over the December 2003 holiday period. At that time, 
the Threat Condition was raised from Yellow to Orange based on 
intelligence reports indicating a substantial increase in the volume of 
threat-related reports from credible sources that Al-Qa`ida continues 
to consider using aircraft as a weapon and other threat reporting 
targeting numerous cities in multiple geographic locales. These were 
the most specific threat reports that we have seen thus far. Even 
though the national Threat Condition was lowered on January 9, 2004, 
DHS recommended that several industry sectors and geographic locales 
continue on a heightened alert status. In this case, DHS utilized the 
HSAS communications tools to provide specific recommendations to 
particular industry sectors and for particular geographic areas in 
response to specific threat information. For the first time since the 
creation of the HSAS, the Department lowered the national threat level 
but recommended maintaining targeted protections for a particular 
industry sector or geographic locale.
    In addition to the ability to change the Threat Condition, the 
advisory system also utilizes communications tools, defined as threat 
products, to provide more targeted and specific information to a broad 
or narrowly focused audience. In some cases, the protective actions 
taken by the affected entities affect decisions on raising or lowering 
the Threat Condition.
    Threat products consist of warning and non-warning information 
designed to inform a particular audience about an existing threat or 
current incident. Two threat products used by the Department are Threat 
Advisories and Information Bulletins.
    Threat Advisories contain actionable information about incident 
information or a threat targeting critical national networks, 
infrastructures, or key assets. These products may suggest a change in 
readiness posture, protective actions, or response that should be 
implemented in a timely manner.
    Information Bulletins communicate information of interest to the 
nation's critical infrastructures and other non-governmental entities 
that does not meet the timeliness, specificity, or significance 
thresholds of threat advisories. Such information may include 
statistical reports, summaries, incident response or reporting 
guidelines, common vulnerabilities and patches, and configuration 
standards or tools. Because these products are derived from 
intelligence they are generally communicated on a need-to-know basis to 
a targeted audience, such as the intelligence that is shared at both 
the classified and unclassified level with State, local and private 
sector officials. Together, these products provide a thorough, well-
calibrated system to prevent terrorist attack. The evolutionary nature 
of the advisory system, and the authority resident in HSPD-3, enable 
the Secretary to utilize a variety of tools to address terrorist 
threats that may affect the United States.
    Like other advisory systems, the success of the HSAS also depends 
upon our ability to work closely with Federal, State, and local 
officials, the private sector and the public. DHS not only communicates 
threat information but must also provide our partners with specific 
actions that can be taken at all levels to protect against the threat. 
The cornerstone of the HSAS is the protective measures that are 
implemented at each Threat Condition. The Federal government, States 
and the private sector each have a set of plans and protective measures 
that are implemented when the Threat Condition is raised. It is these 
protective measures and those specifically recommended in the HSAS 
communications tools that reduce the nation's vulnerability to 
terrorist attacks. However, it must be noted that while DHS encourages 
the adoption of the HSAS at the State and local level, the HSAS is 
intended to supplement, not replace, other systems currently 
implemented by State and local authorities and the private sector.
    Prior to announcing a decision to elevate the Threat Condition, DHS 
communicates directly with its Federal, State, local, private sector 
and international contacts as appropriate. These communications provide 
specific information regarding the intelligence supporting the change 
in the Threat Condition. As appropriate for the audience, protective 
measures are developed and communicated with the threat information 
prior to a public announcement of the decision. While at a heightened 
Threat Condition, DHS maintains regular contact with State and local 
officials and provides regular updates. In the event that threats are 
targeted to particular cities or states, DHS provides those State and 
local officials with the most detailed intelligence information 
possible at both the classified and unclassified level.
    It is important to note that threat information that is shared by 
the Department, and the ultimate raising of the Threat Condition, are 
actions primarily intended for security professionals at all levels of 
government and the private sector. However, in this post 9/11 world, in 
some cases threat information distributed by the Department or other 
Federal agencies eventually becomes accessible in the public domain. 
Based on this reality, the HSAS has again evolved to include a clear 
public explanation of the threat information to avoid misinterpretation 
of the information. When a change is made to the Threat Condition, DHS 
Secretary Tom Ridge includes guidance to the public regarding specific 
actions that can be taken in response to the threat. In addition to 
encouraging increased vigilance, DHS has recommended specific actions 
for the public including guidance for expediting their interactions 
with Transportation Security Administration airport screeners when 
traveling by commercial aviation. Although information is provided 
publicly regarding protective measures, it is important for the public 
to understand that DHS implements and recommends additional and more 
specific protective measures to State and local officials that are only 
disseminated to security professionals.
    Increasing citizen and community preparedness is a Departmental 
priority. One year ago, Secretary Ridge launched a multi-faceted public 
information campaignSec.  conjunction with the Ad Council, which has 
received over $150 million in donated advertising. The public 
information campaign directs callers to a web site or and ``800'' 
telephone number that provides critical information on emergency 
preparedness and different types of terrorist threats. Brochures on 
this effort are also distributed through Post Offices across the 
country and Salvation Army distribution centers as well as other 
private sector partners. The Ready information campaign works in 
concert with the American Red Cross and Citizen Corps, the department's 
initiative to mobilize volunteer leaders to increase their community's 
preparedness. The Ready.gov website provides specific actions 
individuals and families can take such as creating and testing a family 
emergency plan and assembling an emergency kit to ensure there are 
sufficient supplies available when needed.
    Along with providing information to the public, DHS also works with 
State and local officials and the private sector in developing specific 
protective measures. The Department recognizes that each State, 
locality and private sector facility is unique and requires the 
development of different protective measures. For example, the 
protective measures required for and implemented by New York City are 
vastly different from the protective measures that Orange County, 
California will implement. In recognition of this difference, DHS 
communicates regularly with and provides technical advice to State and 
local officials to assist in the development of specialized and 
appropriate protective measures. Certain national law enforcement 
associations have also been awarded Homeland Security grant funding to 
further develop their own standard procedures for security measures to 
correspond with HSAS Threat Conditions.
    DHS also works directly with critical infrastructure owners and 
operators to ensure that adequate protective measures and plans are in 
place to reduce the vulnerability to terrorism. Through this effort, 
DHS can deny terrorists the opportunity to use our infrastructure as a 
weapon. Let me offer two examples of this partnering:
    DHS sends out teams consisting of DHS personnel and personnel from 
other agencies to critical infrastructure sites throughout the country 
to conduct site assistance visits. These visits are focused on 
identifying vulnerabilities and shared characteristics of that critical 
infrastructure sector element. After the visits, a report is prepared 
about the site and shared with local law enforcement, Federal law 
enforcement and the owner/operator of the facility. This procedure 
assists the owner/operator in identifying their vulnerabilities and 
adding appropriate protective measures.
    However, it is not enough just to ``look inside the fence'' and 
identify the vulnerabilities of the site. We must work to remove the 
operational environment for a terrorist outside these facilities. To 
protect the area outside these critical infrastructure sites, DHS also 
conducts and prepares buffer zone protection plans. These community-
based protection plans facilitate the development of effective 
preventive measures and make it more difficult for terrorists to 
conduct surveillance or launch an attack from the immediate vicinity of 
a high value or high probability of success site. The site assistance 
visits and buffer zone protection plans are just two ways in which DHS 
partners with critical infrastructure owners and operators to ensure 
that they have the best protective measures to guard against any 
terrorist incident.
    Since the creation of the Department of Homeland Security, the HSAS 
has experienced an evolution from the preventative elevation of the 
threat level from Yellow to Orange during Operation Liberty Shield to 
the most recent threat specific elevation during the December 2003 
holiday season. Over the past year, the system has been raised and 
lowered on three separate occasions, and each occurrence demonstrates 
that the Department's ongoing work to strengthen the system has 
improved the implementation of the system specific to each emerging 
threat. The evolutionary nature of the System, and the authority 
resident in HSPD-3, enable the Secretary to utilize a wide variety of 
tools to address threats that may affect the United States.
    In the future as the Department matures and our implementation of 
the HSAS continues to evolve, we will work diligently to provide 
information that best suits the needs of Federal, State and local 
officials, the private sector and the public. We look forward to 
working with the Congress on ideas to improve the system. HSAS is 
simply a tool and is one of the many means to the end we all are 
working toward which is a secure homeland.
    Thank you Mr. Chairman. I would be pleased to answer any questions 
you may have.

    Chairman Cox. Thank you, Admiral.
    I now welcome our second and final witness, Mr. John 
Brennan, director of the Terrorist Threat Integration Center. 
Mr. Brennan is a 23-year veteran of the Central Intelligence 
Agency. He served as chief of staff to Director Tenet, and just 
prior to being appointed director of TTIC held the position of 
deputy executive director at the CIA.
    Mr. Brennan, we are very appreciative of your being here 
today. I was going to say we have your testimony, but, do we 
have your testimony? We do, in fact, have your written 
testimony and we want to thank you for that, and also want to 
add five minutes for you to summarize that testimony.

   STATEMENT OF MR. JOHN BRENNAN, DIRECTOR, TERRORIST THREAT 
                       INTEGRATION CENTER

    Mr. Brennan. Thank you very much, Mr. Chairman.
    Thank you, Mr. Turner.
    It is certainly a pleasure to appear before the committee 
today to be with my very good colleague, Secretary Loy, who, as 
he said, we have gotten to know each other quite well over the 
past many weeks.
    I have submitted the written testimony and I look forward 
to answering your questions. But I would like to start off as 
we begin the hearing on the Homeland Security Advisory System, 
making three key points, important points, about the Terrorist 
Threat Integration Center's role in that system.
    The Terrorist Threat Integration Center, which we refer to 
as TTIC, since its stand-up on 1 May of last year, has played I 
think an important role supporting the Department of Homeland 
Security during periods of heightened concern about terrorist 
attacks.
    As you know, TTIC analysts have full, unfettered access to 
the full array of information available to the U.S. government 
related to the terrorist threat to the United States.
    This access allows the analysts, who come from the 
Department of Homeland Security, the Central Intelligence 
Agency, Department of Defense, Department of State, the FBI and 
other departments and agencies of the government to produce 
integrated assessments of the terrorist threat facing U.S. 
interests, both at home and abroad.
    As a recent example, in the very late hours of 20 December 
of last year, TTIC produced a terrorist threat alert and an 
analytic assessment of the Al-Qa`ida threat to the homeland, 
including against the aviation industry.
    These TTIC products were key factors in the decision made 
the following day to raise the threat condition level to 
orange. Language from these TTIC products was provided to the 
Department of Homeland Security, to Secretary Loy and Secretary 
Ridge to use both publicly as well as in their interactions 
with state and local officials.
    Second, even when the threat level is not heightened, TTIC 
has constant, in-depth interaction with the Department of 
Homeland Security intelligence components, indeed components 
throughout the Department of Homeland Security involved in the 
fight against terrorism. At least twice daily, TTIC and 
Department of Homeland Security officers are involved in a 
secure video teleconference with their colleagues from 
throughout the government to review the threat reporting and to 
look at it in terms of what type of threat it poses to U.S. 
interests.
    In addition to these opportunities, there are also regular 
interactions between DHS and TTIC officers to include 
electronic connectivity between TTIC and the Department of 
Homeland Security. This greatly facilitates the flow of 
information that is necessary for the Department of Homeland 
Security to do its work.
    Finally, TTIC, the Department of Homeland Security and 
other elements of the homeland security, law enforcement and 
intelligence communities engage in regular discussions on the 
many different factors that are taken into account when 
determining threat condition. This integrated effort allows 
threat information, which the TTIC provides, to be assessed in 
the context of the assessed capability of a terrorist group, in 
the context of the vulnerability of potential targets, in the 
context of extant mitigation and defensive measures that are in 
place, as well as in the context of the options available to 
enhance security.
    In this manner, Secretary Ridge, Secretary Loy and other 
senior officials are able to gain a true appreciation of the 
prevailing threat condition, and then make the informed 
decisions as appropriate.
    I look forward to taking your questions.
    [The statement of Mr. Brennan follows:]

          Prepared Statement for the Record of John O. Brennen

    Good afternoon, Chairman Cox, Ranking Member Turner, and the 
Members of the House Select Committee on Homeland Security.
    I appreciate the opportunity to join the Deputy Secretary of the 
Department of Homeland Security (DHS) to discuss how terrorist threat-
related information supports the Homeland Security Advisory System 
(HSAS).
    As Committee Members well know, U.S. interests at home and abroad 
remain at risk of terrorist attack. Usama Bin Laden and Al-Qa`ida 
represent the most significant terrorist threat; however, there are 
many other known and suspected terrorist individuals and groups with an 
interest and the capabilities to do us harm. Since the tragic events of 
September 11, 2001, many steps have been taken to prevent future 
attacks. One of the most significant steps has been the creation and 
implementation of a national, color-coded Homeland Security Advisory 
System.
    The HSAS was originally established in March 2002 as a mechanism to 
inform the public during periods of elevated threats. TTIC supports the 
HSAS through the provision of terrorist threat-related information and 
analysis to those charged with administering the process.
    TTIC is a multi-agency joint venture that opened for business in 
May 2003, to integrate terrorist-threat related information, collected 
domestically or abroad, to form a comprehensive threat picture. On a 
daily basis, TTIC coordinates terrorist threat assessments with partner 
agencies, including DHS, Federal Bureau of Investigation, the Central 
Intelligence Agency, Department of Defense, and Department of State. 
Assignees from these partner departments and agencies have, of course, 
been involved in the production of these assessments prior to 
coordination with their headquarters. Twice daily, these assessments 
and others are discussed during interagency secure video teleconference 
meetings to discuss the current threat picture. DHS, TTIC, and others 
coordinate regularly on a product that combines threat information with 
actions being taken to protect the Nation against those threats. This 
multi-agency coordination process is enabling the USG to better know 
what we know, compare information, and make rational decisions based on 
a more comprehensive threat picture.
    When threat information dictates, TTIC participates in special 
meetings that are convened to determine whether to recommend to the 
Secretary of Homeland Security and other senior officials that the 
Homeland Security Advisory System condition should be adjusted. Last 
December 2003, for instance, TTIC--in close coordination with our 
partner entities - published a Holiday threat assessment that 
facilitated multi-agency discussions resulting in a decision to elevate 
the national threat level to ``orange.'' TTIC's threat assessments 
played an important part of the risk evaluation strategy that was used 
in making decisions related to the threat level.
    Another aspect of national preparedness and effective warning of 
terrorist threats to the U.S. and U.S. interests abroad, is more 
systematic information sharing across the intelligence, law 
enforcement, and homeland security communities. Progress has been made 
toward ensuring that all obligations are met, as detailed in applicable 
statutes and interagency agreements such as the Homeland Security Act 
and the Homeland Security Information Sharing Memorandum of 
Understanding (MOU) of March 2003, signed by Secretary Ridge, Attorney 
General Ashcroft, and Director of Central Intelligence (DCI) Tenet. On 
behalf of the DCI, and in close coordination with all partner entities, 
TTIC is facilitating efforts within the Intelligence Community to 
provide the Department of Homeland Security access to all information 
and analytic products required to execute its mission.
    Within TTIC, there is connectivity with 14 separate USG networks, 
allowing for unprecedented, near-real-time information sharing--the key 
to our support to the Homeland Security Advisory System. A primary 
conduit for information sharing across the intelligence, law 
enforcement, and homeland security communities is a TTIC-sponsored, 
classified website called TTIC Online. This website currently has over 
2,500 users throughout the Federal government, and it is being updated 
to support collaboration and information sharing at varying levels, 
from Top Secret to Sensitive-But-Unclassified. The website is also 
being updated to enable users to search across disparate USG-maintained 
data sets and to enable account holders from multiple Federal 
departments and agencies to post relevant information for collective 
access.
    In addition, TTIC is working with DHS and the Federal Bureau of 
Investigation (FBI) to ensure that all relevant threat information and 
analysis is expeditiously passed to state and local officials and law 
enforcement personnel, so that they may re-evaluate and adjust 
protective measures to prevent a possible attack. This rapid sharing of 
threat information with those working to disrupt potential terrorist 
activity is a critical area of emphasis in the national homeland 
security effort--some call state and local officials and law 
enforcement personnel our ``first responders,'' but if the information 
reaches them in time to apply appropriate protective measures, they are 
really our ``first and last defenders.'' For this reason, TTIC and 
others across the intelligence, law enforcement, and homeland security 
communities are working together to implement ``write to release'' and 
other innovative business processes to increase the number of sanitized 
and unclassified products available for rapid dissemination to better 
enable state, local, private industry, and foreign partners to 
implement protective measures in the Global War on Terrorism.
    In conclusion, through collective effort, we are making daily 
progress toward improving National preparedness through the HSAS and 
the effective warning of the Nation.

