```

[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]

  PROTECTING AMERICAN INTERESTS ABROAD: U.S. CITIZENS, BUSINESSES AND 
                     NONGOVERNMENTAL ORGANIZATIONS

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

                                HEARING

                               before the

                   SUBCOMMITTEE ON NATIONAL SECURITY,
                   VETERANS AFFAIRS AND INTERNATIONAL
                               RELATIONS

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 3, 2001

                               __________

                           Serial No. 107-16

                               __________

       Printed for the use of the Committee on Government Reform

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

                                 ______

                  U.S. GOVERNMENT PRINTING OFFICE
75-955                     WASHINGTON : 2001

____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpr.gov  Phone: toll free (866) 512-1800; (202) 512�091800  
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                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       MAJOR R. OWENS, New York
ILEANA ROS-LEHTINEN, Florida         EDOLPHUS TOWNS, New York
JOHN M. McHUGH, New York             PAUL E. KANJORSKI, Pennsylvania
STEPHEN HORN, California             PATSY T. MINK, Hawaii
JOHN L. MICA, Florida                CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia            ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
JOE SCARBOROUGH, Florida             ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
BOB BARR, Georgia                    ROD R. BLAGOJEVICH, Illinois
DAN MILLER, Florida                  DANNY K. DAVIS, Illinois
DOUG OSE, California                 JOHN F. TIERNEY, Massachusetts
RON LEWIS, Kentucky                  JIM TURNER, Texas
JO ANN DAVIS, Virginia               THOMAS H. ALLEN, Maine
TODD RUSSELL PLATTS, Pennsylvania    JANICE D. SCHAKOWSKY, Illinois
DAVE WELDON, Florida                 WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   ------ ------
ADAM H. PUTNAM, Florida              ------ ------
C.L. ``BUTCH'' OTTER, Idaho                      ------
EDWARD L. SCHROCK, Virginia          BERNARD SANDERS, Vermont 
------ ------                            (Independent)

                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
                     James C. Wilson, Chief Counsel
                     Robert A. Briggs, Chief Clerk
                 Phil Schiliro, Minority Staff Director

 Subcommittee on National Security, Veterans Affairs and International 
                               Relations

                CHRISTOPHER SHAYS, Connecticut, Chairman
ADAM H. PUTNAM, Florida              DENNIS J. KUCINICH, Ohio
BENJAMIN A. GILMAN, New York         BERNARD SANDERS, Vermont
ILEANA ROS-LEHTINEN, Florida         THOMAS H. ALLEN, Maine
JOHN M. McHUGH, New York             TOM LANTOS, California
STEVEN C. LaTOURETTE, Ohio           JOHN F. TIERNEY, Massachusetts
RON LEWIS, Kentucky                  JANICE D. SCHAKOWSKY, Illinois
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
DAVE WELDON, Florida                 ------ ------
C.L. ``BUTCH'' OTTER, Idaho          ------ ------
EDWARD L. SCHROCK, Virginia

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
            Lawrence J. Halloran, Staff Director and Counsel
                Thomas Costa, Professional Staff Member
                           Jason Chung, Clerk
                    David Rapallo, Minority Counsel

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 3, 2001....................................     1
Statement of:
    Bergin, Peter, Director, Diplomatic Security Service, co-
      chairman, Overseas Security Advisory Council, U.S. 
      Department of State; Michael Waguespack, Deputy Assistant 
      Director, Counterintelligence Operation Support, Federal 
      Bureau of Investigations; Dianne Andruch, Managing 
      Director, Overseas Citizens Services, Bureau of Consular 
      Affairs, U.S. Department of State; and Leonard Rogers, 
      Acting Assistant Administrator, Humanitarian Response, U.S. 
      Agency for International Development.......................   139
    McCarthy, John M., cochairman, Overseas Security Advisory 
      Council; Robert F. Littlejohn, first vice president, 
      International Security Management Association; Ambassador 
      James K. Bishop (Ret.), director, disaster response and 
      resource committee, Interaction; Frank J. Cilluffo, senior 
      policy analyst, Center for Strategic and International 
      Studies; and Dr. Bruce Hoffman, director, Washington 
      Office, RAND Corp..........................................    36
Letters, statements, etc., submitted for the record by:
    Andruch, Dianne, Managing Director, Overseas Citizens 
      Services, Bureau of Consular Affairs, U.S. Department of 
      State, prepared statement of...............................   177
    Bergin, Peter, Director, Diplomatic Security Service, co-
      chairman, Overseas Security Advisory Council, U.S. 
      Department of State, prepared statement of.................   142
    Bishop, Ambassador James K., (Ret.), director, disaster 
      response and resource committee, Interaction, prepared 
      statement of...............................................    82
    Cilluffo, Frank J., senior policy analyst, Center for 
      Strategic and International Studies, prepared statement of.    94
    Hoffman, Dr. Bruce, director, Washington Office, RAND Corp., 
      prepared statement of......................................   111
    Kucinich, Hon. Dennis J., a Representative in Congress from 
      the State of Ohio, prepared statement of...................     8
    Littlejohn, Robert F., first vice president, International 
      Security Management Association, prepared statement of.....    57
    McCarthy, John M., cochairman, Overseas Security Advisory 
      Council, prepared statement of.............................    40
    Rogers, Leonard, Acting Assistant Administrator, Humanitarian 
      Response, U.S. Agency for International Development, 
      prepared statement of......................................   197
    Shays, Hon. Christopher, a Representative in Congress from 
      the State of Connecticut, prepared statement of............     3
    Waguespack, Michael, Deputy Assistant Director, 
      Counterintelligence Operation Support, Federal Bureau of 
      Investigations, prepared statement of......................   165

 
  PROTECTING AMERICAN INTERESTS ABROAD: U.S. CITIZENS, BUSINESSES AND 
                     NONGOVERNMENTAL ORGANIZATIONS

                              ----------                              

                         TUESDAY, APRIL 3, 2001

                  House of Representatives,
Subcommittee on National Security, Veterans Affairs 
                       and International Relations,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:08 a.m., in 
room 2247, Rayburn House Office Building, Hon. Christopher 
Shays (chairman of the subcommittee) presiding.
    Present: Representatives Shays, Putnam, Gilman, Platts, 
Otter, Kucinich, and Tierney.
    Staff present: Lawrence J. Halloran, staff director and 
counsel; Thomas Costa, professional staff member; Alex Moore, 
fellow; Jason M. Chung, clerk; David Rapallo, minority counsel; 
and Earley Green, minority assistant clerk.
    Mr. Putnam [presiding]. A quorum being present, the 
Subcommittee on National Security, Veterans Affairs and 
International Relations' hearing entitled, ``Protecting 
American Interests Abroad: U.S. Citizens, Businesses, and Non-
governmental Organizations'' is hereby called to order.
    The Chair recognizes Mr. Shays from Connecticut for an 
opening statement.
    Mr. Shays. Thank you, Mr. Chairman.
    During our hearing on counterterrorism strategy last week, 
witnesses described a significant new contextual element of 
U.S. security planning in the post-cold war world: widespread 
resentment fostered by our global military and economic 
dominance. Unable to challenge our preeminence by frontal 
assault, our adversaries vent their frustrations through 
sidelong, or asymmetrical, attacks on Embassies, naval vessels, 
and other valuable, but vulnerable, national assets.
    Individuals and corporate facilities are also at risk. As 
diplomatic and military facilities abroad are hardened against 
attack, terrorists and transnational criminals look for softer 
targets. American businesses and tourists have always been 
potential symbols and valuable pawns in the deadly game of 
international terror, kidnapping, and ransom. Today, more than 
ever, private interests abroad are the victims of publicity-
hungry, cash-starved terrorists.
    An effective, comprehensive national security policy to 
combat terrorism should acknowledge this harsh new reality and 
include the private sector in programs to prevent, as well as 
respond to, lawlessness aimed at Americans abroad. 
Nongovernmental organizations [NGO's], performing humanitarian 
missions in some of the most isolated, devastated parts of the 
world should have access to security information and training 
to minimize the risks of their inherently dangerous work.
    So we asked our witnesses this morning to describe current 
Federal efforts to enhance the security of U.S. citizens and 
businesses overseas. They will describe some recent progress 
toward greater awareness of new threats and closer public/
private cooperation to prevent loss of life and property.
    But the nascent effort faces significant challenges coming 
to grips with the dynamic, multidimensional, interconnected 
problems of economic espionage, cybercrime and fanatical 
terrorism that ignore old rules and old boundaries. Many 
corporations are reluctant to report extortion and kidnapping, 
calculating the costs of official entanglements and attendant 
publicity to be higher than the ransom. Definitional and 
jurisdictional barriers can impede the flow of information and 
fragment Federal efforts to help.
    Kidnapping and ransom insurance premiums should not be a 
routine cost of doing business abroad. A U.S. passport should 
not mark our citizens as targets. We look to our witnesses 
today to help us understand how national security policies and 
programs to counter terrorism can operate more effectively to 
protect American lives and property abroad.
    All those testifying this morning bring considerable 
expertise, experience, and breadth of perspective to our 
discussion.
    I thank you for your time and for your assistance with the 
subcommittee's ongoing oversight of terrorism at home and 
abroad.
    Thank you, Mr. Chairman.
    Mr. Putnam. Thank you, Mr. Shays.
    [The prepared statement of Hon. Christopher Shays follows:]

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    Mr. Putnam. We're also pleased to have the chairman 
emeritus of the International Relations Committee, Mr. Gilman 
from New York.
    Would you like to have an opening statement?
    Mr. Gilman. Thank you, Mr. Chairman.
    I want to welcome--first of all, I want to tell you how 
much we appreciate your conducting this hearing at this time. 
It's particularly important since we just concluded a hearing 
with Chairman Shays on antiterrorism.
    I want to welcome our distinguished panelists who are here 
with us today. I want to thank them for taking the time to be 
with us.
    As our world has drawn closer together over the last 30 
years as a result of improved travel and communications, 
Americans have benefited from these improvements perhaps as no 
other nation on Earth. Advances in travel, communication, 
however, are available to all. And those who would harm 
American interests have occasionally turned their hate or greed 
against our American citizens abroad in recent years.
    For example, a total of 12 Americans were killed and 18 
injured in 14 terrorist attacks just in Israel in the West 
Bank, in Gaza, between September 13 and November 17 of last 
year. There were some 37 Americans kidnapped in 1999, not to 
mention the many who were not reported.
    Threats against Americans abroad range from physical harm 
to unfair economic practices that include stealing intellectual 
property and computer hacking. It is among the first and most 
important functions of the consular officials of our diplomatic 
service to provide aid and assistance to American citizens 
abroad.
    With regard to terrorism, Mr. Chairman, any agency 
representing our government overseas should join with our 
Department of State to promote the safety of Americans. And our 
recent hearing, conducted by Chairman Shays, underscored the 
fact that we had over some-40 agencies that have some 
responsibility in terrorism, but without any proper central 
control, without any proper agency that would handle all of 
these and bring them together in some centralized function.
    In combating the scourge of terrorist attacks directed 
against our people abroad, timely information-sharing among 
responsible agencies is certainly a logical and appropriate 
response. It's for that reason that many of us on this 
committee feel that we should be adopting a centralized system 
of control of the agencies that are spread out throughout our 
government.
    I'm interested to hear from our witnesses today and how 
they believe our Nation may better work to improve the economic 
and physical security of our citizens who work abroad, live 
abroad, have businesses abroad.
    Thank you very much, Mr. Chairman.
    Mr. Putnam. Thank you very much.
    I'm pleased to welcome the ranking member, Mr. Kucinich 
from Ohio, for an opening statement.
    Mr. Kucinich. Thank you very much, Mr. Chairman. Members of 
the committee, good morning. Good morning to the witnesses. I'm 
glad to have all of you here.
