```

[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]

                       THE DEPARTMENT OF HOMELAND
                     SECURITY: PROMOTING RISK-BASED
                     PRIORITIZATION AND MANAGEMENT

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

                                HEARING

                               before the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 13, 2005

                               __________

                            Serial No. 109-7

                               __________

       Printed for the use of the Committee on Homeland Security
                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     

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

                               __________

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                     COMMITTEE ON HOMELAND SECURITY

                 Christopher Cox, California, Chairman

Don Young, Alaska                    Bennie G. Thompson, Mississippi
Lamar S. Smith, Texas                Loretta Sanchez, California
Curt Weldon, Pennsylvania, Vice      Edward J. Markey, Massachusetts
Chairman                             Norman D. Dicks, Washington
Christopher Shays, Connecticut       Jane Harman, California
Peter T. King, New York              Peter A. Defazio, Oregon
John Linder, Georgia                 Nita M. Lowey, New York
Mark E. Souder, Indiana              Eleanor Holmes Norton, District of 
Tom Davis, Virginia                  Columbia
Daniel E. Lungren, California        Zoe Lofgren, California
Jim Gibbons, Nevada                  Sheila Jackson-Lee, Texas
Rob Simmons, Connecticut             Bill Pascrell, Jr., New Jersey
Mike Rogers, Alabama                 Donna M. Christensen, U.S. Virgin 
Stevan Pearce, New Mexico            Islands
Katherine Harris, Florida            Bob Etheridge, North Carolina
Bobby Jindal, Louisiana              James R. Langevin, Rhode Island
Dave G. Reichert, Washington         Kendrick B. Meek, Florida
Michael McCaul, Texas
Charlie Dent, Pennsylvania

                                  (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, Committee on Homeland 
  Security
  Oral Statement.................................................     1
  Prepared Statement.............................................     3
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security..............................................     4
The Honorable Donna Christensen, a Delegate in Congress From the 
  U.S. Virgin Islands............................................    40
The Honorable Peter A. DeFazio, a Representative in Congress From 
  the State of Oregon............................................    29
The Honorable Charles W. Dent, a Representative in Congress From 
  the State of Pennsylvania......................................    25
The Honorable Norman D. Dicks, a Representative in Congress From 
  the State of Washington........................................    23
The Honorable Bob Etheridge, a Representative in Congress From 
  the State of North Carolina....................................    43
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,.......................................    48
The Honorable John Linder, a Representative in Congress From the 
  State of Georgia...............................................    34
The Honorable Zoe Lofgren, a Representative in Congress From the 
  State of California............................................    50
The Honorable Daniel E. Lungren, a Representative in Congress 
  From the State of California...................................    38
The Honorable Michael McCaul, a Representative in Congress From 
  the State of Texas.............................................    44
The Honorable Kendrick B. Meek, a Representative in Congress From 
  the State of Florida...........................................    46
The Honorable Eleanor Holmes Norton, a Delegate in Congress From 
  the District of Columbia.......................................    32
The Honorable Bill Pascrell, Jr., a Representative in Congress 
  From the States of New Jersey..................................    37
The Honorable Dave G. Reichert, a Representative in Congress From 
  the State of Washington........................................    21
The Honorable Mike Rogers, a Representative in Congress From the 
  State of Alabama...............................................    42
The Honorable Loretta Sanchez, a Representative in Congress From 
  the State of California........................................    18
The Honorable Christopher Shays, a Representative in Congress 
  From the State of Connecticut..................................    31
The Honorable Rob Simmons, a Representative in Congress From the 
  State of Connecticut...........................................    17
The Honoralbe Curt Weldon, a Representative in Congress From the 
  State of Pennsylvania..........................................    27
The Honorable Don Young, a Representative in Congress From the 
  State of Alaska
  Prepared Statement.............................................     5

                                WITNESS

The Honorable Michael Chertoff, Secretary, Department of Homeland 
  Security
  Oral Statement.................................................     6
  Prepared Statement.............................................     8

 
                       THE DEPARTMENT OF HOMELAND
                     SECURITY: PROMOTING RISK-BASED
                     PRIORITIZATION AND MANAGEMENT

                              ----------                              

                       Wednesday, April 13, 2005

                          House of Representatives,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The committee met, pursuant to call, at 1:37 p.m., in Room 
2200, Rayburn House Office Building, Hon. Christopher Cox 
[chairman of the committee] presiding.
    Present: Representatives Cox, Weldon, Shays, King, Linder, 
Lungren, Simmons, Rogers, Pearce, Harris, Reichert, McCaul, 
Dent, Thompson, Sanchez, Dicks, Harman, DeFazio, Lowey, Norton, 
Lofgren, Jackson-Lee, Pascrell, Christensen, Etheridge, 
Langevin, and Meek
    Chairman Cox. [Presiding.] Welcome. This hearing will come 
to order. Today, the committee will examine the Department of 
Homeland Security's use of the principle of risk to prioritize 
America's counterterrorism strategy.
    We presently have business on the floor of the House of 
Representatives. We expect three votes to come up in short 
order. Because I want to honor the time of the Secretary and 
the time of all the members who are here and who will be here 
after we vote, we are going to begin the hearing on time. We 
will go through opening statements and at least get those 
accomplished before the bells ring, and then we will 
immediately resume the hearing after the conclusion of our work 
on the floor.
    Our sole witness today is the Honorable Michael Chertoff, 
Secretary of the Department of Homeland Security.
    Mr. Secretary, we welcome you. This is your first 
appearance before the Homeland Security Committee, and we look 
forward on both sides of the aisle to working with you.
    Using risk management, which is the subject of your 
testimony today and the focus of our hearing, is important 
because we have, while significant resources are devoted to 
homeland security, limited resources. We also have an 
extraordinary breadth of targets with which to concern 
ourselves in the country and obviously a limit to our capacity 
to reach all of them.
    Using risk management involves, first, intelligence. We 
have got to examine and rely upon the information that we put 
together on terrorist capabilities and intentions. We have got 
to conduct threat assessments to evaluate the likelihood that a 
given asset will be subject to a terrorist attack. We have got 
to conduct vulnerability assessments to identify specific 
weaknesses in given assets that might be exploited by 
terrorists. And, we have got to assess as well the potential 
consequences such as economic impact and loss of life to 
determine the level of significance of an asset and how much 
protection that asset should receive in comparison to others.
    This kind of risk assessment, both within a particular 
programmatic area and across Department of Homeland Security 
responsibilities is a vital management tool. It is one that is 
new to the United States since September 11. As a result of the 
newness of this challenge, it is not yet possible for the 
Secretary or this Congress to evaluate as well as we would like 
the degree to which we are appropriately aligning our resources 
to match our nation's greatest risks.
    One example of the work that we have yet to do is the 
billions of dollars that Congress and the Department allocate 
each year to states and local governments to enhance the 
terrorism preparedness of first responders. Instead of applying 
specific risks and allocating funds to address them, the system 
that we presently use sometimes does nearly the opposite.
    Congress and the Department allocate tens or even hundreds 
of millions of dollars to each state and to certain local 
governments across the country without the prerequisite 
analysis of risk, and these authorities then occasionally find 
themselves looking for ways to spend the money. The abuses such 
an approach invites have been well publicized, and if not 
corrected ultimately will undermine our legitimate efforts to 
prepare our first responders for acts of terrorism.
    Unfortunately, the lack of risk-based rigor affects even 
those DHS grant programs that are not formula driven and that 
are, by intention, based on competition among applicants. For 
example, the DHS Inspector General recently found that $67 
million in port security grants had been spent on projects of 
``marginal homeland security benefit'' and that awards had been 
made to private sector projects that ``appeared to be for 
purposes other than security against an act of terrorism.''
    The 9/11 Commission rightly recognized the inherent dangers 
from this type of spending, recommending that ``Homeland 
security assistance should be based strictly on an assessment 
of risks and vulnerabilities. Federal homeland security 
assistance should not remain a program for general revenue 
sharing,'' that according to the 9/11 Commission.
    We, on this committee, and the Select Committee that 
preceded it, have advocated that Federal efforts to prevent, 
prepare for, and respond to terrorist attacks within the United 
States should be based on risk. That is why we introduced the 
original version of the Faster and Smarter Funding for First 
Responders Act 18 months ago.
    This bill, which has been reintroduced in the 109th 
Congress and which Ranking Member Thompson and I have 
coauthored with the support of every one of this committee's 
members, would expedite the delivery of Federal assistance to 
those first responders who face the greatest risk of terrorist 
attack.
    This kind of risk-based approach has to be expanded beyond 
specific grant programs to encompass all of our Federal 
government's activities. Strong leadership and clear 
congressional direction will be required to instill risk-based 
prioritization in the formulation of budgets, into policies and 
into programs throughout the Department and across the 
government, and especially to legacy agencies that prior to 9/
11 did not have to think this way. We cannot have 20th century 
programs to respond to 21st century threats.
    That is why, Mr. Secretary, I noted with great interest the 
speech last month that you gave in which you emphasized your 
intention to bring a risk-based philosophy to the management 
and operations of DHS, and that is why we invited you here 
today to talk about that very topic.
    Not only is such an approach necessary to enhance our 
national security, it is also critical to our long-term 
economic security. Each year, 440 million visitors arrive in 
the United States by land, sea, and air; 7 million cargo 
containers cross through our ports; and 118 million vehicles, 
including 11 million trucks and 2.5 million rail cars, cross 
our borders.
    A layered risk-based security system is the only one that 
will ensure that our borders and ports of entry remain open and 
secure to accommodate the free flow of legitimate goods and 
travelers. We have got to work to strengthen security in ways 
that simultaneously improve our security and promote economic 
growth.
    The purpose of today's hearing is to start a dialogue with 
the new Secretary to understand how this committee, the 
Congress, and the Department can work together to instill risk-
based prioritization and management throughout DHS programs and 
operations.
    I want to thank the Secretary for his testimony today and 
look forward to continuing this crucial dialogue in the weeks 
and months ahead.
    I will now recognize the Ranking Member, Mr. Thompson, for 
his opening statement.

 Prepared Statement of the Honorable Christopher Cox, a Representative 
 in Congress From the State of California, and Chairman, Committee on 
                           Homeland Security

    Today, this Committee will examine the Department of Homeland 
Security's use of the principal of risk to prioritize America's 
counterterrorism strategy. Our sole witness is the Honorable Michael 
Chertoff, Secretary of the Department of Homeland Security (DHS).
    Mr. Secretary, we welcome you in your first appearance before the 
Homeland Security Committee, and we look forward to working with you as 
you seek to build on the progress of the past two years.

               Risk management begins with intelligence:

    (1) assessment of what is likely to be subjected to a terrorist 
attack;
    (2) a vulnerability assessment to identify specific weaknesses in a 
given asset that could be exploited by terrorists; and
    (3) an assessment of consequences, such as economic impact and loss 
of life, to determine the level of significance of an asset and how 
much protection that asset should receive in comparison to other 
assets.
    Such risk assessment--both within a particular programmatic area, 
and across DHS programmatic areas--is a vital management tool, and one 
that is, new to the U.S. since September 11th. As a result of the 
newness of this challenge, it is not yet possible for the Secretary or 
the Congress to evaluate whether we are appropriately aligning our 
resources to match our Nation's greatest risks.
    One example of this failure is the billions of dollars DHS 
allocates each year to States and local governments to enhance the 
terrorism preparedness of first responders. Instead of identifying 
specific risks and allocating funds to address them, DHS--with the 
complicity, if not outright direction, of the Congress--does exactly 
the opposite. DHS allocates tens or even hundreds of millions of 
dollars to each State and to certain local governments across the 
country without any analysis of risk, and these authorities then look 
for ways to spend the money. The abuses such an approach invites have 
been well-publicized, and--if not corrected--ultimately will undermine 
our legitimate efforts to prepare our first responders for acts of 
terrorism.
    Unfortunately, this lack of risk-based rigor affects even those DHS 
grant programs that are not formula-driven and that are, supposedly, 
based on competition among applicants. For example, the DHS Inspector 
General recently found that $67 million in Port Security Grants had 
been spent on projects of ``marginal'' homeland security benefit, and 
that awards had been made to private sector projects that ``appeared to 
be for a purpose other than security against an act of terrorism.''
    The 9/11 Commission rightly recognized the inherent dangers from 
this type of spending pattern, recommending that ``[h]omeland security 
assistance should be based strictly on an assessment of risks and 
vulnerabilities. . . .[F]ederal homeland security assistance should not 
remain a program for general revenue sharing.''
    I long have advocated that Federal efforts to prevent, prepare for, 
and respond to terrorist attacks within the United States should be 
based on risk. That is why I introduced the original version of the 
``Faster and Smarter Funding for First Responders Act'' 18 months ago. 
This bill, which Ranking Member Thompson and I reintroduced yesterday 
with the support of this Committee's Members, would expedite the 
delivery of Federal assistance to those first responders who face the 
greatest risk of terrorist attack.
    But such a risk-based approach should be expanded beyond specific 
grant programs, to encompass all of the Department's activities. Strong 
leadership and clear Congressional direction will be required to 
instill risk should be risk-based prioritization into the formulation 
of budgets, policies, and programs throughout DHS, and especially its 
legacy agencies. We cannot have 20th century programs responding to 
21st century threats.
    That is why, Mr. Secretary, I noted with great interest the speech 
last month in which you emphasized your intention to bring a risk-based 
philosophy to the management and operations of DHS. Not only is such an 
approach necessary to enhance our national security, it also is 
critical to our long-term economic security.
    Each year, 440 million visitors arrive in the United States by 
land, sea, and air; 7 million cargo containers cross through our ports; 
and 118 million vehicles, 11 million trucks, and 2.5 million railcars 
cross through our borders. A layered, risk-based security system is the 
only system that will ensure that our borders and ports of entry remain 
open and secure to accommodate the free flow of legitimate goods and 
travelers. Indeed, we must work to strengthen security in ways that 
simultaneously improve our efficiency and promote economic growth.
    The purpose of today's hearing is to start a dialogue with the new 
Secretary, to understand how this Committee, the Congress, and the 
Department can work together to instill risk-based prioritization and 
management throughout Department of Homeland Security programs and 
operations.
    I want to thank the Secretary for his testimony today, and look 
forward to continuing this crucial dialogue in the weeks and months 
ahead.
    I will now recognize the Ranking Member, Mr. Thompson, for an 
opening statement.

    Mr. Thompson. Thank you, Mr. Chairman, and I am pleased to 
welcome Secretary Chertoff to this committee.
    Judge Chertoff, you are well qualified for your position, 
and I look forward to your service. I hope we will see you more 
before this committee, and I know this is your maiden voyage on 
the Hill. I am sure you will remember it for a long time to 
come.
    Unfortunately, since 9/11, we have had a lot of things with 
the Department that have gone wrong, and you will have an 
awesome responsibility to help us move the Department forward. 
But I want to talk to you a little bit about the past failures 
to handle risk analysis by the Department.
    This hearing is focused on using risk analysis to 
prioritize and manage the Department's efforts, but in the one 
area where the Department has experience, it is risk analysis, 
the development of a database of the nation's critical 
infrastructure, the Department has failed miserably.
    As my Republican colleague representative, Ernest Istook, 
told USA Today in December, the asset database list is a joke. 
If the Department has been unable to handle risk analysis in 
the past, then what confidence can we have that it will be able 
to do it in the future. And I am sure your leadership will help 
us in that respect.
    If the Department really wants to prioritize and manage 
based on risk, then should we have some uniform definition of 
risk? For example, I live in Mississippi. Most of my district 
is along the river, and I have a nuclear power plant. Are we 
planning for risk based on that analysis or are we using the 
same standard?
    Other issues, Mr. Secretary, we talked about missed 
deadlines. You are aware that over 100 congressionally mandated 
deadlines have already been missed by the Department. We have 
to do better. There is no question about it. Now that we have 
pretty much the jurisdiction as a committee, we are looking for 
your leadership to meet those deadlines, and we will talk about 
those a little later.
    There are some other issues associated with the Department. 
The whole issue of minority participation from the staffing 
level is absolutely important, from the issue of Hispanic and 
other minority-serving institutions participating in programs 
in the Department is absolutely essential. At this point, under 
the Centers of Excellence Program, for example, there are no 
minority or Hispanic-serving institutions participating. We 
have to do better. From the standpoint of small, disadvantaged 
and minority business opportunities within the Department, I 
challenge you to make the Department responsible and adhere to 
those edicts.
    Again, Mr. Secretary, we welcome you here. I look forward 
to your testimony, and welcome aboard.
    Chairman Cox. I thank the gentleman. Let me remind all 
members that you are entitled to submit written opening remarks 
for the record, and due to our time constraints, I would ask 
the Ranking Member whether members should go to the floor in 
response to the bells or whether we want to risk getting the 
Secretary halfway through his opening statement?
    Do you think we should go to temporary recess while we vote 
on the floor? There are seven minutes remaining in this vote. 
That will give members time to make it, and we will return 
immediately and commence with your opening statement.
    Mr. Chertoff. Thank you.
    Chairman Cox. Thank you, Mr. Secretary.
    We are in temporary recess.
    [Recess.]

  Prepared Statement of the Honorable Don Young, a Representative in 
                   Congress from the State of Alaska

    Mr. Chairman, thank you for holding today's hearing on ``Risk-
Based'' funding and management. This is an important yet often 
misunderstood subject. It sounds so simple, but it is extremely 
difficult in practice.
    The basic argument goes something like this: ``The Department of 
Homeland Security (DHS) has limited resources so it must focus its 
efforts and funding on those areas of greatest risk.'' That sounds good 
right? Well, only if DHS is really certain which areas are at greatest 
risk, and if DHS is the best agency for addressing that risk. 