    Chairman Cox. I thank you both for your testimony.
    Members will now be recognized for questions. We will be 
observing the five-minute rule with the exception that members 
that were here within five minutes of the gavel will be able to 
extend their time of questioning by three minutes.
    The chairman recognizes himself for five minutes.
    I would like to ask both of you or either of you, depending 
on how you care to respond, about the difference between the 
public and the nonpublic aspects of our national response to 
this heightened alert.
    We have, as you both outlined in your testimony, an 
admirable system, still developing but very far advanced from 
where it was a few years ago, of sharing information among 
scores of government agencies at the Federal level and 
integrating that information also at the state and local level.
    The TTIC online example that you provided, for example, is 
a secure network that can be accessed by many users all over 
the country. That is working, as I think citizens expect it 
should, so that our government springs into action, does 
everything it can to anticipate and prevent and prepare for 
terrorist attacks in response to actionable intelligence.
    What we are also wrestling with here today, though, is the 
impact on the rest of the country, specifically everybody else 
who is not part of either law enforcement or intelligence.
    The government in any way does not manage a large chemical 
facility or a nuclear power plant, does not run an airport or 
an airline, is not responsible for a high-rise office 
building--just somebody watching TV who is told, ``Now, we are 
at a heightened state of alert.''
    Why are we asking that person to be at a heightened state 
of alert? What do we expect that person to do differently? And 
how do we expect that person to square that message with the 
simultaneous message, at least what we have seen was a 
simultaneous message in our recent experience, that you should 
go about your business just exactly as you were before?
    I ask you this question because in my experience, these 
warnings are having a chilling effect. I have admittedly 
episodic evidence, but a lot of it, of, for example, school 
groups canceling their field trips to other countries that have 
nothing to do with terrorist attacks on the United States of 
America. They do not know that. They are just worried, and so 
they are playing it safe.
    Business groups canceling conferences, even sometimes 
within the United States, in other cities, all manner of 
tourism being affected from small to large decisions that 
people make. They are behaving differently because a heightened 
state of alert means to them a heightened state of anxiety.
    What is the payback for that? And how are we going to 
mitigate those effects of the public warning system?
    And if you can in addressing that, also include in your 
answer the consequence and the way that you deal with this 
consequence of the fact that in communicating publicly with 280 
million Americans we are also communicating very publicly with 
Al-Qa`ida, or whoever it is that we must thwart.
    And I would be happy to hear either of you.
    Admiral Loy, you seem ready to begin.
    Admiral Loy. I will take a stab at it, sir.
    I think first and foremost, Mr. Chairman, we are all, as 
citizens and as responsible public servants, learning our roles 
in this very, very new security environment that we all woke up 
to on 9/11/01.
    It is just so fundamentally different from--not that any of 
us are pining for the good old days of the Cold War. But the 
notion of what occurred from 1989 to 2001 was almost an 
interruption, when the wall fell and the Soviet Union imploded, 
that the whole notion of a complacency gene sort of rose among 
us.
    And I saw that not only in individuals and people but 
perhaps in organizations and even in nations. And come 9/11/01, 
that cold pail of water in the face, offered a very different 
environment, an enormously different environment, an enemy that 
we do not understand, that we are just beginning to learn 
about, that we are just beginning to read about, with no flag, 
no president, no boundaries, no nation-state--all those things 
that were comfortable to us in the course of the Cold War 
window.
    So as we try to learn our way through that fog, if you 
will, toward a more clear day when we will really be able to 
react much more adroitly and specifically to the things at 
hand, I think the challenges have to be about across-the-board 
notions.
    But for the individual citizen, I think three things are 
important. I think it is about awareness, it is about 
preparedness, and it is about recognizing they, too, have a 
contribution to make, almost in the Rosy the Riveter notion of 
World War II, because this is really an all-hands evolution. 
Every citizen has the potential to be involved.
    So on the awareness side, vigilance matters. And to make 
that an impression on the citizens of this country is an 
enormously important thing for us to do. We have to have every 
citizen understand it is important to hold the edge associated 
with this new security environment that we are grappling with.
    So that means every citizen is a sensor. They have the 
opportunity to report things that are out of the ordinary, and 
they should be doing that.
    And the notion of interoperable communications suggests 
that that citizen should have the capacity to report whatever 
they see out of the ordinary that makes good sense to them.
    Preparedness is simple things as much as a family emergency 
plan, an emergency kind of support kit that would be 
appropriate, and finding their way, as a citizen must, in this 
new normalcy that we are trying to define for ourselves in the 
new security environment we are grappling with.
    Chairman Cox. I take it that we do not wish that level of 
preparedness to evaporate if the threat level is at yellow?
    Admiral Loy. Absolutely not, sir.
    Chairman Cox. So that by ticking up the threat level, we 
are not telling them at that time to go do an emergency 
preparedness kit or at that time to start looking for 
suspicious activity?
    Admiral Loy. No sir. If you look, for example, at the 
department's Web sites associated with such things, you will 
find counsel to the citizens at large that are directly along 
the line of both yellow and orange as a set of conditions that 
demand of them these kind of different behaviors in the 
security environment that we are all trying to understand.
    Chairman Cox. Mr. Brennan, do you want to add to this?
    Mr. Brennan. Mr. Chairman, I would just make reference to 
the TTIC online, which is the classified Web site that we in 
TTIC maintain to make information available to the Department 
of Homeland Security and other Federal departments and 
agencies.
    We are working very closely with the department to in fact 
try to construct a multilayered and interconnected 
classification system as far as the flow of information 
downward.
    And so as you pointed out, the Department of Homeland 
Security has a statutory responsibility for providing the 
information to the state and local officials. And we, with TTIC 
online, are working with the department to make sure that there 
can be that flow of information to the departments so that the 
department can then take the information and share it as 
appropriate.
    Even though as a classified Web site, we put products on 
there that are at the unclassified level, or at the sensitive 
but unclassified level, that can be released. So we are working 
hand in glove with the department on that effort.
    Chairman Cox. Well, I will reserve for a later round of 
questioning similar questions that get at that point, Mr. 
Brennan, about what state and local law enforcement can do and 
what specifically we are asking them to do when we change these 
alert levels. And certainly that access to information is a key 
starting point.
    Mr. Turner?
    Mr. Turner. Thank you, Mr. Chairman.
    Admiral Loy, Mr. Brennan, I, as you know, share much of the 
sentiment that the chairman just shared. I mean, I have many 
instances of folks saying they have canceled their plans to do 
things that, frankly, my better logic would say they had no 
reason to cancel, because they heard we changed the alert 
system to orange.
    I think when we look at our efforts, there is no question 
that we need a threat advisory system and we need to see it 
continue to mature, as I think it is doing.
    And I even noted on several occasions where Secretary Ridge 
has himself questioned the system and has made some adjustments 
already as your information gathering system matures.
    But I really think the color codes, while may be useful two 
years ago when this was all new and we were in our infancy, and 
if you did not have a way to get the information out and you 
did not know exactly what you were hearing and how important it 
was, well, sure.
    Let's say, yellow to orange--and I do not know what red 
means. I never did get a clear understanding of that. I had a 
lot of different people tell me what they thought it meant. But 
all I know is that if you said red today, it probably would 
just create mass panic. I do not know what it means.
    But I really do think that you have reached the point where 
you could abandon these color codes and rely on specific threat 
advisory information. And if that information needs to go to 
the public, have a press conference and tell every network what 
it is we are worried about.
    Much of the information, I think we all know, needs to be 
directed to local law enforcement and to the private sector 
that may be affected.
    And that information sharing has not yet matured to the 
level it needs to. And we are going to have to, I think, get to 
the point where we have a greater willingness not only to 
sharing information among Federal agencies, which we always 
seem to have to struggle with, but with the Federal, state, and 
local officials who have a role in protecting the homeland.
    But I agree completely, Admiral Loy, with what you said 
about the need to have the citizens involved. But I just do not 
believe the color code involves them. Because, clearly, as you 
stated, we need a culture, if you will, of vigilance in this 
country.
    Every citizen has a role in protecting our homeland and 
they need to be reminded of that. But more often than not, I 
think, when the color code goes up, they do what the chairman 
said and they cancel some travel plans.
    And think about it a bit, if you were the youth director at 
your local church and you had responsibility for 30 children of 
parents in your church, and you heard the alert system went to 
orange, your tendency would be to say, ``Listen, I better not 
risk anything here; we better cancel this trip.'' And that 
ripples all through the society every time you raise that 
level.
    And I even think it goes on in the department. I think the 
political reality that I shared a minute ago is very much the 
case. And I really think the department would be better off if, 
when you have new information, the key players in the 
department and the FBI and the White House, if they were 
talking about, ``What is it we have on our hands and what 
information can we share and how quick can we share it?'' 
rather than sitting around the table and getting on these phone 
calls that I am sure that take place, saying, ``OK, should we 
go to orange, should we not go to orange?''
    It is just basically a judgment that somebody ultimately 
has to make. And I do not think there is any great precision in 
it. Because the flow of threat information, as I said earlier, 
I think we all understand it is fairly regular and continually 
constant.
    And, Admiral, you said we need the citizens to be prepared, 
and we do. And we probably failed in this regard, because the 
color coded system has not prompted anybody that I know of to 
make different preparations for different levels.
    And if you ask the average person on the street, when the 
level went to orange, they might have declined to go take a 
trip, but I doubt many of them would tell you, ``Yes, I made 
sure I had more water in the basement,'' or whatever it is that 
we all think folks are supposed to do when the level goes up.
    So I guess my question for you is: Have there been serious 
discussions within the department about the color codes and 
whether or not the color codes are really an important element 
of an effective alert advisory system?
    Admiral Loy. Yes, sir. There have been such discussions.
    I, too, believe this is a work in progress, and there very 
well may come the day when categories, as are reflected by the 
colors, are no longer necessary when our citizenry and our 
private industry sectors and the state and local governments 
actually have the capacity and have internalized this new 
security environment that we are dealing with and are 
adequately prepared to deal across the spectrum from low threat 
to high threat as it really does change, perhaps not day to 
day, but over the course of time.
    My sense is that we are not there yet.
    There are very valuable levels of activity that are 
clarified for many of the industries that we are dealing with 
already. And as we reach out, just as we are speaking, to 
engage all of those economic sectors with respect to following 
on the president's homeland security Presidential Directive No. 
7 on critical infrastructure, we will be able to at least 
initially sort activity levels associated with those industrial 
sectors and geographic places according to a range from low to 
high of varying activities associated with a threat, if in fact 
a threat can be understood to be that and communicated to them.
    The communications channels we have in place are very 
strongly now able to communicate that information. But what we 
are still working very hard on is the delineation of what is 
different between the activity set associated with yellow, for 
example, from that of orange.
    I have run the Transportation Security Administration for 
the last couple of years, sir. And I can guarantee you that 
every airport in this country has a security plan that denotes 
a variety of activities that change as we go from one threat 
condition to another.
    So for the moment, it is a very good set of anchors along 
the path to a spectrum perhaps of adjustment that can be made 
further down the road. I believe they continue to serve a good 
purpose for us today.
    Mr. Turner. Thank you, Admiral. And I am not telling you I 
disagree with classifications that apply to sectors. I mean, I 
can see the wisdom of that.
    Admiral Loy. Sure.
    Chairman Cox. The gentleman's time has expired.
    The gentlelady from Texas, Ms. Granger, is recognized for 
eight minutes.
    Ms. Granger. Thank you very much.
    I appreciate your being here and the work you are doing. 
And not to beat a dead horse, as we would say in Texas, but let 
me add my concern about the color-coded system.
    A little different, there are some people, yes, who do 
react. My concern are the people that listen to it and now have 
become very cynical and very angry--one or the other. And the 
cynicism will lead them to do nothing differently. And so that 
is a concern I have.
    I am very aware the airports do make a change and are very 
aware of what they are supposed to do, but others are not, 
particularly at the local community. So when you go from one 
color to another, there is concern with what they do, and then 
of course the cost of doing that. And the local communities are 
having a real struggle keeping up with additional costs that 
are not being reimbursed.
    Let me move from that to something else.
    In the fiscal year 2004 Homeland Security appropriations 
bill, it required a report on the use of NOAA's radio network, 
what we call the weather alert system. And I was going to ask 
if that report has been written. If so, could you summarize the 
conclusions of the report, and then what steps DHS is taking to 
use the NOAA system.
    Admiral Loy. I apologize, Ms. Granger, I simply do not know 
where the status of the report is. I will check that out today 
and call you.
    Ms. Granger. Great, I would appreciate that very much.
    And one of the committee's goals is to ensure that DHS 
utilizes an alert advisory system. That means it can 
disseminate local alerts and national alerts. Have you focused 
on the available technology that is out there already for that 
alert?
    Admiral Loy. Yes ma'am. I think there is a couple of very, 
very real communications kind of challenges that are part of 
what we are doing.
    One of the things I think we can do dramatically is set 
standards such that they are associated with grants in the 
future, such that when the acquisition of communications 
equipment is procured, it is procured according to the standard 
such that they have become interoperable.
    One of the most dramatic lessons that we learned from 9/11, 
of course, was at the World Trade Center when this police 
officer could not talk to that fireman, could not talk to that 
emergency medical technician because of not having 
interoperable communications.
    It is one of the absolute goals of Secretary Ridge, and we 
have done some very good work on that to this point. Out 
science and technology directorate is right on the verge of 
establishing and issuing those standards such that down the 
road that kind of procurement process will yield continuing 
interoperable communications.
    Ms. Granger. That is extremely important, particularly at 
the local level if you are talking about from hospital to 
hospital--all of those first responders.
    Admiral Loy. Responders, yes ma'am.
    Ms. Granger. Thank you very much.
    Chairman Cox. Does the gentlelady yield back her time?
    Ms. Granger. I do.
    Chairman Cox. The gentlelady from California, the ranking 
member of Intelligence, is recognized for eight minutes.
    Ms. Harman. Thank you, Mr. Chairman.
    Welcome to our witnesses, both of whom are very competent 
managers and are doing an excellent job.
    I want to commend you, Mr. Chairman, for holding this 
hearing. Among the hearings I know of that this committee has 
held, this would be up there in terms of the most important.
    I also want to commend you and the ranking member for the 
bipartisan collaboration on this issue. I think it is 
critically important, as you know, that we engage in oversight 
activities by our committees on a bipartisan basis, and this is 
happening in this case.
    I also think it is useful for us to be offering 
constructive criticism to Federal agencies. This is part of 
what Congress is supposed to do. We pay the bills and the 
taxpayers expect us to do this.
    And, Mr. Chairman, I noticed in your statement, a large 
amount of constructive criticism, and I applaud you for it, and 
I frankly agree with the comments that you made.
    I think it is useful for us to criticize constructively our 
Federal Government, and I am sure our witnesses took it in that 
vein.
    And, Admiral Loy, you said that things are evolving, you 
are operating a work in progress. We all understand that. And 
so this criticism is intended to help you shape your future 
steps toward an end that we all share, which is to make our 
homeland safe.
    So, Mr. Chairman, I am happy to be in this room, and I 
commend this productive activity of the House of 
Representatives. Today, there are too few activities like this. 
And so it makes me feel good, and I hope it makes all of us 
feel good to be part of this one.
    I have questions in two areas. One is your point about the 
public, and the second is more technical questions about the 
interface between DHS and TTIC.
    And let me not forget to mention my valuable visit to TTIC 
a few weeks ago where I saw Mr. Brennan and his very talented 
work force. TTIC is a success story in this government. I 
commend you for your leadership and as important, I commend 
those from a variety of agencies who work for you for their 
part in helping make certain that we keep our homeland safe.
    Admiral Loy, I look forward to visiting your folks as well 
sometime soon. I think it would be a very valuable visit for 
me, both in my role as a member of this committee and as 
ranking member on the Intelligence Committee.
    My question on the warning for the public is this: A year 
ago, I mentioned to Secretary Ridge, my interest in a program 
called FLASH. That program is an acronym which I cannot 
remember, but the idea behind it is to invent a curriculum for 
our public schools which would be taught each year in the same 
week to all the children in the public schools by their regular 
teachers. And the point of this curriculum, which would become 
more complex with each year, is that both the teachers and the 
students would be trained in what to do in the event of a 
terrorist attack.
    I am old enough, and I think you are, too, Admiral Loy, to 
remember the civil defense drills of the 1950's when I was 
trained on what to do in my public school, and it was valuable 
training.
    It seems to me that in terms of an effective warning system 
for the public, making certain that every school kid and every 
school teacher knows what to do would go a long way toward 
reducing panic, improving response and giving parents the 
comfort that their kids will know what to do and be adequately 
protected.
    But, I cannot get to square one on this issue. I have 
proposed a pilot project. I have offered, you know, five 
different permutations of how this thing could work.
    Secretary Ridge sent me to the Education Department. They 
responded with a ``no''.
    I think this is dead square in your jurisdiction, and I 
just want to mention it to you here, ask you if you have any 
comments about it, and urge you, please, to take back to 
Secretary Ridge at least one Member's opinion that this would 
be a very effective way to augment your threat advisory system.
    Admiral Loy. My comments would go to be actually very 
supportive. I think the notion of what Mr. Turner and I spoke 
about just a moment ago of the holding the edge issue, the not 
allowing the complacency gene to kick back in place, of truly 
holding on to the sense of urgency that is associated with this 
global war on terrorism on the home front and then translating 
that to a consciousness, if you will, that is pervasive across 
our citizenry.
    I believe it is in the very direct interest of all 280 
million of us to have that kind of sense about us in this 
dramatically different security environment that so many people 
actually would like to sort of just push away and return to 
normalcy, whatever normalcy used to be. But we have a new 
normal normalcy, and this has got to be part of it.
    I will, in fact, carry your message back to the secretary. 
And we have initiated a number of educational notions inside 
our science and technology directorate which can translate to 
curriculum elements that would be very profitable.
    Ms. Harman. Thank you for that answer. I will be following 
up. Be warned.
    I hope we will do something like this, at least on a pilot 
project basis, in the school system in one or more states to 
see how it works.
    But the curriculum has been developed. A very talented team 
of people, who happen to be based in California, has developed 
it and is trying it out, and I really think this will add value 
to the public piece of the threat warning and homeland security 
problem.
    Turning to the interface between your two organizations: 
This is also critically important. Some members of this 
committee--I think all members of this Congress--were surprised 
when the president suggested that TTIC be stood up. It was not 
the way we had intended this to go in the way we drafted the 
homeland security law, but I, for one, am pleased with how it 
is going and am very pleased about the connection between the 
two of you.
    My questions just want to probe this a little further, and 
I will observe my time.
    First of all, Mr. Brennan, you mentioned in the past that 
one of the major strategic issues for you is figuring out where 
TTIC's counterterrorism job ends and the counterterrorism work 
of other agencies begin. You convened something called the 
Water's Edge Panel, and I am curious how that came out. And I 
do not want this clock to go off here.
    I would invite both of you to tell me how you are working 
together, whether there are any problems with sharing 
information, sharing technology, interoperability, which was 
raised before, meeting each other's intelligence needs, or 
anything else out there that you did not cover in your 
testimony that this committee should be aware of.
    Mr. Brennan. I would say that, first of all, there are a 
series of challenges as opposed to problems.
    The challenges as far as bringing together different 
information systems--in TTIC we have 14 different information 
systems that come in from all the different departments and 
agencies. In trying to address the different information 
security policies, different infrastructure, hardware-software 
issues--those are challenges that we are overcoming.
    So these are things that we are working very compatibly on.
    We have, in fact, a joint program office: TTIC, the 
Department of Homeland Security, and Department of Justice, FBI 
to address these initiatives in a collective and a 
collaborative way as opposed to doing it individually.
    So again, there are a series of challenges there, but it is 
something that I think we are able to attack together. And we 
are making progress every day.
    Admiral Loy. I would just wholeheartedly agree.
    I think the most important thing in here is that the law 
clarified the realities of 9/11, clarified intent on the part 
of all the players.
    And at those twice-daily sessions, where each of us has an 
opportunity to hear John's analytical product be tabled and 
then the discussion offers the opportunity to come to a 
collective consensus onto what that threat piece really means, 
and then offer it forward as something that has really been 