    Last week, the subcommittee held a hearing on combating 
terrorism. The focus of that hearing was on threats to 
governmental interest. The focus of today's hearing is on 
threats to nongovernmental interest. This includes violence 
against U.S. citizens, U.S. companies and, importantly, 
nongovernmental organizations.
    With respect to the last group, I'm particularly interested 
in finding out what specific U.S. programs are designed to help 
human rights groups and others delivering humanitarian 
assistance.
    You know, certainly some of the questions that are being 
posed here today I think we need to go over and pay close 
attention to. You know, what threats do you face? How does the 
U.S. Government address those threats? And, third, what could 
the U.S. Government do better? I think that these are some of 
the logical and compelling questions which we will be reviewing 
today.
    Just as we need a comprehensive assessment of the threat 
against governmental interests, we also need to ensure that 
resources to protect nongovernmental interests are allocated 
efficiently.
    I also think it would be helpful if in our discussions 
today we could address the root causes underlying threats to 
the security of nongovernmental interests; in other words, to 
describe incidents that we've faced is important, and the 
manner in which the U.S. Government responded is important, but 
also, I think it would be helpful to address some of the 
motivations which might be behind those confrontations, such as 
U.S. foreign policy.
    The actions of U.S. companies may affect security issues. 
For example, oil company executives point out that their 
employees have been kidnapped repeatedly in Nigeria. But these 
officials do not address some of the extenuating circumstances 
that deal with those kidnappings, such as human rights abuses 
by the oil companies. That's something that I think needs to be 
looked at; otherwise we are dancing in the dark here on some of 
these security issues.
    I'd like to submit for the record several reports issued by 
Human Rights Watch that criticize oil companies for their role 
in harsh treatment of workers who attempt to raise grievances, 
the exploitation of natural resources of indigenous populations 
and environmental damage caused by their enterprises.
    In one case from January 4, 1999, Human Rights Watch 
reported that the Chevron Co. supplied helicopters and boats to 
Nigerian security forces that attacked two communities, killed 
several people, and burned several villages.
    Last week, several witnesses testified there's a growing 
sense of resentment against the United States. Since this 
resentment sometimes manifests itself as violence against 
nongovernmental, as well as governmental, interests, perhaps a 
greater focus on the cause of the resentment would be in order.
    I'm certainly proud to be a Member of the U.S. Congress 
here, representing my constituency and my country. I'm also 
interested in what my country can do that would be better to 
protect citizens abroad.
    Thank you very much, Mr. Chairman. I will submit my full 
statement for the record.
    Mr. Putnam. Thank you, sir. Without objection, the reports 
will appear in the record after your statement.
    [The prepared statement of Hon. Dennis J. Kucinich 
follows:]

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    Mr. Putnam. At this time, I ask unanimous consent that all 
members of the subcommittee be permitted to place any opening 
statement in the record and that the record remain open for 3 
days for that purpose.
    Without objection, so ordered.
    I ask further unanimous consent that all witnesses be 
permitted to include their written statements in the record. 
Without objection, so ordered.
    Gentlemen, welcome. We appreciate your being with the 
committee at this time. As you know, this is a hearing, and we 
must swear you in. If you would, please stand and raise your 
right hand.
    [Witnesses sworns.]
    Mr. Putnam. I note for the record that the witnesses 
responded in the affirmative.
    At this time, we'll recognize Mr. John McCarthy, cochair of 
the Overseas Security Advisory Council, to begin our testimony. 
And because the panel is so large, we would ask that you 
maintain, within some reason, the 5-minute rule.
    Welcome.

 STATEMENTS OF JOHN M. McCARTHY, COCHAIRMAN, OVERSEAS SECURITY 
 ADVISORY COUNCIL; ROBERT F. LITTLEJOHN, FIRST VICE PRESIDENT, 
INTERNATIONAL SECURITY MANAGEMENT ASSOCIATION; AMBASSADOR JAMES 
  K. BISHOP (RET.), DIRECTOR, DISASTER RESPONSE AND RESOURCE 
   COMMITTEE, INTERACTION; FRANK J. CILLUFFO, SENIOR POLICY 
 ANALYST, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES; AND 
   DR. BRUCE HOFFMAN, DIRECTOR, WASHINGTON OFFICE, RAND CORP.

    Mr. McCarthy. Thank you very much, Mr. Chairman. Thank you 
for allowing me to testify at this time before this 
congressional subcommittee.
    I'm here in my capacity as cochairperson of the Overseas 
Security Advisory Council, U.S. Department of State, 
representing the private business sector. Perhaps it would be 
fitting at this point to briefly furnish some background 
information concerning OSAC and the role it plays in American 
business.
    Both the State Department and private industry have a 
common interest in protecting their assets and their people. 
The U.S. Department of State, through OSAC, has been able to 
build a bridge between the public and private sectors. By 
teaming together in OSAC, private industry and the public 
sector have discovered synergies from which both are able to 
fulfill their obligations.
    The goal is very simple: Working together in OSAC, security 
information is exchanged and analyzed so that the best security 
practices can be used to address overseas security concerns and 
better protect the U.S. citizens and assets.
    There are many accomplishments associated with OSAC--with 
the OSAC partnership, many of which will be articulated later 
by Peter Bergin, the cochair of OSAC for the public sector.
    One of the most important responsibilities of American 
business is to supply a safe and secure workplace for its 
employees. In the United States, the task is easier than it is 
overseas. Today, many U.S. companies, particularly those in the 
extractive industry do business in high-risk areas of the 
world. In Colombia, Nigeria, Indonesia, and Angola, U.S. 
citizens daily face the hard reality of personal security for 
themselves and their families. Civil war, threats of 
kidnapping, extortion and terrorism are real problems for 
business and Americans working in high-risk areas overseas. The 
security departments of globally involved American companies 
must have efficient security plans and programs to neutralize 
security threats and allow employees to focus on their job 
responsibilities.
    Crisis management and emergency response teams, kidnapping 
and extortion plans, emergency and evacuation programs, as well 
as good physical security profiles are key to an excellent 
employee and asset protection program.
    My colleague, Mr. Robert F. Littlejohn, vice president of 
global security, Avon Products, representing American business 
through the International Security Management Association, will 
furnish you more information on the life safety issues just 
mentioned.
    Since Mr. Littlejohn will be addressing employee asset 
protection in depth, I will cover the other security challenges 
faced by American business when it decides to do business 
outside the United States, and provide some proposed and 
currently practiced measures that have applied to meet these 
challenges.
    Much of America's businesses are no longer limited to the 
U.S. marketplace. As a result, the business risk analysis for 
these global companies becomes more complicated. The constants 
that America takes for granted--political stability, honest law 
enforcement, fair and impartial administration of justice--now 
become variables.
    Due diligence inquiries are the vehicles that American 
business uses to make informed decisions concerning the 
feasibility of entering into an overseas business venture. 
Conducting due diligence inquiries in foreign countries is a 
problem particularly in emerging nations. Trying to determine 
indepth background information concerning a foreign country's 
political system and commercial environment is difficult 
because of the lack of good and accurate records.
    Further, the laws of the country sometimes prohibit 
disclosure of the type of information that is part of the 
public domain in the United States.
    Without accurate information concerning the commercial 
environment in a particular company or the individual who will 
be a future business partner, investment opportunities may be 
lost. Whether a company is controlled by organized crime, is an 
instrument for money laundering, is a reverse engineering 
expert, or otherwise engaged in matters which test the ethics, 
values, and laws of the United States is a proper subject for 
due diligence inquiries.
    The intelligence units of the U.S. Government have 
excellent methods of gathering this type of information which 
can benefit American business and help avoid running afoul with 
the laws of the United States and the host country in which it 
seeks to do business. It is here that OSAC and other government 
agencies can play an important role in making classified 
information available to the business community in the 
following manner.
    Business and security specialists who are cleared and 
authorized by the U.S. Government could review the information 
for its business value. If they decide that the information has 
a business value and should be shared, it would be their 
responsibility to sufficiently sanitize it so that it still has 
business intelligence value, but its dissemination does not 
compromise national security.
    Information concerning terrorist affiliation, organized 
crime associations, fraudulent and illegal business practices 
will be examples of the information American business needs to 
make an informed business decisions. Other information 
including, but not limited to, indigenous insurgent 
affiliation, associations with unsavory political figures, and 
those engaged in extortion or other crimes that endanger the 
lives of individuals would also be valuable when conducting due 
diligence inquiries.
    The globalization of American business was made possible in 
large part through the computer technology developed mainly by 
American scientists and engineers. Computers are now 
commonplace, portable, and an indispensable part of the 
commercial world. The computers and the intellectual property 
they communicate and store is vulnerable to all kind of 
attacks. Even though viruses are planted by hackers and they 
attack them, or cyber-thieves try to steal their stored patents 
and trade secrets, computers are the main means of 
communication and file distribution for American global 
business.
    Protection of the computer from unauthorized invasions is a 
top priority for American business, and it has joined with 
government efforts to devise plans and efforts to ward off 
unwanted attacks. Not to do so would threaten the basic fabric 
of national security.
    But American business is struggling against a tough 
adversary when battling against computer attacks and theft of 
intellectual property. In fact, it has been said that the world 
economic battle of the 21st century will be over the 
intellectual property rights. This is not speculation; the 
battle has begun.
    Protection of computers and the intellectual property they 
contain is a national security issue of gigantic proportions. 
It must be remembered that the United States is no longer 
solely a manufacturing economy, it is also an information and 
ideas economy. If America cannot adequately protect its 
intellectual property, it could suffer dire economic 
consequences.
    The U.S. Government, through OSAC, does an excellent job in 
sharing information regarding international crime and terrorism 
with U.S. business interests, but much more is needed to help 
the U.S. companies so they can protect their intellectual 
property and trade secrets. The government must become 
increasingly mindful of the dynamics of computer technology and 
intellectual property protection and develop programs to assist 
the U.S. companies in protecting their intellectual property 
and trade secrets.
    One such attempt by the government turned out to be 
essentially meaningless. The Economic Espionage Act of 1996, 
championed as the solution to a serious theft of intellectual 
property, could potentially provide the perpetrator with just 
the information they are attempting to steal.
    More serious and meaningful legislation and other programs 
need to be put in place by the government. More information is 
needed to be shared with private industry on how to protect its 
computers and intellectual property.
    Other initiatives that can be launched by the public and 
private sector to build defenses against computer intrusion and 
protect intellectual property are as follows.
    Continue the OSAC initiative since it has been highly 
instrumental in protecting U.S. business interests abroad; 
ensure the permanency of the OSAC charter and support 
legislation establishing and ensuring its budget; enact a 
mandate to supply information to OSAC so that it can continue 
to be the premium supplier of American business; provide relief 
from encryption and export restrictions; ensure that fines are 
assessed for violators for agreed-to protection programs; the 
United States must be able to respond extraterritorially to 
intellectual property violations since some of the countries 
will be unwilling or unable to respond to cyber attacks; ensure 
that the FBI, which investigates most of the violations of 
computer law is adequately staffed, trained, and equipped to 
meet the vast, changing technical environment in 2001 and 
beyond; crack down on pirated software, CDs, and movies; 
develop treaties, bilateral and multilateral conventions and 
agreements; encourage common international statutes and laws; 
encourage nation-states to improve their judicial capacities 
and political will; support global anticorruption legislation 
and activities; and, provide technical advice to nations 
seeking help in implementing economic reforms.
    Overall, we have to make protection of intellectual 
property rights a core issue in our relations with the many 
foreign governments in order to ensure a level playing field 
for American business.
    The spread of transnational crime makes conducting business 
in a foreign environment also more difficult. Advanced fee 
schemes, credit card fraud, money laundering put American 
business at risk of becoming a victim of unscrupulous victims.