Otherwise, we just put all of our eggs into the wrong basket.
    Now I would be the first to say that DHS cannot do everything. If 
it tries to do all things, then it will end up doing nothing well. 
Perhaps the most important ability DHS needs is to understand its own 
limitations. DHS can then focus on what it can do well, delegate other 
areas to agencies with more expertise, and develop new capabilities to 
address risks for which we are currently unprepared.
    We also need to appreciate a few simple facts. First, terrorism is 
incredibly difficult to predict. We have a lot of really bright and 
talented people working on this, but the reality is that threat and 
risk assessments are extremely uncertain. We simply do not know where 
or when terrorists will attempt to strike next. Second, security 
requirements have the potential to place a tremendous burden on our 
economy and citizens. We must be very careful not to regulate our 
economy into a recession or undermine our freedom. If we do that then 
the Bad Guys have won.
    When it comes to terrorism preparedness and first responder 
funding, all States need to have baseline capabilities and a guaranteed 
minimum level of funding for at least three reasons. First, every State 
could be a target so they at least need to have minimum response 
capabilities. Second, during a catastrophic attack units from all 
across the country will be called upon to help respond or backfill 
jurisdictions that respond to the attack. And finally, DHS is 
responsible for assisting States respond to all disasters, not just 
terrorist attacks.
    Thank you again Mr. Chairman for calling this important hearing. 
Also, I would like to thank you for working so closely with me on your 
first responder bill. I believe we have a better bill because of our 
efforts, and that it will help ensure our Nation is ready for the next 
attack or major disaster. Thank you.

    Chairman Cox. The Committee on Homeland Security will again 
come to order.
    Secretary Chertoff, again, welcome. Thank you for indulging 
us during our floor votes.
    Your complete written testimony will be included in the 
record, and you are now recognized for such time as you may 
consume to provide an oral summary of that testimony.

 STATEMENT OF THE HONORABLE MICHAEL CHERTOFF, SECRETARY, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Mr. Chertoff. Thank you, Mr. Chairman. As you pointed out, 
this is my first outing before this committee. I look forward 
to a long and productive relationship.
    Mr. Chairman, Ranking Member Thompson, I think what I am 
going to do is simply summarize the main points of my statement 
in the interest of time.
    The Department of Homeland Security was created a little 
bit over 2 years ago, and it was created to do more than simply 
erect a big tent under which a lot of different organizations 
would be collected.
    It was created to put together a dynamic organization that 
would identify a set of missions in furtherance of homeland 
security, that would execute those missions in an integrated 
and comprehensive manner and that would take a reasonable and 
sensible philosophy to dealing with the matter of homeland 
security. And, 2 years into the Department, coming on as the 
new Secretary, I have the opportunity to engage in what we call 
a second-stage review of where we are headed, where we have 
come and what course corrections, if any, we need to make.
    And we undertake this process of the second-stage review 
with a very keen appreciation for the fine work done by my 
predecessor, Governor Ridge, and his deputies, Gordon England 
and Jim Loy. They put this together in the first instance. They 
launched the first stage, and that has gotten us on the 
mission, but we have to again ask ourselves what adjustments we 
need to make.
    And I think broadly speaking they fall into three 
categories. First of all, we need to make sure that all of our 
activities are not focused on the process of the component that 
is performing the function but on the mission that we are 
trying to achieve.
    We need to be outcome oriented, and the best example I can 
give to people about what I mean by this is, if I have a 
problem in my house, my appliances are not working, and I call 
the electrician, I call the plumber, I call the contractor, and 
they work for a day and then they come to me and they say, 
``Well, we have all done exactly what we are supposed to do. We 
followed all of our protocols, but the stuff still does not 
work.''
    I do not consider that a job well done. I consider a job 
well done to be when the appliances work. And that is called 
being outcome or mission oriented. We want the thing to work 
the way it is supposed to work, and we do not care about how 
many of the processes are checked off along the way.
    So the second-stage review is designed to take a look at 
our missions, evaluate how far we have come, how far we need to 
go and then talk about how we accomplish the rest of our 
objectives without regard to the existing structures but with 
regard to what it is we need to get accomplished.
    And the second piece of what I want to briefly mention is 
how we organize ourselves to carry out missions, and this 
obviously is going to be a function of our study of the mission 
and where we are and where we need to be. But I can tell you at 
this point, again, in general terms, it seems to me there are 
three aspects in which we need to be operating as a 
coordinated, comprehensive department.
    First of all, intelligence. Intelligence is the driver of 
everything we do, and we need to operate under a common picture 
of the threats we are facing. There are two dimensions to that. 
First of all, we are collectors of intelligence, meaning that 
we have a lot of different organizations that interact with the 
outside world and collect information. We need to make sure 
that we are capturing all that, we are pulling it together and 
we are fusing it at the top of our organization. And so some of 
what we are going to be looking at in this review is how to 
make that happen and to improve our collection, capturing, and 
fusion of intelligence.
    The second piece of intelligence is operating within a 
larger intelligence community, as contributors, as 
disseminators, and as customers. Obviously, we have a new DNI 
coming on. That is going to create an opportunity for us to 
work with the community as a whole to make sure that we are 
contributing the way we should be contributing, that we have 
the access that we need to have to do our job and that we are 
in a position to disseminate what needs to be getting to our 
Federal, state and local partners.
    We need to also have a comprehensive approach to policy. 
Again, we have policy in a lot of different components, there 
are very smart people there, but we need to have a vision that 
looks beyond the components through the Department. And so 
elevating and standing up a policy organization that is capable 
of strategic planning and dealing with policy issues is a 
second matter we are paying close attention to.
    And, finally, the issue of operations. We have proud 
organizations that are part of the Department of Homeland 
Security that have very strong senses of their own missions, 
but the purpose of the Department was to create an organization 
that could operate jointly, and therefore we need to make sure 
we have an operational element, an operations coordinator that 
is able to coordinate across the board so that when we take an 
item of intelligence and we try to translate that into action, 
we do it in terms of prevention, we do it in terms of 
protection, we do it in terms of response.
    And standing up a comprehensive and robust operations 
function is the third piece of what we have to do in this 
effort to look at the way we are structured and operating.
    Finally, let me touch on philosophy. As the chairman 
mentioned, he was gracious enough to mention early on in his 
remarks, a few weeks ago I spoke at George Washington 
University and talked about risk management as the template for 
how we do our work, and that means that in our handling of 
grants, in our deployment of resources, in our policy making we 
have to be driven by a disciplined, analytical approach that 
looks to the issue of measuring consequence, measuring 
vulnerability, and measuring threat.
    And, obviously, there are a lot of subtleties involved in 
applying this general template to the kinds of individual 
issues that we face. But if we are at least clear about what 
our overall philosophy is, I think that is going to go a long 
way to making sure that we have a coherent and sensible and 
reasonable set of priorities about how to deal with homeland 
security.
    As the chairman has observed, we cannot protect everybody 
in every place, at every time. We have to prioritize, and I 
think we are launching a process through this review of making 
ourselves better at doing that.
    That being said, I look forward very much to working with 
the members of this committee in the weeks and months to come, 
and I am delighted to be here and to answer your questions.
    [The statement of Mr. Chertoff follows:]

          Prepared Statement of The Honorable Michael Chertoff

                              INTRODUCTION

    Mr. Chairman, Representative Thompson, and Members of the 
Committee: Thank you for the opportunity to address you today, and for 
your ongoing support of the Department of Homeland Security's efforts 
to keep America secure and free.
    I am honored and pleased to appear before the Homeland Security 
Committee. This is my first appearance before the Committee, and I look 
forward to a productive exchange as the Department begins to reassess 
and readjust priorities and policies in accordance with the changing 
threat of terrorism over three and a half years after the September 11, 
2001 attacks.
    For more than two years now, the Department of Homeland Security 
has led a national effort to protect our country and our citizens from 
all manner of threats. It has been an honor to join the dedicated men 
and women who carry out this task daily. Ours is a difficult mission--
to prevent another deadly and catastrophic terrorist attack such as the 
one we experienced on September 11, and if an attack occurs, to respond 
quickly and prevent further damage.
    The 180,000-plus people of the Department carry out this mission 
with unflinching resolve and a driving determination that such an 
attack should never occur on American soil again. Realizing that we can 
make no guarantees, we pursue our mission with a sense of urgency and 
daily diligence, so that this nation can respond and recover quickly, 
should an incident or attack occur.
    Since its establishment just over two years ago, DHS has made great 
strides in its efforts to unify the defense of our homeland. We have 
continued to integrate 22 distinct agencies and bureaus, each with its 
own employees, mission and culture.
    But our security requires even greater coordination and effort 
throughout the Department, across all levels of government, and 
throughout our nation to create synergy and new capabilities. It 
requires an unwillingness to accept complacency as part of anything we 
do; rather, we know we must apply all effort to tear down stove-pipes 
and coordinate key intelligence, policy, and operational issues across 
DHS and the government.

                          SECOND STAGE REVIEW

    I have therefore initiated a comprehensive review of the 
organization, operations and policies of the Department as a whole. 
This comprehensive review will examine what we are doing and what we 
need to do without regard to component structures and programmatic 
categories.
    We want to understand better what's working and what isn't. We will 
be evaluating every element of our working mission and making sure that 
the Department is best organized to meet the threats--both current and 
future--that face our nation.
    Old categories, old jurisdictions, old turf will not define our 
objectives or the measure of our achievements because bureaucratic 
structures and categories exist to serve our mission, not to drive it.
    Deputy Secretary Michael Jackson has been charged with overseeing 
this process. The goal of the review is to help me make informed 
decisions as I lead the Department. Deputy Secretary Jackson has 
selected a team of Department officials to look at a number of critical 
cross-cutting issues and determine how departmental resources and 
programs can be most effectively applied to achieve our security goals. 
I have asked them to get back to me by Memorial Day with the bulk of 
their recommendations. I intend to study and act on their 
recommendations.
    What will the review cover? Take an issue such as maritime cargo 
security, which cuts across several departmental components. Customs 
and Border Protection, Coast Guard, Science and Technology, Information 
Analysis and Infrastructure Protection, and the Transportation Security 
Administration each address aspects of this overall mission. Each might 
perform its element well, but we must go further to ensure that each is 
performing seamlessly and in coordination with the others, that we 
eliminate any duplication of effort, and that we reap the full strength 
of our wide spectrum of capabilities.
    Of course, in executing the initial phase of putting the Department 
together and integrating the different components into a working 
structure, my predecessor and the men and women of Homeland Security 
did a tremendous job. They should be commended.
    Now, as we enter into the second phase of the Department's life, we 
must also take a fresh, creative look at the Department itself--
including its organization, its operations, and its policies. We are 
not yet fully integrated and our entities are still not always 
coordinated with each other. Now the challenge is to take the advantage 
of two years' experience and evaluate the Department to see if there 
are potential structural and operational changes that will improve and 
enhance our capabilities to protect and safeguard this nation.

                CROSS-CUTTING FUNCTIONS AND INTEGRATION

    On the most basic level, we need to take a step back and focus on 
the fundamental question: Why was the Department of Homeland Security 
created? It was not created merely to bring together different agencies 
under a single tent. It was created to enable these agencies to secure 
the homeland through joint, coordinated action. Our challenge is to 
realize that goal to the greatest extent possible.
    Let me tell you about three areas where I plan to focus our efforts 
to achieve that goal. First, we need to operate under a common picture 
of the threats that we are facing. Second, we need to respond actively 
to these threats with the appropriate policies. Third, we need to 
execute our various component operations in a unified manner so that 
when we assess the intelligence and we have decided upon the proper 
policies, we can carry out our mission in a way that is coordinated 
across the board.
    My intent is to integrate each of these three areas-intelligence, 
policy, and operations--across the Department, so that each is directed 
from the most senior level of the Department.
    Let me turn to intelligence. Intelligence plays a pivotal role in 
mapping our mission. When the Department was created, 22 separate and 
distinct entities were woven together, a number of which had components 
focused on intelligence-gathering and analysis. One of my top 
priorities is to make sure that these various intelligence components 
function as a cohesive unit, and that our information and analysis is 
coordinated across the Department so that DHS, as a full member, can 
enhance its contribution to the Intelligence Community.
    First, we must organize and combine all intelligence within DHS. To 
do this effectively, we must ensure that our own intelligence 
components are interoperable. The Department has already made progress 
in this area. For example, the Homeland Security Operations Center was 
stood up to help the Department develop a common operating picture and 
facilitate information sharing.
    We must make sure that we are gathering all relevant information 
from the field, communicating with each other, and approaching analysis 
with a mission-oriented focus. We must ask, for example, whether those 
who evaluate the border from the Customs and Border Protection 
perspective are learning from analysts in the U.S. Coast Guard. They 
each look at border security, but from different vantage points. Only 
if they are working together can they fill in key gaps, paint a 
realistic picture, and evaluate all of the different pieces of 
information and intelligence that they are each gathering. We have to 
maximize the fact that all of these components now exist under the same 
umbrella.
    Second, we must make sure that information is being disseminated 
both up and down the ranks of the Department. Strong and effective 
coordination does not just mean that our analysts at DHS headquarters 
are working together. We need to fuse and exploit all the information 
that we learn across the country, so that when a Border Patrol agent in 
Texas learns of a new alien smuggling method, that information is fed 
up to our intelligence analysts, incorporated where appropriate into 
our strategy to combat smuggling, and disseminated across the 
Department to others focused on the same problem. We must build a 
culture in which the disparate pieces of information are being 
transmitted to our analysts so that they, who have the benefit of the 
fuller picture, can properly analyze all of our information and inform 
our decision-making.
    The converse must be true when our intelligence analysts learn of 
new vulnerabilities that terrorists are trying to exploit. That same 
agent in Texas needs to know, on a timely basis, of the threat and what 
he should be looking out for. We have a great many talented individuals 
at the Department. Some gather and analyze intelligence. Others learn 
critical information as they are in the field performing their jobs. 
The opportunities are endless. DHS needs to bring all of these nuggets 
of information together and disseminate them appropriately. We need to 
have the structure and the correct systems and technologies in place to 
take full advantage of them.
    Third, our focus must extend beyond the Department itself. We must 
review and make use of intelligence coming from the Intelligence 
Community and we must play an active role in providing intelligence 
information to the Intelligence Community. As the WMD Commission made 
clear in its report two weeks ago, sharing information across the 
Federal Government is critical if we are to succeed. To that end, I am 
committed to making sure that our law enforcement and intelligence 
partners across the Federal Government have appropriate access to the 
Department's information and analysis, to the maximum extent possible 
under the law, while protecting the privacy rights and civil liberties 
of Americans. By the same token, we must sit as full partners at the 
table with full access to others in the Intelligence Community. We must 
work in concert with the Intelligence Community. I will work closely 
with the Director of National Intelligence, whose job it will be to 
make sure that the Intelligence Community is well-coordinated and 
mission-focused.
    In addition, intelligence and information from other Federal 
agencies is critical to our efforts to secure the homeland. The 
development of the terrorism information sharing environment, as called 
for under the Intelligence Reform and Terrorism Prevention Act, will 
connect the resources (people, systems, databases, and information) of 
Federal, State, and local governments, and the private sector allowing 
users to share information and improve collaboration.
    Finally, we must inform and communicate with our State, local, 
tribal entities, and private sector partners. As I observed just last 
week during TOPOFF, when it comes to securing the nation, we must 
ensure that these entities are well-equipped both to react to crisis 
and to prevent it. As part of this effort, we must improve our ability 
to operationalize intelligence. As information comes in, we need to 
make sure it is getting out to the right people and in a way that they 
can use to strengthen their efforts and contribute effectively to ours. 
Intelligence in a vacuum is meaningless. We need to explain how our 
outside partners can counter that threat and what we need them to do to 
watch out for it.
    Now, let me address policy development. Development and 
coordination of policy are major responsibilities of this Department. 
The Department has the central mission of securing the homeland, but 
there are many different aspects of that mission with numerous 
contributors. Large elements of DHS include traditional operational 
functions in which we deploy personnel, equipment, planes, ships and 
vehicles. But other elements principally involve planning and rule 
making, and networking with State, local, and tribal entities, and 
private parties. All of these must serve and promote our homeland 
security imperatives.
    Therefore, we need to further enhance our capability to think 
through broad and over-arching issues like border security, emergency 
preparedness, transportation security, and cargo security, with a 
Department-wide perspective, rather than just through the lenses of one 
particular component. We need to develop our policies by first looking 
at our missions and asking the comprehensive, result-oriented 
questions, rather than by looking to one particular entity that has the 
lead in driving an issue to conclusion.
    Accordingly, I believe that we should pull together the vast 
expertise and the varying perspectives already at the Department as we 
work toward integrating our many cross-cutting functions. For this 
reason, one of the areas that we are closely studying in the Second 
Stage Review is the advisability of creating a department-wide, 
substantial policy office. This office will also be a very important 
focal point for coordinating DHS's policy work with other Federal, 
State, local, and tribal entities.
    Finally, let me discuss operational coordination. Just as with 
intelligence and policy, we need to find new ways to increase our 
operational coordination. Diverse operational components were woven 
together when Congress stood up the Department, each with its own 
history and identity. As I have become acquainted with these various 
components, I have quickly learned that there is a great deal of talent 
within them. Each entity has its own unique focus, but often they 
address the same mission from differing perspectives. But we cannot 
function as a cohesive unit, unless each operational component works 
together in combination to promote common missions.
    This means that our operations must be driven by mission-oriented 
plans. It can no longer be the case that different components tackle 
different problems each in its own way and then later look to see if 
the pieces fit together. Whether it is preventing a potential act of 
terrorism, emergency preparedness, border protection, or countering a 
particular threat, we must first define the mission and second deploy 
all the tools within the Department to effectively execute each 
operation.