kicked around among ourselves, us from the standpoint of the 
operator and the requirements to be met, John from the 
standpoint of attempting to meet those and helping us 
understand just what are to the possible is inside the 
intelligence community flow.
    We also have people connections as well as technical 
connections.
    The secunded DHS representatives to TTIC that staff is his 
world as well as those from across the Federal Government are 
such that all the players that have a contribution to make are 
at his disposal to gather and allow the analytical work to be 
done inside the organization. I think it is going very, very 
well.
    Ms. Harman. Well, just keep at it.
    My time is up, Mr. Chairman, but I would like to share a 
secret, and that is that the hard drives that are under the 
desks of the talented people at TTIC have names. And their 
names for the moment are Huey, Dewey, Louie and Fred.
    And a little humor goes a long way, but it is important 
that we keep developing the IT and that we keep it compatible 
and we keep moving this mission ahead together, and we keep the 
public trained to understand what they are supposed to do too.
    Thank you very much, Mr. Chairman.
    Chairman Cox. The gentlelady's time has expired.
    The gentleman from New York, Mr. Sweeney, is recognized for 
five minutes.
    Mr. Sweeney. Thank you, Chairman, and I appreciate the 
recognition. I also appreciate you conducting this hearing. 
Because I think as my prior colleague, Ms. Harman, just pointed 
out, this is one of the critical oversight responsibilities we 
have in Congress. And we oftentimes, I think, have not been as 
particularly focused as I would like.
    I would like to thank Admiral Loy and Director Brennan in 
advance for their cooperation and their work both here today 
and prior to this.
    You know, the principle piece of legislation this select 
committee has proposed has a number of very valuable and 
important components to it. And I think it is reflective of a 
bipartisan effort on this committee's part to really help you 
as you evolve this process and construct what is an entirely 
new concept in American government.
    One of the pieces I think is particularly important in that 
legislation is when we call upon the Department and try to help 
you establish a sector-by-sector or regional threat assessment 
system.
    There are a lot of reasons why there is great utility to 
that. There are a lot of reasons why it is important. And I 
will simply point out as a New Yorker, I know I would expect 
that my colleague, Congresswoman Lowey, will also follow up 
with some of this.
    But New York, and New York City in particular, have huge 
costs that cannot be reimbursed right now by the Federal 
Government. And one of the tangible examples of that is when 
the rest of the country goes to yellow, New York City pretty 
much constantly stays at orange.
    I will ask Admiral Loy this question--when do you think the 
Department can move to that kind of more specifically focused 
threat analysis and threat information system?
    Admiral Loy. Mr. Sweeney, I think we are very close to 
being there. The capabilities that are now important for us get 
on with are the analytical work necessary in a partnered 
fashion with the stakeholders of all 13 economic sectors of the 
Nation and the four key assets inventories that are identified 
in the president's national strategy for homeland security.
    Since the president has now signed HSPD-7, the ball is in 
our court to do that outreach. A series of meetings were just 
held this week with respect to internal to DHS. The next one is 
internal to the department.
    And then the template associated with that has to be taken 
literally to each of those 13 economic sectors to discuss 
through, understand the requirements on their end, what can be 
provided on our end to establish that security paradigm, for 
lack of a better phrase, that we are all looking for.
    Mr. Sweeney. So as we speak it is evolving and developing.
    Admiral Loy. Absolutely. Yes, sir.
    Mr. Sweeney. Within a year is practical or not?
    Admiral Loy. Absolutely, it is, sir.
    Mr. Sweeney. OK, good to hear.
    Admiral Loy. We should have that done inside a year.
    Mr. Sweeney. Director Brennan, thank you for all of your 
work and your interaction with my office.
    How is the relationship with the FBI Joint Terrorism Task 
Force going?
    Mr. Brennan. With the JTTFs that are located nationwide, it 
is a very strong relationship. We have had interactions, we 
have had TTIC officers who have been out to the JTTFs and have 
sat down with the FBI agents and analysts there to review 
different issues, review information.
    We work very closely with the JTTFs through FBI 
headquarters in terms of the counterterrorism division that has 
sort of oversight on the terrorism matters.
    So it very, very close.
    Mr. Sweeney. Has the FBI retracted or taken back any of its 
analysts from your operation?
    Mr. Brennan. Oh, no, sir. In fact we are getting more 
analysts from FBI. And in fact, I have been very impressed with 
some of the young FBI analysts in TTIC in terms of their 
dedication and the quality of their work.
    Mr. Sweeney. Somewhere, there is that misinformation that 
recently in some sort of in-the-bowels kind of turf war, the 
FBI removed 70 of their analysts from your shop. We would like 
to know that, I think, on this committee. And I especially 
would like to know it as an appropriator who is both on 
Homeland and on Commerce-Justice-State. So I would like to know 
that if that happened.
    Mr. Brennan. I have noticed none of them missing. If I do, 
I will let you know, sir.
    Mr. Sweeney. Let me ask one final question, and it is 
really for Admiral Loy: New York Police Commissioner Ray Kelly 
testified on the record before this committee and the Judiciary 
Committee last year. Another important part of the principle 
piece of legislation relates to the formulation and how we are 
spending money and what you are allowed to do and what you are 
not allowed to do.
    He noted that the personnel costs in New York City are a 
significant part of the expenses when the threat level is 
increased. I am wondering, your thoughts. Why shouldn't 
overtime costs, personnel costs, training costs associated with 
those increases be reimbursed?
    Admiral Loy. Sir, I think the categorization of grants and 
the ability for state and locals to claim against those dollars 
over the course of time is the answer to that question. It, 
too, is something I think that is evolving.
    The Congress was generous in the supplemental on all three 
till I identified $200 million in the aftermath of Liberty 
Shield as a pool of funds to be claimed against by the locals, 
state and local elements.
    There is about 60 of those billions of dollars that have 
actually been claimed against as opposed to the $200 million 
that has been offered.
    There is an exchange going on as we speak. We clarified 
that the 23rd of February was sort of a deadline that we would 
like to have people let us know what were the costs associated 
with this last experience at orange over the holiday period. 
That will give us another data point associated with the role 
of the Federal Government, as appropriated by the Congress in 
terms of the capacity to reimburse, and also help us all 
understand that as, again, we have talked about several times 
before this afternoon already, this is really an all-hands 
evolution.
    And so to some degree, it is about state and local folks 
standing up to the task, including the financial end of 
whatever is appropriate for these evolutions, and the private 
sector as well.
    So in threats to our national security historically, you 
know, when it was the artillery folks looking over the Folda 
Gap at each other or whether it was across the demilitarized 
zone in Korea, the notion there was the clarity with respect to 
Federal responsibility in taking care of that ``for the 
citizenry'' was very, very direct.
    This is a very different security environment that we are 
grappling with in understanding. The rules as they play out, 
sir, are still literally being forged by the Congress and by 
the executive branch.
    Mr. Sweeney. And I understand that. I know my time is 
expired, but I think we need to get specifically focused on the 
impacts in order to maintain the vigilance we seek here. And I 
thank you.
    And I thank the chairman for his time.
    Chairman Cox. I thank the gentleman. The gentleman's time 
has expired.
    The gentleman from Massachusetts, Mr. Markey--the proud 
owner of a Super Bowl trophy, almost, almost personally, 
derivatively. He is recognized for eight minutes.
    Mr. Markey. Thank you, Mr. Chairman, very much. It is water 
on the desert up in Boston, I can promise you. It has been a 
long drought in every other sport but football.
    Mr. Brennan, your job is to remedy the problem that we 
found before September 11, that there was fragmented 
dissemination of information across the Federal bureaucracy to 
state and local governments that did not effectively make it 
possible to coordinate in a way that could protect against a 
terrorist attack.
    As the Senate office building, Mr. Brennan, remains closed 
for a second day due to ricin contamination, we have learned 
that three months ago the White House also was the target of a 
ricin attack. However, the information reportedly was not 
shared with congressional leaders until after the discovery of 
ricin in the Senate earlier this week.
    Mr. Brennan, did this information, that is, the information 
about ricin attack on the White House, did that come to your 
attention three months ago?
    Mr. Brennan. Sir, I would have to go back and check the 
record as far as when it came to my attention. And I can get 
back to you on that.
    Mr. Markey. Did you know about the ricin attack on the 
White House before there was an attack on the Congress?
    Mr. Brennan. As far as an attack, sir, I do not believe--
and I also do not think, sir, this is the appropriate forum for 
discussion about the nature of particularly the terrorist 
threats that may exist to the White House. There are other 
venues.
    Mr. Markey. Mr. Brennan, this is the forum. We are the 
committee given responsibility to make sure that the agency, 
which we have created, is working to protect the American 
public against attack.
    If you had knowledge that there was a potential ricin 
attack on the White House, and you did not give that 
information to the Congress, or other relevant high-priority 
targets of Al-Qa`ida, then that is something that we have to 
talk about and you have to tell us what is your decisionmaking 
process as to who is on the list that receives this very 
important information.
    Mr. Brennan. Mr. Markey, I would be glad to talk to you 
about the process. My comment that this is not the appropriate 
forum is because sometimes with threat information, as you well 
understand, there is classified information, and this is an 
open hearing. And so, any type of discussion about the 
underlying reporting or information regarding that should be 
kept in appropriate channels.
    Mr. Markey. OK. Well, let us put it this way: Did you 
notify the Capitol Police when you found about the ricin attack 
on the White House?
    Mr. Brennan. Sir, I would have to go back and I would have 
to check as far as what action was taken, when such information 
was known.
    Mr. Markey. You do not know if you notified?
    Mr. Brennan. I will have to go back, sir, and check on 
that. I do not want to give you--.
    Mr. Markey. Doesn't an attack on the White House, Mr. 
Brennan, automatically trigger a set of responses in TTIC in 
terms of notification of other high-priority targets?
    Mr. Brennan. Sir, I would like to get the facts in front of 
me first before I respond to your questions as far as what 
actions were taken.
    Mr. Markey. To the best of your knowledge, did your agency 
notify mail processors handling mail bound for Capitol Hill or 
basically the same post offices that had to be shut down after 
the anthrax attack here in Washington? Did you notify them?
    Mr. Brennan. It would have been our responsibility to 
notify the Federal departments and agencies that have a 
responsibility to share that information with the nonFederal 
family.
    Mr. Markey. Well, I will tell you, Mr. Brennan, that if the 
White House took upon itself not to share this information with 
other potential targets in Washington, D.C., then that is a 
very serious matter.
    We know that Al-Qa`ida was targeting either the White House 
or the capitol dome with the final plane that was pulled down 
in Pennsylvania. And we know that within that same timeframe, 
Congress was the subject of anthrax letter attacks, as were the 
networks and other high-visibility institutions in the United 
States.
    So I believe that if that information was not shared, then 
there was a very serious mistake which was made.
    Mr. Brennan. As I said, Mr. Markey, I will look into it and 
find out what the facts are.
    Mr. Markey. Well, we cannot thwart--I would just put it on 
the record that we cannot hope to thwart terrorists who use the 
U.S. mail system and other means to threaten our homeland 
security without all the facts.
    It is, to me, unnecessary. And as the facts unfold, 
potentially appalling, that innocent lives could be put at risk 
if they were not given the fundamental information that there 
was already a ricin attack that had occurred in Washington, 
D.C., that protective actions could have been implemented to 
lessen dramatically the likelihood that that could be a 
successful attempt.
    Mr. Brennan. Mr. Markey, I can tell you that the Terrorist 
Threat Integration Center has looked very carefully at the 
potential use of CBRN materials by Al-Qa`ida. We have shared 
information with those respective departments and agencies that 
have responsibility for guarding against those types of 
attacks.
    And we also have worked with the Department of Homeland 
Security and the FBI and others to ensure that the appropriate 
measures are put in place.
    And so, as I said, on that particular case, on that 
particular day, as far as what happened, I will be glad to 
check the record on this.
    Mr. Markey. You can understand that two days after this 
attack unfolds, the fact that you do not know the answer to 
that question as you sit here is something that in and of 
itself causes some concern to those of us who are in charge of 
overseeing the department.
    Admiral Loy, you have Secret Service as part of the 
Department of Homeland Security. When did you learn of the 
ricin attack?
    Admiral Loy. I was not in the department at that time, sir. 
But I did anticipate that this question might come fro the 
committee this morning. I touched a base with the director of 
the Secret Service who advises me that his recollection was 
that the reports were made constructively inside the executive 
branch. I did not ask him whether or not they had advised the 
Congress. I will go ask that question, sir, and get back to 
you.
    Mr. Markey. Is that a decision that the White House has the 
right to make under these existing new share-the-information 
rules and regulations, that is, can the White House decide, 
just as a matter of executive branch authority, not to share 
that information with the Congress or other Federal 
institutions or other state and local institutions that might 
also be at threat? Is that a policy?
    Admiral Loy. Of course not, sir.
    Mr. Markey. It is?
    Admiral Loy. Of course not, sir.
    Mr. Markey. Of course not.
    So if the Secret Service and the White House decided not to 
share this information with the Congress, knowing that we were 
a target just two yeas ago--the staffer over my shoulder here, 
she was on Cipro for two months--that is a very serious issue 
to those of us who lived through that. It touched the lives of 
the people who are here and working with us--and as proxies for 
all other Americans as well.
    So do you think that the system works, Admiral Loy? That 
is, do you believe that the White House having obtained this 
information handled it correctly in terms of ensuring that the 
rest of the vulnerable targets would also be notified?
    Admiral Loy. Sir, all I know is the conversations I had 
with Mr. Basham this morning. I will be delighted to found out 
who called who when and let you know.
    Mr. Markey. Well, let me ask it another way: If Congress 
did not know, do you think the system worked?
    Admiral Loy. No.
    Mr. Markey. The system did not work.
    Admiral Loy. Right.
    Mr. Markey. OK.
    Mr. Brennan. I might add, Congressman Markey, that there is 
a representative of the Capitol Police within the Terrorist 
Threat Integration Center who is fully cleared and authorized 
for access to information such as this.
    Chairman Cox. The gentleman's time is expired, but we may 
return to this on a subsequent round.
    The vice chairman of the committee, the gentlelady from 
Washington, Ms. Dunn, is recognized for five minutes.
    Ms. Dunn. Thank you, Mr. Chairman, thank you very much.
    And, gentlemen, I apologize for not having been here to 
hear your earlier testimony and the other questions, so forgive 
me if I overlap on some questions. I was in another committee 
meeting.
    I wanted to ask you, Mr. Brennan, when we first heard about 
TTIC, my inclination was to recommend that it be under the 
Department of Homeland instead of the CIA. Have you had any 
reason to change your opinion of where TTIC should be located?
    Mr. Brennan. First of all, Ms. Dunn, TTIC is not within the 
CIA. We are located right now, temporarily, at the CIA 
compound.
    Ms. Dunn. But you are funded by the CIA, is that correct?
    Mr. Brennan. We receive funding from the director of 
central intelligence budget. But in fact we see monies from all 
the different partner agencies.
    So we receive it from CIA, FBI, Department of Homeland 
Security, Department of Defense and others.
    So my view, though, is that we should not reside within in 
one department or agency because the fight against terrorism is 
a collaborative fight, and if we are really going to do this 
well, we need to have an organization or an entity such as TTIC 
that is able to represent the interests of those different 
agencies and departments.
    Ms. Dunn. But the Department of Homeland Security has that 
as its primary focus.
    Mr. Brennan. There are many different departments and 
agencies in the U.S. government that have a terrorism 
responsibility. The CIA has responsibility for transnational 
threats to U.S. interests, including at home.
    The Department of Defense has that responsibility, the FBI 
and others.
    So, yes, the Department of Homeland Security has the 
responsibility for homeland security. But the threat to the 
homeland from international terrorism is truly international, 
and TTIC has that worldwide responsibility to report and 
analyze on those threats to U.S. interests at home and abroad.
    Ms. Dunn. What is your relationship to IAIP? Is that 
relationship and that coordination satisfactory to you now?
    Mr. Brennan. It is very close. Information Analysis and 
Infrastructure Protection Directorate within the department, we 
have constant interaction with them. The assistant secretary 
for information analysis, for example, retired General Pat 
Hughes and I are on the phone constantly. We have daily 
meetings, several times a day.
    The under secretary for IAIP, Frank Libutti, is also 
someone who I am in regular contact with.
    So it is very satisfying. It is improving and growing 
stronger.
    Ms. Dunn. In your opinion, do they have the adequate 
resources to perform the analysis of function after they get 
the information?
    Mr. Brennan. We do not collect the material. But I would 
defer to Admiral Loy as far as whether or not they have the 
adequate resources to do their mission.
    Admiral Loy. They certainly do, ma'am, and that is growing 
as part of the department's growth as we speak. Literally, they 
are physically moving to another building with adequate space 
to put analysts in seats, if you will. And so the growth is a 
work in progress as well.
    But the notion that John cites I think is the important 
point here.
    DHS is enriching TTIC's ability to do its work by the 
contributions and the flow of whatever our piece of the 
information and intelligence-sharing process is that our people 
at TTIC provide him.
    At the same, he enriches our ability to do our work by 
having this full all-source array of material at his disposal 
to do his analysis, to create his products from, and then we 
accept those products back in the other direction for the 
mission of securing the homeland.
    There is a very strong assessment process that I think is 
appropriate for us to go through as we then attempt to map that 
threat piece to the economic sectors, regions of the country or 
individual citizens, whatever might be highlighted in the 
threat piece that he has provided us.
    So at this point, the free standing nature of TTIC as an 
entity is serving the best interests of the country very, very 
well.
    Ms. Dunn. How does the organization work? Do you have 
regular meetings? Or do you meet on a needs basis? Or do you do 
work by e-mail or over your communications devices? Is it 
hierarchical? Is it that you reach out when you need to to the 
particular department that you are interested in talking with? 
How does it work?
    Mr. Brennan. It works in all the above ways that you 
mentioned as far as we have regular meetings, we have twice 
daily secure video conferences with the Department of Homeland 
Security. We have electronic connectivity as far as sharing 
information both ways, between ourselves and Department of 
Homeland Security. We have officers from the department, not 
just IAIP but also from the various constituent agencies--the 
Coast Guard, the Secret Service, Customs, others--who actually 
are resident within TTIC performing the analytic function and 
liaising, then, back with their parent agencies.
    So it is across the board, both in terms of information 
sharing, people, interaction meetings. There are regular 
meetings throughout the week where I, along with the DHS 
counterparts, get together to review threat information as well 
as the actions that DHS is taking.
    Ms. Dunn. Just to finish my questioning: Is there any area 
where you believe that communications could be improved with 
regard to TTIC's relationship with these other agencies of 
government?
    Mr. Brennan. I think as we referenced before, this is an 
evolving process. We have a number of challenges ahead of us as 
far as stitching together the different types of information 
systems. We have different metadata standards as far as how 
reporting comes into the government.
    So there are a lot of challenges out there, and I think we 
are making progress on it, and we need to make further 
progress.
    But I feel good about the progress that has been made to 
date.
    Admiral Loy. Ms. Dunn, if I may, one other thought: The 
other value of the free-standing nature of TTIC is that, I 
believe that on down the road we will find valuable other kinds 
of data and pieces of information that heretofore have probably 
never been part and parcel of the thought patterns about 
analyzing the threat to the homeland.
    For example, I believe much more can be done with respect 
to proprietary private sector data--what is in that container 
coming at us? What does the bill of lading say? What does the 
manifest say?--and the mixing bowl that TTIC represents by 
having all those kind of things in the future offered into that 
cauldron, so to speak, so that the mix is the product that is 
of greater value to those of us who are trying to secure the 
homeland, or to those of other executive functions that are 
trying to do their work overseas.
    Projecting down the road, I think this freestanding nature 
represents a continuing positive opportunity.
    Ms. Dunn. Thank you very much, Admiral.
    Thank you, Chairman.
    Chairman Cox. I would just observe, as I yield to the 
questioner, that TTIC is not, strictly speaking, freestanding, 
but rather it is under the direction of the director of central 
intelligence.
    And when you talk about something that may well have 
fruitful ends for homeland security such as further mining 
private sector data, it is because of, among other things, 
civil liberties concerns, that many of us in Congress did not 
want the DCI to be in charge of the intelligence analytical 
portion of homeland security, that integrating fusion function.
    And it is why if somebody is going to be in charge, I would 
much prefer that it were the secretary of homeland security. As 
I said in my opening statement, that is a carol for another 
Christmas.
    And so I yield next to the gentleman from Maryland, Mr. 
Cardin, for eight minutes.
    Mr. Cardin. I thank you very much, Mr. Chairman.
    And let me thank both of our witnesses that are here for 
their service to our country in this very important area.
    Admiral Loy, I was listening to your response as to what we 
expect on the code changes from the different stakeholders, 
including local governments. And you point out, and I think 
rightly so, that we all have responsibilities, including local 
government, to do what is necessary for the security of our 
country.
    I am not exactly clear what we expect, though, when we 
change the coding from local governments. Do we expect that 
they will increase their presence of law enforcement in the 
community? Will they tighten up their port securities, if they 
have ports? Will they do their critical assets, more police 
patrolling? And probably all of the above, you will say, and 
that this is something that is somewhat intuitive, although I 
think we should have better understanding as to what these code 
differences mean.
    You then point out, though, that the funding for this 
additional burden is reimbursable under the general funding 
formula, or grants, that we make available to local 