    The Association of Certified Fraud Examiners estimate that 
fraud and abuse costs U.S. organizations more than $400 billion 
annually, with the average organization losing more than $9 per 
day per employee. The association says the average organization 
loses about 6 percent of its total annual revenue to fraud and 
abuse committed by its own employees. This is an enormous cost 
for American business as a price to pay.
    Sharing information and maintaining a reasonable and 
effective relationship between the public and private sectors 
through OSAC will enable American businesses to overcome these 
difficulties. It will give American industry a chance to 
conduct an efficient and profitable business, not only in the 
established overseas markets, but also in the new emerging 
economies, full of promise and hope for the future.
    Thank you very much.
    Mr. Putnam. Thank you, sir.
    [The prepared statement of Mr. McCarthy follows:]

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    Mr. Putnam. At this time, the Chair would recognize Mr. 
Littlejohn. Mr. Littlejohn is the first vice president of the 
International Security Management Association.
    Welcome to the subcommittee.
    Mr. Littlejohn. Thank you, Mr. Chairman. We are pleased 
that the subcommittee chose to draw on the expertise of the 
International Security Management Association in reviewing the 
safety of Americans working and traveling abroad.
    By way of background, ISMA represents private sector senior 
security executives worldwide. Some 80 percent of our 
membership works for U.S. companies that compete 
internationally, representing an aggregate employee base of 
10.5 million and aggregate revenues in excess of $3 trillion.
    I am the vice president of global security of Avon 
Products, responsible for security operations in 140 countries. 
However, today, I testify on behalf of ISMA as the first vice 
president and a member of the board of directors.
    Let me, at the outset, thank both the Overseas Security 
Advisory Council and the Federal Bureau of Investigation for 
the assistance that they have provided U.S. business abroad. 
Although the U.S. business community, as Mr. McCarthy 
mentioned, is confronted with many issues abroad, we will focus 
our testimony on the personal safety issues, as the lives of 
U.S. citizens are by far our most important priority.
    We'll look at the risks affecting our employees abroad. We 
feel that they fall into four general categories: travel, 
global crime in general, and then, more specifically, 
kidnapping and terrorism.
    Travel: American travelers today face a number of security 
risks, and we anticipate that these risks will grow as business 
personnel become more and more mobile. Increased threats have a 
chilling effect on global commerce. In countries with high 
levels of street crime, concern for the safety of business 
travelers will discourage entry into new markets. Moreover, 
U.S. business concerns are only magnified when coupled with 
language barriers, cultural issues, and more importantly, 
uncooperative and corrupt law enforcement personnel.
    Global crime issues, with the exception of kidnapping and 
terrorism: The most significant security problem faced by 
private enterprise is global criminal activity. This is a 
nearly ubiquitous problem which, in its most extreme forms, 
poses a serious threat to foreign commerce. Such crimes 
threaten, not only the staff and physical assets, but also 
increase costs, because security provisions, high-risk 
compensation, and the difficulty in attracting skilled workers 
and other accommodations are quite expensive.
    Kidnapping: Kidnapping for ransom is on the rise worldwide. 
Perpetrators use kidnapping for a variety of reasons. In 
Mexico, criminal gangs kidnap for cash. While, in Colombia, 
guerilla groups use kidnapping to fund their armed struggle 
against the state.
    Terrorism: The U.S. Department of State reported 169 
international terrorist attacks in 1999 that targeted U.S. 
interests specifically. Long-running terrorist campaigns have 
had an effect of rising insurance premiums and other operating 
costs for U.S. companies working in certain high-risk 
countries.
    ISMA recommendations: With these issues in mind, our 
government can and should implement a dozen actions to enhance 
the protection of U.S. businesses and their people abroad.
    First, U.S. Government should expand training programs to 
enhance the effectiveness of the global law enforcement 
community. It should work with other nations in providing 
targeted financial assistance to law enforcement agencies in 
high-risk countries that are currently unable to provide 
adequate protection to U.S. business.
    The government should require the FBI to send observers to 
advise U.S. companies when an employee has been kidnapped 
abroad. The U.S. Government should establish agreements with 
other companies--countries to expand territorial jurisdiction 
of law enforcement agencies. The government should use 
contacts, existing contacts, to facilitate relationships 
between private companies operating abroad and local law 
enforcement agencies. And we must create a closer working 
relationship with Interpol and its member nations.
    We must encourage other nations to enact wars against ``air 
rage.'' The government should create programs that help the 
private sector companies to adapt crisis management planning 
and training designed to address threats in high-risk 
countries.
    We must encourage greater cooperation and communication 
between the security and the commercial branches of government. 
The Department of State's political branch should provide more 
timely and accurate reports of global criminal activity, 
irrespective of political concerns.
    The government should require Federal agencies immediately 
to disclose information with any appropriate security 
classification that would protect U.S. business abroad.
    And, finally, OSAC is the appropriate agency to disseminate 
information; and we should consider increasing the OSAC funding 
to expand both its personnel and educational programs.
    In conclusion, much more can and should be done to protect 
Americans working abroad. We believe the recommendations, if 
adopted, will have a significant impact on improving individual 
security and also enhancing global opportunities for U.S. 
business today.
    Thank you, Mr. Chairman.
    Mr. Putnam. Thank you very much, Mr. Littlejohn.
    [The prepared statement of Mr. Littlejohn follows:]

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    Mr. Putnam. Let the record note that Mr. Platts of 
Pennsylvania and Mr. Tierney of Massachusetts have joined the 
subcommittee.
    At this time, the Chair recognizes Mr. Bishop. Mr. Bishop 
is the director of disaster response and resource committee, 
InterAction.
    Welcome to the subcommittee.
    Mr. Bishop. Thank you, Mr. Chairman and members of the 
subcommittee, for the opportunity to participate in this 
morning's hearing.
    Security for nongovernmental organizations, particularly 
those NGO's on the front lines of disaster relief and refugee 
protection and assistance, has become a vital concern among our 
members.
    Mr. Putnam. Mr. Bishop, could you move the mic closer, 
please.
    Mr. Bishop. We greatly appreciate your interest and 
concern. Where NGO's were once the victims of random violence, 
they increasingly have become the specific targets of violence 
by governments, nonstate actors, as well as individuals. 
Motives include resentment at perceived NGO preference for one 
of the belligerent parties; a desire to force foreigners out of 
an area so that there will be no credible witnesses to war 
crimes and other human rights violations; and the desire of 
thugs or belligerents to seize the assets NGO's, U.N. agencies, 
and the Red Cross movement bring to disaster sites.
    Death and severe injuries, hostage-taking, rape, and theft 
have taken an increasing toll among United Nations, NGO, and 
Red Cross movement field workers during the 1990's. The United 
Nations keeps the best records, and they report that between 
January 1992 and the year 2000, a total of 189 field personnel 
lost their lives on overseas assignments, with 98 murdered.
    Our members are dealing each year with incidents in which 
their personnel are robbed, incarcerated under one pretext or 
another, and taken hostage by criminals or belligerents. 
Offices are invaded by loot-seeking soldiers, guerilla bands, 
crooks, etc. There are near escapes as bullets and grenades 
strike nearby. Land mines blow off limbs. NGO vehicles slip off 
back roads taken to avoid mines, and their occupants die.
    As security threats have become more lethal and common, 
NGO's have taken greater care to look after their employees 
overseas. The process has been encouraged by the sympathetic 
response of USAID's Office of Foreign Disaster Assistance 
[OFDA]. It has provided InterAction with over $800,000 to 
design and field-test two courses, one on provision of health 
services and complex emergencies and the other on security for 
field workers.
    The further we looked into the subject of security, the 
more sharply our members appreciated that the government and 
corporate approaches to overseas security are not appropriate 
for NGO's.
    CARE and Catholic Relief Services cannot retreat to walled 
and barred compounds or ride through the city in armored cars 
accompanied by armed bodyguards. The mission of most NGO's is 
to live among and serve the local poor and disaster stricken. 
They must remain accessible to their clientele, forgo sidearms, 
and depend upon their good relations with the local community 
and constant threat assessments as their primary survival 
tools. The NGO approach cannot be one of physical deterrence or 
retaliation; it has to be acceptance by the population they are 
serving.
    Thus, the InterAction security course relies more on the 
Mennonites than the U.S. Marines for content. It stresses 
personal conduct and cultural sensitivity as well as roadblock 
negotiations, mines avoidance, communications security, vehicle 
movement controls, and evacuation planning.
    The next stage in our collaborative relationship with OFDA 
on security was approval of a proposal to persuade CEOs of 
disaster response agencies that security could and should be 
incorporated into their organizational culture and operations. 
Twenty-four CEOs and senior managers of leading American and 
Canadian NGO's spent 2 days last September in a very 
participatory program. CEO accounts of their successes and 
problems in trying to promote security awareness and training 
within their own agencies were very credible to their peers.
    The InterAction is pleased with the support it continues to 
receive from OFDA in addressing its security vulnerabilities.
    With respect to the State Department, the help on security 
has not been financial, but diplomatic. Senior officials of the 
Bureau of Population, Refugees and Migration have been very 
accessible and ready to bring--see pressure put on foreign 
governments impeding access to refugees and internally 
displaced persons, or refusing visas to relief workers.
    There are several security issues which remain unresolved 
between the U.S. Government and most of our members. I must 
note at this point that I am not speaking for all of our 
members in identifying additional help. Most would appreciate 
receiving funds from the government. As a matter of principle, 
some of our members do not solicit or accept any U.S. 
Government funds. And one member which does solicit U.S. 
funding for the operations of its overseas partners recently 
informed us that it opposes any U.S. Government funding for NGO 
security initiatives.
    The unmet needs most of our members would like to see the 
government resolve include coverage of the costs NGO's incur in 
upgrading their security awareness and procedures. These 
include the cost of employees hired to supervise security 
operations, training costs, equipment costs, particularly 
communications equipment, additional insurance, better 
protective vehicles and so forth.
    Another key issue for our community is eligibility for 
evacuation by the U.S. Government. I was surprised by reports 
that members of our agencies had been told by Embassy officers 
in some evacuations that their foreign citizen spouses and 
children were ineligible to accompany them. More frequently, 
American NGO's reported that their third-country employees had 
been told that there was no room for them in the helicopter or 
naval vessel conducting the evacuation.
    In fairness to Assistant Secretary of State for Consular 
Affairs, Mary Ryan, and Embassy officers who conduct these 
hazardous operations, I must admit that we have not sat down 
with them to seek greater clarity and consistency on this 
issue. We will seek such a discussion.
    Another of our concerns is the growing unwillingness of the 
U.S. Government to put its personnel in harm's way. When U.S. 
Government employees assigned to work with NGO's and instructed 
not to go outside their hotel, to be back across the border by 
nightfall, are withdrawn under the pretext of a voluntary 
departure, it is hard for NGO's to provide the humanitarian 
services the Congress and U.S. people want undertaken.
    As our members frequently find themselves involved working 
alongside U.S. military forces engaged in peacekeeping and 
humanitarian operations, we have long had a program which 
involves our staff and members' giving presentations on the 
respective roles of NGO's and the military at disaster sites. 
We have helped prepare relevant military manuals and 
participated in both command post and field exercises. 
Unfortunately, the information shared often does not reach 
those assigned to the next intervention. We're trying to 
identify funding which would give our input greater reach and 
timeliness.
    A 30-minute video placed aboard each assault ship and in 
pilot ready-rooms, defining the roles of NGO's, would be one 
approach if we can mobilize the funding. If members of this 
subcommittee find the concept meritorious, your assistance in 
providing the funds or directing their use would be greatly 
appreciated.
    Thank you for this opportunity to appear before you this 
morning and for your attention. I look forward to your comments 
and questions. Thank you.
    Mr. Putnam. Thank you, Mr. Bishop.