    The Department has already begun this process. To take but one 
example, on the Arizona border, we have a cross-cutting initiative to 
protect the border, integrating intelligence gathering, border 
enforcement, and monitoring. It encompasses the efforts of several of 
our agencies, including Customs and Border Protection, Immigration and 
Customs Enforcement, Science and Technology, the Coast Guard, and 
Information Analysis and Infrastructure Protection. Each plays an 
integral role. The operations themselves involve patrolling the border, 
generating information, and using it to take enforcement actions. The 
genius of the Department of Homeland Security is that we have the 
capability within one department to do all of these things. But we need 
to carry out joint operational activities and have a joint perspective 
on a routine basis, not only when we stand up a special project.
    Operations are also the mechanisms by which we respond to crisis. 
We cannot wait for a crisis, however, to learn, for example, whether 
TSA has the capability to communicate effectively and coordinate with 
FEMA. Nor can we learn in crisis that both are conducting the same 
operations or sending different messages to the private sector. The 
Department has made significant progress in this area. For example, it 
developed the National Response Plan to more effectively map out how to 
handle crisis situations. Now is the time to organize around missions 
rather than old bureaucracies, work through all of these potential 
disconnects in our systems, and operate as one unified Department.
    But integrating ourselves cohesively is not enough.

                          RISK-BASED APPROACH

    I have been saying, and you will continue to hear me say, that we 
need to adopt a risk-based approach in both our operations and our 
philosophy. America is dynamic. Our strength as Americans is the sum of 
every generation that has ever been born in or immigrated to this great 
land. Our wealth and livelihoods are advanced by the inspired ideas and 
innovation of our own people. We prosper through the vast opportunities 
that exist to interact with the global economic community.
    Risk management is fundamental to managing the threat, while 
retaining our quality of life and living in freedom. Risk management 
must guide our decision-making as we examine how we can best organize 
to prevent, respond and recover from an attack. We need to be realistic 
in our prioritization. We must assess the full spectrum of threats and 
vulnerabilities.
    We all live with a certain amount of risk. That means that we 
tolerate that something bad can happen; we adjust our lives based on 
probability; and we take reasonable precautions.
    So, too, we must manage risk at the homeland security level. That 
means developing plans and allocating resources in a way that balances 
security and freedom when calculating risks and implementing 
protections.
    The most effective way, I believe, to apply this risk-based 
approach is by using the trio of threat, vulnerability, and consequence 
as a general model for assessing risk and deciding on the protective 
measures we undertake.
    Here I inject a note of caution because the media and the public 
often focus principally on threats. Threats are important, but they 
should not be automatic instigators of action. A terrorist attack on 
the two-lane bridge down the street from my house is bad but has a 
relatively low consequence compared, to an attack on a major 
metropolitan multi-lane bridge. At the other end of the spectrum, even 
a remote threat to detonate a nuclear bomb is a high-level priority 
because of the catastrophic effect.
    Each threat must be weighed, therefore, along with consequence and 
vulnerabilities.
    As consequence increases, we respond according to the nature and 
credibility of the threat and any existing state of vulnerabilities.
    Our strategy is, in essence, to manage risk in terms of these three 
variables--threat, vulnerability, consequence. We seek to prioritize 
according to these variables. . .to fashion a series of preventive and 
protective steps that increase security at multiple levels.
    We must examine the mission and work of all elements of DHS through 
this template of consequence, vulnerability and threat. Have we fully 
defined our missions? How far have we gone in carrying them out? What 
more needs to be done?
    The Department is already working with State, local, and private 
sector partners to further refine the Interim National Preparedness 
Goal to aid the targeting of resources to where the risk is greatest. 
There is much that we are doing. DHS agencies, for example, have 
provided unprecedented level of funding and resources since 9/11 to 
State, local and private sector partners to protect and prepare 
America's communities and individual citizens. We continue to improve 
the ways for first responders across the nation to be better equipped, 
better trained and more capable of communicating across the public 
safety community. But we must bring even greater focus and discipline 
to our preparedness mission. We need to take a very substantive look at 
how we align our preparedness activities and functions. We need to look 
at how best to configure our organizations, operations, programs and 
policies so that we can think strategically about preparedness.
    What should drive our intelligence, policies, operations, and 
preparedness plans and the way we are organized is the strategic matrix 
of threat, vulnerability and consequence. And so, we'll be looking at 
everything through that prism and adjusting structure, operations and 
policies to execute this strategy.

                               CONCLUSION

    Two years ago, Congress and the President took on the enormous 
undertaking of creating a new Department whose central mission would be 
to secure the homeland. Under Secretary Ridge's leadership, the 
entities that now comprise the Department of Homeland Security unified 
under this overarching goal. As I have become acquainted with the many 
talented people of the Department, I am impressed by all that they have 
accomplished thus far. But there is no time to pat ourselves on the 
back. We must now take it to the next level.
    We must move in an expeditious and innovative manner to carry out 
our important mission. On September 11, 2001, we learned that the 
homeland is not immune from attack and that we must do everything 
within our means to keep our great nation safe. The Congress responded 
by constructing a Department dedicated to this mission. Together, our 
job is to make sure that the Department accomplishes that mission. As 
the Department initiates our second stage review, organizes around 
missions, eliminates duplications, and adopts a risk-based approach, we 
must identify our cross-cutting functions and ensure that we are 
thinking innovatively how to best exploit our intelligence 
capabilities, develop policy functions, execute our operational tasks, 
and implement our long-range preparedness planning.
    I thank the Congress for its support, which has been critical in 
bringing us to this point. I am grateful to be here today to talk about 
the work we are doing to make America a safer home for us, for our 
children and generations to come. Thank you for inviting me to appear 
before you today. I look forward to answering your questions.

    Chairman Cox. Thank you very much.
    And let me take this opportunity to tell you how personally 
pleased I am that President Bush asked you to do this job. I 
know that he has selected the right person for the most 
important task of management and organization in the Federal 
government at this time.
    We have a high degree of confidence in your ability to do 
this, and the second-stage review that you are going through 
right now is, in my view, a very important first step to making 
sure that we benefit from all that we have learned since 9/11 
and all that we have learned since Congress mandated the 
creation of what is now the second largest cabinet department 
in terms of authorized spending.
    You and I have spoken in other venues, and as you 
mentioned, you delivered a speech expressly on this topic about 
how we might bring more disciplined approaches to risk 
management, to the choices that we make--policy makers here in 
Congress--and the decisions you make as the manager of that 
Department when it comes to setting priorities, to determining 
which threats we are going to protect against, and where we are 
going to place our money across America and around the world.
    One of the things that has struck me for some time is that, 
because of the newness of this task, we are not yet accustomed 
to making tradeoffs of any kind, so that if someone points out 
that terrorists might do this, or that this many people would 
die if terrorists were to choose this site or this method of 
attack, there seems to be a reflexive response to go after 
that, the, if you will, ``seize the pants'' approach to risk 
management.
    Congress, in my view, is much more guilty of this than is 
the Department, because we are in the job of earmarking things 
sometimes, and we just indulge our collective priorities in 
this way. We need to discipline ourselves in Congress, and we 
need to help you as we authorize and send you money to maintain 
discipline in the Department.
    Forty thousand Americans, innocent Americans are going to 
die this year here at home, in the continental United States in 
car accidents. This is a risk that we knowingly take. It is a 
cost that we knowingly bear. The Federal government will spend 
this year about $600 million to mitigate that risk on highway 
safety programs, but it has taken us a century to internalize 
this risk management approach with the automobile.
    We know that the best way to reduce that risk to zero would 
be to stop driving or stop being passengers in cars or stop 
using crosswalks. We do not do that because life has to 
proceed, and there are tradeoffs involved.
    There are tradeoffs also involved, as we put our economy on 
the block, send a lot of its resources to preparations for 
terrorist attack, towards intelligence to warn us of terrorist 
attack, and so on. We have to find the right balance. We need 
to find which terrorist threats are the most consequential, 
which are the most likely, and where are our greatest 
vulnerabilities, and in a much more systematic fashion put that 
all together.
    As you conduct this second-stage review, what are the 
opportunities that you see for doing this within the 
Department? What are the big picture approaches that you are 
going to take to head in that direction? And then what, in 
terms of specific resources that you might need to accomplish 
this task, do you want assistance from Congress on in order to 
help move us in that direction?
    Mr. Chertoff. Well, thank you, Mr. Chairman, for asking me 
that question, because I think it really goes to the heart of 
what we are trying to do here.
    I think we have a couple of opportunities, broadly 
speaking. First of all, we are going to undertake the process 
of looking at our objectives in terms of these three issues: 
consequence, vulnerability, and threat.
    For example, take the issue of cargo. Cargo security is the 
issue that falls within the responsibility of a number of 
components of the Department, but what I am interested in 
seeing is if we look across the board at how we deal with the 
issue of cargo security and efficient movement of cargo, which 
are two important goals, I want to look at it across the board, 
and I want to look at it without thinking about what the 
components have responsibility for. I want to see it in terms 
of the outcome of a secure but efficient cargo transmission 
system. Where are we doing a good job in promoting that, where 
are we not doing a good job and then plugging the gaps.
    And we are going to apply that template across the board to 
things like how do we keep bad people out of the country, how 
do we better service people who want to come into the country 
and become productive members of America by getting 
citizenship? How do we deal with the issue of airline security 
in a way that properly focuses on the priority risks in a way 
that allows people to enjoy air travel without having it become 
so cumbersome and difficult that they actually choose other 
forms of transportation? So this is the approach we want to 
take across the board in terms of what we are doing.
    In terms of how we actually analytically start to measure 
these things, one of the questions I have asked is how do other 
parts of the government, what kind of analytical tools do they 
use in measuring risk, what does the private sector use in 
measuring risk? People do this all the time. As you point out, 
each of us does this in our own life when we decide whether we 
want to get in a car and go to the movies, and we trade off the 
risk of getting into an accident against the benefit of the 
movie.
    But, actually, government and private industry do this all 
the time too, and they have a variety of tools for doing so. So 
as we are developing and refining our analytical tools, I am 
asking people to be looking at other departments and get 
expertise from their experience. The EPA has certain analytical 
tools they use, DOD has certain tools and practices they use, 
and try to, again, use the benefit of all of this experience to 
help us sharpen our own ability.
    And I think we are--one example of this is the preparedness 
goals which we issued, I think, in the last couple of weeks are 
an effort to start to really identify capabilities that 
responders need in a variety of different scenarios so that we 
can then start to be quite specific about what kind of 
equipment should they be looking for, what kind of training 
should they be needing, and that would be the kind of tool one 
could use, again, bearing in mind potential consequences and 
vulnerabilities and threats so that when we advise people about 
what to do and we talk to government entities about the kinds 
of steps they ought to take, we can do it with a very specific 
and disciplined approach.
    How can Congress help? I think it may emerge, and of course 
we are still waiting for the results the recommendations that I 
hear that there are some structural changes that would be 
efficient, that might help us comprehensively operate the 
Department more readily and at the same time might flatten some 
of the bureaucratic structures, so that we would have the 
benefit of both coordination and yet a more nimble ability to 
manage. And I think as we develop this review and get a better 
sense of what we need to do, we may be asking Congress for some 
assistance in that regard.
    Chairman Cox. Thank you. My time has expired.
    The gentleman from Mississippi, Mr. Thompson, is 
recognized.
    Mr. Thompson. Thank you, Mr. Chairman.
    Appreciate your testimony, Mr. Secretary. You have 
indicated that you have undertaken this second-stage review in 
a number of things, but let me call a situation to your 
attention that causes concern for a lot of us.
    You had three directors at TSA in 3 years. You have no head 
of the Border and Transportation Security Directorate. You are 
missing the entire leadership of the Infrastructure Analysis 
and Infrastructure Protection Directorate, you have no 
Cybersecurity Director and you are about to lose your Chief 
Information Officer, your Director of Citizenship and 
Information Services, and your head of ICE.
    That is a significant challenge for you, and I would just 
like to hear how you propose to close that gap and give us some 
confidence that we can get some people who will stay on the job 
long enough to finish it.
    Mr. Chertoff. Well, of course it is a concern to me to make 
sure we have a good leadership structure in the Department, and 
it is not unusual after people serve a number of years in 
office for people to move on. In some cases, we have had more 
rapid turnover than in other cases.
    I can say, for example, with respect to infrastructure 
protection, I think the President announced last week his 
intention to appoint someone to that position who has been a 
very significant member of the Department, Bob Stephan, so that 
is a position that we are moving to fill. I now have a Deputy 
in place, there has been a General Counsel nominated, and with 
respect to a number of these other positions, we are moving 
rapidly, working to find the right person for the job.
    I mean, there is an opportunity here as well to draw 
creative energy and fresh perspective to the job that we have 
not had. And so while it is, in some sense, a burden to fill 
the turnover, there is an opportunity we intend to exploit to 
get very good people into the Department to bring a lot of 
energy and creativity to the task we have to do.
    Mr. Thompson. One other question, and I would hope that my 
comments earlier about diversity as you select the leadership 
in homeland security, that it is one of the considerations that 
you would look at. I think it is important that diversity is 
taken into consideration.
    With respect to the infrastructure protection and national 
infrastructure risk analysis, we have information that there is 
an inordinate amount of contractors and detailees in the 
Department and not enough people who are actually employees of 
the Department of Homeland Security. If that is the case, how 
do you propose to consolidate this Department so that those 
individuals become employees of the Department of Homeland 
Security?
    Mr. Chertoff. Well, as I sit here, I cannot tell you that I 
have a clear picture in my mind of where we have a lot of 
contractors. I know traditionally it is not uncommon, 
particularly in standing up a department and trying to get 
people with the skill set in, to have contractors. But I would 
like our Department to develop an internal structure for career 
development that would make, first of all, a very attractive 
place to work and to recruit and also build within the 
Department a spirit of opportunity for advancement and for 
education and for improvement that would, again inspire our 
workforce to do a good job.
    I mean, one of the things that interests me in terms of 
building a single department is developing within the career 
path for people who work in the Department an advantage in 
cross pollination, moving out of their particular agency and 
perhaps working at a joint coordinating function or a 
department-level function, much the same reason the military 
does to some extent. They encourage their officers to spend 
some time in a joint planning or operations function as a 
career development element, and that has the benefit of giving 
people a little bit of a perspective of other parts of the 
Department.
    So one of the things I am looking forward to doing is 
working with the employees to see if there are ways we can use 
the career advancement process to bind us together as a unitary 
organism.
    Mr. Thompson. Last question, Mr. Secretary: We have had 
some security breaches with the staff at companies like 
ChoicePoint, Lexus Nexus. Have you directed your department to 
look at that as a potential risk for us to be concerned about?
    Mr. Chertoff. Well, of course, as you may know, Secret 
Service obviously has an investigative responsibility and 
shares it with the FBI in this particular area. The area of 
identity theft is a very serious area that we are concerned 
about from a number of different standpoints. I mean, 
obviously, from a cybersecurity standpoint, we are concerned 
about hackers. That is one kind of threat.
    My understanding, at least in the ChoicePoint, is it was 
not so much a hacker as it was their internal decision to sell 
some of their product to somebody who turned out to be 
different than who they expected. And whether that is something 
that is corrected investigatively or in some regulatory reform, 
I do not know that I am prepared to say at this point.
    But I do agree that the issue of identity theft and 
identity use is not something we are very carefully focused on 
in terms of a whole range of issues that we consider in the 
Department, including things like screening for identity, and 
that brings us to the issue of biometrics, which of course is 
one way to deal with this kind of problem.
    Mr. Thompson. Thank you.
    Chairman Cox. The gentleman's time has expired.
    I would advise members that under our committee rules, 
members will be recognized for questions in order of seniority 
present at the time of the fall of the gavel. For members who 
arrive later, they will be recognized in order of appearance.
    The Chair now recognizes the gentleman from Connecticut, 
Mr. Simmons.
    Mr. Simmons. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for your testimony. I was very 
pleased to see in your testimony that you laid out three 
priority areas--intelligence, policy and operations--and spent 
much of your testimony dealing with the area of intelligence.
    It is my honor to be now serving as the chairman of the 
Intelligence Subcommittee with my colleague from California, 
and I believe that the fundamental obligation of the Department 
of Homeland Security is to protect our homeland, to protect our 
citizens and our people from attack and the greatest investment 
that we can make is in intelligence so that we can detect, 
deter, defend, disrupt or mitigate any such attacks and that 
while we must prepare, as we have in the TOPOFF exercise, for a 
failure of that system, that it is most important to put our 
money up-front and put it into intelligence.
    In saying that, I am aware of the fact that the 9/11 
Commission report and the recent Robb report have laid out 
serious failures of the U.S. intelligence community. I am aware 
of the fact that your organization is relying, in many 
respects, on information collected by that intelligence 
community, that that intelligence community has relied on 
secret systems of collection, which do not necessarily lend 
themselves to domestic activities here in the United States, 
because we value our civil liberties, we value our civil 
rights, our Fourth Amendment rights to privacy.
    And so my question to you would be to what extent have you 
looked at open sources of intelligence to feed your information 
analysis system? To what extent do you believe the intelligence 
community is actually sharing information with you? And I can 
tell you as a former CIO, there is a culture against sharing, 
we all know that, that is the way it goes. To what extent are 
your requirements being given priority in the intelligence 
cycle, by the intelligence community? And, finally, do you feel 
that the Department of Homeland Security is sitting at the 
table? In other words, do you have a representative, for 
example, on the President's Foreign Intelligence Advisory Board 
or other similar boards at this point in time.
    Mr. Chertoff. Congressman, I am delighted to answer those 
questions, and I think I have tried to keep track. If I miss 
one, come back and remind me.