governments. And that is at odds with what we are being told by 
the conference of mayors and our governors.
    The chair of the Homeland Security Task Force is the mayor 
of Baltimore. And I have talked to him frequently.
    Mayor O'Malley said: Cities are our front lines in ensuring 
homeland security. And America's cities need direct homeland 
security funding. We simply cannot fund robust homeland 
security on the proceeds of local property taxes and fire hall 
bingos.
    The report that was issued pointed out that most--in some 
cases 100 percent--of the costs are borne solely by local 
governments and that there is no funds available under the 
current system.
    Congressman DeFazio has a bill in Congress which has a lot 
of interest on both sides of the aisle to reimburse directly 
local governments when we change the code to a higher level for 
the additional cost.
    I guess my question to you is: I would hope there would be 
some sensitivity to working with Congress to develop a more 
sensitive funding source to local governments to pay for the 
extra cost of when the security rise so that we have a national 
expectation as to what local governments will do but we are 
also providing the resources in order to carry that out.
    Admiral Loy. It think it is a very, very difficult and 
appropriate question for us all to get on the table and grapple 
with, sir, until we have that resolution.
    There are an existing inventory of grant systems in place 
as we speak today. Some of them are tailored to specific 
purposes--state formula grants, emergency management grants, 
Citizen Corps grants, law enforcement terrorism management 
grants, and the new grants associated with the urban areas.
    And the formulaic approach to that I believe must be much 
more complex than the simple notion of a base-plus-per-capita 
kind of formula across the board.
    And so the president's budget, for example, this year, when 
it came up, recognized by doubling the urban security grants, 
which are about a combination of population in general, the per 
capita notion, which remains sound; population density, for 
example, in terms of the likelihood of the targets there; 
critical infrastructure associated with that particular area, 
community or region; and the threat itself in terms of how it 
is focused toward those things.
    And so I believe there remains a challenge for us across 
the board in a distribution of those monies for the purposes 
that have been outlined by the Congress and reinforced by the 
administration.
    But there is a nature of changing that formula to 
recognize, for example, Baltimore as opposed to my hometown of 
Altoona, Pennsylvania. Maybe there is a greater population 
density, critical infrastructure inventory, threat notion that 
is more appropriate there.
    Mr. Cardin. I appreciate that, and I agree with you said.
    Our distinguished chairman and ranking member have been 
working very hard on the funding formula that, as the chairman 
indicated, will be marked up in the full committee soon, that 
is sensitive to the points that you raise.
    I would point out, though, that I do not think it directly 
answers the concerns of local governments when we change the 
alert level in that there is some specific expenses that we 
anticipate will be incurred when we raise those levels. And the 
funding formulas really are not geared to dealing with that 
problem.
    And I would hope that we could work together to try to 
figure out whether there is an appropriate way that we can help 
provide that assistance to local governments consistent with 
the national assessment on homeland security.
    Admiral Loy. Yes, sir, I look forward to working with you, 
sir, on such things.
    You know, again, the sort of shock value of what 9/11 
represented to all of us, in this particular instance, became 
$200 billion in the supplemental of 2003 as a pool of 
recognized funds to be dispersed.
    As I mentioned earlier, only $60 billion of those $200 
billion have actually been claimed against to this point in our 
time line.
    So we are sort of finding, like is often the case in the 
wake of a national tragedy, the mix between job description on 
one hand, so to speak, and the resources to do it.
    Mr. Cardin. Of course, that brings up the second problem, 
and that is getting the money actually out there as quickly as 
possible. And that is another area that we hope that the 
legislation we are acting on will help in that regard.
    I want to turn to the budget itself because you have 
mentioned that a couple of times.
    I am trying to understand the president's budget, and I am 
hoping that you may be able to clarify this point.
    Interoperability is the one area that is been a very high 
priority of this committee. And in testimonies before the 
committee, we have talked about that as a prerequisite to a 
national system. Yet it looks like the 2005 budget zeros out 
the specific grant for interoperability. Am I reading that 
wrong--I hope?
    Admiral Loy. I do not know that I have a good enough 
understanding of it, sir. I will get back to you with that 
specific question.
    Certainly the intention with respect to interoperability is 
among the secretary's four or five most important things to try 
to get accomplished for our country this year.
    Mr. Cardin. Well, I appreciate that.
    According to the information I have, it was zeroed out in 
2005.
    I want to mention one other thing, which is port security 
grants for state and local governments. It was included in the 
2004 budget in transportation security administration at $124 
million. It looks like that it is now in the opposite, domestic 
preparedness, but at $45 million, which would be a substantial 
reduction in port security.
    Next to the airports, I would say that the next highest 
priority has been in port security. And I can tell you, again, 
from the Port of Baltimore, but speaking to my colleagues that 
represent many other ports, there is tremendous need there, and 
I would hope that we would be increasing the Federal 
Government's commitment to local government for port security 
and not reducing it.
    I appreciate perhaps you could look into that also and get 
back to me.
    Admiral Loy. All right, sir.
    Mr. Cardin. Thank you, Mr. Chairman.
    Chairman Cox. I thank the gentleman. The gentleman's time 
has expired.
    The chair recognizes the gentleman from Connecticut, Mr. 
Shays, for eight minutes.
    Mr. Shays. Thank you, Mr. Chairman.
    Mr. Chairman, I have to control myself in this hearing 
because I find myself feeling like we are ships passing in the 
night. I find myself thinking, ``Maybe we don't have a 
terrorist threat. Maybe it is all in my imagination. Maybe the 
20 hearings I had before September 11 were really just, you 
know, make believe. Maybe the three commissions that we had''--
talking about the terrorist threats--''we are just inventing 
this. Maybe September 11th didn't even happen.''
    I vowed after September 11th that I would not be silent 
about the threat. And now I am hearing that we have a system 
that I think makes sense. I think it makes sense. I do not care 
what color you call it. We have low, we have guarded, we have 
elevated, we have high, we have severe. I think it makes sense. 
I congratulate you for having a system that warns the people 
who can protect us in the general public.
    What I think is idiotic, foolish and stupid is to go to a 
high threat and then tell the public, ``Just do what you 
normally do.'' I cannot think of anything stupider than that.
    Because it would seem to me that when you are going to high 
threat--now high threat is--a high condition is declared when 
there is a high risk of terrorist attacks in addition to the 
protective measures taken under the one below it.
    How about just elevated condition? An elevated condition is 
declared when there is a significant risk of a terrorist 
attack.
    You have low risk, you have general risk, you have 
significant risk, you have high risk, you have severe risk.
    Maybe the problem is, on this committee, that we do not 
think you were right in going to high risk. But I think, 
Admiral, you thought you were. Correct?
    Admiral Loy. Absolutely.
    Mr. Shays. And we are now under significant risk. Isn't 
that correct?
    Admiral Loy. Correct, sir.
    Mr. Shays. Significant. Not general, not low, not no risk.
    Admiral Loy. that is correct.
    Mr. Shays. And it was based on the reality of information 
that was coming to you. Is that correct?
    Admiral Loy. that is correct.
    Mr. Shays. Why would the department tell people to do 
everything they would normally do? We are not at low risk, we 
are not at general risk, we are not even at significant risk. 
We are at high risk, second only to severe risk. Why should I 
just do what I normally would do?
    Admiral Loy. I think it goes to both the comments from the 
chairman and from Mr. Turner that the notion of the secretary's 
comments when he has solicited awareness, when he has solicited 
preparedness and when he has solicited from the citizenry an 
understanding and even an endorsement, that their 
responsibilities entail recognizing there may very well be some 
inconvenience associated with what has just occurred.
    Mr. Shays. So it is just about inconvenience? In other 
words, from the general public, we just have to know it is just 
about inconvenience?
    Admiral Loy. Of course not, sir.
    Mr. Shays. OK.
    Admiral Loy. The reality here is that having solicited 
those senses of understanding from the American public, the 
secretary's also suggesting that they should go about their 
normal business as best they can under the heightened threat 
condition that has been established.
    Mr. Shays. But maybe normal business does not mean you do 
not have to do something. Why would you have them do something 
that puts them at risk if they do not have to do it? Why would 
you put the general public at risk?
    Admiral Loy. We are not trying to put the general public at 
risk, Mr. Shays.
    Mr. Shays. In Israel, if they were at high condition, they 
would not invite people to assemble in a large crowd. Now, if 
you have to take a bus to get to work, they would tell you to 
take a bus. But they recognize there are certain things they do 
not want the public to do.
    I have not heard one thing that you have said, even when 
you are at high alert, that you do not want the public to do. 
Tell me one thing they should not do.
    Admiral Loy. I certainly do not think they should be doing 
things that are foolish as it relates normal activity.
    For example, the question was raised in terms of whether or 
not the church group should go to Washington, D.C., to see the 
sites at orange as opposed to yellow.
    My counsel is that having gone to orange, we have also 
raised the security paradigm to the degree that the secretary 
is encouraging that trip to be taken, and that trip can be 
taken safely and securely because of what we have undertaken to 
actually put into place activity-wise associated with the 
threat condition rise.
    Mr. Shays. So if you think a plane is going to be hijacked, 
potentially from Europe to the United States, you would still 
tell your child to fly on any plane coming from Europe.
    Admiral Loy. Sir, through the course of this last period, 
as a direct answer to your question, we thoughtfully, I 
believe, gathered all the right minds to the table, including 
our international colleagues at the government-to-government 
level and at the airline level, and arrayed what we felt would 
be the prescription of activities and mitigating strategies if 
in fact that plane were to fly.
    And the choice, as you saw in the press several times along 
the way, made either by the government or by the airline--.
    Mr. Shays. So it is a foolproof system? You are going to 
catch all terrorists?
    Admiral Loy. Of course not, sir.
    Mr. Shays. So isn't there a possibility that you know that 
a terrorist might be taking a plane from Europe and they might 
actually succeed, you might not catch them? Isn't that a 
possibility?
    Admiral Loy. There is not a single moment where the 
secretary or the president or anyone else has said that we have 
a foolproof system. This is a journey, sir; it is not a 
destination.
    Mr. Shays. I will tell you what I would do. I would do the 
following: If I knew a plane likely is going to be hijacked 
from Europe--because they do not have the same procedures we 
have, they do not have fire marshals--I would advise the people 
I love not to take a trip to Europe right now, just defer it 
until you go to code yellow or until you go to code blue.
    Admiral Loy. And the point, sir, is if we provide the 
public with information, they can make those decisions. They 
can make those decisions.
    Mr. Shays. So you want the public--so you do not want them 
do what they normally would do. You would like them to use 
their brains and maybe make a decision.
    Now, if they want to make a statement of patriotism of not 
letting terrorists interfere with them in any way, let them 
make that. But shouldn't they be the ones to make that 
judgment?
    Admiral Loy. And that is precisely why the secretary offers 
them both the combination of a threat condition change and the 
reflection that it represents in terms of additional activities 
security-wise, as well as, we heard earlier, the challenge to 
tell them in a public sector that it is their decision to make.
    Mr. Shays. OK, I get your point.
    We were concerned about planes being hijacked from Europe, 
particularly because they do not have air marshals and they do 
not do the same type of security.
    Admiral Loy. No, sir. We were afraid--I will use that time 
loosely, to parallel your thought.
    Mr. Shays. Concern.
    Admiral Loy. We were concerned because of what we saw in 
the threat stream.
    Mr. Shays. Well, but you do know the following: You do know 
they do not do the same process that we do. They do not have 
marshals on planes. Correct?
    Admiral Loy. Many of them do not, that is correct.
    Mr. Shays. And we encourage them to, but they still do not. 
We are encouraging them to do, and they are resisting.
    Admiral Loy. Sir, in the case of many of--.
    Mr. Shays. Isn't that true?
    Admiral Loy. In the case of many of those, they in fact did 
exactly that.
    Mr. Shays. OK, but we are encouraging them to. We are 
encouraging them to have marshals on a plane because we think 
there is a danger.
    Isn't it not true that we were concerned about dirty bombs 
during this last code? Isn't that a concern?
    Admiral Loy. Sir, I would take that one behind closed 
doors, if you do not mind.
    Mr. Shays. Why? Why? Why would we take it behind closed 
doors? Why doesn't the public have a right to know? Why should 
I know and why should other people know and then tell their 
families to act accordingly but we are not going to tell the 
public? Why? Why? Why?
    I want to know why, if we think there is a concern--I am 
not asking sources and methods. I want to know why the public 
does not have a right to know what you have a right to know if 
in fact it endangers the public?
    If we are concerned about dirty bombs, why shouldn't the 
public know?
    If we are concerned that it might be where a large 
congregation of people gather, why shouldn't the public know?
    If we are concerned that it might be at a place where it is 
dramatic, why shouldn't the public know? Why should I know and 
you know but the public not know?
    Chairman Cox. The gentleman's time has expired.
    But I think there has certainly been a number of questions 
put to you, Admiral Loy, so feel free to answer at whatever 
length you choose.
    Admiral Loy. Thank you very much, Mr. Chairman.
    Mr. Shays, the notion is very complex. The challenge here 
for us as public servants is to develop that security paradigm 
that will allow us to have confidence that the threat as 
identified and the map to economic sector--in this case, 
airlines--have an opportunity to develop a set of mitigating 
strategies that takes that threat sense down from where it was 
that gave us pause.
    So our challenge through the course of those hours and 
hours and hours of discussions around that table at the CVITS 
twice a day, in international discussions with the players that 
were a part of our identified threat stream this past holiday 
season, was to take as good a set of judgments as we could in 
the interests of the security and safety of the flying public 
and to so require of anyone that was heading this way and were 
going to penetrate U.S. air space and get landing rights here.
    And in each of those instances, sir, we either had those 
mitigation strategies met and those aircraft flew. Or in those 
instances where that was not possible, or chosen not be on the 
part of the international lines, those governments or those 
airlines canceled their flights.
    Mr. Shays. Sir, I have tremendous respect for you. You are 
an American hero.
    Chairman Cox. The gentleman's time has expired.
    Mr. Shays. Could I just please make this point?
    Chairman Cox. I am sorry, the gentleman's time has expired.
    Mr. Shays. I just would like to say--.
    Chairman Cox. I am sorry, but the gentleman's has--.
    Mr. Shays. --that it was a bureaucratic answer--.
    Chairman Cox. The gentleman's time has expired.
    Mr. Shays. The terrorists know--.
    Chairman Cox. The gentleman's time has expired.
    Mr. Shays. The terrorists know there there is a threat--.
    Chairman Cox. The committee will be in order.
    Mr. Shays. --shouldn't the public know?
    Chairman Cox. The gentleman's time has expired.
    The gentlelady from the Virgin Islands, Dr. Christensen, is 
recognized for five minutes.
    Ms. Christensen. Eight, but I will probably only take five, 
Mr. Chairman. I did not make an opening statement. But anyway, 
I only have a few questions.
    But I want to thank you for this hearing, because the alert 
system is something that not only we in Congress but our 
constituents have to deal with on a regular basis. And to the 
extent that it can be clarified and brought to a level that is 
meaningful and where one is able to develop a specific 
response--which is what I think we are trying to get at today--
this is a very important hearing.
    I have, I think, three questions. Two to Admiral Loy.
    And I want to welcome both of you for being here this 
afternoon.
    And it goes back to the standardization of the responses at 
each terror level. Because you cited that in the area of 
airports, for example, I think in the instance of airports, 
they have clear responses as to what is supposed to happen when 
we go to an orange alert. But I think you allow that this is a 
work in progress and that other agencies, businesses, the 
public still have to develop a capacity and a knowledge base to 
be able to fine tune what needs to be done.
    I wanted to know: Is there a systematic process ongoing to, 
one, develop those standards and then to communicate and put 
those standards in place? Or is this just kind of just flowing?
    Is there something specifically being done to develop those 
standards, or communicate them and put to put them in place?
    Admiral Loy. Absolutely.
    Ms. Christensen. And what is the time line that you have on 
that?
    Admiral Loy. Absolutely, Ms. Christensen.
    With respect to geographic locales, we have just literally 
received on the deadline of yesterday representative security 
plans from state and territory that is associated with our 
work.
    We are reviewing them very, very carefully so as to look 
for those things that have become common concerns among states 
and territories to be dealt with in that fashion.
    In the notion of your parallel with aviation, ma'am, that 
is a piece of the transportation sector. The other 12 major 
economic sectors are each being reached so as to have not only 
a blueprint for what they should be doing but rather to have 
them also help us develop that blueprint. Because they know 
much better than we do what are the essential ingredients, for 
example, of securing their chemical plant or their nuclear 
plant or whatever it is that they are responsible for.
    This is a very active and very ongoing outreach program. 
And I would like to think that by the end of this year we will 
have the national game plan for critical infrastructure 
protection in place.
    The president has just recently signed, as I mentioned 
earlier, the homeland security presidential directive on that. 
The ball is now in our court to engage all the players as 
appropriate to do so. And we are very actively doing that.
    Ms. Christensen. The agencies or the Federal Government--
and I often come back to one that I have responsibility for, 
which is the National Parks Service.
    When we go to orange alert, a lot of the agencies, all they 
can do is a shotgun approach to responding to that alert. Is 
there something being done to also prepare standards in terms 
of their response at different levels? What is absolutely 
required of them? Because they are not being funded to respond 
to these alerts. The money is coming from other operational 
dollars.
    Admiral Loy. There is an interesting question there, ma'am, 
for an authorizing committee, for example.
    The notion of whether or not the interior budget ought to 
be looked at through the lens of whether there is adequacy with 
respect to homeland security activities and responsibilities 
may be something of interest to the committee.
    I only parallel my personal experience in the 
counternarcotics effort when, as a Coast Guard commandant, I 
was obligated to make sure my budget that had to do with 
counternarcotics was authored through the Office of National 
Drug Control Policy for their commentary on the way to OMB so 
that they could pass judgment on whether what I was asking for 
was going to be sufficient to the responsibilities that they 
saw me doing for them in the counterdrug effort.
    There may be a parallel notion here that would be of value 
to the committee.
    Ms. Christensen. I think they need some help. Many of the 
parks are areas where either illegal people or goods can pass 
through.
    Admiral Loy. Yes, ma'am.
    Ms. Christensen. They need some help in developing 
specifically what they need to be doing, what they need to be 
putting in place at different levels of alert so that they can 
plan.
    Admiral Loy. You are absolutely right. This is an all-hands 
evolution. It is not only private sector, state and local, but 
it is of course all the Federal agencies and our 
responsibilities as well.
    Ms. Christensen. And you said that as in the last orange 
alert for the country was dropped to yellow, there was still 
some targeted areas that remained at high alert. And I wanted 
to know to what extent were our members of Congress who 
represent those areas informed? Is that standard practice?
    Admiral Loy. I personally picked up the phone and called 
several folks associated with helping them understand as the 
threat was going by. The secretary's judgment in terms of being 
lowered to yellow offered the opportunity for us to continue to 
concentrate on a couple of economic sectors and on several 
geographic locales. Those players were communicated with 
routinely, ma'am, including at the local level. For example--.
    Ms. Christensen. But specifically members of Congress--.
    Admiral Loy. Oh, yes, ma'am.
    Ms. Christensen. --can be expected to be informed if an 
area in my district, or any of our districts, remain at high 
alert.
    Admiral Loy. That would seem to be a reasonable thing to 
do.
    Ms. Christensen. Any my last question--.
    Chairman Cox. I am sorry, the gentlelady's time has 
expired, but I think we are going to have time for another 
round.
    The gentlelady from New York.
    Ms. Lowey. Thank you, Mr. Chairman.
    And thank you, Admiral Loy and Mr. Brennan.
    As you heard from many of my colleagues today, and you hear 
from members of the public, as well as state and local law 
enforcement officials, there are real concerns about the 
vagueness of the systems warning, its lack of preparedness and 
response recommendations to state and local governments and the 
public.
    In fact, even Secretary Ridge, the top official in charge 
of HSAS, has even expressed concerns about its credibility and 
conceded that it needs to be further refined. And you both were 
talking about it evolving.
    In my judgment we need a system that issues fewer national 
alerts and instead crafts targeted warnings to localities or 
industries with specific information indicating where or what 
the terrorist target might be. And this is exactly the reform 
called for in the first responder legislation, which was 
approved by the committee.
    As you may know, I represent a large portion of Westchester 
County, one of the largest counties in New York State. Within 
our borders we have the Indian Point nuclear plant situated 
among 20 million people within a 50-mile radius. We have the 
Croton and Kensico reservoirs which supply drinking water for 9 
million residents of New York City and the lower Hudson Valley, 
the county airport, which houses the largest corporate fleets 
of planes in Westchester.
    In light of the obvious threats to our region, our law 
enforcement officials work hard to protect these landmarks. So 
when the Federal threat advisory warning goes up, our local 
governments and local enforcement officials go into action, 
whether or not they have special intelligence from the Federal 
Government or guidance how to guard against these threats.
    For example, Westchester County police department spent of 
$220,000 from December 21st through January 9th during the most 
recent heightened alert. Individual communities, smaller ones 
like Larchmont, spent $15,000; Ossining spent $8,000 for police 
officer overtime pay.
    Now, on the surface--and I am right near New York City--
these figures may sound small in comparison to some of the 
numbers that we hear. However, for towns of populations of 
fewer than 30,000 residents, these figures represent sizable 