    [The prepared statement of Mr. Bishop follows:]

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    Mr. Putnam. Mr. Cilluffo and Dr. Hoffman testified last 
week as well. Their expertise spans terrorism issues from broad 
strategy to protection of individuals. We appreciate your 
willingness to participate with us again today.
    The Chair recognizes Mr. Cilluffo, senior policy analyst, 
Center for Strategic and International Studies.
    Mr. Cilluffo. Thank you, Mr. Chairman.
    Mr. Chairman, distinguished members, it is a privilege to 
appear before you today on this important matter. Threats, 
particularly terrorist threats facing nonofficial American 
interests overseas, are an underexamined and often 
underappreciated aspect of the emerging threat environment. 
Given the breadth and depth of the subject, to run through this 
in approximately 5 minutes is a tall order, especially for me, 
as I've rarely had an unspoken thought.
    One can hardly turn on the news without coming across a 
reference to terrorism, kidnapping, or piracy. Just to provide 
you with a brief snapshot, yesterday, Philippine President 
Arroyo declared an all-out war against the Abu Sayyaf in 
response to threats that they would decapitate American 
hostage, Jeffrey Schilling.
    Over the weekend, the Basque separatist group, ETA, 
threatened Spanish tourist resorts and warned of ``undesirable 
consequences'' to Spanish tourism and economic interests.
    During the past month, there were high-profile kidnappings 
in Mogadishu, Somalia, in Nepal, in Bangladesh, and Egypt.
    At the beginning of March, four of five American oil 
workers returned home after 5 months in captivity in the 
Ecuadorian jungle. The fifth had been killed, presumably to 
hasten ransom payments.
    U.S. citizens and facilities have long served as a 
lightning rod for terrorist activity abroad. Official U.S. 
Government facilities are our most visible international 
symbols of power and culture. Because of past terrorist 
actions, the U.S. Government has been hardening diplomatic and 
military facilities, making them less susceptible to attack. I 
would like to note the efforts that Mr. Gilman has put forward 
in this area. These efforts have been ratcheted up in the wake 
of the twin bombings of the U.S. Embassies in Kenya and 
Tanzania in 1998.
    While these efforts are a good beginning, we need to 
examine the issue more holistically. These efforts encourage 
the terrorist, who often takes the path of least resistance, to 
select from soft targets; it displaces risk.
    In addition, business now increasingly symbolizes the 
United States. U.S. companies overseas, particularly those with 
strong brand recognition, are equated with American power and 
culture. Unfortunately, not everyone views these favorably. A 
Hamas training manual expounds that it is foolish to hunt a 
tiger when there are plenty of sheep to be had.
    Terrorism is a multifaceted problem. The intent differs 
from group to group and incident to incident. But the means, 
violence and intimidation, remain the same. Government is not 
in a position to be the sole protector. The private sector must 
better understand the risks and take greater responsibility for 
its own security.
    Terrorism is nothing new. It has always been the weapon of 
the weak to target the strong. It is also dynamic. While it may 
be possible to lessen our vulnerability to the terrorist 
threat, prophylaxis and protection efforts alone will not be 
sufficient since the terrorist will simply shift their modus 
operandi and target selection.
    For example, following the two successful counterterrorism 
operations by the Israelis in Entebbe in 1976 and the German 
GSG-9 operation in Somalia in 1977 against hijacked aircraft, 
terrorists changed their tactics almost overnight, moving away 
from hijacking to bombing aircraft. This illustrates the back-
and-forth nature of the struggle: measure, countermeasure, 
counter-countermeasure, and on it goes.
    Terrorists are no longer content with the land and the air. 
They have also taken to the sea. The bombing of the U.S.S. 
Cole, the aquatic Hamas suicide bomber, and the LTTE Sea Tiger 
attack on Trincomalee Harbor all point to a growing maritime 
terrorist trend. Cruise ships present ripe targets. One should 
consider terrorist or pirate attacks as a possible next step, 
whether they are politically or economically motivated.
    Throughout the 1960's, 1970's and 1980's, groups chose 
their actions with an ear cocked for popular support and an eye 
trained on State funds. Of late, however, there has been a 
shift toward radical religious views and extreme nationalism. 
Neither of these necessarily places the same constraints on 
violence as before. In fact, radical and violent actions could 
bolster rather than undermine support for the cause.
    These terrorists no longer seek a seat at the negotiating 
table. Rather, they want to blow up the table altogether and 
build their own table in its place.
    Usama bin Laden's fatwah makes clear that civilians, not 
just American officials are targets on al-Qaeda's radar screen.
    Funds from States that support terrorism are dwindling, but 
by no means depleted entirely. Terrorist organizations have had 
to search for a new source of funding for their wars. 
Organizations intensified their moneymaking operations, drugs, 
kidnapping, extortion, and a whole host of other illicit 
activity.
    Kidnapping, of course, is nothing new to terrorists either, 
but there is a new twist. More and more terrorists take 
hostages for money, not for publicity. The $64,000 question is 
how much is going into their coffers to further their terrorist 
campaigns and/or how many of these enterprises are transforming 
into outright criminal enterprises, Kidnapping, Inc., if you 
will.
    Kidnapping abroad has evolved into a highly lucrative 
crime. The perpetrators are more sophisticated and savvy than 
ever before. Moreover, indigenous law enforcement may be 
outgunned, outmanned, and outskilled. Worse still, in some 
countries, the local law enforcement is part of the problem 
with high levels of corruption making protector and predator 
almost synonymous.
    Though accurate statistics are notoriously difficult to 
obtain, the majority of global abductions occur in Latin 
America. In the previous decade, business people accounted for 
roughly 40 percent of the victims. International companies, 
particularly those with strong corporate images, may be more 
likely targets, owing to their deep pockets.
    While South America is the global kidnapping center, 
Southeast Asia is the global piracy hub. What kidnapping is to 
land, piracy is to seas. There has been a dramatic increase in 
the frequency and severity of piracy. The International 
Maritime Bureau reports that attacks by pirates increased by 57 
percent from 1999 to 2000. This is a total of 469 reported 
attacks on ships, leaving 72 people dead.
    Business leaders must also expand their concept of security 
to include not only the physical, bricks and mortar, but also 
the cyber. We are aware of our cyber vulnerabilities due to 
major government exercises that we have conducted on our own 
systems. We have also seen what can be done. Luckily, at this 
point, most of the perpetrators have been young adults, but 
someone was able to disable the emergency 911 systems in south 
Florida.
    There is certainly no shortage of bad actors with views 
inimical to the United States. What we have not yet seen is the 
convergence of intent and capabilities where the real bad guys 
exploit the real good stuff. Admittedly, the global good guys 
are at a disadvantage in the cyber realm. In essence, we've 
created this global village without a police department.
    In addition, U.S. businesses are at risk from foreign 
intelligence services in foreign companies, be they friend or 
foe, for losses from economic industrial espionage are enormous 
but almost impossible to quantify exactly.
    While information relating to product design and trade 
secrets are the most obvious targets, information such as 
marketing plans, bid proposals, pricing structures and customer 
lists also rank very high on a competitor's wish list.
    In conclusion, as government targets become more difficult 
to attack and U.S. corporations and businesses expand overseas, 
terrorists and kidnappers have indicated they will likely 
continue to expand their focus to include nonofficial 
Americans, be they U.S. corporations, humanitarian workers, or 
international tourists.
    The private sector needs to be part of the solution. We 
need to expand the national security planning table to include 
them. We have the opportunity to integrate the private sector 
into the overall antiterrorism-counterterrorism framework and 
to attempt to prevent threats and mitigate risk, not merely 
respond to events after they have occurred.
    The U.S. Government must also continue to sharpen its own 
antiterrorism and counterterrorism capabilities. The first line 
of defense is good intelligence. Multidisciplinary intelligence 
collection is crucial to provide indications and warning of 
possible attack, including insights into the culture and 
mindsets of terrorist organizations, and to illuminate key 
vulnerabilities that can be exploited and leveraged to disrupt 
terrorist activities before they occur.
    While a robust technical intelligence capability is 
crucial, our human intelligence capability must be enhanced. In 
addition, we must enhance intelligence-sharing between the 
public and private sector.
    We must also cultivate good relations and connections 
abroad. Terrorism is a transnational problem that demands a 
transnational solution. I just look to the preempted bombings 
in the millennium and the support that we got from the 
Jordanians to give a clear insight as to how important that can 
be.
    Companies also ought to establish direct contact with 
indigenous law enforcement agencies and security services, and 
the U.S. Government ought to help facilitate these meetings and 
ensure that small to medium-sized companies are included.
    More and more, the public and private sectors have 
overlapping duties. We must realize that we cannot protect 
everything everywhere all the time. But we do have the 
opportunity develop a comprehensive plan and strategy to combat 
terrorism in all its forms. And I highlight and really do 
appreciate the work of this subcommittee on assuring that we 
get to that point. Once developed, implementing and sustaining 
such efforts must be a high priority for U.S. national 
security.
    Mr. Chairman, I'm pleased that the Congress in general and 
your subcommittee in particular have recognized these needs and 
will reform our Nation's policies and posture and guide it 
accordingly.
    Thank you for your time.
    Mr. Putnam. Thank you, Mr. Cilluffo.
    [The prepared statement of Mr. Cilluffo follows:]

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    Mr. Putnam. The record will note, the gentleman from Idaho, 
Mr. Otter, has joined the subcommittee.
    The Chair now recognizes Dr. Bruce Hoffman, director of the 
Washington office for the RAND Corp.
    Welcome.
    Mr. Hoffman. Thank you very much. Thank you, Mr. Chairman 
and distinguished members of the subcommittee for the 
opportunity to testify in this matter.
    While the volume of worldwide terrorism fluctuates from 
year to year, one trend remains constant. Since 1968, the 
United States is annually head of the list of countries 
targeted by terrorists. Indeed, for more than 3 decades, 
terrorists have targeted the United States and its citizens 
more than any other country. This phenomenon is attributable as 
much to the geographical scope and diversity of America's 
overseas commercial interests and the number of our military 
bases on foreign soil as to the U.S. stature as the lone 
remaining superpower.
    Terrorists are attracted to American interests and citizens 
abroad precisely because of the plethora of available targets, 
the symbolic value inherent in any blow struck against 
perceived American, quote-unquote, imperialism, expansionism, 
or economic exploitation, and not the least because of the 
unparalleled opportunities for exposure and publicity from the 
world's most extensive news media that any attack on an 
American target assures.
    The reason why the United States is so appealing to target 
to terrorists suggests no immediate reversal of this trend. It 
is, as one commentator has noted, the price that the West and, 
in particular, the United States as leader of the free world, 
pays for its hegemony.
    Moreover, regardless of what the United States actually 
does, we are perhaps irrevocably perceived as a status quo 
power and, therefore, attacked for real or imagined grievances. 
Indeed, as the lone remaining superpower, the acute feelings of 
anger and resentment toward the United States was cited last 
week before this committee by Senator Rudman and General Boyd, 
in short, the world's continued enmity.
    The main problem that we face in protecting American 
citizens and interests abroad from both current and future 
threats rubs up against one of the fundamental axioms of 
terrorism. Hardening one set of targets often displaces the 
threats onto other softer targets. In other words, security 
measures may successfully thwart plans or actual terrorist 
operations or even deter terrorists from attacking, but they 
may not eliminate the threat entirely, which may mutate into 
other, perhaps even more deadly forms.
    Determined terrorists, accordingly, will simply identify 
vulnerabilities and hence potential targets, adjusting or 
modifying their means and method of attack to execute a 
completely different kind of operation that still achieves 
their goal.
    Therefore, in the current context of heightened threats to 
U.S. diplomatic facilities and military forces overseas, as we 
harden the range of American diplomatic and military targets 
long favored by terrorists, we doubt this will eliminate the 
terrorist threat completely but risk displacing it onto softer, 
more vulnerable and more accessible unofficial nongovernmental 
targets, that is, ordinary American tourists and travelers, 
business people, and otherwise unwary citizens.