    Taking them in turn, I think you have put your finger on 
something very important when you talk about open source 
intelligence. My observation has been oftentimes people think 
of intelligence as by definition something that is only done 
with spies or super secret satellites. And in fact intelligence 
is often the accumulation of individual facts which may be 
right out in the open.
    One of the things I am doing internally at the Department, 
and we have talked to the intelligence people about, is 
recognizing the importance of the thousands of interactions 
that occur at the border, on airplanes, and through ICE every 
day that yield important information.
    In fact, hypothetically, we find that people with a 
particular connection to a terrorist group that turn up on our 
watch lists are seeking to cross the border in a lot of 
different places at the same time. An individual officer might 
not necessarily see the significance of a single interaction, 
but if we can collect all that and we can bring it up, that is 
going to tell us something very important.
    So we are going to work very hard, and this is one of my 
priorities, to strengthen internally our collection system to 
develop a system which I think is similar to what the Bureau is 
putting into effect of making sure we are getting good 
reporting in the field that we can then bring up and fuse 
together in order to maximize what we do internally through 
what is either open source of just kind of fairly routine 
intelligence collection.
    Second, we need to be able to contribute that to the 
intelligence community because that is sitting at the table. I 
think generally my experience with organizations is your value 
as a partner is directly proportional to your contribution as a 
partner. So we need to complete this function so we can 
contribute.
    But at the same time, as you point out, we need to be full 
partners at the table, because we have a need for intelligence 
and a use for intelligence that no other department of the 
government has, because we have to take it and apply it 
directly to homeland security functions: how we handle our 
border, how we adjust our internal investigations with respect 
to people who are coming in illegally, how we structure 
ourselves in terms of what we prioritize for protection 
purposes.
    So we need to force from that large pool of information 
that the community has those items that are of interest to us. 
And I have spoken to others in the community about the 
importance of doing that. We obviously have--the President has 
nominated Ambassador Negroponte as DNI. I am very hopeful that 
the restructuring of the intelligence community and the 
addition of Ambassador Negroponte and General Hayden, if they 
are confirmed, will be a great opportunity for us to 
participate in the community at large.
    Finally, with respect to the issue of requirements, I 
certainly have made an effort in my 2 months here to make it 
very clear that our requirements ought to be treated 
significantly in terms of gathering information, and so far, 
again, in the brief time I have been here, I have seen a 
positive response from the intelligence community. But it is 
certainly something that I will be paying a good deal of 
attention to and will be insistent upon because we need it to 
do our job.
    Chairman Cox. The gentleman's time is expired.
    The gentlelady from California, Ms. Sanchez?
    Ms. Sanchez. Thank you, Chairman Cox.
    And thank you, Mr. Secretary, for being before us today, 
and good luck.
    Mr. Chertoff. Thank you.
    Ms. Sanchez. As you know, one of the challenges of securing 
critical infrastructure is that the majority of it is owned by 
private companies. And in addition to making incentives for 
them, I think that we probably have to set a minimum set of 
standards, or at least that is what I have heard from private 
companies, some sort of standard so that all the companies in a 
sector are doing the same thing or meeting the standards that 
we have.
    And while numerous DHS agencies like the Coast Guard and 
TSA and Customs and Border Protection have regulatory 
authority, the Infrastructure Protection Division does not. Do 
you believe that it should have so that if we need industries 
to comply with standards that we set that they should have 
that? And if so, is that able to do regulatory work at this 
point?
    Mr. Chertoff. Well, I think that obviously, as you point 
out, there are an array of things we can do to get private 
business to do what needs to be done for security and, again, 
balancing that with respect to the need to actually carry out 
their jobs. I mean, I think we always have to be mindful of the 
fact that we do not--I can guarantee perfect security at the 
port, for example, if I shut the port down. That would be self-
defeating.
    So I think the first thing is to make sure that the private 
sector understands that we have an identity of interest here. I 
mean, people who put a big investment in their business do not 
want to see it go up in smoke or do not want to see themselves 
losing customers because there is a problem.
    So the first thing we have got to do is we have got to 
educate them to that. We have got to give them standards and 
best practices that will enable them to make their choices 
wisely about how in fact they do protect themselves. We have to 
use market-based incentives when we can, including working with 
the insurance community.
    I can tell you from the Y2K experience we had a few years 
ago that we can get the private sector to be quite sensitive to 
the need to secure things if we work with the insurance 
community and we work with the marketplace to building 
incentives.
    Now, there are going to be some instances where that is not 
going to be enough, and I know, for example, in the area of 
chemical plants, the President has indicated that if we could 
not get what we need in terms of security using these various 
kinds of market-based incentives and best practices, that we 
would look to the possibility of some kind of regulation in 
order to make sure we get to where we need to get.
    So I think these are all tools we have to have available to 
us. The idea is to try to work with the interest of the private 
sector, which I think is identical to ours, where we can.
    Ms. Sanchez. I understand that, Mr. Secretary. I am just 
telling you that when I have spoken to private sector 
companies, their big pitch is, ``Look, we would like to, it is 
going to cost money, we need a set of standards, we need to 
know what you think should do in conjunction, obviously, 
planning with them.'' But, more importantly, they are concerned 
that their competitors will not be required to do the same 
thing that they would like to do but will cost money. So, 
again, the question is, can this agency take on the 
responsibility of being a regulatory agency if that is what we 
deem in the Congress, in conjunction with the administration?
    Mr. Chertoff. Well, we certainly do have some regulatory 
authorities, and as I indicated in the area of the chemical 
plants, there are obviously some times when you need to 
regulate in order to prevent people from free riding, 
basically, and relying on others to enhance security and not 
doing it themselves. But, as I said, we want to be judicious 
about it.
    I think there is a lot we can do. We clearly have to set 
good standards, and we have to let people know what works and 
what does not work, and that is part of what we are trying to 
do right now.
    Ms. Sanchez. I had a second question because I sent you a 
letter with respect to the TIP grant and it looks to me like 
you are eliminating existing port, rail and transit security 
grants under the Urban Area Security Initiative and putting 
them all together.
    On March 9, before the Senate Homeland Security and 
Government Affairs Committee, you testified that you thought in 
general every type of transportation presents its own issues, 
and I agree with that statement, and that is why I feel it is 
unwise, and I sent you a letter signed by some of the members 
of this committee, for the Department--I think it is unwise for 
the Department to force all of the transportation sectors to 
compete against one another for that funding.
    I am also concerned that the program will not work without 
a completed national threat assessment, national infrastructure 
protection plan and national asset database to help us all 
decide how to prioritize funding. And of course the budget only 
has $600 million. It is nowhere close to meeting the needs.
    Could you comment on that?
    Mr. Chertoff. Sure. I mean, clearly--well, let me begin by 
saying, I think, in general, the idea of allowing a broader 
category of infrastructure to be measured makes sense in terms 
of risk management. It is true that they present peculiar 
issues and different issues, but at the end of the day there 
are certain commonalities that we have to be concerned about, 
going back to what we originally talked about: consequence, 
vulnerability and threat.
    And in allocating money and in taking account of these 
three characteristics, you know it is going to differ depending 
on where you are in the country. In some parts of the country, 
rail service is a huge part of what moves people back and 
forth. In other parts of the country, it is less significant in 
terms of its impact on population. Likewise, the way air or 
bridges are configured and how they would be measured from an 
infrastructure protection standpoint might differ.
    So the ability to look at all of them together I think 
makes sense if we are going to be risk-based. But you are also 
correct that we then have to be pretty specific about the kinds 
of characteristics we are going to look at. And I think we are 
moving down that path, although we are not there yet.
    We have, I think, each year that we have been involved with 
grants gotten more refined about the kinds of things we look at 
that enter into our formula for grant making. We are developing 
better and more refined tools for analyzing consequences, what 
the relative significance of consequences are, what the 
vulnerabilities are and what the threats are, so that these 
common principles, I think, as we get more information, we get 
more sophisticated analytical tools will in fact be the way in 
which we operate an infrastructure protection program in the 
most intelligent way possible.
    Ms. Sanchez. Thank you, Mr. Chairman.
    I guess I would just say it is difficult for me to know 
which is more risky, ports or rail, transit or buses, and I do 
not think anybody here can answer that. And we have been 
waiting a long time to get some more information on the 
infrastructure protection plan and its assessment through 
threat-based threats and vulnerability. And I think the 
chairman talked quite a bit about this. And I am hoping that 
you will spearhead that and get that done for us so we can do 
our job up here.
    Mr. Chertoff. I will.
    Chairman Cox. The gentlelady's time has expired.
    The gentleman from Washington, Mr. Reichert?
    Mr. Reichert. Thank you, Mr. Chairman.
    Good to see you again, sir.
    Mr. Chertoff. Good to see you.
    Mr. Reichert. Just a couple of quick things. First of all, 
I think we need to pause for just a second and as I was reading 
through the first page of your comments, ``Ours is a difficult 
mission to prevent another deadly, catastrophic terrorist 
attack.'' Stop and think about that.
    I mean, our world has changed tremendously. You have only 
been in this job 2 months. This is your mission: Protect the 
country, the United States of America. You have 180,000 
employees to do that with. Not only is it your mission to 
protect this country from another attack, but then you also 
have a mission to assure that we can respond and recover 
quickly to the huge task ahead of you. I hope that we can help 
you in your task, as you mentioned earlier in some of your 
comments.
    I agree intelligence really is where we need to focus our 
efforts and our attention. Intelligence is where we will be 
able to assess risk, gather intelligence, analyze intelligence, 
investigate those leads that intelligence offers us, and once 
we have assessed risk then we can allow and understand--we can 
allow our resources to be placed in those areas where those 
risks are identified.
    We do that every day in the sheriff's office. As you know, 
I used to work for the sheriff's office in Seattle and you 
assess risks and have to analyze where to put your resources 
every day. One of the things that really is important, though, 
as you go through that whole exercise and process of gathering 
intelligence, analyzing intelligence and assessing risk, and 
then assigning resources, is accountability.
    And my question is, as the money is allocated, for example, 
in the State of Washington $234 million have been allocated to 
the State of Washington, $60 million alone to Seattle-Tacoma 
area in the Northwest, only 27 percent of that money has been 
spent thus far. And as we know, as we watch ``60 Minutes'' and 
some other reports come out, some of those monies are not being 
spent in a wise way. What is your plan for holding not only 
your people internally accountable to do their job but how do 
we hold those other agencies, those local agencies accountable 
to use the funding that has been allocated to them?
    Mr. Chertoff. Well, I think this is obviously a very 
important issue for us. We issued in the last couple weeks 
interim national preparedness goals, which basically set forth 
10 tasks and I think 38 capabilities, which cover the range of 
things we think that state and local governments need to be 
able to be prepared to do in the event of any number of 
scenarios that might occur. In fact, I think you got a lot of 
publicity because in building those capabilities we essentially 
imagined a bunch of scenarios that were pretty grim and then 
used those as ways of identifying the kinds of things you would 
need to be able to do if something like that happened.
    Underneath that one document is a series of templates, and 
each of those capabilities that is really quite specific about 
what kinds of things one needs to be able to do, and they take 
account of the differences between the requirements of a city 
of New York, let's say, and a rural community.
    For example, in a city we might say you need to be able to 
get hazardous material personnel to a place within a certain 
period of time. In a rural community, it might be a longer 
period of time. And because it is capabilities-based, it is 
designed to allow state and local governments to find different 
ways to achieve the capability as long as they get there.
    Again, we are not completely through this process yet, but 
as we find this process, this is going to be a great tool for 
us, not only to give guidance but to give accountability.
    If I can just take one minute to talk about our state and 
local partners. I want to be fair to them in this, because 
sometimes they do get an unfair rap. First of all, we have to 
distinguish between monies that are actually spent and money 
that is obligated. We all know as a common sense matter that 
when a grant is awarded what a state and local government is 
going to do is to go out and find the stuff they need that they 
are going to pay for. They do not obviously draw down on the 
money until they get the material. In fact, if they were to 
spend the money immediately before they got the product, we 
would be criticizing them for being wasteful and foolish.
    So I think what is important to look at is what is 
obligated, and I think when I looked at it yesterday, I think 
approximately 96 percent of the funds that have been granted up 
through 2004 have been obligated, which I think is a very good 
number.
    Second, even with respect to some of the stories about 
people in small communities buying HazMat trucks or things of 
that sort, obviously we are always going to find examples of 
waste or maybe misspent resources, but I also want to be fair. 
Sometimes what we have encouraged communities to do is to pool 
resources. We might say to a town, ``Look, you buy something 
with the understanding that it is going to cover the whole 
region and it is going to be available to everybody.''
    And so when they do that, I think it is a little unfair 
when the press goes out and hunts them and says, ``Well, here 
is a shining new HazMat truck in the town of X,'' without 
bothering to tell you that X covers really five counties, and 
that is what the deal is.
    So we want to be disciplined with them. We think the 
preparedness documents are going to help them, but we also want 
to be fair to them.
    Mr. Reichert. Well, I am glad you touched on the regional 
issue. That was going to be my next question, and that is I 
think important.
    Just one last comment. Having been a part of a large 
sheriff's office, the sheriff of the largest sheriff's office 
in the State of Washington and working with the COPS office and 
the grant process there, the COPS office Director, Carl Peed, 
has a great process in place for holding police departments and 
local agencies accountable. It might be worth taking a look at 
the process that they already have used for a number of years.
    Mr. Chertoff. That is a good suggestion. I will do that.
    Mr. Reichert. Thank you.
    Thank you, Mr. Chairman.
    Chairman Cox. The gentleman's time has expired.
    The gentleman from Washington, Mr. Dicks?
    Mr. Dicks. Thank you, Mr. Secretary. I want to welcome you 
and congratulate you on being confirmed by the Senate.
    One of the issues I am concerned about is container 
security. A couple years ago there was a lockout of the long 
shoremen on the west coast of the United States, and within 5 
days companies all over the country were yelling and screaming 
about not being able to get goods. And so I am worried that we 
have to take this container security issue seriously. I think 
in any risk analysis it has got to be up there near the top of 
our concerns.
    Now, recently, 29 Chinese nationals were discovered at the 
Port of Los Angeles. These men lived inside a container filled 
with machinery parts for 2 weeks, and DHS officials had no idea 
that migrants were in the container until it arrived in the 
U.S. This is disturbing but not surprising given the millions 
of containers arriving in the United States without being 
screened or inspected.
    This event occurred despite the fact that there is a 24-
hour rule, a national targeting center to assess the risk of a 
container before it is shipped to the U.S. and the fact that we 
have Customs inspectors stations overseas as part of the CSI 
Program, including at the Port of Hong Kong where the container 
transited.
    If 29 humans can be smuggled inside a container full of 
legitimate goods, can we be sure that our current strategy will 
prevent a dirty bomb or worse, a weapon of mass destruction 
from entering our country through one of our west coast ports 
or the Port of New York? And this is one area that--this and 
port security are areas of concern that I have in my region.
    Mr. Chertoff. Well, actually, that story bothered me a lot 
when I read it too. And to make it worse, right before I was 
confirmed there was a similar story involving the Port of Los 
Angeles and so I asked a question about this. So needless to 
say, I was disturbed and it is something we are examining and 
also there are some elements of this that are classified that 
we can give a classified briefing on later.
    Let me just make a couple points. My understanding is that 
the containers in question at the time that the migrants were 
discovered were still in the pre-inspection area of the port, 
meaning they had not yet come to the part of the port where 
they would be inspected. So you should not assume that they 
would not have been inspected. They might well have been 
inspected before they came into the rest of the port and were 
then sent out in the other parts of the country. So that does 
not necessarily mean there is a failure of our screening 
process. It is kind of a geographic issue.
    That does get to your second point, which is container 
security initiatives, can we do more of this overseas, and the 
answer is that is a great example of why we ought to pursue 
this initiative further. We do it in some ports, we do not do 
it in every port. Ideally, if we could do it in more ports, we 
could instead of finding the people in the pre-inspection area 
of whatever port we have in this country, we would find them in 
the port overseas.
    Third, my instruction when I see something like this is, 
look, we have got to go and track back to the shipping company, 
the container company and find out what is the problem from 
their end. If it is a single failure of security and they can 
tighten it up, maybe we then address that.
    Mr. Dicks. I think there is a role for technology here too. 
There has got to be some way, and we did this at the Port of 
Tacoma many years ago, where we would run these containers 
through a sensor on both sides and if there was something 
radiological or there was something of concern, it could detect 
it without having to inspect it.
    The other thing I think we ought to do is what the military 
has been doing for quite a while now and that is having a 
sensor and a lock on these containers so that, one, we know 
where the containers are, and, two, we know what is in it and 
whether it has been tampered with.
    Mr. Chertoff. Well, I think that is exactly right. We have 
been deploying radiological detectors in land ports and sea 
ports. That is a very important program. As we have indicated, 
I think today we have sent up an 872 notice indicating that we 
are going to stand up a domestic nuclear detection office which 
is going to be an interagency office, the function of which is 
going to be to move further on the technology for detecting 
radiological devices.
    So absolutely correct. Again, I mean, part of our strategy 
has to be these non-invasive detection devices as well as other 
technological issues. We are going to look comprehensively at 
the issue of cargo. I think I mentioned that at the outset, but 
I wanted to tell you on this particular issue of the migrants, 
it annoyed me too. I have asked questions. I mean, in fairness, 
it was in the pre-inspection part of the port, but I think it 
is a cautionary tale to us about what we need to do here.
    Mr. Dicks. Thank you, Mr. Chairman.
    Chairman Cox. The gentleman's time has expired.
    Before I recognize Mr. Dent from Pennsylvania, the 
committee inquired of the Department about a week ago, and we 
are still waiting for an answer, whether in this human 
smuggling incident the shipping company was a C-TPAT member, 
and if so, whether it received a lower score and was not 
inspected for that reason. If you could get back to the 
committee, that would be very much appreciated.
    Mr. Chertoff. We will.