portions of their local budget. And they simply cannot continue 
to bear these additional costs without substantial help from 
the Federal Government.
    And as one first responder from my district who testified 
before the committee said, ``Look, we can't go to orange 
without first seeing green.''
    Now that takes me a statement you made before, and I think 
it is important to clarify it.
    You said the $60 billion in grants, February 23rd the 
deadline. Well, this is the first time I have heard that, 
unless you are talking about grants to the states. These are 
not grants, as I understand it, that are going to localities.
    And as my police chief, Chief Kapica in Greenburgh, said, 
``Look, I can't wait for the feds, for the state. I have to do 
what I have to do.''
    They need reimbursement.
    So if you can tell me how much Federal funding has been 
allocated to reimburse localities for these costs and September 
11th, I would appreciate it.
    And this program that you referred to, I am assuming is 
money that is going to the state. Because otherwise, none of my 
localities have heard about it.
    Admiral Loy. that is correct.
    Ms. Lowey. So it is going to the state?
    Admiral Loy. Through the states, ma'am.
    Ms. Lowey. Well, I think you should know that that is not 
good enough. Because the localities have to be able to apply to 
some source of funds to reimburse--and obviously there should 
be appropriate review. We do not expect you to be handing out 
these dollars willy-nilly.
    We need to get legitimate expenses reimbursed.
    And so I would appreciate if you would consider that.
    One of my questions is: Will the Department of Homeland 
Security support legislation to reimburse local jurisdictions 
directly?
    Second, to follow up on the interoperability issue, this is 
one of the top priorities of the secretary. Yet there are no 
specific funds set aside in this bill, in fiscal year 2005, to 
enhance state and local interoperability.
    And last year, Congress put $85 million under the COPS 
program for this purpose, but this administration has proposed 
zero, no funds, in DHS or COPS for interoperability.
    I mean, I do not understand. If this is a priority, how 
exactly are we enhancing interoperability?
    And I would dare say--what, is it six months ago, since I 
am still on yellow and not red--there was a hearing where the 
gentleman was telling us--I forgot his name--that they are 
going out with an RFP with interoperability, and then they are 
going to be issuing guidelines with interoperability.
    Frankly, all our local governments are just going ahead 
with it.
    So I would strongly recommend that there would be some kind 
of reimbursement programs for essential expenditures, because 
our local governments just cannot deal with it anymore.
    I do not know if you have time to respond.
    Chairman Cox. Of course the witnesses may take as much time 
as they see fit to respond.
    Ms. Lowey. Thank you.
    Admiral Loy. Thank you, sir.
    The president's budget asks for I think $3.5 billion. It is 
important for us to take the $200 billion worth of supplemental 
Liberty Shield dollars and separate them from the notion of 
annual grants--I do not want to confuse the two.
    The claims process associated with those $200 billion is of 
course--those are dollars against which only $60 billion worth 
of claims have come toward us. So there was about--I am sorry, 
millions.
    There was this pool of leftover dollars, if you will, that 
was very important for us to gain as quickly as we could a 
sense of what the period from the 20th of December to the 9th 
of January was costing the first responders in the local 
communities.
    So the call has gone out to allow that claims process to be 
initiated.
    As it relates to annual grants, the $3.5 billion worth of 
grant requests that are in the president's budget is back to 
the discussion we had earlier, ma'am, on the adjusting nature 
of how best to provide those dollars in a post-9/11 security 
environment that is just dramatically different than times 
before.
    And where there are areas of greater population, greater 
population density, greater critical infrastructure elements, 
like you were just describing in Westchester County, the notion 
that that distribution algorithm should reflect that is I think 
something that is--we are sort of in violent agreement at this 
point between the committee and the administration to how we 
get down to--the devil is always in the details--but the notion 
of it being other than just an across-the-board base-plus per-
capita distribution algorithm I think is clarified by what the 
president is requesting and a doubling of those UAC grants for 
2005.
    Chairman Cox. The gentlelady's time has expired.
    The gentlelady from Texas, Ms. Jackson-Lee, is recognized 
for five minutes.
    Ms. Jackson-Lee. Thank you very much, Mr. Chairman--and a 
very important hearing and one I hope that I can capture for 
both Mr. Brennan and Admiral Loy the frustration that you have 
heard on occasion among members.
    For the last two State of the Union addresses, we have had 
the president dominate his message to the American public with 
the idea of either war or the war on terrorism.
    We are living in a state of panic, a state of fear.
    This committee, I believe one of the singular committees in 
this Congress and in this nation to able to be a partner when 
what is a 170,000-person department--that is a lot of people--
are trying in essence to get its act together. And I do not say 
it negatively. I know there are hardworking individuals there.
    If I recall correctly, the president's recent State of the 
Union address took 35 minutes on the issue of terror. And so, 
when we hear--keeping in mind the line of questioning of 
Congressman Markey--that there was an incident at the White 
House, obviously there is great concern that we now find a 
similar incident in the Congress. And who knows where else it 
might occur.
    You can imagine the public's view of this incident, as to 
where it might occur next.
    So I am going to ask the chairman of this committee--
because we cannot be problem solvers if we cannot be part of 
the factual information--that we hold a secured briefing and 
meeting with the appropriate officials of the Homeland Security 
Committee to provide us with both the knowledge of the 
occurrence at the White House, how the information was 
disseminated, who it was shared with and its ultimate--I do not 
want to use the term tracking, but I will use it--to the point 
where we are now in the United States Congress facing a similar 
incident.
    I am going to ask that to you, Mr. Chairman, that we have 
such a briefing.
    We have had those. And I do not even like to call it a 
briefing. I want it to be a meeting where we are engaging on 
what I perceive to me a national problem that we have to 
address. And I would like to have that request made. And I am 
putting that on the record.
    I do not know, Mr. Chairman, am I allowed to yield to you? 
I know I would be losing my time. I want to proceed. But I 
would like to make that offer, Mr. Chairman.
    Chairman Cox. Well, I would advise the gentlelady that at 7 
p.m. this evening on the House floor there is precisely such a 
discussion, for members only, on the ricin incident in the 
Dirksen Senate Office Building.
    Ms. Jackson-Lee. And Mr. Chairman, what I would offer to 
say to you is that I would prefer to have a separate meeting 
for members of the Homeland Security Committee, inasmuch as 
this takes a lot longer time. And as well, we are entrusted 
with the responsibility to secure the homeland.
    So I will make that request still, recognizing there is a 
meeting this evening.
    Let me also then continue--and I thank you, Mr. Chairman, 
very much--to lay that groundwork for why we are concerned with 
what I am hearing today.
    Let me ask the question, or let me put on the record so 
that you also know the frustration with the reimbursement 
question that my colleague from New York has raised.
    Cities nationwide are now spending $70 million per week. 
Houston, the fourth largest city in the nation, is obviously 
spending even more.
    In a 145-city survey on either the homeland security, Iraq 
war on terrorism and war in Iraq, with the homeland security 
issues and the question of alerts coming and going, they may 
spend over $2 billion in the next six months.
    So you did not answer the question of Ms. Lowey on the 
point of whether or not you are reimbursing cities now, 
directly, for the costs they have already expended. Can I just 
get a yes or no or where we are in that position?
    Admiral Loy. Yes, ma'am. As I indicated, we have set a 
February 23rd deadline for the claims that are put together as 
a result of the experiences from 20 December to 9 January. And 
we expect to pay the bills when we get those claims and have 
reviewed them.
    Ms. Jackson-Lee. And those will be directly to the 
locality?
    Admiral Loy. I do not know that to be the case, ma'am. I am 
not personally familiar with the process of how the claim goes 
in and how the claim goes back out.
    My sense is of course that the difference between working 
with 55 entities, the states and territories, as opposed to a 
countless number of entities, if you were dealing with each and 
every city in the country--.
    Ms. Jackson-Lee. Let me stop you for a moment so I can get 
my other question on the record here, so you can answer it. Let 
me complain or raise a question of concern on the idea that it 
goes to the states and not directly to the localities.
    I am going to research that with you. I understand that you 
do not have the specific information.
    But let me move forward.
    During the Super Bowl weekend, there was a decision for a 
flight leaving from London not to come into Houston. My 
question is whether the TTIC is involved in this kind of 
intelligence assessment.
    If that is the case, I want to hear from Mr. Brennan 
whether or not he is comfortable in light of the 
vulnerabilities and failures of the intelligence system, as 
related to the Iraq war, as we are now seeing unfold.
    Are you confident in the intelligence that is now moving 
this alert system up and down, up and down? And what is it that 
you are doing to vet the intelligence that is coming to ensure 
that even as we use the system that we are now critiquing, that 
you in fact have the information to make determinations that 
would then cause you to go to orange alert or yellow alert, 
which then generates this high cost that we are now expending 
in our local communities?
    What is the basis upon which you are utilizing or 
collecting intelligence? And what is the basis upon which you 
are vetting intelligence to make sure that we have viable 
intelligence to make the right decisions?
    Chairman Cox. The gentlelady's time has expired.
    But both Admiral Loy and Mr. Brennan, please take whatever 
time you see fit to answer the questions.
    Ms. Jackson-Lee. I thank the chairman.
    Mr. Brennan. As you I am sure understand, there are many 
different types of information that come into the U.S. 
government regarding threat--some of high credibility, some of 
low credibility.
    Analysts and TTIC, as well as in other organizations, 
constantly look at that information, evaluate it, assess it, 
digest it, challenge it and compare it with what we know about 
what terrorists are doing.
    We then, as an intelligence analytic element, we interact 
then with those agencies that collect the information, whether 
it is collected from human sources or technical systems or 
whatever it is that they do, to make sure, then, that we 
provide them the feedback as far as what our questions, what 
our requirements are so they can then go back to do the vetting 
of the sources that is necessary.
    But this is a constant back-and-forth process.
    We get the information in, we look at it, we compare it, 
then we provide feedback to those organizations that are 
providing the information to us.
    And so what we try to do is to appropriately characterize 
the nature of the information to the Department of Homeland 
Security so that they fully understand the nature of the 
information, any questions that we might have about it, as well 
as our assessment of its credibility and reliability of the 
sources.
    So it is a cycle in terms of--a cyclical process. The 
information comes in. We provide it to customers. They have 
issues or questions about it, we have our own and we pass it 
back to the collectors so that they can better vet those 
sources.
    Ms. Jackson-Lee. Admiral Loy, you are the recipient of the 
information, at least the department is.
    Admiral Loy. Yes, ma'am. John describes it exactly the way 
we watched day after day through the course of those weeks, Ms. 
Jackson-Lee.
    And the specificity and credibility of that intel stream is 
always going to be the judgment we need to take when that 
analytic product, as a result of that give and take John just 
described, is then offered to the Department of Homeland 
Security.
    Our intelligence shop will give us a good assessment of 
that product that they just received and then map it across the 
vulnerabilities that we know to be in our country, in all those 
economic sectors.
    And then our challenge is to make a good judgment, a risk 
assessment, if you will, knowing this threat piece that was 
just provided to us, knowing the vulnerabilities that are 
there--what are we going to do about it and what are the tools 
that we have to do it, including the communications tools to 
tell locales, economic sectors and indicate specifically, as 
you alerted with your question, the aviation industry as it 
related to the flight in question that was heading to Houston 
on the even of the Super Bowl.
    That flight, as I can recall, would originally have arrived 
in Houston around half-time. And the combination of the threat 
piece that we received, and our engagement process with 
vulnerability, as we understood them at the time, caused us to 
engage with that particular airline, prescribe what would have 
been a set of mitigating strategies that we felt were 
appropriate if it was to fly and leave the judgment associated 
with flying to the airline.
    That process worked through that particular event.
    And frankly, the day-after-day engagement between TTIC as 
the threat collector--collector in the sense that it is 
provided as information for them to produce a tactically 
actionable product, if you will, and then offer that to the 
customers elsewhere in the business of securing our homeland.
    Ms. Jackson-Lee. Thank you, Mr. Chairman.
    I think their answers evidence the need for a security 
briefing of this committee. Because as you well know, if our 
nation's citizens continue to hear about alerts and they do not 
respond, they are not being secure.
    So I think it is very important that we have this closed-
door meeting of the Homeland Security Committee.
    Thank you.
    Chairman Cox. The chair recognizes himself for five 
minutes.
    Admiral Loy, Mr. Brennan, you have heard from a number of 
our members questions coming at you from I think both 
directions on the clarity or ambiguity of the threat-level 
message, not to law enforcement, not to Federal agencies, to 
governors, but rather to the general public.
    And that remains a concern of mine.
    I want to be absolutely clear and unambiguous in my 
compliments to TTIC, to the Department of Homeland Security, to 
the administration across the board on the progress that you 
are making, the very rapid changes that you are making in the 
way that government does business when it comes to sharing 
information among people in the government who can do something 
with it.
    But I have great concerns about the adequacy of our system 
for dealing with the general public, because I think that the 
confusion that is sown is about equal with the benefit that it 
gained, and that tradeoff is not working as well as it might.
    But let me turn now to the second part, which is actionable 
information in the hands of people who can act, people who are 
responsible because of their job descriptions for doing 
something with this information.
    There are two main sources of responsibility for the 
department. We have Homeland Security Presidential Directive 3 
and we have the Homeland Security Act.
    HSPD-3 tells departments and each Federal agency that they 
are responsible for developing their own protective measures in 
response to each threat level.
    The directive also recommends, as you pointed out in your 
testimony, is binding on the Federal Government, advisory as to 
everyone else, it recommends that governors, mayors and others 
develop their own protective measures for each threat level.
    Then we have the Homeland Security Act, which authorizes 
the department to provide guidance to state and local 
government--to the mayors, the governors, the police chiefs, 
the fire chiefs, the first responders and so on--about what 
they should do at each threat level.
    And this includes also private sector entities and the 
public.
    It is my understanding that we are not yet at the point 
where we can take a look at a classified document that says, 
``Here are the protocols for this sector,'' or ``Here are the 
protocols for this law enforcement arm when we go,'' for 
example, ``from yellow to orange.''
    What guidance, if any, has DHS issued to Federal, state and 
local and private sector agencies regarding the appropriate 
protective measures at each level? In what form has that 
guidance been given? And is it sufficiently digestible that it 
would be sensible for the committee to review it?
    Admiral Loy?
    Admiral Loy. Sir, it varies across the board, if you will, 
in terms of sectors of the economy. The focus is associated 
with sectors of economy at this point in terms of being able to 
identify, with clarity, such that the state and local elements 
as well as the private sector elements, know what is expected 
of them, if you will, and what they should--the encouragement 
process here, of course, is to identify the kinds of things 
that they should expect of themselves.
    And I go back to Mr. Turner's I think absolutely right-on 
commentary about all of us rising to the occasion in this very 
different security environment that we are all part of today.
    So, for example, with respect to aviation security--one 
that I just happen to know a good about, based on what I have 
been doing for the last two years--there are very specific all 
the way down to encouraged additional patrols to be foot 
patrols, not in uniform, around the airport terminal building, 
looking for the briefcase that is left unattended.
    It has to do with the parking lots and how we are actually 
going to be dealing.
    It has to do with threat reduction plans associated with 
potential bombings, given that vehicle bombs remain one of the 
most dramatic potential sources of problem.
    So in the case of the aviation piece of the transportation 
sector, enormously specific guidance has been provided--
actually, I would call it worked through with the airport 
directors and with the airlines themselves.
    It has to do with identify authentication of people in 
those airports.
    It has to do with access control of how we deal with 
elements in those airports.
    There are probably less robust but aggressive and growing 
interchanges with the rail industry, with the transit industry, 
with other elements in the transportation sector.
    that is just one of this puzzle of sectors the secretary's 
responsible for across the board.
    We have established ISACs, as they are called, information 
sharing and analysis centers, associated with each of the major 
economic sectors in the nation. The ability to exchange and 
hear from them so they are part of the design work of that set 
of things we would be expecting of them or ask of them at 
different threat condition levels, that process of engagement 
is robust as we speak at the moment and about to almost 
explode, sir, as we are moving with respect to this critical 
infrastructure national game plan that is going to be built.
    Chairman Cox. So I do not want to use up any more of my 
time in asking new questions, but just to re-ask the question 
that I already put, is the information in digestible form for 
this committee?
    Admiral Loy. There is absolutely a lot of it, sir, that we 
would be delighted to share and help you understand where we 
are trying to go and where we are with respect to--.
    Chairman Cox. I say that because I think every member on 
the committee has had the same experience of a police chief in 
my hometown of Newport Beach, California. What is the Newport 
Beach police chief supposed to do? What should his department 
do differently when the threat level rises? Or is it up to him? 
After a fashion, HSPD-3 leaves it up to everybody to come up 
with their own.
    Admiral Loy. To a degree there is a strong encouragement 
process and then there is absolutely an appropriate ``let the 
mayor define what is going to happen in his town, let the 
governor define what is going to happen in his state, let the 
police chief be part of the process of defining what is going 
to happen in his responsibility area.''
    Yes, sir?
    Chairman Cox. The gentleman from Texas is recognized for 
five minutes.
    Mr. Turner. Admiral Loy, that reality that every mayor and 
every governor and every CEO of a corporation is complying with 
your alert level voluntarily--there are no requirements of law 
to do so--is the very reason I think it is so critical that we 
move forward to a more sophisticated system.
    Because I heard an emergency manager at the U.S. conference 
of mayor's meeting just a couple weeks ago that I was a part 
of. He was from Arizona. He reminded everybody around the table 
at this meeting of the mayors and emergency managers that they 
did not have to comply with what the Federal Government was 
saying, that was theirs.
    And some of them were somewhat shocked. They kind of 
thought, well, maybe they were supposed to do this.
    And he reminded them, ``No, this is voluntary.'' And he 
said many times he has not complied when the alert level has 
gone up in recent times.
    So I think there is beginning to be an erosion of 
confidence in the system.
    You mentioned many times the importance of looking at 
threats and matching them against the vulnerabilities. And that 
is what the task is all about, as you go through analyzing 
these threats.
    And yet, a few weeks ago, I read in some publication that 
Assistant Secretary Liscouski said that it would be five years 
before the department would complete the congressional-mandated 
national comprehensive threat and vulnerability assessment.
    So it struck me that that time line is totally 
unacceptable. And so I would ask you: What do we need to do in 
the Congress and what do you need to do to be able to shorten 
that time frame to accomplish that very critical assessment?
    Admiral Loy. I could not agree with you more, sir. That is 
unacceptable.
    Someone was suggesting to me just the other day that the 
notion of standard-setting for interoperable communications was 
something that might be at 18 or 24 months out. And I had to 
help them understand that is totally unacceptable. It should 
have been maybe done by now.
    But there are challenges associated with this, sir, that 
are enormously difficult. I do not think there is plenty of 
``authority'' in the Homeland Security Act and HSPD-3 to enable 
the secretary and I and others to get on with the business of 
these enormously important things that you described.
    On the other hand, Congress has acted in addition to the 
Homeland Security Act in many ways. If you think, for example, 
of the MTSA, the Marine Transportation Security Act, an 
augmenting piece of legislation where the Congress felt for 
whatever correct set of reasons, probably that either we were 
not moving fast enough or the nature of the maritime 
transportation system deserved guidance in the form of 
legislation.
    And in the president's budget today you will see a $100 
million worth of requests from the Coast Guard to get on with 
the implementation of the ingredients of the Maritime 
Transportation Security Act that the Congress passed last year.
    I would offer in this greater sense, there is almost a 
repeatable series of things that must occur with respect to 
each of these sectors. There must be a standard-setting 
process.
    There must be a vulnerability assessment process. There 
must be an identification of mitigating strategies. And there 
must be, then, an action plan that comes out as a result of 
that sequence of events with accountability at the bottom end 
of it as the most appropriate and final loop for us all to 
close.
    Mr. Turner. You know, that description you just made there, 
what needs to be done, it would be very helpful if you could 
lay that out in a letter to the committee as to what the 
process is so we can have a better understanding.
    And if you could, also let us know what we can do to help 
move it along. Because I think we have got to come to grips 
with the fact that five years is not acceptable.
    There is another issue that I wanted to lay on the table 
before my time expires for you to respond to. And that is it is 
not only the collection of intelligence and the analysis of it 
and matching against vulnerabilities, but it is then turning 
around and providing information back to those who have a need 
to know.
    And a few weeks, maybe it has been a couple of months ago 
or longer now, the department made an announcement that we are 
going to change the policy regarding information sharing. And 
the governors were able to designate, I believe it was three 
people, within their office that could receive classified 
information.
    Now, the Gilmore Commission made some recommendations on 
this. And I think it is incumbent upon the department to take a 
look at this. And I think that we are all of like mind here, 