    The implications involving a potential increase in maritime 
terrorist attacks following the successful assault on the 
U.S.S. Cole are particularly chilling. It is horrifying to 
contemplate a U.S.S. Cole suicide attack on a cruise ship 
steaming into a Caribbean, Mediterranean or U.S. port, much 
less any other unprotected harbor.
    The general pattern of terrorists attacking a wide variety 
of, quote-unquote, soft American targets is, however, already 
well established. For example, according to the U.S. Department 
of State, a total of 778 Americans have been killed by 
terrorists overseas between 1968 and 1999, the last year for 
which published Department of State statistics were available.
    Let me pause for a second and say that in a country where 
murder rates hover around 16,000 persons per year and where the 
annual incidents of violent crime regularly exceeds a million, 
the risks to U.S. citizens traveling and working abroad need to 
be put in an admittedly discomforting perspective of just how 
safe we are as Americans living and working in our own borders.
    But, that aside, of the 778 fatalities, half were private 
citizens, ordinary travelers, tourists and businessmen; 319 
were U.S. Service personnel; and 63 were American diplomats. 
Accordingly, although the attacks on our two Embassies in East 
Africa in 1998 and the more recent assault on the U.S.S. Cole 
are seared into our collective consciousness, they actually 
mask the threats that perhaps affect ordinary citizens far more 
than diplomats and soldiers and sailors.
    Equally significant is the fact that 83 percent of 
Americans killed by terrorists between 1968 and 1999 died in 
attacks in which they were specifically targets. Clearly, 
American citizens traveling, living and working overseas who 
have no ostensible or official connection with the U.S. 
Government are indeed already firmly in the terrorist cross 
hairs.
    This should not conceal the fact that at times individuals 
are targeted not necessarily because they are U.S. citizens but 
because they are westerners in general and hence 
opportunistically regarded by terrorists as desirable for their 
potential to bring large cash ransom payments for their 
release.
    These basic patterns of terrorism are evident in the key 
incidents reported during 2000 that have continued into the 
present year. In addition to the attack on the U.S.S. Cole, 
four American climbers were kidnapped by members of the Islamic 
Movement of Uzbekistan last August. That same month, an 
American, Jeffrey Schilling, was seized by the Abu Sayyaf 
organization in the Philippines, a group that had previously 
kidnapped two other American citizens--a Protestant missionary 
and a Roman Catholic priest.
    In November, an American who headed a program of the U.S. 
Republican Institute in Azerbaijan, a nongovernmental 
organization, was found murdered in Baku, apparently the victim 
of a robbery. And in January 2001, a U.S. citizen in Chechnya, 
there as a part of the humanitarian aid mission, Action Against 
Hunger, was kidnapped.
    As the latter incidents evidence, threats to Americans 
working for international humanitarian relief organizations and 
similar nongovernmental organizations present a special 
problem. These people are under increased threats for a number 
of reasons. According to Randolph Martin, senior director for 
operations at the New York-based International Rescue 
Committee, there are at least six reasons that NGO's are 
targeted: The overall increase in the number of conflicts in 
the past decade to which these organizations are being 
deployed; a general absence of the rules of war in these 
conflicts and the proliferation of so called irregular 
fighters, many of whom also include criminals and bandits 
interested as much in plunder as in the realization of a 
political agenda; a prevailing perception of aid operations as 
especially soft targets; the eroded acceptance of neutrality 
amongst these groups; and, within the NGO's themselves, a lack 
of security combined with the skeptical if not adversive 
altitude on the part of some for the need for security and 
protective measures.
    These views dovetail with those of another American 
citizen, in fact a former student of mine, who works with a 
U.S.-based aid organization in a particularly conflict-ridden 
country in Africa. In a recent e-mail she wrote to me: The 
first threat we face is basic--and I am quoting--threats 
against expatriates by terrorists, guerrillas, paramilitaries 
and others to gain publicity or to enhance panic and fear or to 
attempt to get the aid agencies to withdraw altogether. The 
second threat is common banditry of theft that is common 
anywhere but enhanced in a country of war facing severe 
economic difficulties. The third threat that we face is being 
caught in the cross fire, whether it be stray bullets hitting 
expatriate houses, rebel ambushes on the roads, hitting mines, 
or being caught in the field during a rebel attack. This third 
threat is often the most difficult to predict.
    Based on the observations of this aid worker, the help 
provided by the local U.S. Embassy appears to be ingenuous but 
limited.
    In general, therefore, the problem with NGO's and the 
security of NGO's overseas appears to be twofold. On the one 
hand, the NGO's themselves may have in the past paid too little 
attention to their own security and could have provided 
insufficient training before deployment. While, on the other 
hand, it often falls to the local American Embassy to fill this 
void, whose efforts and activities in this respect can be 
limited as much by insufficient resources as by too few 
personnel.
    In conclusion, it should be recognized that terrorism is 
not a problem that can be solved, much less ever completely 
eradicated. No country with the breadth and magnitude of the 
overseas interests and presence that the United States has can 
reasonably expect to hermetically insulate or seal itself off 
completely from any and every manifestation of this threat. In 
this respect, there are no broad, sweeping policies or new 
approaches in the form of individual ``magic bullets'' that can 
hope to counter, much less defeat, a threat that is at once 
omnipresent and ceaseless. By the same token, we are neither 
powerless nor completely defenseless in the face of terrorism; 
and there are a number of practical steps that might usefully 
be taken that might effectively mitigate the threat.
    First, ensuring that our intelligence resources and 
capabilities, especially with respect to human intelligence 
sources, are sufficiently funded, properly organized and 
continually oriented to actively identifying and countering the 
range of threats confronting American citizens and interests 
overseas.
    Second, making certain that the security in and around the 
principal transportation nodes, both for air as well as 
maritime travel, most frequented by American tourists and 
business people overseas are of a uniform, high standard. In 
this respect, Federal Aviation Agency and Department of State 
inspection teams in the past have identified lax security in 
airports throughout the world, particularly in some African, 
East Asian and Latin American countries.
    Third, working in concert with NGO's, further educate and 
inform the headquarters and staffs of these U.S.-based 
organizations of the importance of security and predeployment 
proactive measures that can be adopted to enhance the safety of 
Americans working overseas.
    Finally, perhaps seeking to achieve further consistency and 
clarity in the travel advisories and other warnings and public 
announcements emanating from U.S. official government sources.
    Finally, the threat of terrorism itself needs to be kept in 
perspective. In this respect, a prerequisite to ensuring that 
our formidable resources are focused where they can have the 
most effect is a sober and empirical understanding of the 
threat. Only in this manner can our efforts achieve the 
greatest likelihood of success and effectiveness.
    Thank you very much.
    Mr. Putnam. Thank you, Dr. Hoffman.
    [The prepared statement of Mr. Hoffman follows:]

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    Mr. Putnam. I thank all of our witnesses on the first 
panel.
    Before we move into questions, I would say, pursuant to 
House rules and committee rules, I note for the record that the 
subcommittee requested and all witnesses appearing at this 
hearing in a nongovernmental capacity have provided a resume 
and disclosure of Federal grants and contracts received.
    At this time, I would call on the gentleman from New York, 
Mr. Gilman.
    Mr. Gilman. Thank you, Mr. Chairman; and I want to thank 
our panelists again for focusing on the important aspects of 
what we're confronted with worldwide.
    George Tenet, our agency head, CIA Director, stated, U.S. 
remains a No. 1 target of international terrorism. Close to 
one-third of all incidents worldwide in the year 2000 were 
directed against Americans.
    I am going to address this to all of our panelists. Last 
week when we conducted our hearing we found that there was a 
proliferation of the responsibilities among 40 some agencies 
who had a little bit of their responsibility directed to 
terrorism; and I think then we focused on the need for a 
centralized agency, some central control at White House level. 
What I am going to ask all of our panelists, from your 
knowledge and your experience, and you all are experienced in 
this area, what improvements can we make that would have the 
greatest promise of improving the safety of Americans traveling 
abroad and Americans in business abroad?
    Let's start with Mr. McCarthy.
    Mr. McCarthy. I think that in order for people to protect 
themselves abroad, as they travel abroad they must have the 
information that exists in country at the time that they 
travel. The Office of Consular Affairs of the U.S. Department 
of State certainly provides a lot of information concerning the 
current economic--well, actually, the political situations in 
these areas. This information should--is very difficult 
sometimes to get. Of course, now with the Internet and several 
other means of mass communication, the public can get this 
information they need.
    It's very difficult--it's very difficult for the U.S. 
Government to control activities in foreign countries, 
obviously, for sovereignty reasons. But I think some effort--
much more effort must be made in order to try and help these 
countries. It's been my experience that the U.S. Government and 
the Western powers have exported democracy to some of these 
high-risk areas and emerging areas but did not export the 
handbook as to how democracy should be implemented, and I think 
the U.S. Government and its allies in the Western world should 
cooperate more with these countries to try and show them how 
democracy must be implemented and, in that way, possibly help 
safeguard not only the people within the country themselves but 
also the people who travel into these countries.
    In many of the high-risk areas we see poverty--as Mr. 
Kucinich has pointed out, we see poverty and we see 
exploitation of the local populations by these new governments. 
Particular examples, of course, are Nigeria and Indonesia. And 
when you look at the way the money that's proliferating in 
these countries, the money that's available in these countries 
is unbelievable from the extraction--actually, from the 
extractive industry, from the extraction of oil from these 
areas, and the tax dollars that the oil companies pay to the 
governments fails to trickle down to the populations 
themselves.
    Yet if you look at the Far East--not the Far East but the 
Middle East and see the way the people in those countries live, 
they depend on the same source for their economy, namely the 
oil industry, but yet the governments treat them a lot better. 
Granted that they're not democratic governments, but here in 
the area of Nigeria and Indonesia, where they have exploited a 
democracy and the Presidents of those countries have more or 
less wrapped their arms around the democratic principles and 
trying to enforce them, yet the people remain fairly poor and 
poverty stricken.
    The oil companies, of course, do take a beating in this 
regard; and they're blamed for everything. And the people in 
the communities look to the oil industry and the extractive 
industry and the companies there to supply them with the 
infrastructure and----
    Mr. Gilman. Mr. McCarthy, I am sorry to interrupt you. 
We've got four other panelists and my time is limited, if you 
could just wrap up.
    Mr. McCarthy. What I am trying to say is that when we 
export democracy we have to export the handbook. We have to try 
and train the police and train the military to be responsible 
for their people there and for the people who come in there, 
and we have--and the U.S. Government I feel owes a 
responsibility to try and proliferate the problems.
    Mr. Gilman. Thank you. I see our time is running, Mr. 
McCarthy.
    Mr. Littlejohn.
    Mr. Littlejohn. Thank you very much.
    I agree with Jack. I think the first thing we need is good 
information, good intelligence information. As I made a 
statement in my opening remarks, often we get conflicting 
information. Presently, most of our members in the private 
sector working abroad work with OSAC, and we strongly believe 
that OSAC should be the organization that should be the 
clearinghouse. However, we question whether or not OSAC is 
getting all the information from Central Intelligence, etc., 
that could be sent out to U.S. companies to protect their 
people both traveling and living abroad.
    Second, as Jack also mentioned, what goes on in a 
respective country. Now the FBI working with State had an 
excellent operation in National Academy of Budapest, which was 
very, very successful in training law enforcement in east bloc 
countries, and I understand that the DEA is looking at 
something in Thailand. There are also----
    Mr. Gilman. We have one in Thailand now. We've opened a 
similar one.
    Mr. Littlejohn. Is it open?
    Mr. Gilman. Yes, it's open and functioning. They're now 
exploring South Africa, but I am going to ask you to please 
wrap up.