    Chairman Cox. Mr. Dent?
    Mr. Dent. Thanks, Mr. Chairman.
    Good afternoon, Mr. Secretary. You were talking about 
threat vulnerability and consequence or criticality. How do you 
in the Department go about determining the relative importance 
of these critical infrastructures when you are looking at a 
nuclear plant versus a bridge or some kind of maybe 
telecommunications infrastructure? How do you go about that?
    Mr. Chertoff. That is not the easiest thing in the world to 
do. We have used a variety of different analytical tools to 
look at the question of consequence. You obviously look at 
possible direct loss to human life. You look at economic 
consequences. What would blowing out a particular power grid do 
to the economy? You might look at other kinds of consequences 
that are indirect consequences in terms of illness or things of 
that sort.
    To some degree, at some level, there is an element of kind 
of art rather than science in making the judgments, but I do 
think they are at least reasonable and I think analytically 
sound judgments that we make. And, again, because we are not 
just looking at consequences, we are also looking at 
vulnerability and threat, no one issue where there might be a 
disagreement is going to be necessarily dispositive. I mean, it 
is going to be a factor but there will be a number of factors. 
So that I think although someone could disagree at the margins, 
I think, in general, broadly speaking, it is a pretty sensible 
way of making a determination.
    Mr. Dent. More specifically, if you have something that 
might be considered not very vulnerable but of high 
consequence, maybe like a nuclear plant, how do you make those 
determinations? I mean, when you have vulnerability is low but 
consequence is high, how do you balance those?
    Mr. Chertoff. There are actually formulas that you can 
apply to that, and without getting into things again which I 
think are maybe somewhat classified, what I will say is I think 
it is intuitively obvious. Consequence is really a big driver 
in this in the sense that a cataclysmic consequence is one 
which you pay a lot of attention to even if there was 
comparatively low vulnerability. Whereas something, on the 
contrary, with very little consequence you do not care about. 
Like the footbridge down the road from my house I am not going 
to waste any time on even if it is very vulnerable. So 
consequence is a big part of that.
    Mr. Dent. Thank you.
    Chairman Cox. The gentleman's time has expired.
    The gentlelady from California, Ms. Harman?
    Ms. Harman. Thank you, Mr. Chairman.
    And welcome, Mr. Secretary. Count me as a big fan, because 
I think that this notion you have of getting your hands around 
the whole problem and attacking it with a strategy is exactly 
right. We will never succeed with the squeaky wheel theory of 
homeland security.
    Let me make a couple points. First of all, we are all aware 
of substantial turnover at your department. In that regard, it 
pleases me to see Pam Turner behind you. She is excellent. I 
hope you are staying, Pam. Good. She has been excellent.
    As you may know, I served on the Commission on Terrorism, 
which predicted in 2000 a major attack on U.S. soil. I actually 
hosted an event in my district in August of 2001 with the 
question, are we ready? And, clearly in September of 2001, we 
were not. And I would say we are still not ready. The key to 
getting ready is to have a strategy.
    The goal of the Homeland Security Department was not to 
rearrange the deck chairs but to create one deck, one common, 
national integrated strategy, and I think, if I am hearing you 
right, that your focus on intelligence policy and operations is 
directed precisely to that; am I right?
    Mr. Chertoff. That is correct, yes.
    Ms. Harman. And I just applaud you for doing that. We 
cannot protect everything equally, and we should not, but this 
risk analysis applied to everything in some organized way will 
lead us to protect what we must, and, boy, must we protect many 
things like our ports better than we are.
    I represent the communities around the Port of Los Angeles. 
I hope you will visit them soon. There have been two incidents, 
as you point out, where human beings have exited containers at 
the port. In one case, I know, the bill of lading said the 
contents of that container were clothing, and it missed all the 
screens and just an astute crane operator happened to notice 
people getting out of the container and called the police. And, 
fortunately, we had eyes and ears at the port and maybe or 
maybe not they would have been picked up. They were human 
smuggling rings, they were not terrorist cells, but there were 
more people in each container than attacked us on 9/11. So it 
is a very, very serious problem.
    I want to ask you about two things. One of them is not 
intelligence. I think you have the right fix on intelligence, 
and if I can be helpful, please call on me. But there are two 
big problems that I do not think have been mentioned today, and 
I just hope they are on your screen. One is interoperable 
communications. Congressman Curt Weldon and I have for years 
been trying to require that Congress keep its promise to make 
some analog spectrum available for interoperable communications 
by the end of next year. That is a tough sell.
    The broadcasting industry opposes us, but, boy, do we need 
that. Just in Los Angeles County alone, the largest county on 
the planet, all we can manage at the moment are bridging 
technologies, trucks that carry frequency integrators on them 
so that you can plug in at the site. That is just not near good 
enough, not for LA and not for the country. So please put that 
on your screen.
    The other one is our broken threat warning system. I think 
the color-coded approach was a good try but I joked at one 
point and Tom Ridge did find it funny that he sounded more like 
an interior decorator talking about what we could do with 
yellow than he sounded like someone who earned the confidence 
of the country to talk to people and first responders about 
threats. So I hope you will figure this out.
    That is a primary mission of yours, your Department. That 
is not resident in any other department, and I do not think the 
DNI is going to be the threat warner. So I would urge you, as 
might light turns to red, to get on top of that as quickly as 
possible.
    Mr. Chertoff. Well, speaking of interior decorating, as you 
mentioned it, I was trying to figure out what the heck you 
could do with orange in interior decorating.
    [Laughter.]
    I think both those are serious issues. Both of them are 
things which we do have as part of our second-stage review, and 
I think we have to--particularly with respect to the warning 
system, there are a lot of things that are geared to that 
system. We have to figure out whether we have come to a point 
where we need to make some adjustments with it. We have now a 
little bit more experience about what is useful and what is not 
useful, and it is a good time to take a second look.
    Ms. Harman. Thank you.
    Thank you, Mr. Chairman.
    Chairman Cox. The gentlelady's time has expired.
    The gentleman from Pennsylvania, Mr. Weldon?
    Mr. Weldon. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for being here.
    Mr. Secretary, if there is some pessimism coming out of 
this hearing today, you have to understand the mindset that 
comes from the members on the committee. I agree with you 
totally on the intelligence aspect of preparing for protection 
of our homeland, but it was the Congress back as far as the 
summer of 1999 that proposed creating a national collaborative 
center, we called it the NOAH, National Operations Analysis 
Hub, which would have brought together all 33 classified 
systems managed by 16 agencies.
    In November of 1999, the FBI and the CIA said, ``We do not 
need that.'' It took us until January of 2003 in the State of 
the Union speech for the President to announce the TTIC. The 
TTIC is exactly what the Congress proposed 4 years earlier.
    The Congress has cried since 1995 to deal with what the 
gentlelady referred to and that is interoperable 
communications. That is when the Public Safety Wireless 
Advisory Committee came out and said, ``We have to set aside 20 
megahertz for public safety.'' This is 2005. We still have not 
done that. And all across the country when you meet with first 
responders, as you did last week, and we thank you for coming 
to the dinner, their number one problem is they cannot talk to 
each other.
    When I went to the Trade Center in 1993 and talked to the 
fire commissioner, he said the same thing that the fire 
commissioner said in 2001, ``We cannot talk to each other.'' So 
the frustration here is that the agencies just still are not 
getting it, and we talked to Secretary Ridge about this 
repeatedly.
    The issue of technology transfer, I happen to serve as vice 
chairman of both this committee and the Armed Services 
Committee. It is frustrating to me to see us spend billions of 
dollars on technology that the first responder ought to have 
but for some reason we cannot get it to them. When I was at 
Loma Prieta Earthquake walking with the freeway with the fire 
chiefs of Oakland and San Francisco, they were looking for 
people in the freeway with dogs. I said, ``Why aren't you using 
thermal imagers?'' They said, ``What are thermal imagers?'' 
That was 12 years ago.
    The Navy had produced that technology 5 or 10 years before 
that. We do not use the technology well, and if you could use 
and perhaps establish an enhanced effort to integrate the 
technology transfer between DOD as opposed to reinventing that. 
We are spending a lot of money on UAVs. UAVs are going to 
become very important for homeland security as well as other 
transmission and other related technology.
    In terms of private interface, I would hope that the agency 
has done or would do an assessment of all the stakeholders. I 
spoke this morning to ASIS. ASIS, as you know, has 33,000 
members. It is the largest private sector representation of the 
private security leaders of our Fortune 1000 companies. They do 
not have a direct relationship yet to the agency. I asked them 
if they would. They said, ``Absolutely.''
    And, Mr. Chairman, they have offered to establish a 
consulting role with this committee to provide the ongoing 
interface with the private sector.
    And when you look at threats like--in my opinion, the 
number one threat to our security from the broad standpoint, 
which is not being addressed, is the threat of an EMP laydown, 
a terrorist country getting the capability of a low-yield 
nuclear weapon, launching it over our shore, detonating it, and 
then you basically fry all the electronic components and you 
dumb-down the entire country. We are not prepared for that.
    In fact, up until 2 years ago when Congress mandated the 
establishment of the EMP Commission, the military did not want 
to hear about it. That is a homeland security threat that we 
have got to interface with the private sector on. So I hope you 
would see that as a priority for you.
    And, finally, you referred to the people that are doing the 
first responding, and I appreciate your sensitivity to them, 
because, as you know, 85 percent of them on the fire and EMS 
side are volunteers, and many of them are not part of 
government. They are parts of 501(c)(3)s; they operate on their 
own. They have bought with their own money, through chicken 
dinners and tag days, to buy their equipment. We need to be 
sensitive to keep that base in place, because if the federal 
government ever tried to replace that, it would bankrupt the 
nation.
    And simple things like the--and you just came from the 
Justice Department. The Justice Department ruling that says 
that a firefighter under 18 is really not a firefighter. The 
federal government has never defined what a firefighter is, but 
all of a sudden after 25 years of the Public Safety Officer 
Death Benefit Program, one person in DOJ decides that a 17-
year-old firefighter is not a volunteer firefighter. Well, that 
is outrageous. The states determine criteria in line with their 
local departments.
    And what that is having is a terrible effect across the 
country where the 32,000 fire departments have got to recruit 
new people. And so we have got to address those kinds of 
concerns to keep those people volunteering.
    And I would ask you to be sensitive, as you were when you 
came to the dinner, and gave an outstanding speech, by the way, 
that was very positively received by all the firefighters in 
attendance, to make sure that we are nurturing that group of 
leaders that will in fact be there to protect the nation. Thank 
you.
    Mr. Chertoff. Well, taking the last first, because on a 
personal level in the communities I lived in, most of them 
relied on volunteer firefighters, and I ate my share of chicken 
dinners and participated in that process, and I think they are 
the backbone of our response in many, if not most, communities, 
and we do owe them respect and also we need to attend to their 
needs and their capabilities.
    I think all the points you make are important points. I 
know with respect to intelligence sharing, which has been a 
long time coming, the President is very committed to making 
sure that we are sharing and we are operating off the same 
page. There is no mistake about that. And he welcomed the most 
recent report by Judge Silberman and Senator Robb's commission 
and we have a new DNI coming out. So I think we really have--
the table is set for completing this process of integration.
    Likewise, I agree, I think that we need to work more 
closely with the Department of Defense on getting the benefit 
of some of those technologies, although I would put in a plug 
for the dogs. You know, when all is said and done, the dogs are 
actually very good at a lot of the stuff that they do, 
including the bomb detection and the USAR teams.
    And, if I can just, again, be allowed a little moment of 
sentimentality, there were stories in 9/11 in the area of the 
crater of dogs that almost broke down because they could not 
find people that were in there that they were trying to find. 
So I do not want to diminish their utility as well.
    Mr. Weldon. As a dog lover, I agree.
    Chairman Cox. The gentleman's time has expired.
    The gentleman from Oregon, Mr. DeFazio?
    Mr. DeFazio. Thank you, Mr. Chairman and Mr. Secretary.
    I think that you have got a tough job in ascertaining on a 
risk-based system where to allocate resources, but I think we 
would all agree there is a continuing high interest with high-
risk to aviation. So I would like to just focus on that for a 
couple of minutes.
    Just want to kind of get your vision. As you know, Admiral 
Stone, the third Director of the TSA, is departing in June, and 
I see there are some ongoing problems at the agency, some of 
which I think he was cognizant of and at least as he 
represented in hearings, trying to deal with.
    One is the overcentralization, bureaucratization of the 
agency, which deprives the local security directors of the 
flexibility they need to hire, fire, train, split shifts, do 
things like that, which creates certain frustrations with the 
airports and meeting the needs of passengers. So he was very 
aware of that, kept telling us he was going to deal with, it 
never quite got done, and I would like to hear what we hope to 
do there.
    Secondly, he certainly was a good soldier and did not?well, 
let's put it this way: He was aware of, as is everybody, the 
fact that we are not investing enough in the technology, as we 
heard from the previous gentleman. We have airports lined up 
who want to go to inline systems, waiting for federal grants 
that are not available, which is in part a failure of the 
Congress but also the administration. We have not deployed 
technology that exists for what I consider to be the highest 
threat, which is bombs. I mean, the Russian incident is pretty 
clear and maybe the last maybe wakeup call before something 
happens.
    And I would just like to know what your vision is. And I 
particularly have a concern that Michael Jackson, with whom I 
have dealt with over the years with his previous iterations 
with the government, who went to the private sector and just 
before he came back he gave what has been described to me as a 
extraordinary speech to the Homeland Security Institute saying 
that there was no way to do aviation security except privatize, 
and I would like to know if you intend to push, because very 
few airports have applied to go back to privatized systems but 
they do want those problems that I described fixed with the 
federal system.
    Mr. Chertoff. Well, we do have, as you know, some pilot 
programs with respect to privatizing, and that is certainly an 
option which the current system lays open for them. And maybe 
that in terms of our doing things we ought to do under the 
Safety Act, we have not been as efficient as we should be, and 
that is an issue we are going to look at.
    I think that there is no question that a key part of the 
issue of dealing with aviation security is technology. The 
issue of explosives is obviously of great concern. Now, that is 
a little different than the 9/11 issue, which involved people 
turning aircraft into weapons, but it is of course in itself a 
serious issue. And there are technologies out there that we 
have to start taking a serious look at in terms of whether they 
can be deployed and how they would operate, and that includes 
backscatter, it includes puffing, and some of these things, you 
know, people have arguments about whether they are intrusive or 
not, and we have to think about how to deal with those 
arguments in ways that take account of legitimate concerns 
about privacy.
    But you are quite right that ultimately our best tool and 
our advantage in this kind of asymmetrical warfare with 
terrorists is technology. And I think we need to make some 
decisions about getting new generations of technology out. 
There also may be in terms of financing this kind of new 
technology some tools we can use in terms of alternative ways 
of financing that would get it out there more rapidly than in 
the conventional method, and we have got to look at that as 
well.
    Mr. DeFazio. I would be very interested to follow up on 
that because Mike and I had talked about that in the past but 
did not get much response from the administration in terms of 
some ways to fund these things up front and get them into the 
field.
    Mr. Chertoff. We are thinking about those things, and we 
are exploring some of those as possibilities, and we will be 
interested in engaging on that subject.
    Mr. DeFazio. And one other for all your portable memory 
units who are there behind you writing great notes, a number of 
firms have been certified under the Safety Act for aviation 
security. As I read the act, it is basically they carry a 
liability insurance and that is the limit of their liability. 
And I have been trying to find out what the liability limits 
have been set at, particularly for screening companies since we 
saw significant problems with screening companies pre-9/11. So 
if I could that get that information?
    Mr. Chertoff. We will get that.
    Mr. DeFazio. Thank you.
    Thank you, Mr. Chairman.
    Chairman Cox. The gentleman's time has expired.
    The gentleman from Connecticut, Mr. Shays?
    Mr. Shays. Thank you, Mr. Secretary. I will join with the 
heartfelt congratulations and prayers as well. You have an 
awesome responsibility and a great opportunity.
    I wanted to just say to my colleague on the other side of 
the aisle when she talked about being on the commission, there 
were three commissions, the Bremer Commission, Hart-Rudman 
Commission, Gilmore Commission. They all said we need an 
assessment of the terrorist threat--this is before 2001. We 
needed a strategy to combat that. We needed to assess a threat, 
a strategy to deal with the threat, and we needed to reorganize 
our government to implement the strategy. And all three 
basically concurred on that except the Hart-Rudman Commission 
went the furthest and said we needed a Department of Homeland 
Security and that is what we have.
    We established the Department of Homeland Security, 
frankly, though, before we really established the strategy and 
really had an assessment of the threat. If I were to ask you 
now what is our strategy, what would it be?
    Mr. Chertoff. I would say the first part of the strategy is 
not part of what we do in this Department but what the 
President has done in taking that word of the enemy. I have to 
say I continue to believe that the first layer of defense is a 
good offense, and that means as we eliminate camps, we 
eliminate labs that the enemy has, we kill or capture them, we 
put them in a position where they spend a lot of time worrying 
about their own safety rather than training and recruiting. 
That is the first piece of a major strategy.
    A second piece of the strategy is working globally with our 
allies all over the world in making the world inhospitable to 
terrorists. And that is, again, a second piece.
    And then of course there is a piece that begins at our own 
borders, which is complementary and part of the layering 
approach, and that involves having increased capabilities, both 
at our ports of entry and between our ports of entry to protect 
ourselves from bad people and bad stuff getting into the 
country, our capability inside the country to protect our 
transportation and our infrastructure, our special effort that 
we are undertaking now with respect to nuclear detection 
capability, which I think is an area where we need almost a 
mini Manhattan Project in terms of technology as well as 
deployment.