that if this information is going to mean anything, we have to 
be able to share it with people that can use it. Otherwise, you 
are in the same position that I am in when I get a briefing, 
and that is I cannot tell anybody this classified information 
or I violate the law.
    And so, since I am not a first responder, since I am not 
out there on the front line anywhere, then it is good for 
educational purposes in terms of congressional oversight, but 
it is not making the country a lot safer in the short term.
    And the Gilmore Commission said this: ``We should designate 
one or more security-clearance-granting authorities which can 
grant security clearances Federal Government-wide.'' In other 
words, we need some entity that can grant security clearances 
that will be recognized by all Federal agencies.
    We also need to, I think, extend that to local and state 
governments. They said we need to develop a new regime of 
clearances and classification for dissemination of intelligence 
and other information to state and local governments and the 
private sector, and develop a training program for state, local 
and private sector officials for interpreting intelligence 
products. Obviously not only for interpreting but for 
understanding what the classification system means and what you 
can and cannot do with that information.
    But to say that we are collecting all this information and 
we are understanding these threats and yet we are not passing 
this information down to those who need it, who could use it--
and I am not just talking about passing it down to the folks 
that might be affected in a given area--because when you are 
relying on this color-coded system, you know the folks in 
Houston need to know just as much as the folks in Buffalo, 
because if the threat relates to Buffalo, they then know it 
does not relate to them.
    But we have to get to the point where we broaden the number 
of people who we have enough trust and confidence in, and there 
is a lot of patriotic Americans out there working real hard on 
front lines that I would trust--.
    Admiral Loy. Yes, sir.
    Mr. Turner. --that we can share this classified information 
with and get them in a position where what we are collecting 
would actually be meaningful in the event that the worst 
occurred.
    Admiral Loy. Sir, let me take a crack at it, if I may sir. 
And John probably has some thoughtful cautions along the way 
with respect to sources and methods and things that he is far, 
far, better to answer than I.
    First of all, we may be able to take a lesson from, again, 
the aviation book, sir.
    Well before 9/11, there was a category of information known 
as SSIs, sensitive security information, that had been part and 
parcel of the means by which airlines and airports worked with 
the FAA and others in terms of concerns that had been, of 
course, part of that community's interest since Lockerbie and 
since many, many years before 9/11, the means by which we could 
translate--I will use that word--the classified information you 
are describing such that it is totally there with respect to 
its import at that local chief of police station or JTTF 
locally in the city is absolutely a goal that we should all 
have.
    To find the way, A, to communicate it, that is the 
technical end of the communications channels, and also so that 
the receiver, that first responder set that we are expecting so 
much of, to be as armed as possible in terms of understanding, 
sort of, what they are getting into.
    And I could not agree with you more that we should find and 
are in the midst of trying to design better ways that will 
approximate that SSI system that served the aviation industry 
reasonably well.
    John?
    Mr. Brennan. Mr. Turner, I would not disagree with the 
comments that you read of the Gilmore Commission, first of all.
    second, I think it is critically important that there be a 
national enterprise business process architecture. But 
honestly, the technical challenge I do not find as daunting as 
the engineering of the business processes that need to go on in 
terms of bringing together the different elements of the 
Federal family, then bringing in state and local and local 
police or law enforcement officials.
    That type of architecture, as far as how information should 
flow, who it should flow to, under what circumstances 
individual components should receive information, that is a 
tough, tough challenge as far as, again, putting together a 
national architecture of moving information very quickly--which 
can be done--but as far as who has that responsibility in 
certain areas, I think this is still being worked out with the 
state and local officials and the Department of Homeland 
Security.
    But what we are trying to do is to get the Federal system 
right as far as the terrorism intelligence feed to the 
departments so that they can then take it to the next level.
    Admiral Loy. If I may, sir, just a closing comment on that 
if our answers of course have been adequate.
    There is a system called JRIES, J-R-I-E-S, it is a Joint 
Regional Information Exchange System. I might not have all the 
acronym correct. But the notion there is that the technical end 
of being able to do the communication is a system that we need 
to build. that is the how to it.
    Then the what to be shared and the means by which that 
classified matter through the JRIES can actually be exchanged 
between levels of government, for example, Federal, state, and 
local, is absolutely on point. And we are about to develop a 
couple prototypes to prove that it has its merit and move out 
on it, sir.
    So we could not agree with you more. The rightness of being 
able to share the tactically sound and valuable information 
among those players that can best use it for our national 
interest is right on target.
    Mr. Turner. Thank you.
    Thank you, Mr. Chairman.
    Chairman Cox. The gentlelady from New York is recognized 
for five minutes.
    Ms. Lowey. Thank you, Mr. Chairman.
    And I want to thank you, Admiral Loy, and Mr. Brennan for 
being here today. And I want you to know that we appreciate the 
enormity of the task.
    However, as a member of Congress--and I know I speak for my 
colleagues as this hearing winds down--we represent over 
660,000 people. I am the mother of three, a grandmother of six. 
As I travel around my district, the fear is palpable. These 
youngsters are not growing up the way I grew up.
    And they all want to know, what should we do? Should we go 
to the mall? Should we go to Times Square? Should we take an 
airplane? Should we take the train?
    So I want to make it very clear that although I understand 
how hard everyone is working, and I know we appreciate your 
efforts, when you look at 170,000 people that are making policy 
two years after 9/11, as someone who lives 30 minutes from New 
York City who has family and children in New York City, I 
frankly think in order to earn the public's confidence we have 
to move more quickly.
    It is just not good enough to say that we are thinking 
about it and we are planning it, and a year from now and five 
years from now--we were talking about all the nuclear plants 
that are not up to standards that you and I would deem 
adequate--we just have to move more quickly.
    And it seems to me that DHS should be able to not only 
decide that it is orange or green or yellow, but they should be 
able to provide some kind of standard, some kind of information 
to the locals. They are not receiving it.
    In fact, I guess it was at the last time--I was looking 
through the dates. It was awhile ago, when Secretary Ridge 
appeared before the committee, and he testified before the 
Senate Government Affairs Committee last May. He also 
acknowledged that the process for notifying state and local 
agencies of the change in the threat level needs improvement.
    I wonder: Have there been improvements made? It is my 
understanding from that hearing that when the secretary decides 
to raise or lower the threat level, DHS makes a conference call 
to as many state and local law enforcement agencies as can be 
reached.
    Number one, approximately how many state and local law 
enforcement agencies are you able to reach through this method? 
My people, who I meet with regularly, tell me they hear about 
the threat level through the media.
    Is this the best method in a time when you are trying to be 
as efficient as you can?
    I would be interested to know who is on the conference 
call. I mean, fire departments, for example, are so critical to 
increasing security protections during an increased threat 
level. Are they part of this effort? Or are the mayors part of 
this conference call--and they are supposed to alert.
    I just wanted to, as we close down this hear, let you know 
that I know your concern. But from the perspective of most 
members of Congress, you hear our frustration and we just do 
not feel that the department is moving as efficiently and as 
expeditiously as it should.
    And I understand the complexity. But I just hope that you 
get that message loud and clear.
    And perhaps you could answer that one question about who is 
on this conference call. Do you think it is working 
efficiently? Should we be e-mailing or BlackBerrying everybody? 
What kind of information are the locals getting?
    And I believe you answered--I believe it was Chairman Cox--
that you are not providing specifics. With all the expertise 
you have, with all the various people in play, not to provide 
some kind of directive to the locals, and just say, we are in 
alert, that does not seem to be as good as we could possibly 
be.
    Admiral Loy. Yes, ma'am. To answer your question directly, 
the conference calls that are cited are with the homeland 
security advisory players in the respective states. And it is, 
for lack of a better analogy, it is a phone tree, if you will. 
And we count on those state officials to advise their local 
constituents as appropriate to what it is that has been passed 
to them.
    Now, in addition to that, depending on what we are actually 
seeing in the stream. For example, in the holiday period, we 
were on the phone several times a day to Ray Kelly and his 
team; we were on the phone to Mayor Hahn and his team several 
times a day; we were on the phone to Las Vegas and their team 
several times a day to update them on whatever it was that the 
twice-daily sessions associated with TTIC re-analysis of the 
threat stream was helping us understand.
    We made executive visits. We comprised teams from the 
Department of Homeland Security that went and visited Los 
Angeles and Las Vegas and New York and Washington, D.C., 
because that is where the threat stream was telling us in this 
particular period these folks deserved a more wholesome review 
of the information that we have so they can understand what it 
is that is being asked of them.
    Now, can we make, you know, 30,000 executive visits in a 
10-minute period, when we are trying to ``pass the word''?
    There are technical and substantive values to both the 
technology that you are describing to help us do that better--
whether JRIES is the answer, we will know very quickly and we 
will be able to do that or whether the holding on to the blunt 
instrument nature of HSAS in its color-coded fashion that we 
have it today may continue to have value there, when each of 
them who sees it occur understands what that translates to 
them--and then of course the follow-up that we would have with 
anyone that we would be getting more specific information for.
    Ms. Lowey. Just let me thank you very much and thank the 
chairman.
    And I just want you to know we feel as if we are all on the 
same team, Democrat and Republican, and whatever we can do 
legislatively or in any way cooperate, we recognize the urgency 
of this issue, and we applaud you for taking the 
responsibility.
    Admiral Loy. Thank you, Ms. Lowey.
    Ms. Lowey. Thank you.
    Chairman Cox. The gentlelady's time has expired.
    The gentlelady from Texas, Ms. Jackson-Lee, is recognized 
for five minutes.
    Ms. Jackson-Lee. Thank you, Mr. Chairman, very much.
    And gentlemen, let me do as I did earlier and give you a 
few pearls of thought, if you will. And then, if you would 
comment.
    But allow me a moment of personal privilege to add my 
appreciation and applause for the law enforcement that included 
Department of Homeland Security, United States Customs and TSA, 
and my own Houston police department, and various country and 
other local law entities for this past weekend. I believe they 
did an excellent job in Houston with the Super Bowl. Massive 
number of people, massive number of potential activities that 
could have occurred, good and bad.
    I think most of the good did occur and none of the bad. And 
so I want to acknowledge that and express the appreciation for 
the service that was rendered.
    Chairman Cox. If the gentlelady would yield, I think the 
question was put earlier, you know, what should people do 
differently when we are at this heightened state of alert, and 
I think the example was given during half-time of the Super 
Bowl. People should not do that.
    Admiral Loy. Thank you, Mr. Chairman. I could not agree 
more.
    Ms. Jackson-Lee. Being a supporter of the First Amendment, 
and I appreciate and yield to the chairman on his views, I will 
just associate myself with the views that Houston did a great 
job. And of course the law enforcement did a very good job.
    Chairman Cox. Of course I agree with the gentlelady, and I 
thought it was a great game as well. And Houston did a 
wonderful job of hosting the Super Bowl.
    Ms. Jackson-Lee. Thank you very much.
    A lot of interesting things occurred. We could have been a 
little better on the streaker that was on the field that no one 
was able to capture.
    But let me proceed and be on the same theme, if you will, 
of the frustration is not with the hard work that you are 
obviously engaged in, it is that we want our fellow Americans, 
our nation, to be safe.
    So let me ask some pointed questions.
    I have held a number of meetings on terrorism in the 
Houston area--one, I want to thank the ranking member, who was 
present, and we look forward to the chairman being present--a 
very good meeting in the summer that we visited a lot of sites 
and heard from at least 50 or 60 witnesses on this question.
    Subsequently I held another meeting toward the end of this 
last year, December 31st. And one of the questions asked was 
that monies seemingly had not been distributed to local 
entities that were promised since 2001.
    That may require you to go back to your drawing boards.
    And, again, this city is Houston, Texas. But this is my law 
enforcement that truly, I would say, is victimized or impacted 
by the fact that it seems that monies go to the states and not 
to the local entities. So I would like to have that 
information.
    And then, to follow up, as to whether or not this 
application process for the 23rd will--and you were going to 
look into it because you were not sure--go directly to cities, 
or whether or not it will go to state entities. That is a 
definitive and a real problem for us.
    In addition, one of the issues were that local communities 
need more hospital beds and medical equipment in time of 
tragedy. And how does the Homeland Security Department 
interface with them on that basis?
    Let me cite for you out of the U.S. Conference of Mayors 
another point--I made one earlier: Cities have received little 
direct Federal assistance for homeland security since the 
attack on September 11th. The president's proposed an 
additional $1.4 billion in aid for local governments, 
recommending that all but $50 million of that funding be 
channeled first through state bureaucracies.
    I think it is key that the Homeland Security Department be 
engaged with the administration--you are part of it--but with 
the White House on this fallacy, where monies are not coming 
directly to local facilities or local entities, because they 
are, in fact, spending the money.
    I appreciate the states' role, but it is the Federal 
Government that the local communities look to. Those monies 
then are stopped, if you will, estopped, midway, and it is a 
long, long time before they get there.
    And I think that is unfortunate.
    I do not know where I am going to come down as it relates 
to alerts, orange, yellow and other colors. But I will say to 
you that I think it is imperative that we engage and not be 
afraid of each other. It appears that we are afraid of each 
other--it is the administration, it is the Congress. Because 
what is happening is that individuals are becoming less engaged 
when they hear the alert system.
    that is the only criticism. that is what we are saying to 
you. Less engaged. While cities are either spending money or 
forgetting about it.
    The Red Cross at one of my meetings suggested maybe in the 
alternative that you offer a plan, review your personal 
disaster plan, ensure you have supplies, develop alternative 
routes to and from work, exercise caution when traveling, have 
shelter in place, localities for you.
    One of my big issues with respect to the schools, we need 
to think about them. And if you could comment on that.
    Let me finish, however, by making this point: Citizen 
Corps, which is a very, very good promise and proposal, that is 
supposed to be organizing our citizen groups in our respective 
communities. Not many citizens are aware of Citizen Corps. They 
come in; they take up the larger entity, which is the county in 
my instance. They may be doing a great job. I want to 
compliment them. But neighborhoods do not know anything about 
it.
    Citizen Corps needs to be diversified. It needs to be 
smaller. It needs to go into neighborhoods. And it needs to be 
funded.
    Mr. Chairman, I see the gavel. I will say one last 
sentence. And that is: You might answer me on whether or not 
you have been able--if good intelligence is important, have you 
been able to diversify your analysts? Are you pulling from 
diverse populations? Do you have Arabic speakers? Do you have 
African-Americans? Do you have Hispanics? Do you have Asians?
    That has been a key concern of many of my colleagues. And I 
might just add, Congressman Donna Christian-Christensen, who 
had to leave, we are very concerned about that issue.
    Chairman Cox. The gentlelady's time has expired.
    Ms. Jackson-Lee. I thank the distinguished chairman.
    If you would answer the series of questions. I hope you 
were gathering notes. I was, so I hope you will be able to 
answer some of them.
    Admiral Loy. I will try several, ma'am. And then John 
perhaps has more insight on the last one.
    First of all, Citizen Corps, I think the public affairs 
dimension of that is enormously important. And we do need to be 
as understanding as we can with what the potential is there for 
its purpose. And its purpose is to basically enhance individual 
citizen preparedness.
    Ms. Jackson-Lee. Right.
    Admiral Loy. And the flow of the dollars through that 
particular process, in terms of community emergency response 
teams, and their ability to be adequately resources, so as to 
be able to do what they are supposed to do when they are 
supposed to do it, I think Citizen Corps is a great program. I 
think the president has asked for $50 million for the program 
for this upcoming year?
    Ms. Jackson-Lee. We may want to talk. That is not 
happening. I will just say on that point.
    Admiral Loy. Yes, ma'am, OK.
    As it relates to the flow of monies, first of all, I think 
it is enormously important as we look at the absolute dollar 
amounts asked for in grants this year to have some context to 
this over the course of a couple of years.
    Over the window of 1999 to 2001, I think there was a $1.3 
billion total to the grants to be administered in that fashion; 
2002 to 2004, not counting the $3.5 billion the president is 
asking for this upcoming year, $13 billion, a 900 percent 
increase in those two windows of time.
    So the context in which we think our way through numbers, 
in terms of their absolute value and potential value to 
preparedness in the nation, is very important.
    And lastly, I could not agree with you more that we must 
have an efficient system for the distribution of those dollars. 
I am a new arrival to the department. I will guarantee you I 
will take on the challenge of looking very carefully at the 
efficiency of the system as you were describing your 
frustration in terms of the Federal through states on the way 
to the locals. I do not see any reason why that should not be 
as it is called for, as I understand, something like an 80 to 
85 percent pass-through, on to the cities and counties of our 
respective states.
    I will take a round turn on that, ma'am, and look forward 
to working with you on it.
    Ms. Jackson-Lee. I look forward to that.
    Mr. Brennan?
    Thank you, Admiral.
    Mr. Brennan. Ms. Jackson-Lee, the Terrorist Threat 
Integration Center takes that word in its title, 
``integration,'' very seriously. From the standpoint of that, 
we recognize how much of a force multiplier the integration of 
those different perspectives and agencies within the U.S. 
government can bring to the fight against terrorism.
    There is a rich diversity there. We are fortunate I think 
right now to have within the TTIC population African-Americans, 
Hispanics, Asians, Arabic speakers and others.
    Since we are not an independent agency or department, we do 
not have direct hiring authority. So we receive the analysts 
who are sent to us from those departments and agencies. And one 
of the things that we are going to be looking at is ensuring 
that we have within the TTIC population that type of richness 
and diversity, not just in terms of departmental 
representation, but also in terms of the richness and diversity 
of America.
    Ms. Jackson-Lee. I look forward to working with you further 
on that, and also tracking how those individuals are shared 
with you and what opportunities you will have to have your own 
impact on that diversity as well. I think it is key for good 
intelligence.
    Mr. Brennan. I look forward to it. Thank you.
    Ms. Jackson-Lee. Thank you, Mr. Chairman.
    Chairman Cox. I thank the gentlelady.
    Before we proceed, I have an announcement I would like to 
make. Today is the last day for our senior counsel, Mike 
Jeffroy, whom many of you know, who has ably served this 
committee. He is here on his last day for a while at least, 
because he is going to be leaving for six months. He has been 
called up by the United States Marines to go to Iraq.
    And I want to wish him Godspeed and to thank you both for 
the outstanding work you have done in making America safer, 
working here in Washington in the Congress, and for what you 
are embarked upon to make Iraq and the world a safer place as a 
United States Marine. Thank you very much.
    [Applause.]
    I want to thank our witnesses. You have been very patient 
through 2.5 hours, nearly three hours of hearing here. We have 
covered a lot of ground. I think we have made a lot of progress 
in informing the Congress. And hopefully you have learned 
something from our questions.
    There is, as you know, in progress a GAO analysis of the 
color-code threat warning system. The GAO has briefed both the 
Democratic and Republican staff. I believe it is GAO's habit to 
work with the department while they are preparing these 
reports, and I take it that you have heard from them in the 
process of this.
    But I would just note that much of what you have heard from 
the members here has also been echoed in the interim report 
from GAO on this subject, specifically that Federal, state and 
local agencies wish for much more detailed information and 
advance information, separate from the color-code warnings.
    Some 85 percent of GAO customers said that they got this 
information first from television, the same way, in other 
words, that Al-Qa`ida or Osama bin Laden's getting it, when it 
is made public to the world.
    Second, GAO pointed out that nobody is doing a good job--
nobody meaning not the Federal Government, state government, or 
local government--of tracking the costs associated with this 
system.
    Perforce, we do not have a way in the Federal Government of 
measuring this system's effectiveness. Simply put, are the 
costs worth it? We do not know, because we do not know what it 
costs. There is no accounting system that is agreed upon by 
anyone.
    Some people are keeping careful track of their costs, but 
others are using different methods completely. And there is not 
any common denominator.
    I think as we go forward, we have to have some system of 
measurement, and that, thus far, is lacking.
    Lastly, GAO reports that Federal, state and local 
government agency officials indicated that they would like to 
receive more information and intelligence on a regional, state 
and infrastructure sectoral basis . That is something, of 
course, that you have heard from this committee before.
    So we hope that you take these suggestions to heart. And we 
look forward to working with all of you.
    I would yield to the gentleman from Texas, if you have any 
closing comments.
    Mr. Turner. Mr. Chairman, I think it has been a productive 
hearing. And I join you in thanking our two distinguished 
witnesses, great patriots who are working hard to be sure this 
country is safe.
    And we appreciate what you do and those who work with you.
    I have often had the opportunity to be impressed with the 
quality of people that we have serving this country. And you 
two here today are fine examples of that. So thank you very 
much.
    Chairman Cox. That is a fine comment. One I wish to join 
in. I want to thank you, Admiral Loy, Mr. Brennan, for your 
service to our country. And in addition, for your very close 
cooperation and work with this committee and with the Congress. 
We look forward to continuing that relationship.
    This hearing is adjourned.
    [Whereupon, at 3:29 p.m., the committee was adjourned.]