    Mr. Littlejohn. OK. Finally, we have to do something to 
assist law enforcement communities in these communities who 
personally, A, are corrupt and, B, are not properly trained.
    Mr. Gilman. Thank you.
    And Mr. Bishop.
    Mr. Bishop. Nongovernmental organizations engaged in 
humanitarian response in conflict situations are required by 
international humanitarian law to maintain their political 
independence. They do not represent the U.S. Government, and 
they cannot. As long as they're able to maintain this 
independence, they are at less risk of terrorist attack.
    With great respect, Mr. Gilman, I do not think that, as 
their representative, it would be appropriate for me to comment 
on how the U.S. Government should organize itself to deal with 
terrorism. I have made several suggestions on what the U.S. 
Government might do to assist NGO's in enhancing their security 
overseas.
    Mr. Gilman. Thank you, Mr. Bishop.
    Mr. Cilluffo.
    Mr. Cilluffo. Thank you, Mr. Gilman.
    I personally don't think that there's a single fix, nor do 
I see this as a one-time fix. This is something that requires 
perseverance and continually reacting and keeping up with the 
state of the threat.
    But on the macro side--and there are a number of micro 
issues that we obviously don't have time to discuss right now--
but on the macro side I personally believe the first line of 
defense is intelligence. We should always get there before the 
bomb goes off. To date, signals intelligence and other 
technical means have provided the lion's share of actual 
counterterrorism operational intelligence, but the truth is 
that only a human source is going to tell you when and where a 
bomb is going to go off. So we need to enhance our human 
capabilities, and we need to make sure that there are no 
constraints prohibiting these capabilities from being able to 
flourish.
    Obviously, we need oversight, and that's a responsibility 
that the Hill and others should take very seriously. But the 
point is that terrorists don't frequent the cocktail circuit, 
they are not Boy Scouts, and we need to be willing to recruit 
these sorts of individuals.
    Second, I think improving the signal-to-noise ratio of 
indications in warning intelligence has been the biggest 
challenge. After a major event we're all at delta in terms of 
threatcon, but before you--basically, Embassies, military bases 
and even U.S. companies get bombarded with vague threat 
warnings. The challenge is going to be, how do you improve that 
from a vague warning to a very specific warning where you can 
take very specific actions to prevent, preempt or protect 
against a particular action?
    Third, I think training, training cooperation. The ILEA is 
a good example. It's been a very successful model. We need to 
build on that. I think companies also need to be working with 
the indigenous security services; and I would note the 
millennium bombing, the Jordanians saved a lot of American 
lives during the millennium in Jordan. So I think we need to be 
working toward enhancing transnational cooperation.
    Then, of course, there are a lot of prophylactic and 
antiterrorism as opposed to counterterrorism measures that 
should be taken.
    Mr. Gilman. Thank you very much.
    Mr. Hoffman, our time has run, so we need----
    Mr. Hoffman. I'll be very brief. I agree in improving 
intelligence, but I think also improving the accuracy and 
timeliness of open source information.
    Mr. Gilman. Could you put the mic a little closer, please? 
I can't hear you.
    Mr. Hoffman. Sure. Improving the accuracy and timeliness of 
open source information as well as intelligence and its 
dissemination.
    Second, increasing, I think, the overseas resources 
available to Americans. It is my understanding--I may be 
incorrect--that OSAC is oriented primarily toward the American 
business community, but increasing the resources available to 
ordinary American citizens. Regional security officers, for 
example, at our Embassies and consulates, already overworked, I 
think do a superb job. Their responsibilities have increased as 
the number of surveillances reported against their Embassies 
has grown, but their focus is diplomatic security, not 
necessarily that of ordinary Americans.
    And, finally, I think strength in programs such as the 
Anti-Terrorism Assistance Program run by the Department of 
State, which trains law enforcement personnel in other 
countries, that helps them improve their own security and, in 
turn, affects the safety of Americans but also fosters an 
atmosphere of invaluable cooperation and liaison.
    Mr. Putnam. Thank you, Dr. Hoffman.
    Mr. Gilman. Thank you, Mr. Chairman.
    Mr. Putnam. Thank you, sir.
    At this time, I will recognize the ranking member, Mr. 
Kucinich, for 10 minutes as well, after which we're going to 
try to go back and hold firm on the 5-minute rule, alternating 
between sides. Mr. Kucinich.
    Mr. Kucinich. I thank the gentleman, and I again want to 
thank the witnesses for their participation.
    Mr. McCarthy, I have a detailed summary of questions that I 
have for you as the director of corporate security for Texaco, 
and rather than make this entire meeting the focus of Texaco, 
what I'd like to do is to--I am going to submit these questions 
for the record, but I'd like to give those questions to you and 
perhaps you could respond in writing. That way we can 
facilitate this.
    I am not here to embarrass anyone, but I do have some 
concerns about Texaco's practice in Ecuador. I know you're 
working right now on trying to settle a case for $500 million 
on the pollution in Ecuador and the Amazon region, and I have 
questions that relate to human rights abuses with Texaco and 
Chevron in Nigeria and questions that relate to Texaco and 
Unocal in Burma and questions that relate to Texaco in 
Indonesia.
    But as I review all the questions, what it comes down to is 
this. I think this hearing can help solve some real concerns 
that people have in the world about business. Dr. Hoffman was 
the only panelist who had a--what I think is some degree of 
political analysis as to what our dilemma is here, and I speak 
as someone who has had some background in international 
business as a marketing director for a software company. I had 
the chance to go around and visit many countries and saw 
Fiumicino airport protected by people with machine guns, 
understand the climate some of you are working in.
    These hearings have a way of communicating the fear that's 
out there. None of us wants to see any of our citizens hurt 
abroad, that's for sure. We want to be able to see American 
business go abroad and be successful and help other countries 
grow as well. I think all of us would agree with those 
principles.
    But there's another level here that we have an opportunity 
to get to beyond this litany of questions which, Mr. McCarthy, 
I assume you would be willing to respond to them, rather than 
us drag it out here, but I want to go beyond that.
    Do you see that there is a role for human rights 
principles, such as we had with the Sullivan principles in 
Ireland, human rights principles to guide the work of U.S. 
multinational corporations and those principles incorporating 
workers' rights, environmental quality principles? Mr. 
McCarthy, do you think that if Texaco had or could enunciate 
principles of doing business that it would enable Texaco not 
only to be less of a target but for Texaco to lead the way in 
terms of a new era in global business? I'd like your response.
    Mr. McCarthy. Texaco at the present time is part of an 
initiative which has been developed by the British Foreign 
Office and the U.S. State Department where for the past year--
actually began in November 1999 and completed with a press 
release in December 2000, where it supported and welcomed a 
number of human rights principles that were developed with the 
cooperation of the extractive industry and the NGO's. It's 
about a 10-page document and has been released to the public. 
And just recently we came from a meeting in London where we're 
in the process of determining how these human rights principles 
can be incorporated into the business plans of various 
industries, not only from the extractive industries but also 
from other American business industries, these principles.
    Mr. Kucinich. See, I think Texaco and your business partner 
Chevron, because of your presence in so many countries, can 
help to lead the way internationally for setting new standards 
for human rights. I mean, it would be very easy, frankly, to 
spend this time in this committee to go over the litany of 
human rights challenges which are faced, and I can also 
understand that in the extractive industry you enter into a 
climate which you're going to receive resistance anyhow, and I 
can also understand in talking to people in your industry the 
challenges that you face from people who don't want to be fair. 
I know that, too, but I think with the tremendous financial 
power which Texaco has, with the scope and the reach of your 
industry, that there might be an opportunity here to create 
some new possibilities.
    Now, we can--you know, again, I understand the past. I know 
the record, believe me. I have spent a lot of time studying the 
record of Texaco and Chevron and other people in your industry. 
But we can't change that past. We can change the future, and so 
I would like you to submit to this committee, and I'd like to 
see it personally, and I'd like to work with you in crafting 
some human rights principles and principles that protect 
workers and the environment because we might be able to have an 
opportunity here for a new dialog. Then, if we take that 
direction, it may be that some of these security risks which we 
find ourselves having with our citizens abroad would not take 
the shape that they have taken today. And, again, that's not to 
in any way soft pedal what I think is a disturbing record of 
human rights violations, but we're all accountable, not just 
you. I am accountable, too. We're all accountable.
    So to try to go above this debate, yes, we should do 
something about making sure our citizens are safe abroad. 
Whether we want to use the intelligence apparatus of the United 
States of America to do that, I'll let some of my other 
colleagues get into that, but I would like to work with you to 
do something about creating new possibilities in this new 
millennium for human rights. I think we could do it, and I 
think Texaco has the understanding to do it. I don't think 
there's any industry in this country that has the kind of power 
and scope that your industry has, but we need to find a way to 
go into a new millennium with some new possibilities.
    So we have a short time for a response, but I just wanted 
to refocus this a little bit. Mr. McCarthy.
    Mr. McCarthy. Well, I think I--for Texaco, Texaco's always 
been interested in human rights and as part of its values--and 
its vision and values certainly has incorporated the basic 
human rights and operates in a perfectly legitimate and ethical 
manner around the world. That's been our policy. And again, as 
I say, we are part of the most recent initiative as far as 
developing human rights principles to be used not only in the 
extractive industry but all other industries that happen to 
operate in high-risk areas.
    Mr. Kucinich. And I would like to again work with you to 
facilitate the delineation and enunciation of those principles. 
So it goes beyond talking. I am just openly offering that. I 
mean, I could take another position here at this committee 
table, as you well know, but I am not doing that. I am 
submitting questions for the record, but I am letting you know, 
let's go beyond where we are at because I don't think where 
we're at is satisfactory, to be charitable about it.
    Mr. McCarthy. Well, as I said, that Texaco with the 
Department of State and the British Foreign Office is working 
very diligently and has crafted over the past year and has 
worked very hard with NGO's, Human Rights Watch, Amnesty 
International and several other NGO's as well as the top 
companies from the extractive industry in formulating these 
principles that have already been promulgated. And we are 
working now in phase two to try and find some way that we can 
implement these principles around the world.
    So we're already doing that. In fact, we've taken a 
leadership role. I was one of the first ones to sit on this 
board and take a leadership role in establishing these human 
rights principles. So Texaco and the extractive industry is 
certainly out in front when it comes to trying to put together 
human rights principles that protect people and protect their 
property.
    Mr. Kucinich. I'd like to have some followup meeting with 
your company about these things. I just see this as the opening 
of a dialog. Thank you.
    Mr. Putnam. Thank you, Mr. Kucinich. Gentleman's time has 
expired.
    Mr. Otter, you're recognized for 5 minutes.
    Mr. Otter. Thank you very much, Mr. Chairman; and I think 
this is probably a pretty timely hearing that we're having.
    I, like the previous member of the committee, have had a 
lot of experience in the international marketplace. I was the 
president of a company called Simplot International, which was 
a company that sort of followed McDonalds, if you will, around 
the world; and we supplied the French fries. I am from Idaho, 
if that surprises you.
    Anyway, I found that in order to be successful 
internationally the first two mistakes that most companies make 
when they go into a foreign country, into a foreign value 
system is--No. 1 is failure to recognize their traditions and 
to respect those traditions; and the second thing is failure to 
recognize their practices and their beliefs and then respect 
those.
    And, you know, I can think of many, many cases where I 
would no more put up with the way women are treated in certain 
areas of the world, especially the Middle East, than I believe 
any person in this room would, yet depending upon the value 
that we place on those goods and/or services that we get from 
that area of the country we are willing to look beyond that. So 
I think part of our whole attitude toward what we want to 
happen in the rest of the world has got to conform to what the 
rest of the world wants as well. Because I know I was not going 
to be successful.