    I think these are all parts of a comprehensive strategy, 
the idea being that we are going to do our best at every level 
to put them on the defensive, take them off the boards, prevent 
them from coming in, prevent them from shipping their stuff in, 
protecting our infrastructure and transportation if they do get 
in, and then if worst comes to worst, and we have to prepare 
for this too, being able to respond and mitigate the harm.
    Mr. Shays. The last answers please me the most, because it 
seems to me that the Cold War is over, the world is a more 
dangerous place, that the Cold War strategy of contain, react, 
and mutually assured destruction went out the window, and that 
has to be detect, prevent and it may have to be preemptive and 
it may have to frankly be unilateral. And it seems to me that 
that is what the mainframe work is, and then what you said 
about the strategy taking the word of the enemy, working 
globally with our allies and so on are parts of that.
    I am concerned that we are not doing enough to detect and 
prevent, and I realize that is part of your responsibility. 
With the time I have left, how can we justify for a minute 
giving resources to deal with the reactive part of the dealing 
with the consequence of an attack? How can we for a second 
justify giving to a community resources that they do not need 
as much as, say, New York City or D.C. or even where the Hoover 
Dam is because, clearly, they need to have some. How can we 
justify that?
    Mr. Chertoff. Well, I mean, I think we need to be--and I 
think I have said this before--we need to be driven by risk and 
that means that the resources have to go where they will do the 
most good to prevent, protect and respond based on consequence 
and vulnerability and threat. And that is where we have to put 
our resources.
    We do not have money to waste, we do not have effort to 
waste. We have to be realistic about the fact that we have a 
menu of a large number of different things we have to protect. 
Some of them are--there are obviously people we have to protect 
directly, there is infrastructure, there are transportation 
nodes. There is no cookie cutter answer to this, but I 
completely agree with you that we cannot afford to waste money 
by just making everybody feel good like they got a little piece 
of something. It has got to be driven by essential priorities 
about what we have to worry about the most.
    Mr. Shays. I just wanted to hear you say it again.
    Thank you.
    Chairman Cox. The gentleman's time has expired.
    The gentlelady from the District of Columbia, Ms. Holmes 
Norton.
    Ms. Norton. Thank you very much, Mr. Chairman.
    And thank you very much for being with us and for your 
useful testimony. I appreciate the distinction you made between 
obligation and spending.
    I would like to ask a question about your own definition of 
a risk-based approach. As I see it, the two top challenges you 
face are putting Humpty Dumpty together, not again but for the 
first time. It is very difficult. These are melding together 
agencies that nobody ever meant to be together. Were it not for 
9/11, they would not be together. They still have domestic 
responsibilities that have nothing to do with you. That is real 
hard.
    The second one has been of great concern to this committee, 
and that is developing and applying a risk-base analysis. I 
looked at page 10 of your testimony, and I was rather much 
attracted by the way you sent at the notion of ``a trio of 
threat, vulnerability and consequence.'' I kind of like the 
notion of giving your example of a two-lane bridge down a 
street from your own house. Hate to see that dam but comparing 
it to an attack on a major multilane bridge, this is a touch 
approach, but what it seems to me does is give one an objective 
standard. Until we get an objective standard, we are going to 
have great problems making jurisdiction as vast and diverse as 
those represented at this table.
    Understand why A got more money than B and that this is not 
another of those population-based programs.
    Let me try to apply the notion, the trio notion in your 
testimony to different rather disparate examples since I 
understand this that way.
    One has to do with rail security. I have had a bill for 
rail security. Very, very concerned. You come from a part of 
the country where you ought to be even more concerned than I 
am, particularly after Madrid. I do not know what the latest 
figures are. It looks like 141 million in the 2005 budget. 
After 9/11, of course, we pumped money into aviation we better 
had. What I really am trying to get at is whether we are using 
any risk-based approach, either to budgeting or to other 
things.
    Compared to air security, I mean it pales beside the number 
of people to get onto subways, buses, light rail every day of 
the week, and I have been flabbergasted by how far behind rail 
is. It does not hardly register here, I am not even talking 
just money. On the screen for approach as far as I have been 
able to tell, I would like to ask about your approach, threat, 
vulnerability and consequences applied, to that way of doing 
budgeting. That is number one.
    Then let me take a specific example of whether that 
approach even works in the everyday world. We have got now two 
bills by the Chairs of two committees to bring aviation back to 
the nation's capital. Both chairman have gone at TSA. We even 
had a briefing, it was embarrassing, far from a risk-based 
analysis.
    This was about a couple of years ago, Judge Chertoff. It 
was a kind of doomsday approach involving the monument and the 
Capitol. It did not have any analytical sense of risk versus 
cost and commerce and convenience and the rest of the kind of 
things you would expect a market society to do by instincts 
almost with more like a science fiction movie.
    Here now you have what I regard as an override of the 
Department of Homeland Security, because TSA has taken no 
action. Both of these Chairs now are going to have committees. 
They both have introduced bills that no longer call for a plan. 
In the FAA bill, there was a section that said TSA had to 
present a plan. There having been no plan for 18 months, now 
they call for opening general aviation.
    They do not have any risk-based analysis, they just know 
that something is wrong with the Department of Homeland 
Security if they make it even look like they do not know how to 
protect the nation's capital. Understand general aviation was 
up and running in New York City within days, helicopter 
service, all the rest of it, where the great debacle occurred.
    I would just like you to take a stab at your own approach 
to risk-based analysis, threat vulnerability and consequence 
and apply it to the two examples that I have just presented.
    Mr. Chertoff. Well, I think that they do apply, and let me 
take the second one first. We are working, as we speak, on this 
issue of general aviation, because I think actually it 
demonstrates two facets to this risk management concept. One is 
we have to really think hard about what the consequence would 
be if someone misused a general aviation plane in Washington, 
how vulnerable we are at this point given what has been put in 
place and how real the threat is. But, you know, there is 
another piece to risk management which I think the chairman 
alluded to earlier which is there is also a cost benefit. 
Because I can completely eliminate risk by having no air travel 
and there will never be a risk of an aviation problem.
    And that is clearly not the right answer. And I know that 
there was an understandable tendency on the part of some people 
right after 9/11 to take the attitude that protection overrides 
everything, but I think we understand now that this has got to 
be a long-term strategy, we have got to be structured for a 
long-term war against terror, and that means we cannot destroy 
our way of life in order to save it.
    So whenever we make a risk analysis, we have to also make a 
cost-benefit analysis, and we have to say how much risk are we 
prepared to tolerate, or should we tolerate, in order to make 
sure we have a free flow of commerce, and that is an approach 
we are taking across the board.
    So that I think in the area of general aviation, we are 
working hard now with general aviation to talk about what are 
precautions to put in place to have a plan so that we neither 
have nothing nor bar the door, everything goes like 9/11 never 
happened. Neither of those approaches make sense. What makes 
sense is an approach that opens up the possibility of general 
aviation but in a way that guarantees a reasonable amount of 
security bearing in mind consequence, vulnerability, and 
threat. So I think it very much does apply.
    Likewise, with rail, we are obviously looking at the issue 
of rail, and we have to consider the consequences of a rail 
incident, bearing in mind that just a couple months ago in 
California there was a derailment. That was a bad thing, but it 
was not a catastrophic thing.
    Ms. Norton. And South Carolina?
    Mr. Chertoff. And South Carolina too. And then we have to 
build things like a response capability, a security capability 
in terms of sensors on the tracks, things that might anticipate 
someone driving a car on the tracks. So, again, that is 
something we are working on. We are using exactly the approach 
I am talking about, and I think it is valid across the board 
and one which I think will give results that may not satisfy 
everybody but will at least be reasonable.
    Ms. Norton. Thank you, Mr. Chairman. I appreciate the 
responses. I am going to be looking--you are new at the 
Department--to see whether or not in these two areas I see this 
approach being carried out.
    Thank you very much.
    Chairman Cox. The gentlelady's time has expired.
    The gentleman from Georgia, Mr. Linder?
    Mr. Linder. Thank you, Mr. Chairman.
    Mr. Secretary, welcome. Nice to have you here. I just had 
an honest question I ask people all the time: Do you ever think 
another airplane will fly into a building?
    Mr. Chertoff. Do I think it will? I think it is certainly 
possible.
    Mr. Linder. Do you think the passengers would tolerate 
that?
    Mr. Chertoff. You know, I think it would depend on a lot of 
circumstances. Are we talking about a large commercial airline, 
are we talking about a private airplane? I think the chances 
are much less now, but I cannot rule it out.
    The one thing I can tell you is that as we take each step 
to secure the airlines from that kind of a possibility, we have 
reduced the chance measurably. I do not know that we are 
completely there yet, and I certainly would not suggest 
reversing direction and tempting fate.
    Mr. Linder. I just cannot imagine a flight full of 
passengers on a commercial airliner, allowing some people to 
take it over without going after them themselves, because they 
know what is going to happen. They know what it is all about, 
and they would rather risk dying in an effort to fight than 
going into a building. And we spend $5.5 billion looking for 
fingernail clippers. It seems that money could be spent more 
wisely worrying about, as you said, there is a difference 
between bad things and catastrophic things.
    Mr. Chertoff. I am not sure that--I certainly think that 
toenail clippers are not the thing we are worried about, and I 
do agree what I think someone said earlier. I think we need to 
be concerned about explosives, but I do not think that I would 
draw the conclusion because I would rely on the passengers that 
we could stop searching people for knives or guns. I mean I 
think that we want to continue to keep those kinds of things 
off planes.
    Mr. Linder. It would be a bad thing if an airliner went 
down and 200 people died, but it would not be catastrophic. It 
would be catastrophic if we could find a way to use some of 
that money to worry about the intelligence for the bigger 
things like the nuclear bombs that are radioactive or 
biological threats.
    And I worry about your department that you inherited. I 
appreciate your 60-day review, but I worry that you get so 
bogged down in a huge bureaucracy doing really some stupid 
things that you do not have the time to think about the big 
things.
    Mr. Chertoff. Well, actually, I worry about that too, and I 
do not want to keep invoking the review, but I do want to tell 
you that almost every morning I get kind of a briefing as to 
what is going on from an intelligence standpoint, and I sit 
around with the very top people in the Department, and we talk 
about exactly the kinds of things you are talking about. We 
talk about whether we are spending too much time worrying about 
the kind of risk that is comparatively less of a consequence 
that while serious is not catastrophic and not enough time 
worrying about other things. And we really try to dig into 
this.
    One of the reasons I do want to see us have a more powerful 
policy capability is precisely to be able to start to think 
about these things department-wide, to avoid the issue I think 
you are pointing at, which is every component focused on its 
world and its vision without someone standing back and looking 
at the whole menu. And that is really what we have to do, we 
have to look at the whole map.
    Mr. Linder. I view your challenge as becoming a very 
sophisticated intelligence organization so that when a threat 
arrives in some location, it may be in Reno or it may be in 
Hahira, Georgia, that you can alarm those folks, let them know 
ahead of time the risk, and it is probably not going to be the 
same risk you might face in Phoenix. And I do not know how much 
percentage of your budget is spent on intelligence, do you have 
an idea on that?
    Mr. Chertoff. I cannot tell you--I mean, partly I cannot 
tell you because there are pieces of intelligence that are 
placed within a lot of different--.
    Mr. Linder. Rob Simmons tells me it is 2.5 percent.
    Mr. Chertoff. I am not in a position to dispute that. I 
know it is parceled out in a lot of different areas, frankly, 
and one of our challenges is to unify it and fuse it so we get 
the benefit of all of it.
    Mr. Linder. The biggest threat that I am worried about is 
biological. How much of a component in your intelligence 
community that you have is experts in bio threats?
    Mr. Chertoff. Well, I mean, we deal with biological threats 
in a number of different ways. In terms of intelligence, of 
course, we get not only whatever intelligence we have within 
our department, but we get what the intelligence community 
generates.
    But there is a separate piece of this which has to do with 
preparation and preparedness and response. We have in our 
Science and Technology Directorate scientists and medical 
people who have expertise. We largely also draw on the 
expertise of HHS and the Centers for Disease Control in terms 
of understanding the different kinds of biological agents there 
are. We have a Bio Watch Program in a large number of cities in 
which we have very sensitive sensing devices that do monitor 
for various kinds of biological agents.
    And then we also--and I think this is an important piece of 
this entire approach--is we focus on having a clear set of 
plans for what to do in case of a biological incident. And that 
requires us to understand the way the agent works, to have 
access to the appropriate antidote and a plan for deploying 
that antidote and a sense of how to do it in a way that is most 
efficient in terms of getting it out and preventing the spread 
of the agent.
    Mr. Linder. Just one last question, Mr. Secretary: How did 
the plan work when the Pentagon withheld information for 5 days 
on their anthrax threat?
    Mr. Chertoff. Well, you know, we have done, I guess what we 
call, an after-action report. I think the state and locals have 
too. We have talked to all the agencies involved. The Defense 
Department has changed its protocols. Thankfully, it was not 
really anthrax, but it was for me, actually, a very useful 
lesson in terms of seeing where we had a deficiency in our 
response capability and where we could correct it.
    You know, I think where I want to go beyond that is I think 
we need to have on the shelf, and I think we are in the process 
of developing this, we have a lot of good product, an ability 
with respect to any one of the likely agents to understand how 
the agent works and have an ability to think about how to 
respond, because the response is different depending on the 
agent. It depends on how contagious it is, it depends on how 
long it persists in the environment.
    So we jumped on studying this right away. We have embodied 
some immediate lessons that we have now changed, but I think we 
are building on that incident as a way of now going all around 
the federal government and making sure that everybody has got 
their protocols and their plans in place for dealing with this 
kind of situation.
    Mr. Linder. Thank you, Mr. Secretary.
    Chairman Cox. The gentleman's time has expired.
    Mr. Pascrell from New Jersey?
    Mr. Pascrell. Thank you, Mr. Chairman.
    Mr. Secretary, you have done a lot of good things in New 
Jersey concerning homeland security, and I would say that under 
Mr. Casperson I would put us as a model in terms of bringing 
all the entities together in New Jersey.
    But that entity cannot do its job unless we share 
intelligence with that entity, and this is not happening--this 
is not happening.
    I think the 9/11 Commission, Mr. Secretary, got it right, 
and I think you have it right. I will tell you why I think 
that. You have a philosophy which you bring to the job. I never 
even heard that word before in the last 2.5. years. It is not a 
scary word to me. You bring something to the table and not just 
reacting and responding. I think this is important, extremely 
important.
    And while you say in your opening statement that you cannot 
guarantee, realizing that we can make no guarantees, we cannot 
guarantee but we can minimize our vulnerabilities. We need to 
be primarily dependent on intelligence, and you bring this up. 
Of course, that can mean a lot of things to a lot of people, 
and I want to get into that in a second.
    So before port security, aviation security, train security, 
border security, all the way down the line, philosophy and 
strategy is very important to what we do. And so we have seen a 
lot of finger pointing over the last 2 years at the CIA and the 
FBI. Now, we know they have made mistakes but they have been 
driven, if you read the 9/11 report, if all of us have read it, 
you know that that is driven by philosophy and strategy. And if 
you are not--I am not saying you personally--if you are not 
willing to accept that, then nobody is ever held accountable. 
And that is the situation that we had.
    That is why looking back over that 9/11 Commission report 
no one has been held accountable. Take a look. Unless I missed 
it in the news. So we can line up al the mistakes and we can 
point fingers at the FBI and the CIA but those entities run on 
the basis of where the President, be it Clinton, Bush or 
whomever, want to go. And let's not mistake anything about 
that.
    So intelligence can mean a lot of things if it is supported 
by a strategy, if it is supported by a philosophy and we hone 
in on an enemy. Now, you say who is the enemy, take the war to 
the enemy. The end result of this is saving a lot of money, as 
you say, because we want to know where to spend that money. 
Say, take the war to the enemy. The problem is we do not know 
who the enemy is. We are fighting non-state terror. If it is a 
state, we know it is easier to get your hands around it. We are 
not fighting Islam; we are fighting extreme fundamentalist, 
Islamic, radical terrorists. That is who we are fighting.
    We have not made that distinction in our policy or in our 
philosophy. And that is why some members of this body support 
increasing the profiling. And you know exactly what I am 
talking about in getting at the enemy.
    Now, I believe we are at war. I believe that from the 
bottom of my heart and that we are at war with terrorists. But 
we need to preserve the freedoms, and you more than anything 
else know that and you have struck that balance in your entire 
life. I say that--I am not patronizing you because I say it 
because I mean it.
    What is your reaction and response to the issue of 
profiling, keeping in mind Chapter 12 of the 9/11 report about 
who we should be reaching out to?
    Mr. Chertoff. Well, let me say this: First of all, before I 
get to that issue, I just want to make it--I am certain to you 
about the fact that the President and everybody who works for 
him is committed to the idea of intelligence sharing, and I 
know that the President was committed to that before. Judge 
Silberman and Senator Robb presented the report, and I know 
that only reinforced it, and that has been a very clear 
mandate.
    I agree with you, Congressman, that we have to be very 
careful about who we are fighting. We are fighting radical 
Jihadists. The vast majority of people who follow the religion 
of Islam are peaceful members of this community and this 
country, are every bit as good Americans as everybody else. And 
we make a grave mistake if we allow the actions of Jihadists to 
spill over into everybody who is practicing Islam--many more 
than we would do so if we were to identify the acts of Timothy 
McVeigh with people who are Christian or pick someone Jewish 
who does something wrong.
    So we have to distinguish between--I am deadset against 
religious profiling for the following at least two reasons--
many reasons. First of all, it is counterproductive. It is 
counterproductive, because we do need to reach out to--we will 
not do well if the world walks away with the impression that we 
are fighting a war against religion, because we will do very 
poorly in the world and we will do very poorly with the hearts 
and minds we need to win.