                            A P P E N D I X

                              ------------

                   Material Submitted for the Record

 Questions and Responses for the Record Submitted by Deputy Secretary 
                               James LOy

              Questions from Congresswoman Loretta Sanchez

Question: 1. Since the inception of the Homeland Security Advisory 
System, the threat level has been raised to Orange 5 times. Thankfully, 
no attacks occurred at these five times. Do you have evidence that the 
increased threat level prevented attacks, or did the attacks simply not 
happen--in other words, were these false alarms?
Answer: The protective measures and alerted posture the Homeland 
Security Advisory System elicits and the incredible work done by all 
members of the Department of Homeland Security and other Federal, 
State, local, tribal, major city, and private sector partners serve as 
a deterrent to terrorists and terrorist actions. Based both upon the 
scope of measures implemented and on the intelligence we have received, 
we believe that the current system is effective and that attacks 
against the homeland have been prevented. With each new threat and with 
the lessons learned from unfortunate international incidences, DHS is 
learning about how it can continue to secure the homeland and to 
provide a significant deterrent.

        a. Is this a sign of the limitation of our intelligence 
        capabilities?
Answer: The Information Analysis and Infrastructure Protection (IAIP) 
Directorate and specifically the Office of Information Analysis (IA) 
believes it has the capabilities to adequately analyze all intelligence 
information, compare threat information, and issue timely warning 
products to state, local, tribal, major city, and private sector 
officials.

        b. I know this is an unclassified setting, but can you tell us 
        about any activity that DHS or other law enforcement agency 
        thwarted that coincided with the Orange alert?
Answer: The answer to this question is classified.Sec. he Department is 
willing to provide the answer by way of a secure brief or some other 
means acceptable to the Committee.

        c. Can you tell us generally what you perceived as the threat 
        that made you decide to increase the threat level to Orange?
Answer: In each case of the five times the threat level has been raised 
to Orange, Department of Homeland Security (DHS) officials, and 
specifically the Secretary of DHS, felt that the particular 
combinations, in each case different, of the credibility of the threat 
information, the degree to which information was corroborated, the 
specificity and imminence of the threat, and the gravity of potential 
consequences of an event were high enough to warrant alerting the 
Nation.

        d. The second time the threat was raised was just after the 
        attacks in Bali and Kenya. The fourth time the threat was 
        raised was just after attacks in Saudi Arabia and Morocco. What 
        advanced intelligence did we have about these attacks? Did 
        These attacks correspond to increased levels of chatter? If so, 
        why wasn't the threat level elevated before these attacks?
Answer: Beginning in the Fall of 2002, a body of intelligence 
originating from overseas suggested that Al-Qa`ida operatives were 
planning multiple operations against U.S. or Western interests. 
Although the Homeland was never directly or overtly mentioned in those 
reports, the possibility of an attack on US soil could not be 
dismissed. That particular body of reporting developed over a six-to-
nine-month time frame in the period between the Bali and Kenya attacks 
in the Fall of 2002, and the May 2003 attacks in Morocco and Saudi 
Arabia. By the May 2003 timeframe, this body of reporting, combined 
with the Morocco and Saudi Arabia attacks, raised the potential that an 
operation in the Homeland was near or close to execution, which led to 
the decision to raise the Homeland Security Advisory System level.

        e. Has anyone been apprehended as being part of a terrorist 
        plot in relation to previous Orange alerts?
Answer: The answer to this question is classified.Sec. he Department is 
willing to provide the answer by way of a secure brief or some other 
means acceptable to the Committee.