    I have been to 82 foreign countries and, for the most part, 
everybody in those countries--and there isn't a country I can 
believe or that I was part of that I was in that didn't have a 
little bit different value system than what I as a farm boy 
from Idaho had. And so I had to respect that if I was going to 
be successful.
    The second thing that I found out is that almost anyplace I 
went, anyplace I went, not only my company but any other 
American country had elevated the value of life, had elevated 
the style of living, had elevated the purpose of the individual 
in society. It was maybe slow, and it may be, to some who 
wanted perhaps a little more, a little faster response in human 
rights, in other areas, it may well be slow, but I can tell 
you, from the time that I first arrived in a country until 
maybe I went back several times to view how the operation was 
going, things had improved, understandings had come together.
    So laying that as a format for all the panelists, I want to 
ask you a couple of things. It's been my experience that the 
types of, quote, unquote, terrorism basically came in two 
areas. One was economic terrorism. They were after me or one of 
my people in order to hold us for ransom so that they could get 
some money to advance some more of their efforts which in many 
cases, believe it or not, the world believed was an advancement 
of human rights, oddly enough.
    The second thing was for philosophical purpose, and 
philosophical purpose is broke down into two veins. One is 
religious, and the other was political. I never went to a U.S. 
office in a foreign area without making sure that everybody, 
everybody that I knew knew why I was going there. I did not 
want to be part of the information gathering system of the U.S. 
Government because that immediately left me suspect in my 
community, in the business community, and it immediately left 
me vulnerable to some of these folks who were, quote, unquote, 
working for democracy in their country.
    I'd just like you to respond all but briefly, now that I've 
made my speech, all but briefly as to whether or not I am right 
or wrong. No. 1, do you believe that Texaco, any country you 
went into, are those people worse off now that you're there or 
better off? And with the experiences that the rest of you have 
and including the humane efforts of Mr. Bishop's outfit. Mr. 
McCarthy first.
    Mr. McCarthy. Well, I think in many of the undeveloped 
areas that the extractive industry has gone into that the 
people are better off than they were before. The reason that's 
true is because, just as we practice humanitarian and 
philanthropic aid here in the United States, we also do it 
overseas in these poor areas. And so we build roads for them, 
we build hospitals for them, we furnish them with light sources 
and medical equipment and medical training and medical 
facilities that they normally would not have. This has, in 
effect, lengthened their life and increased their standard of 
living.
    Mr. Otter. Thank you.
    Mr. Littlejohn.
    Mr. Littlejohn. First of all, I agree with the traditional 
belief. Clearly, a business is not going to be successful 
unless it's molded around the local traditions and beliefs. 
But, second, the area of terrorism, I've experienced--I've had 
kidnappings in the Philippines, Colombia, Russia and Mexico 
which I have managed.
    Mr. Putnam. The gentleman's time has expired. If we could 
finish out this panel with a yes or no, if people are better as 
a result of these.
    Mr. Littlejohn. Yes.
    Mr. Otter. Thank you.
    Mr. Bishop.
    Mr. Bishop. Sometimes. In Sierra Leone, there was a 
conflict. It was ended. We needed, with the U.S. Government and 
other donors, to provide development assistance to consolidate 
that peace. They walked away from it.
    Mr. Putnam. Thank you, Mr. Bishop. We'll put you down as a 
sometimes.
    Mr. Cilluffo.
    Mr. Cilluffo. Well, I sit here in the city of northern 
charm and southern efficiency. I don't have business interests 
abroad, so I can't answer the first question.
    The second question, however, you are seeing a shift from--
I mean, terrorism has always been both political and economic, 
but you are seeing a shift toward less political terrorism, 
toward more nationalist and radical fundamentalist religious 
terrorism.
    Mr. Otter. Thank you.
    Dr. Hoffman.
    Mr. Hoffman. Well, with all due respect I would say that's 
not the right question because it's not so much important what 
I think but what they think. And I think a problem is what we 
regard as benevolence and munificence they see as interference, 
as propping up the establishment and as preserving the status 
quo, and that's the problem.
    Mr. Putnam. I am sorry, we're going to catch you the next 
round.
    The chair recognizes Mr. Tierney for 5 minutes, plus a 
Washington version of a yes or no.
    Mr. Tierney. Thank you, Mr. Chairman, and thank you for 
your fair way of handling this hearing. Is there going to be 
another round of questioning after the first panel?
    Mr. Putnam. I have got time, if you've got time.
    Mr. Tierney. I am hard pressed to let pass some of the 
comments that were made, because I am dying to find out just 
how much mistreatment of women would equal the price of 
commodities or what we get out of commodities in some of these 
countries. I don't think we should let that go unexplored at 
some point, and perhaps we'll ask all of you the question along 
that line.
    But let me start with the question for perhaps Mr. Cilluffo 
initially. What is your opinion what the United States should 
do beyond providing information and communication networks and 
electronic data bases, newsletters and other publications in 
order to increase security for corporate interests worldwide?
    Mr. Cilluffo. I do think that when we do look at 
information sharing and intelligence cooperation, that is 
absolutely crucial. And we are not talking about a Kumbayah 
kind of fest where we sit at the campfire----
    Mr. Tierney. I understand. I am talking about beyond that.
    Mr. Cilluffo. I also think that we can be working toward 
common standards, common procedures to benchmark what is OK and 
what is not. I am not saying--I don't know if we want to go 
down that path too far, because then you're accountable based 
on certain standards, but I think we can work toward that. And 
I also think that working with our foreign counterparts is 
absolutely essential and not just in terms of investigations 
and techniques and capabilities but also understanding the rule 
of law, the way we at least--maybe it's blinded, but the 
American version of the rule of law.
    Mr. Tierney. Thank you.
    Mr. Littlejohn, what do you say to that? How much more 
should the United States through its official agencies do to 
protect corporate interests beyond information and 
communications?
    Mr. Littlejohn. Well, I think we need help in the field. I 
think when companies are starting a startup operation they 
should be aware of what they're getting into. And, as I pointed 
out in my initial recommendations, I believe that agencies, 
particularly FBI leadouts in the country, should be introducing 
the security people to the local law enforcement agencies, 
people that they can trust that can help. But I do believe also 
that OSAC has been providing us a lot and should continue on to 
provide both training and information; and the RSOs, of course, 
have to get into that.
    Mr. Tierney. To the extent that the United States provides 
that kind of assistance to corporations, do you believe that 
there's any right for the public, the tax-paying public, to 
expect backing and quid pro quo from businesses such as a 
commitment to certain environmental standards and perhaps 
treatment of employees?
    Mr. Littlejohn. Oh, absolutely. How to define it, I 
couldn't say, but, yes, I believe that.
    Mr. Tierney. How about you, Mr. McCarthy? Do you believe 
that there's a right for us to require some standard of 
environmental standard and employee protection in return for 
what the U.S. taxpayers' money does in security interests?
    Mr. McCarthy. Well, I think that these companies in the 
extractive industry are already providing that to a certain 
extent. The division of values of American companies embody the 
American spirit which incorporates environmental protection and 
human rights, and most companies that I am aware of anyway have 
incorporated that division of values.
    Mr. Tierney. You don't want to rely on what Texaco has done 
for protection of environmental rights in making that 
statement, do you?
    Mr. McCarthy. Well, Texaco has done pretty good in 
protecting environmental rights.
    Mr. Tierney. Well, I have got to go there then.
    I've got to ask you. You've been sued in New York, your 
company, for dumping tens of millions of gallons of toxic waste 
into the Amazon over a period of 20 years. Is that your idea of 
a good environmental policy for indigenous people?
    Mr. McCarthy. I am really not fully familiar with the 
problems in Ecuador at this particular point in time. For me to 
answer these questions would be pure speculation on my part.
    Mr. Tierney. You're basically answering my question. 
Without the knowledge of what your company has been at least 
charged with doing and which they settled at the cost of $500 
million for doing--you're aware of the settlement?
    Mr. McCarthy. I am aware of that----
    Mr. Tierney. But you don't rely on that for the statement 
that your company has a great record of protecting 
environmental interests?
    Mr. McCarthy. I don't really represent Texaco at this 
particular meeting. I represent OSAC, and I was under the 
impression that my presence here was to deal with terrorism, 
not with the policies and programs of Texaco. If we had----
    Mr. Tierney. Well, you're talking about security for our 
nationals, right?
    Mr. McCarthy. If I knew that the questions would deal on 
human rights and on problems in Ecuador certainly somebody 
would be here to answer those questions for you.
    Mr. Tierney. Well, I just have to tell you that I hope all 
the witnesses are prepared to answer what responsibilities 
people that are protected at the cost of taxpayers' money owe 
back to the taxpayers in terms of corporations. My question was 
really designed toward, could we rely on some expectation that 
if we're going to spend taxpayer money for security measures 
abroad, could we expect that those corporations would be asked 
to adhere to certain environmental standards and labor 
standards?
    Mr. McCarthy. Well, as I mentioned to you, Texaco, as well 
as other companies in the extractive industry, are already 
engaged in issues with foreign--with not only the U.S. 
Government but foreign governments in trying to put together 
human rights policies and other policies that will address 
those situations.
    Mr. Tierney. Thank you.
    Mr. Putnam. Gentleman's time has expired.
    The Chair would note that the role of human rights advocacy 
in reducing resentments and easing the terrorist threat may 
indeed be a very appropriate topic for a future hearing. The 
subject of today's hearing is the potential--excuse me, the 
protection of the U.S. interests against the immediate threat 
of terrorism.
    Mr. Tierney. Point of order on that, please.
    Mr. Putnam. You're recognized.
    Mr. Tierney. Is that to say that you're limiting the 
hearing, there will be no questions about what we might expect 
back in return for the provision of those security measures?
    Mr. Putnam. No. The gentleman is incorrect. It was simply 
to remind all members and the audience that the topic of 
today's hearing is protecting of U.S. interests against the 
immediate threat of terrorism. You can direct your questions in 
whatever way you see fit. You're an elected Member of Congress.
    We will do one more round for this panel and then bring in 
panel two. Mr. Gilman, you are recognized.
    Mr. Gilman. Thank you, Mr. Chairman; and I'll be brief.
    Mr. McCarthy, as co-chairman of the OSAC organization I 
note that OSAC is supposed to be a clearinghouse for exchange 
of information among everyone in the private sector, businesses 
and executives and NGO's, etc. The panelists have all 
highlighted the fact that we need better intelligence, more 
accurate intelligence, better exchange. Tell me what OSAC does 
to improve that intelligence dissemination.
    Mr. McCarthy. OSAC is a--they have a council of 
approximately 30 security professionals which actually operate 
the OSAC facility--the OSAC organization. One of the major 
things that OSAC has done is put together the electronic 
bulletin board, the electronic data base; and this data base 
contains not only anecdotal information but professional 
analyst information concerning political and criminal 
situations abroad.
    Mr. Gilman. And security threats as well?
    Mr. McCarthy. Security threats abroad, and it's available 
on a Web site. A part of it is password protected because 
it's--some of it is very specific and would be considered 
proprietary, and a lot of it is only of interest to the 
security professionals, but the majority----
    Mr. Gilman. Let me interrupt a moment. How do you protect 
your password security for OSAC information?
    Mr. McCarthy. When you're an American company and sign up 
for OSAC, you are given a password. The senior security officer 
is given a password which he can proliferate throughout the 
company at his discretion.
    Mr. Gilman. Can NGO's find that access?
    Mr. McCarthy. There are some NGO's that are included in 
OSAC. The Church for Latter Day Saints, for instance, is a 
very, very active member of OSAC.
    Mr. Gilman. And tell me about your country councils. I 
understand OSAC has country councils.
    Mr. McCarthy. They have about 30 councils that have been 
started around the world, and the purpose of these councils is 
to try and give to the nonprofessional security-type 
information that would help him fulfill his responsibilities. 