    Second, I can guarantee you that if we telegraph that we 
are going to look at a particular type of person when they come 
into the country, that Al Qa`ida will find somebody who does 
not look like that person to come in and carry a bomb. So we 
would be making a big mistake if we were so obvious and so kind 
of unsophisticated in what we do.
    And, third, obviously it strikes the fabric of our own 
country and what we believe in terms of our Constitution and 
our civil liberties to single out people based upon their 
religion. People who have consciously adopted an ideology of 
hate and war we should pursue without quarter. But those who 
are peaceful, religion should not enter into it.
    Mr. Pascrell. Thank you very much, Mr. Secretary.
    Mr. Lungren. [Presiding.] Thank you, Mr. Secretary. 
Obviously, I am not Mr. Cox even though it says that. My name 
is Dan Lungren. I am a Californian.
    As Secretary Rumsfeld said, I am a retread. I like to think 
I am a returning congressional veteran. That sounds better. I 
came back here because of 9/11. I know you have taken this 
commitment because of 9/11.
    I guess my first question is because of the need for 
certainty and continuity, is it your intention, if you continue 
to have the confidence of the President, to stay for the rest 
of his term in this position?
    Mr. Chertoff. As long as the President wants me to serve, I 
will serve.
    Mr. Lungren. Secondly, with respect to risk assessment, you 
know, we can all talk about the failure to complete that task 
to this point by the Department, but the Congress bears a great 
deal of that burden, as well. My observation is we have not 
made the transformation after 9/11 by recognizing that we need 
to reorganize ourselves and reprioritize with respect to that.
    I would just ask you very simply, you have not been 
described to me as a wallflower in any of your previous 
experiences. I hope that you will--if you think those of us in 
Congress, in terms of the legislation we are presenting or the 
pressure that we put on your department do ignore risk 
assessment, you will feel emboldened to tell us that and to 
loudly tell us that.
    Mr. Chertoff. Well, I will, Congressman. I think I have 
already been pretty blunt, and hopefully, polite, but blunt in 
saying, you know, that I understand this approach of being 
risk-driven will disappoint some people. What I can hopefully 
hold out is that we will at least present an analytic approach 
that people will understand and respect, even if they disagree 
with it.
    But you know, this is not an approach that says, ``Let us 
give everybody a little something to make them happy.'' It is 
an approach designed to maximize the benefit of what we do to 
avoid the greatest risk.
    Mr. Lungren. As important as it is to get that right, it is 
also important that we be able to articulate it in such a way 
that members of Congress can go home to their districts and 
explain why they may not be getting the money and why it is 
necessary, why we are national legislators. So not only in 
terms of the substance, but in terms of the ability to 
articulate, and frankly, we need you in the bully pulpit doing 
that. And I hope you will.
    Let me turn to the question of the Safety Act, because it 
appears to me that the effort of the Congress was to try and 
stimulate the development of technology transfer that you 
talked about in your testimony by setting up a mechanism by 
which we could have some limited protection in terms of 
liability.
    I come from the legal arena, as do you. We know we have had 
legal reform here in the Congress, and it has been somewhat 
controversial. Here you have something where the Congress 
basically came together and said it is important for us to do 
that. And yet, if you look objectively at the results of that, 
I think you would have to be--at least I am--disappointed in 
the number of applications for that kind of a review and the 
assessment completed by your department.
    It seems to me, if we are to look at setting priorities, 
and you have talked about the mechanism of the transfer of 
technology to aid us in that, that that would be one of the top 
priorities of your department. And yet, as I look at what has 
happened thus far--maybe it is just because of start-up 
difficulties, but I do not see that as a priority. Would you 
please comment on that?
    Mr. Chertoff. Well, we did, I think, recently change the 
regulations to try to streamline them, because I think there 
was a sense that the original set of regulations may be too 
onerous. And that will hopefully help, in terms of encouraging 
people to apply.
    But I did--you know, I had the same observation when I came 
onto the job that it seemed we were not getting as much out of 
that program as one would have hoped. And so, you know, that is 
an issue which we are currently looking at as part of this 
review. I do not know whether the regulatory change is enough 
or whether we are being unduly nitpicky in terms of where we 
are requesting.
    But I do think that is a powerful tool to harness the 
private sector, in terms of its ingenuity. And I think if we do 
not make full use of it, we are really shortchanging ourselves.
    Mr. Lungren. And let me ask you this: Will there be a 
prioritization of the type of applications that are made? That 
is, if you make a risk assessment, and you determine that there 
are specific areas in which we really need some assistance, 
would it be your thought that the department ought to, in a 
sense, try and put that on the streamlined highway, maybe over 
something else that might be important technically but, in 
terms of your department's review of the assessment, would not 
fit the need as readily?
    Mr. Chertoff. Well, I would hope we can actually get this 
to the point that it is all pretty streamlined. I think we do 
want to encourage certain kinds of technology. And there are 
some other tools that even may be more powerful than the Safety 
Act, which, of course, is really a liability-capping act.
    But there are things--you know, we have a version of DARPA 
called HSARPA. And you know, DARPA was a great tool for the 
Defense Department. I want to make sure we are using that tool 
and also that we are--a part of what we need to do is get our 
procurement system more unified and then connect it up with our 
research, so we really have kind of a powerful economic engine 
to drive important technological advances.
    Mr. Lungren. Thank you very much, Mr. Secretary. My time is 
expired.
    The gentlelady from the Virgin Islands, Ms. Christensen?
    Mrs. Christensen. Thank you, Mr. Chairman.
    And welcome, Mr. Secretary. I am encouraged like the others 
by your statements, your brief opening remarks, and your 
responses, and especially, of course, knowing that you have 
come from the Third Circuit.
    Mr. Chertoff. We are the Virgin Islands--not initiated.
    Mrs. Christensen. Mr. Secretary, as you work to change and 
improve the working culture at the department, I wanted to add 
another challenge, a basic one, and that is that the department 
respect this committee's work and responsibility and be fully 
forthcoming with the information that we need to work with you, 
and to give you the support you need, and to fulfill the tasks 
for which we are charged. That has not always been the case.
    I want to ask a question, again, around port security. The 
OIG report on Port Security Grants generated a national debate 
within the maritime community and how grant funding ought to be 
distributed. Some say funding should be distributed solely on 
risk. Others feel that the Maritime Transportation Security Act 
is a federal mandate as is on all ports, and therefore all 
ports should receive security funding regardless of risk.
    Some of the op-eds that followed criticized the fact the 
ports in the Virgin Islands specifically received grant funding 
because they believe that these ports do have the same risk 
compared to the larger ports, such as New York and Los Angeles. 
As a member of the committee, I do that more financing is 
needed at all of our country's ports, but I believe that we 
ignore the smaller ports at our peril, as well.
    And while ports in the Virgin Islands may not have as many 
containers moving through as New York or some of the other 
ports, our ports are host to cruise ships, passengers, anywhere 
from--very rarely at 5,000, and maybe as many as 12,000 on any 
given day, second only to Miami.
    So if you feel that homeland security should be risk-based, 
what would be your definition of risk? Because in a maritime 
environment, I feel it has to go beyond just looking at 
containers.
    Mr. Chertoff. Well, I do not think risk is only containers. 
I think risk is--but I think it is at the end of the day 
consequence, vulnerability and threat. And as I said, I mean, 
that will not necessarily result in everybody getting 
something. But I think to put it in perspective, it is 
important to know that our entire effort in port security 
involves a lot of different things.
    And I think there was some confusion about the role that 
the port grants play, in terms of container security. The port 
grants are designed--or were designed, since they are now 
rolled into the total infrastructure program, they were 
designed to deal with the actual security of the port itself.
    But the security of containers, which is a cargo function, 
is addressed in a lot of additional ways. It is addressed 
through customs and border protection, and the screening and 
inspection, and the security initiative. Coast Guard plays a 
direct role. There are, depending on where you are, there may 
be state grants or UASI grants that are available also for 
ports.
    So unfortunately, when you isolate a single program, 
particularly one that is directed at a particular function, you 
are not, frankly, capturing all the resources that are brought 
to bear. And I think the thing I would ask when people evaluate 
how we do, is they recognize that sometimes we may accomplish a 
result using a different set of tools.
    And again, you know, we are ultimately capability-and 
mission-oriented. We want to get the job done. We want to keep 
the bad stuff out. If we do it by having Coast Guard do 
something as opposed to giving a port security grant, if we get 
to the right result, that is good. And that is the kind of 
philosophy we are going to take.
    Mrs. Christensen. Well, I appreciate that, and that means 
that perhaps our Coast Guard will be getting some more funding 
and more assets, as well. Because I appreciate your approach 
that brings all of the different components together in a 
smooth-working, smooth operation.
    You have undertaken a overview, a look at the department 
with an eye to reorganizing it around threat, vulnerability and 
consequence. We are about to--we are reauthorizing the 
departments--I surprised this question was not asked before--
and we may do it before the end of the month. What is your 
opinion as to whether we should not extend the current 
authorization until such time as you have completed your 
assessment, so that we can do this--at least take into 
consideration, as we reauthorize the department, some of the 
recommendations that you, the Secretary, would be coming up 
with?
    Mr. Chertoff. Well, I have to say, I am not--I am 
sufficiently versed in the legislative schedule to know what a 
normal schedule is like. I think it probably would not be a 
good idea for me to be specific about that. I hope, obviously, 
that whatever is done--I am going to try as hard as possible to 
at least get to you what we can in a timely fashion, to have it 
incorporated in.
    Mrs. Christensen. And what is your timeline?
    Mr. Chertoff. Well, I am looking to have recommendations--I 
have set a deadline for recommendations, or substantially all 
the recommendations, by the end of May. But there may be some 
things, you know, working with the committee, that if there are 
some things that we can identify ahead of time that might 
require some legislative action, that might be something worth 
exploring.
    Mr. Lungren. The gentlelady's time has expired.
    We have the Secretary for 29--well, no, 19 more minutes. 
And we have seven people who are in line. So I intend, or the 
rules are, to recognize people for 5 minutes. But if they could 
possibly do less than that, you might allow another member to 
ask a question.
    Congressman Rogers from Alabama is recognized for 5 
minutes--.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Lungren. --or such time as he may take of that 5 
minutes.
    Mr. Rogers. I got it.
    Thank you, Mr. Secretary, for being with us. I want to talk 
about first responders. I am of the opinion that currently our 
organization for training first responders does not meet our 
nation's needs. And I would like to specifically reference the 
Gilmore Commission Report from December of 2003 which 
recommended the Department of Homeland Security develop a 
comprehensive process for establishing training and exercise 
standards for first responders. And I agree with that 
statement.
    What I would like to know is your thoughts on the current 
organization of training within DHS and your plans for maybe 
improving the organization and provision of those training 
programs.
    Mr. Chertoff. I think through our preparedness process, in 
which we have laid down capabilities across the board, which 
includes response, and then the underlying, supporting template 
of the kinds of functions, you know, that is designed to drive 
us in all layers, including responders, to see, you know, what 
do they have to have the capability to do? What does that mean, 
in terms of the kinds of tasks they have to be able to perform?
    And then that, in our view, and it is not in a final--we do 
not have the final product, but we have kind of created 
successive cuts of this that are more precise. That should be 
the guidance for what, from our standpoint, we need to have 
first responders capable of doing. Not necessarily every 
community do everything, but every community be covered 
geographically by some capability that can perform those 
functions.
    And the idea is to get--you know, use regional support 
networks to make sure we are not simply giving everybody the 
same thing over and over again.
    Mr. Rogers. Right.
    And the last thing--I would just like to make a comment. 
Earlier, my colleague from Mississippi talked about his 
concerns, mainly on several senior management positions within 
your department that are vacant. And I think that is a very 
real problem, and it could have some real management 
consequences down the road if that is not remedied.
    I see the number of vacancies, and are not just people you 
may reference to something similar happening in the military. 
These people have left the department. I think long term, while 
your idea of people being cross-trained is good, we have got to 
find a way to keep that institutional knowledge that we are 
building for our long-term benefit.
    Mr. Chertoff. I agree with that.
    Mr. Rogers. Thank you. Thank you, very much.
    That is all, Mr. Chairman.
    Mr. Lungren. Well, the gentleman yields back.
    Mr. Etheridge of North Carolina is recognized for 5 minutes 
or such time as he may consume--.
    Mr. Etheridge. Thank you, Mr. Chairman.
    Mr. Secretary, welcome. And you have got an important job 
and a tough one. And today, you have been very candid thus far.
    Over the last several years, I have raised the issue with 
people as they came before this committee about an issue that 
they say is a local level, and that is our public schools. What 
we saw in Russia and we have seen recently, that can, number 
one, be a high-profile, and number two, it can send terrible 
shock waves.
    So when you look at the whole issue of threat vulnerability 
and--you may not fit the first two categories, but you know it 
has got huge consequences. And all the other things we may do 
will slide off the sheet when that hits the front page, and it 
will, when you are dealing with people's children.
    So I hope, as you go through your second stage of your 
review, that this will be an issue that you will pay a lot of 
attention to, how you provide not only just a template to the 
local levels, but we have a plan for assistance. Having been 
state superintendent of schools, I can assure you that should 
be a higher priority than we are paying attention to.
    And I will just leave that where it is. And I will ask that 
question again when you come back.
    Mr. Chertoff. Okay.
    Mr. Etheridge. In the 2001 Hart-Rudman Report, ``Roadmap 
for National Security: Imperative for Change,'' the authors 
stated that the greatest threat to our country at that point, 
prior to 9/11, second only to the detonation of a weapon of 
mass destruction would be a failure to manage properly science, 
technology and education for the common good over the next 
quarter century.
    That being said, the Department of Homeland Security has 
got a tough job. You have got to deal with this stuff, sir, 
today that you see immediately, but at the same time, you have 
got to balance those current trends with long-range planning.
    Let me share some statistics with you. Education may not be 
your responsibility, but we should better be paying attention 
to it. And I hope you are meeting with the other secretaries.
    Currently, one-third of all U.S. science and engineering 
doctorate degrees, and 40 percent of the PhDs in computer 
science go to students who are outside the United States, come 
here and get an education. Some stay; many go home. It is a 
great plan, but a problem is, if we do not do a better job of 
training here, we have got a challenge.
    So my question is this: How is the department planning to 
address our nation's current and future needs for technically 
and mathematically proficient students who we are going to need 
to maintain that cutting edge in science and technology to be 
able to meet the challenges for our homeland security?
    Mr. Chertoff. Well, I do think, you know, we have, I think, 
programs in terms of science and technology that deal with 
centers of excellence. And I think we may also have, or are 
contemplating having, some programs that would try to encourage 
people to get into areas of research and study that have an 
application to the kinds of issues we deal with in homeland 
security.
    Obviously, the Department of Education is a separate 
department, but I could not agree more that the long-term 
advantage we have in this war is the advantage of our 
technology and our science. And we cannot afford to lose that 
competitive advantage.
    Mr. Etheridge. Mr. Secretary, let me encourage you to have 
that meeting. And number two, I know, within your department, 
that you have some of those funds to encourage that. And I 
would hope that you would encourage your folks to spend some 
time, because I think this is a critical issue.
    Mr. Chertoff. I agree.
    Mr. Etheridge. And I think it is not only long term, it is 
short term. We need to pay a lot of attention very quickly. And 
if you will do that, I will appreciate that follow-up--.
    Mr. Chertoff. I will.
    Mr. Etheridge. --from that, if you would.
    And I will yield back.
    Mr. Lungren. Thank you.
    Mr. McCaul from Texas is recognized for 5 minutes.
    Mr. McCaul. Thank you, Mr. Chairman.
    Mr. Secretary, it is an honor to have you here today. It 
was an honor to serve under you in the Justice Department. And 
you did a great job then. I think you are doing a great job 
today. You have a lot of challenges, but I know you are the 
right man at the right time for the Department. So I thank you 
for that.
    I also applaud the Department's support for the risk-based 
funding. I toured the Houston Port Authority with Senator 
Cornyn last week. And it is the largest port in the United 
States. It is obviously a target. And I think the fact my 
state, and California, and New York, are at the low end of the 
funding, a change would be for the better, based on risk.
    I want to focus on--and I know when you were assistant 
attorney general, you saw this issue coming up quite a bit. In 
my view, the number-one mission is, and should be, in the 
homeland security department protecting our border, protecting 
our citizens from threats from outside coming in.
    And we have a situation that I believe is really getting 
almost on an epidemic level, in terms of the number of 
crossings illegally. But my biggest concern has to do with what 
I am sure you are familiar with, it is called the Catch and 
Release Program. And it involves people not necessarily from 
Mexico but countries other than Mexico.
    As you saw in your intelligence when you were at the 
Department--I probably saw some of the same things. And we have 
the Mexican border in our jurisdiction. And it is a real 
concern of mine. The thought of a terrorist crossing with a 
nuclear or biological capability is truly frightening.
    In the case of the people from other than Mexico, because 
of the repatriation process, as you know, they do not--it takes 
2 weeks. In many cases, they do not have any space to detain.
    In the McAllen sector in Texas, 90 percent of these people 
get basically released into the streets with a notice to 
appear, and then they do not show up. You recall Ramsey Yusef, 
the perpetrator of the 1993 World Trade Center bombing, got 
into this country that way.
    So my question, without giving a speech, is simply, what is 
the Department doing on this issue? And how can you make 
members of Congress and the American public feel safer on this 
issue?
    Mr. Chertoff. We are doing two things.
    First of all, we are--they reason, in terms of when we 
release, the decision, there are priorities. And we do pay 
attention to whether we are dealing with somebody who is a 
special interest person. So those people are not released. 
Likewise, people who have criminal issues are not released.
    You know, this is a problem, obviously, that global law 
enforcement faces, when you release people on bail, you--you 
know, we want everybody to appear, but we certainly prioritize 
detaining those who pose a threat to the community. So that is 
our template.