2. A U.S. Conference of Mayors survey conducted last year reports that, 
because of the war with Iraq and repeated elevations to high alert, 
cities were spending up to $70 million per week on extra security 
measures. Los Angeles alone was spending about $2.5 million a week. 
Clearly our First Responder community is taking the threat alert system 
seriously, even though it is far from clear what they should be doing.
    In the First Responder bill that recently passed our Emergency 
Preparedness Subcommittee, and will go through the full Committee soon, 
we have included a provision which would allow for Federal Funds to 
support States and localities in covering the added costs associated 
with these changes in threat level. Would you support such a provision?
Answer: We do not support such a provision. We have already 
significantly increased the funding to local communities to improve 
their capacity to respond to heightened threat levels. In FY 2004, 
programs such as the State Homeland Security Grant Program ($2.2 
billion) and the Urban Area Security Initiative Program ($727 million) 
both help local governments meet the preparedness costs associated with 
increased threat levels. In addition to the funds provided in FY 2004 
through SHSGP and UASI, the Department has provided additional 
significant support to our Nation's emergency prevention and response 
community, including more than $2 billion under SHSGP in FY 2003 and 
nearly $800 million under UASI in FY 2003. Similarly, in FY 2002, State 
and local agencies received more than $315 million to support a wide 
array of activities to enhance our Nation's preparedness through ODP's 
State Domestic Preparedness Program.
    We have also created a Homeland Security Funding Task Force to help 
streamline the grant process and enable local governments to quickly 
receive the funding necessary to prepare for future threats. We think 
these measures--in addition to the over $8 billion that has been 
allocated and awarded for First Responders since March of 2003--go most 
of the way to helping defray the costs associated with increased threat 
levels. When we change the general threat level, state and local 
officials have a responsibility to decide how to address and resource 
the protective measures they implement. For the threat advisory system 
to be effective, it must be driven by actionable intelligence and 
public safety rather than the fiscal consequence of a particular 
advisory.

Question 3. What new systems are you putting in place to make sure 
state and local first responders hear about and can react to changes in 
the alert system before the general public hears about the changes from 
their local news? Do you find this to be an important aspect of the 
threat alert system?
Answer: We recently announced the expansion of the Homeland Security 
Information Network (HSIN). This system has been gaining ever expanding 
acceptance within the communities of users which are stakeholders in 
the DHS mission. This system, tested and now in use in the Homeland 
Security Operations Center, provides real-time connectivity between DHS 
and local communities in all 50 states and 50 major urban areas. This 
system already facilitates critical information sharing between federal 
and local governments, thereby strengthening our homeland security. 
This system is the most cost effective way to bring information and 
critical tools to first responders and decision makers at all levels of 
government. In addition, DHS in conjunction with DOJ is exploring all 
available avenues to make HSIN, RISS, and LEO more compatible to 
enhance information sharing across the Federal enterprise and with 
State and Local, Tribal, and private sector security providers. Within 
the next 60 days, the DHS and DOJ systems at the SBU level will allow 
cross posting of information, by later this year, we will have agreed 
upon a plan which will make these systems more compatible, as well as a 
longer term plan for making the networks fully interoperable.
    At the Secret level, DHS is developing and fielding HSIN-Secret 
(HSIN-S) which will allow for more robust delivery of critical 
information to the State, major city, and private sector security 
decision makers and providers. A significant part of making prudent 
decisions about the level of response at the local and state level will 
be significantly enhanced by the ability to share at this level. In 
addition, HSIN-S will become the secret information and intelligence 
sharing backbone for the Federal government organizations which are not 
part of DoD. The network will interface with the DoD SIPRNET to assure 
robust sharing and exchange capabilities to deal with threats and 
incidents--whether natural or man made.
    In the near future, this system will be accessible to select 
private sector critical infrastructure owners and operators as well as 
government officials. Users will have the ability to receive important 
threat information prior to the general release, providing the 
opportunity to prepare for, and possibly forestall, any potential 
terrorist activity. We recognize that information sharing is an 
important component to the success of the Homeland Security Advisory 
System (HSAS) especially as nearly 85 percent of the nation's critical 
infrastructure is owned and operated by the private sector. HSIN will 
provide operators the necessary lead time to take protective measures 
on a real time basis--independent of a change in the threat level--as 
necessary to ensure the safety of their facilities.

Questions4. A vague, color-coded terror threat advisory system has the 
potential to needlessly scare Americans living in relatively safe towns 
and cities, OR desensitize Americans to the real terrorist threats. 
Have you considered replacing the current broad terror threat advisory 
system with one that is more specific?
Answer: The Homeland Security Advisory System (HSAS) has evolved 
throughout the history of DHS and currently includes the flexibility to 
assign threat levels for the entire nation, or a particular geographic 
area or infrastructure sector, depending on the credibility and 
specificity of available threat information. The HSAS is a 
collaborative process which takes into account current threat 
information and incorporates the perspectives of other federal entities 
(both within and outside of DHS); state, local, and tribal partners; 
and private sector stakeholders.
    The elevation of the HSAS level to ORANGE for the financial 
services sector in New York, northern New Jersey, and Washington, DC in 
August of 2004 demonstrates how the HSAS has matured and is an example 
of its flexibility to adapt to available threat information. This 
flexibility allows DHS, local communities, and others to target 
resources appropriately and reduce resultant costs where possible.
    DHS learns new lessons and continues to improve the system each 
time HSAS level changes are considered.

                   Questions from the Minority Staff

Question: 1. The President included $10 million in the FY 2005 budget 
request for the Homeland Security Advisory System (HSAS). What 
specifically will these funds be used for? Are there personnel costs 
associated with this request? Are there technology costs? Will the 
funds be expended in a way that speeds notification and allows for more 
targeted warnings? If not, why not? If so, what specific steps will be 
implemented? What is the projected budget for the HSAS in the coming 
years?
Answer: There is no specific $10 million line for the Homeland Security 
Advisory System (HSAS) in the FY 2005 budget request. It is important 
to understand that HSAS represents and encompasses the day-to-day work 
of the Information Analysis and Infrastructure Protection Directorate 
(IAIP) and the Department of Homeland Security: constantly monitoring 
the threat picture, mapping specific threat information against the 
nation's critical infrastructure, assessing preventive and protective 
measures already in place, issuing timely and actionable bulletins and 
advisories, and when necessary, recommending change in HSAS level to 
the Secretary. HSAS currently has the flexibility to allow us to, if 
the information is specific enough to support it, tailor an advisory or 
other activity to a specific area or critical infrastructure sector. 
Because level of activity and resources involved in administering the 
HSAS is dependent upon the daily situation in the homeland, it is very 
difficult to tie specific resources and requirements directly to its 
operation.

Question: 2. What steps are being taken to ensure that information in 
the HSAS, especially recommendations for responsive action, reaches 
State and local first responders?
Answer: We are implementing the Homeland Security Information Network 
(HSIN) of which the Joint Regional Information Exchange Systems (JRIES) 
is a part, to establish real-time connectivity between DHS and federal, 
state, and local governments. Eventually HSIN will link DHS to select 
owners/operators of private critical infrastructure. When fully 
developed, HSIN will substantially increase the nation's capacity to 
prevent a potential terrorist attack or effectively respond to one.

Question: 3. Is the Department of Homeland Security (DHS) developing a 
plan to differentiate its warnings to targeted American communities as 
indicated by threat intelligence? How many times has a targeted, as 
opposed to a nationwide, alert system been used?
Answer: The elevation of the HSAS level to ORANGE for the financial 
services sector in New York, northern New Jersey, and Washington, DC in 
August of 2004 demonstrated how the HSAS has matured and is an example 
of its flexibility to adapt to available threat information. This 
August 2004 elevation of the HSAS level was the first targeted HSAS 
level change.
    As the HSAS has evolved, it has come to reflect the need for 
certain localities and/or specific areas of industry to be given the 
various threat related issues. As such, DHS has become adept at 
providing information to states and infrastructure sectors through 
Homeland Security Information Bulletins and Advisories. Additionally, 
Department officials speak personally with State, Local, and private 
sector partners when the need arises. This personal communication, 
along with the flexibility in the system to allow DHS to communicate 
broad, generic threats to the Nation and specific threats to a locale, 
embody the enhancements that have been needed this far. Additionally, 
DHS communicates with the officials described above through regular 
conference calls and through calls made to specific locales and sectors 
as the threat requires. Lastly, during specific events and periods of 
high alert, DHS sends officials to areas and events of concern.
    With each raising and lowering of the Homeland Security Advisory 
System (HSAS), the Department of Homeland Security learns new lessons 
and improves its notification process.

Question: 4. Admiral Loy, your testimony included reference to 
information bulletins, threat advisories, conference calls, and 
executive visits as means used to convey threat information without 
changing the threat level. Please provide additional information to the 
Committee on the use of these additional tools, including the number, 
types, and recipients of such past communications.
Answer: Information sharing is one of the critical mission areas that 
the Department of Homeland Security (DHS) has set as a priority for 
better preparing the homeland. The DHS Office of Information Analysis 
(IA) prepares warning products, in conjunction with the other DHS 
entities, and distributes them to state, local, tribal, and major city 
officials through the Office of State and Local Government Coordination 
(SLGC). These products, which include both Homeland Security Advisories 
and Homeland Security Information Bulletins, allow DHS officials to 
communicate threats and suggested protective measures to regions and/or 
sectors of concern, without changing the threat level. Additionally, 
unclassified information is shared through a daily Homeland Security 
Operations Morning Bulletin and the weekly joint DHS-FBI Intelligence 
Bulletin. SLGC also coordinates bi-weekly conference calls with all of 
the Homeland Security Advisors in all the states and territories to 
help relay important departmental information as well as respond to 
queries from advisors. The Department has also paid for and established 
secure communication channels to all of our state and territorial 
governors and their state emergency operations centers. This investment 
in communication equipment included secure VTC equipment along with 
Stu/Ste telephones. Additionally, DHS has worked to ensure every 
governor has been cleared to receive classified information and are 
working with the Governors and their Homeland Security Advisors to 
provide security clearances for five additional people who support the 
Governors? Homeland Security mission. This provides DHS an avenue for 
disseminating classified information directly to the location that 
needs the information.

Question: 5. What steps has DHS taken, and what additional steps are 
planned, if any, to link the HSAS to other existing alert systems, for 
example the Emergency Alert System?
Answer: DHS is working with the Department of Commerce's (DOC) Oceans 
and Atmosphere Undersecretary to provide in the near future the 
dissemination of emergency messages via the National Oceanic and 
Atmospheric Administration's (NOAA) Weather Radio System. (Messages 
sent out on NOAA's Weather Radio System can also be disseminated via 
DHS/FEMA's Emergency Alert System--EAS). The Memorandum of Agreement, 
signed on 6/17/04, provides for enhanced DHS capability to provide 
warnings, advisories, and other vital information to the general public 
in a manner that allows for reaching the maximum population with 
minimum delay. Of note, messages can be targeted to the whole Nation, 
specific regions, and even to the urban area level.
    DHS is also in the process of studying all alert and warning 
systems to seek other opportunities for linking the HSAS.

Question: 6. The Gilmore Commission states that by providing real-time, 
useful guidance to federal, state and local government, an improved 
homeland security strategy can help create a ``new normalcy'' that 
acknowledges that the threat of terrorism will not disappear, but still 
preserves and strengthens civil liberties. The country has been under 
the ``Yellow'' alert level for most of the time that the Homeland 
Security Advisory System has been in effect. Should we regard 
``Yellow'' as normal?
    Answer: While the Department of Homeland Security (DHS) has kept 
the Homeland Security Advisory System (HSAS) at ``elevated'' for a 
number of months, the ``Yellow'' alert level should not be viewed as 
normal. No matter how long it is employed, a ``Yellow'' alert level is 
still indicative of a significant risk of terrorist attack. The fact 
that the risk has remained elevated for an extended period of time 
should not preclude the country from going about business as usual; 
however being always mindful that increased vigilance for activity 
deemed out of the norm should be made aware to appropriate Federal, 
State and Local entities. ``Yellow'' indicates to our state, local, 
tribal, major city, and private sector partners that, given threat 
information communicated through Homeland Security Advisories and 
Information Bulletins, they should increase surveillance and security 
of areas of concern, coordinate emergency plans as appropriate, take 
into account suggested protective measures, and implement suitable 
contingency and response plans.

Question: 7. Among the four criteria laid out in Homeland Security 
Presidential Directive-3 that underlies changing threat conditions 
(credibility of threat information, degree to which information is 
corroborated, specificity and imminence of threat, gravity of potential 
consequences), which factors weigh more heavily in the decision-making 
process? Or is each given equal weight?
Answer: Department of Homeland Security (DHS) officials rely on 
judgment and experience to evaluate intelligence information received 
from the Intelligence Community, state, local, tribal, major city, and 
private sector officials, and DHS component entities. In any given 
situation, the credibility of threat information, the degree to which 
information is corroborated, the specificity and imminence of the 
threat, and the gravity of potential consequences can change. As such, 
DHS authorities, and ultimately the Secretary of DHS, weigh these 
factors against each other and determine the overall danger to the 
Nation.

Question: 8. When local governments and entities undertake additional 
security measures in response to raised threat levels, substantial 
costs are incurred. The Congress provided $200 million for critical 
infrastructure protection in the FY 2003n Supplemental Appropriation to 
help reimburse State and local governments and first responders for 
additional costs incurred under heightened alert, but a significant 
amount of these funds have gone unspent.
        A. Considering the statements of need from State and local 
        officials, why do you believe more of the available funds have 
        not been requested?
Answer: The Office for Domestic Preparedness (ODP) has received state 
reported obligations of approximately $108 million dollars against the 
$200 million provided through the FY 2003 Supplemental appropriation. 
This number represents the amount of funding, reported by the states, 
as firm obligations at either the state or local level. States were 
required to provide at least 50% of the Critical Infrastructure 
Protection funds to local communities. Our initial information from 
some states indicated that they were holding a small portion of funding 
``in reserve'' for future alerts. However, ODP program guidance 
stipulated that states must obligate all funding within 45 days of 
grant award. As such, states and locals then began to re-direct those 
funds towards other authorized program costs. ODP's Information 
Bulletin #84, provided additional categories in which funds may be 
expended, such as equipment for target hardening, critical 
infrastructure site assessments, and protective security exercises and 
training. These numbers do not reflect the drawdown activity against 
these funds, and states reimburses themselves and their local 
jurisdictions on different schedules.
        B. As additional security steps taken under periods of 
        heightened threat fall clearly within the federal government's 
        responsibility to ``provide for the common defense,'' do you 
        agree that it should be the federal government's responsibility 
        to reimburse State and local governments for additional 
        security costs incurred at times of heightened threat?
Answer: Homeland security is a shared responsibility between Federal, 
State, territorial, tribal and local units of government. The Federal 
government's primary role, including that of the Department of Homeland 
Security, is to assist States in preventing, preparing for, responding 
to and recovering from acts of terrorism outside of their traditional 
incident management responsibilities. The Homeland Security Alert 
System was created as an information-sharing tool, not a rationale for 
additional Federal funds. DHS does not reimburse Federal agencies for 
additional security costs they might incur during heightened alerts.
    The Department, through SLGCP, has provided States and localities 
more than $8.2 billion since March 2003. This support ranges from 
assistance to purchase specialized equipment needed to prevent and 
respond to a WMD event to training and exercise support. States and 
localities should be responsible to budget appropriate funds for their 
traditional homeland security missions, while receiving additional and 
supplemental support from DHS and ODP. Funds provided through DHS and 
ODP are meant to supplement, but not supplant State and local funds.

                                 
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