    Second, we have actually begun and are vigorously pursuing 
a project of pursuing absconders, people who do not come to 
appear when they are supposed to appear. And actually, our 
numbers of people apprehended have increased since the program 
has begun. That is a very important program, in terms of 
getting compliance.
    We are trying--for example, we did a repatriation program 
with Mexico. Frankly, if we free up beds for other people, we 
then have more beds for people we cannot move out that quickly. 
So another part of our strategy, again, is to try to cut the 
time that we are holding beds for people who we can deport more 
readily so we can have additional beds for people that we want 
to hold.
    But it is a serious problem. And at a minimum, what we need 
to do is make sure we are prioritizing and keeping the people 
we really have to be concerned about in custody.
    Mr. McCaul. And as you know, I am in favor of the 
prioritizing that issue and making those appropriations for 
that purpose. I think there is no greater issue or threat 
facing this country. So I thank you for being here.
    Mr. Chertoff. Thank you.
    Chairman Cox. [Presiding.] The gentleman's time has 
expired.
    The gentleman from Florida, Mr. Meek?
    Mr. Meek. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for being here.
    I wanted to talk a little bit about the grant process and 
some of the nuts and bolts of the Department. But I cannot help 
but resist sharing with you, which you probably already know in 
your first evaluation, as before the hearing, I told you I was 
from South Florida, which is unique in itself, as it relates to 
protecting the homeland. I think there is no other place in the 
country that faces some of the issues that we face, not only as 
it relates to immigration but also threat.
    I know you are familiar with the act that was passed by the 
Congress, which is the Federal Information Security Management 
Act, which, as you know, the Department has received an F 2 
years in a row, as it relates to securing its own technology 
and systems. And we can talk about protecting the homeland, but 
if the other side, those that are working to infiltrate or to 
harm us are able to hack our computers, we have a serious 
problem.
    We can have TOPOFF programs throughout the country. They 
can go in and find out exactly where we are weak from the 
privacy of their own home. We have a real issue. And with the 
Department of Homeland Security receiving a threat out of some 
24, 25 agencies, and we are supposed to be the leader in 
securing our information, I think we have a real situation. I 
think it is very alarming.
    I also would--as you know, there is a GAO report that has 
been written. And the chairman of our subcommittee, and also 
the Ranking Member, and the chairman of the overall committee, 
we are going to be having a hearing tomorrow on this issue. 
Obviously, we are going to be hearing some people--some folks 
who are in the private sector have served on the subcommittee 
last year that put forth a bill. Two fine members of this 
committee will be introducing that same legislation, from what 
I understand.
    But the Department within, I would like to hear as much as 
you can share at this point of what are some of the steps we 
have taken to protect some of the information, I mean, as 
simple as patrols on the borders, as simple as, you know, some 
of the main functions of the department as it relates to 
intelligence.
    If someone can--if we are getting an F, and there is other 
agencies that are getting C's and B's, I do not see the 
improvement. And if there is improvement that is ongoing now, 
we would like to hear about it.
    And I have one other small thing that I want to share with 
you, but I would appreciate an answer.
    Mr. Chertoff. Well, my understanding is that, even within--
I do not see any other reaction to an F than disappointment. I 
mean, there is no way you can sugarcoat that or make it seem 
good.
    I think that, notwithstanding the F, and I think it was an 
F in a prior year thing, there has been some improvement. But 
there is question more generally speaking that, as a 
department, our IT function needs a lot of work.
    I mean, we were--you know, we inherited IT functions from a 
number of different legacy departments. Those have not been 
fully integrated. And bringing somebody onto--it is going to be 
important to make sure we get that integration process right, 
not only to upgrade our ability to defend ourselves but also to 
make us more interoperable.
    I mean, we cannot function in the 21st century without an 
ability to have an integrated computer system. So I think you 
are right to point that out as a significant challenge for us.
    Mr. Meek. And of course, you know, this is a bipartisan 
feeling here in the Congress. It is not, you know, being in the 
minority side saying, you know, ``What are you doing in the 
administration?''
    A couple of my colleagues, including the Ranking Member, 
addressed the issue of attrition and turnover within the 
Department at some of the highest levels. Some of the 
leadership positions in the Department that receive some of the 
highest security clearance, I mean, they are spending 8 months, 
6 months in some cases, and moving on to the private sector and 
doing other things.
    And I do not know if it is an issue of pay or attention or 
it is so much work to be done, we are saying we are doing 
something we are not actually doing. And I do not want anything 
to happen under my watch, so I am out of here. That could be 
one.
    Mr. Chertoff. Well, I mean, I think--.
    Mr. Meek. The other could be--I could see if there were 
great opportunities within the Department, and you saw talent, 
and you say, ``Hey, I need you over here to be able to fill 
this void,'' these folks are gone. I mean, they are out of 
there.
    And so we are starting from A, as it relates to the whole 
training issue, and that is what the GAO report was addressing, 
that the issue of training, the issue of retention, the issue 
of occurring, being able to testing of contingency plans, I 
mean, these are issues that are not there.
    Some of those issues are IT issues, but some of them are 
human resource issues.
    Mr. Chertoff. Sure.
    Mr. Meek. And we have to address those. But I know that you 
have limited time.
    Mr. Chairman, one last thing I want to share with the 
Secretary. There was a letter that myself and the Ranking 
Member sent to you as it relates to some of the reporting that 
the Department has to make to the Congress to help us and give 
us guidance on what we are doing good, or what is working and 
what is not working.
    Mr. Secretary, I would ask, as you do your review, 
hopefully before the second review, start to hopefully report 
back to the Congress, which is statutorily mandated that we 
receive this information. Because it will help us in resolving 
some of our shortcomings in protecting the homeland.
    Mr. Chertoff. We are going to--I want to try to improve our 
responsiveness on these issues.
    I also have to make a plea that we get some relief from too 
much reporting and also some sense of priority. I mean, if we 
know something is really important, we can move to that first. 
And you know, it is perennially an issue. I mean, sometimes I 
feel it is the nature of an agency, everybody feels they have 
to touch something before it goes out the door. And I want to 
try to streamline that process. But you can help us--that.
    Mr. Meek. Mr. Chairman, I know I am out of time. Mr. 
Chairman, I just would like to ask that hopefully you can speak 
with the Ranking Member and maybe sharing with the Secretary 
what is a major priority of what we need as it relates to the 
work that we are going to be doing, because I think that will 
be helpful.
    Some report is better than no report, and I think the 
Secretary has put an offer on the table that is good.
    Chairman Cox. Thank you. The gentleman's time has expired.
    The gentlelady from Texas, Ms. Jackson-Lee?
    Ms. Jackson-Lee. Thank you very much, Mr. Chairman.
    Thank you very much, Mr. Secretary.
    I was impressed, first of all, by your focus in your 
opening statement that seemed to suggest that you, too, believe 
that one of the important aspects of security and the 
functioning of the homeland security is understanding the 
aspects and facets of the department. And your reference to 
having initiated a comprehensive view of the organization, 
operation and policies, I think, is very positive.
    I think, however, the Congress may have made a mistake. I 
would like to be proven wrong. I am very disturbed at the size, 
as it has become very clear, of the department. It is 180,000 
personnel, I am sure all very hard-working. But I have a sense, 
as this review may show us, that we have a problem with one 
hand not knowing what the other hand is doing.
    I would refer back to the Ranking Member's comments about 
the number of vacancies. And I know that you are just about 2 
months on the job. I would like to pinpoint really a pointed 
answer on what will be the steps taken, immediate steps taken, 
so we are looking for good people to fill some of those very 
vital spots, particularly in border enforcement and security.
    My next question would be--I can just do all the three of 
them--is the dilemma that ICE is in. Before the Judiciary 
Committee, ICE representatives came and said thing such as, 
``We do not have uniforms. We do not have badges. In the 
transition, we are still carrying the same badges and I.D. that 
we had in our previous position.'' There was a reprogramming of 
money, allegedly $500 million. You might comment on whether 
that has occurred.
    But finally, I would say that I hope that, as you look to 
the policy--as I see the theme throughout your statement, if 
there is ever a need for policy cooperation, it is in 
immigration.
    We have failed in immigration. We either spend more time 
stigmatizing it, labeling it, criticizing it, disregarding it, 
not wanting it. It is here to stay. And I think you need to 
have a combination of the policy part of it on immigration 
benefits and enforcement.
    I did not hear one statement--and I understand it was a 
level of frustration on these citizens' part--but I did not 
hear one statement commenting on the existence of Minutemen on 
the border of the Arizona--on the Arizona border. Comments 
being made that the next state would be Texas.
    I understand citizen frustration. But if we are to have our 
hands around homeland security as Congress indicated, it should 
be, as this department's establishment suggests that it should 
be, then the frustration of citizens to the extent that 
Minutemen are on our borders and no policy has come from the 
administration, meaning no policy statement has come from the 
administration to suggest that that is intolerable, or that we 
seek to fix it, or that we will immediately dispatch numbers of 
Border Patrol agents possibly from other areas, to me is a 
silence that we cannot tolerate.
    So I would appreciate and look forward with you on these 
issues. I am particularly interested in the border. We have 
spent a lot of time in that area, being from Texas. But I do 
think that what we have on the Arizona border poses a dangerous 
combination for disaster, for the citizens who mean well and 
for our Border Patrol agents who every day are putting their 
lives on the line to do the best job that they possibly can do.
    I welcome your thoughts, Mr. Secretary, and I thank you for 
staying for all of us, so we are here at the very end.
    Mr. Chertoff. I am appreciative of the congresswoman--.
    Chairman Cox. Mr. Secretary, I would just alert you that it 
is just a few minutes after 4:30. I understand that you have a 
hard deadline that we have agreed to for you to depart. I want 
to give you the opportunity to do that.
    I also want to let you know we have only one member 
remaining who--.
    Ms. Lofgren. I will hang in there, but I will talk fast.
    Chairman Cox. --if you can stay, we would very much 
appreciate it.
    Mr. Chertoff. I will try to deal with each of the three.
    In terms of the vacancies of the senior leadership, again, 
I mean, in some instances, frankly, I think people who are 
leaving are leaving because they have done a good job and they 
are being promoted or moved to something else. And we do have 
some very talented people who are in the process, I think, of 
being considered.
    We have already got some positions that are filled or we 
have nominations. And frankly, of course, to the extent where 
we deal with confirmed positions, and this is an issue for the 
Senate, obviously, you know, it is a long process. And so we 
want to move as quickly as possible.
    As far is ICE is concerned, the reprogramming documentation 
has come up. I think it came up a couple of weeks ago. We 
believe that that will finally at least fix the financial 
problem that emerged when they broke the original INS and 
Customs apart.
    We need to get that fixed. We are looking hard at the 
question of how we can improve their financial management--they 
got cut short with that--including the possibility of having 
another component step in to take over that function. And that 
would be a big help.
    Beyond that, I think ICE does a tremendous job. And I need 
to find a way to elevate its profile within the Department and 
make it clear how much--what a valuable contribution ICE does 
make.
    They have done a tremendous job in dealing with this MS-13 
gang and dealing, obviously, with things like child 
pornography, but also with, you know, human trafficking. I 
mean, there are huge, very high-profile and very important 
areas of investigation that they have a premier role in. And I 
want to make sure that is appreciated and understood.
    Finally, as far as immigration is concerned, I think--I 
mean, the President has it exactly right. He has proposed a 
temporary worker program which would enable us to identify, you 
know, those people who are in this country illegally but with 
no intent to harm and pull them into the system in a way that 
would be regulated and controlled, thereby freeing up the 
resources to focus on people who do not want to operate within 
the system and who are potentially a threat.
    At the border, we added over 500 Border Patrol agents. We 
moved them into Arizona as part of our Arizona border control 
initiative. And that was very successful last year. We hope it 
will be successful again. We have got sensors. We are working 
on getting UAVs stood up over the summer.
    There is no question, I completely agree with you, we have 
got to--this is a big concern of American citizens, rightfully 
so. We have got to put a package together. I think the 
President's package of having, you know, temporary worker 
effort but also, you know, stepped up and smarter enforcement 
is exactly the approach that we need to take.
    Chairman Cox. The gentlelady's time has expired.
    The gentlelady from California, Ms. Lofgren?
    Ms. Lofgren. Thank you, Mr. Chairman.
    And thank you, Mr. Secretary. I will be quick, and I 
appreciate your staying.
    It has been a pleasure to listen to you here today. And I 
am--you said much that there is to like here, in an approach 
that is methodical, and organized, and logical. And frankly, 
that has not always been presented to us. So I am very eager to 
work with you in the years ahead.
    I would like to--and I very much agree with your emphasis 
on technology. That is the key to our being successful in this 
mission.
    Just a couple of issues that I wanted to raise, and perhaps 
you can comment on them.
    In terms of technology, I have focused on the issue of 
immigration functions for several years. The press is reporting 
that the data integration project at the immigration function 
has been abandoned for budget reasons. I do not know if that is 
true. If it is true, I would like to know and if, whatever the 
case, what the plans are, we are still creating paper records. 
And obviously you cannot search the database if it is a paper 
record.
    I firmly believe that, unless you have all of the records 
computerized with a biometric, you are really not going to be 
able to search them. And that gets me to my second question.
    We have never really, so far as I am aware, settled on with 
probably the assistance of NIST, the appropriate biometric or 
metrics--they can be redundant. And we have deployed systems 
that are now incompatible and therefore not fully usable. So I 
am wondering what you plan to do about that problem.
    Finally, I served last year on the Cybersecurity 
Subcommittee. We have not made progress in implementing the 
cyber-plan. We have had turnover. Congressman Mac Thornberry, 
who chaired the committee last year, and I had a bill which we 
have reintroduced this year for an assistant secretary for 
cybersecurity so that we can get some attention to this area.
    I am sure you read about the NSF funding to avoid what some 
has said a cyber-Pearl Harbor. We all hope to do that. And I am 
wondering if you have a position on that bill yet.
    Finally, in terms of science, the HSARPA program is really 
taking a short-term approach. It is not taking the kind of 
DARPA long-term approach that I had envisioned. And I think, in 
terms of science and technology, we have faced some very huge 
risks.
    My colleague from North Carolina mentioned the lack of 
computer, and math, and physics, and science graduates. Half of 
the graduate students are foreign students. Well, no more, 
because half of the universities in America reported that their 
foreign students in graduate departments did not show up 
because of visa problems. So that is also your department.
    We can no longer get scholars into the United States, so 
the international science projects, the big physics, are going 
to have to be located in other countries rather than the United 
States because we cannot get Nobel Prize-winners into the U.S.
    I am wondering if you have a plan for dealing with all of 
those issues. And again, I thank you so much for your approach. 
And I really look forward to working with you.
    Mr. Chertoff. Thank you. I think I can touch on all of 
these.
    I am not quite sure what the report is about us abandoning 
data integration. So it is a little hard for me to answer. I am 
not aware--I mean, clearly, we need to have, and we are moving 
toward, making available--and I believe we have at the ports of 
entry--an ability to search records to make sure we are getting 
watch lists searched. That obviously is something that is not 
complete yet, but we have a lot deployed there.
    Likewise, with the issue of a biometric standard, I think I 
can tell you that there is significant progress made toward 
reaching a resolution of this debate about what is the 
appropriate biometric standard. And part of it is a recognition 
that there are different standards for different functions.
    If you take fingerprints, for identification of one-to-one, 
actually one or two prints is enough. But for searching a large 
database against latest prints, which you want to do in case of 
terrorists, you probably need ten.
    Ms. Lofgren. If I may, I agree with that. But if you have 
got different algorithms on the two fingers versus the ten 
fingers, you cannot use the systems--.
    Mr. Chertoff. It depends on what--you see, and you can use 
systems for different things. And in fact, sometimes you do not 
want to have one system, because you are--both the purposes of 
speed and purposes of actual privacy, not everybody needs 
everything.
    In other words, if I get someone plugged into the system 
enrolled, I want to search the widest database and make sure 
they are not a terrorist. But once I have locked down that 
identity, and I am comfortable with the person, all I need to 
know is each time the person presents themselves it is the same 
person. And that does not require a full search. It requires a 
one-to-one.
    So I think we are moving towards resolution in that area. 
On the area of cyber, I do think we have--that is a serious 
vulnerability. As to whether we should, you know, have an 
assistant secretary or particulars of a bill, I do not know 
that I am in a position to say that. But it is something that 
we have, or are clearly aware of, and we are looking at.
    Finally, on the issue of visas for foreign students, I 
mean, I think we have already taken some steps, in terms of 
lengthening the stay period. It comes back to the original 
point.
    Maybe I should close with the original point the chairman 
made. We want to have a balance. We need to keep bad people 
out. There is no question historically dangerous people have 
abused the student visa system. We have to figure out a way to 
weed them out, but then also welcome the rest of the world.
    I believe, as I think you do, that technology and biometric 
properly deployed actually is the way to achieve both of those 
goals. To vet people to make sure we are keeping bad people 
out, but then to be able to give them a freer ability to go 
back and forth so as to make this really a friendlier place for 
the world so we attract the leading minds and the leading 
capabilities.
    Ms. Lofgren. I totally agree. And it is music to my ears.
    Thank you, Mr. Secretary.
    Chairman Cox. Well, it is appropriate that we end this 
hearing on what can sometimes be a dismal topic with music and 
happiness.
    [Laughter.]
    And I wanted to thank you very much for spending so much 
time with us. Your testimony is very valuable.
    I want to thank the members for their questions. The 
members of the committee may have some additional questions. We 
will hold the hearing record open for an additional 10 days.
    And, Mr. Secretary, we would ask that you respond to any 
such questions in writing.
    Ms. Lofgren. Thank you very much.
    Chairman Cox. Thank you all.
    The hearing is adjourned.
    [Whereupon, at 4:43 p.m., the committee was adjourned.]

                                 
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