In many companies, maybe a person who's assigned to the human 
resources would also have a security responsibility and he is 
not very proficient in many of the best practices of security, 
and through the country council these practices are passed down 
from the other companies to them.
    Mr. Gilman. And what's your relationship with the 
government agencies in providing the information you have 
available?
    Mr. McCarthy. There are government agencies who are 
technical advisers as part of OSAC also, the FBI, for instance, 
and the Department of Commerce and several other agencies.
    Mr. Gilman. Diplomatic Security Agency?
    Mr. McCarthy. Diplomatic security actually runs those, yes, 
sir.
    Mr. Gilman. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Putnam. Thank you, Mr. Gilman.
    The Chair recognizes Mr. Kucinich for 5 minutes.
    Mr. Kucinich. Thank you, sir.
    To Mr. Bishop, continuing the discussion I started with Mr. 
McCarthy, what would be the value if major American 
corporations or American corporations doing business in the--
you know, generally anywhere around the world would have in 
advance of their business activities fully enunciated human 
rights principles, including workers rights, environmental 
quality principles? And, of course, that would also mean, you 
know, if we are talking human rights we are talking about the 
rights of women, children. What if that was the motif that was 
put out there for everyone to understand this is what we stand 
for and it was backed up by business practices that were 
consistent with the enunciation of those principles? What would 
be the effect on improving America's image abroad and America's 
position?
    Mr. Bishop. The organization that I represent hasn't taken 
a position on that issue.
    Mr. Kucinich. I am asking you personally. What do you 
think?
    Mr. Bishop. I think that, speaking generally, that the 
adoption of such a practice would improve the image of 
international business, many of these have lost their American 
identity abroad, and be a calming influence.
    Mr. Kucinich. Mr. Cilluffo, what do you think about that?
    Mr. Cilluffo. I believe that it actually does make bottom-
line sense. To win the hearts and the minds of any indigenous 
or local population has been crucial in time of war, in time of 
crisis. So I do think that it would be something valuable.
    The devil's in the details, and I have no idea----
    Mr. Kucinich. What you just said, though, impressed me, 
because you talked about the bottom line. Because it would 
occur to me that business may actually lose money with 
practices that are adverse to human rights. I mean, is that----
    Mr. Cilluffo. Initially, but the long-term benefits could 
outweigh the short-term costs and just in terms of support of a 
local indigenous population. That is--it's been--I mean, 
militarily, even in traditional national security terms, I 
think that should be underscored, and it's very important.
    Mr. Kucinich. Yeah, I think--and, Dr. Hoffman, would you 
respond to that? Because then I just want to make a comment on 
this. Go ahead.
    Mr. Hoffman. I think it would be extremely useful. It would 
certainly, at minimum, deprive the terrorists of the propaganda 
that they generate and market against the United States to 
drill up hostility to our country and also to increase their 
own recruits.
    Mr. Kucinich. It seems to me that human rights should be 
consistent with people making money. I mean, why not? Just as 
environmental quality principles--you know, we are in a new 
millennium where there's new ways of dealing with environmental 
challenges that can also save money. Sometimes that smoke going 
up the stack is profits lost, for example.
    It seems to me that when we're looking at the possibility 
of a new millennium we could go one or two ways. We could end 
up with more violence, which requires a greater presence and 
security networks, etc., or we could take the world in a 
different direction. And I think that our corporations are in 
the position where they can help make it happen, even--may have 
even more influence than U.S. Government itself when we're 
talking about activities abroad, which is why I raised this. 
Because, look, we're all heirs of traditions that we may not 
always agree with and sometimes question, which is why I am a 
little bit uneasy about asking any individual to be singularly 
accountable for what his organization or corporation does, but 
we all have a role in where we go from here.
    So, as you said, Mr. Cilluffo, you know, the devil is in 
the detail. I think it would be useful to convene U.S. 
corporate leaders on this issue and gather observations about 
what might be a common set of human rights principles covering 
workers and environment. And, you know, if you do that we might 
make some progress on some of our trade issues because, as you 
know, one of the major sticking points in a number of our trade 
agreements is the sense that corporations will not support 
human rights, workers rights, environment. If we can get 
corporations to do that voluntarily, then perhaps we can start 
a new era of human progress. That's where I am coming from.
    So I thank the witnesses and look forward to further 
exchange on these matters. Thank you.
    Mr. Putnam. Thank you, Mr. Kucinich.
    The Chair and the subcommittee thanks the panel for their 
testimony and their thoughts on these issues.
    At this time we will excuse the first panel, take about a 
2-minute recess and bring up the second panel. Thank you.
    [Recess.]
    Mr. Putnam. The hearing will return to order.
    Are all witnesses present?
    The Committee on National Security, Veterans Affairs and 
International Relations is pleased to welcome our second panel 
of witnesses for the hearing on Protecting American Interests 
Abroad: U.S. Citizens, Businesses, and Nongovernmental 
Organizations.
    As you are aware, you will be giving sworn testimony. At 
this time, please stand and raise your right hands.
    [Witnesses sworn.]
    Mr. Putnam. Note for record that the witnesses responded in 
the affirmative.
    At this time, we will take the witnesses' opening 
statements. I ask that you please adhere to our 5-minute rule.
    We will begin with Mr. Peter Bergin, Director of Diplomatic 
Security Service and Co-Chairman of Overseas Security Advisory 
Council, U.S. Department of State. Welcome.

   STATEMENT OF PETER BERGIN, DIRECTOR, DIPLOMATIC SECURITY 
SERVICE, CO-CHAIRMAN, OVERSEAS SECURITY ADVISORY COUNCIL, U.S. 
   DEPARTMENT OF STATE; MICHAEL WAGUESPACK, DEPUTY ASSISTANT 
DIRECTOR, COUNTERINTELLIGENCE OPERATION SUPPORT, FEDERAL BUREAU 
OF INVESTIGATIONS; DIANNE ANDRUCH, MANAGING DIRECTOR, OVERSEAS 
CITIZENS SERVICES, BUREAU OF CONSULAR AFFAIRS, U.S. DEPARTMENT 
 OF STATE; AND LEONARD ROGERS, ACTING ASSISTANT ADMINISTRATOR, 
     HUMANITARIAN RESPONSE, U.S. AGENCY FOR INTERNATIONAL 
                          DEVELOPMENT

    Mr. Bergin. Thank you very much, Mr. Chairman. I am pleased 
to be with you today to address this important matter with you.
    OSAC, which was created by Secretary of State George Shultz 
in 1985, is a partnership, a one-of-a-kind partnership between 
the private sector and the government to address the security 
concerns of the U.S. private sector around the world. The 
Bureau of Diplomatic Security is entrusted to carry out the 
U.S. Government responsibilities in this partnership.
    This afternoon I will explain how the Bureau of Diplomatic 
Security, through OSAC, exchanges security information with 
U.S. companies, nongovernmental organizations, educational 
institutions and private entities so they can make informed 
decisions about how best to protect their people, their 
facilities and their investments overseas.
    What makes the Council most effective is the breadth of its 
membership. The Council is comprised of 30 representatives from 
all sectors of business--financial, airlines, pharmaceuticals, 
consumables and high-tech, among others--as well as government 
representatives from the Departments of State, Commerce and 
Treasury and the Agency for International Development. In 
addition, there are seven government technical advisers from 
the Federal Bureau of Investigation, the National Security 
Agency, the National Counterintelligence Center, the U.S. 
Secret Service, the Federal Aviation Administration, the 
Financial Crimes Enforcement Network and U.S. Customs.
    The Maritime Security Council, an organization of ocean 
carriers, cruise lines, and related industries, also serves the 
Council as a technical adviser.
    Four committees serve as the engine for OSAC.
    The Transnational Crime Committee provides information and 
case studies on transnational criminals and organizations. The 
Transnational Crime Committee is currently chaired by Motorola.
    The Protection of Information and Technology Committee 
deals with intellectual property issues. It is currently 
chaired by American International Group Inc.
    The Security awareness and Education Committee reviews and 
updates the OSAC Web site and publications. It is currently 
chaired by Cargill.
    Our fourth committee is Country Council Support. This 
committee, which is chaired by Kellogg, promotes communications 
between OSAC and Washington and the field.
    Overseas, OSAC is represented by its country councils. They 
serve in the front lines where private sector problems are 
addressed in cities around the globe. An American private 
sector representative and the Embassy regional security officer 
[RSO], chair these councils. Currently, there are OSAC country 
councils in 35 cities around the world.
    The exchange of information is the reason OSAC exists. OSAC 
has an interactive Internet site of security information. This 
Web site contains press reporting from around the world, 
unclassified Embassy reporting, information on overseas 
contacts, groups prone to violence, upcoming global events, 
cybercrimes and other special topics. This user-friendly site, 
which is managed by Diplomatic Security, receives over 50,000 
hits per week.
    The operational element of OSAC is Diplomatic Security's 
Research and Information Support Center [RISC]. RISC is staffed 
by six analysts who are regional security experts. The RISC 
staff is dedicated exclusively to the U.S. private sector with 
interests overseas. This staff is the person-to-person focal 
point for the exchange of overseas security information with 
the private sector. RISC analysts do over 150 consultations per 
month. RISC has also supported the U.S. private sector overseas 
at major events such as the Sydney Olympics, the World Bank/IMF 
meetings in Prague and the World Economic Forum in Davos.
    Every November OSAC holds its annual briefing. This event 
regularly attracts over 700 private sector executives to the 
State Department. At this session, OSAC presents a worldwide 
threat overview specifically tailored to the private sector.
    OSAC publishes material on topics such as emergency 
planning for American families and businesses abroad, 
protecting U.S. business information overseas and responding to 
a biological or chemical threat. These publications are all 
available on the OSAC Web site or on hard copy.
    All of our information services--the Web site, the 
consultation with the RISC analyst, the annual briefing and the 
security publications--are free.
    We have a number of initiatives designed to keep OSAC 
relevant in today's ever-changing security environment. OSAC, 
joined by the State Department's Bureau of Consular Affairs, 
has formed the University Working Group. This working group is 
developing safety programs and establishing best practice 
guidelines to increase security awareness for students and 
faculties traveling and studying abroad. The schools now 
represented on the University Working Group are Pepperdine, 
Louisville, Ohio State, Arcadia, University of Southern 
California and Michigan State.
    Another initiative involves training. The State Department 
now makes available to the private sector a 2-day personal 
security program to prepare their employees to live and work 
overseas. This program offers much the same training that State 
Department and other U.S. Government employees receive before 
they are assigned abroad.
    In the last year we've done four sessions for over 100 
private sector participants. The feedback has been positive. 
The Congress has had a lot to do in legislating our authority 
to train the private sector, and we thank you.
    The future holds many challenges for OSAC. As more American 
companies travel and conduct business abroad, we are 
expanding--we are working to expand our constituent base. We 
also have an effort under way to increase the number of country 
councils.
    Just as U.S. Government officials represent American values 
and interests around the world, every American abroad is a 
partner in our diplomacy. Any threat to their security is a 
threat to U.S. national interests. OSAC is U.S. foreign policy 
at its best. OSAC provides security information to the U.S. 
private sector so that it can travel, operate and invest safely 
in a world that is constantly changing. OSAC is government that 
works.
    Mr. Chairman, thank you.
    Mr. Putnam. Thank you very much. We appreciate your 
testimony.
    [The prepared statement of Mr. Bergin follows:]

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    Mr. Putnam. The Chair now recognizes Mr. Michael 
Waguespack, Deputy Assistant Director of Counterterrorist 
Operation Support Section, Federal Bureau of Investigations. 
Did I pronounce your name correctly?
    Mr. Waguespack. You pronounced it correctly, Waguespack. 
Just for the record, I am the Deputy Assistant Director for 
Counterintelligence Operation Support.
    Mr. Putnam. The record will note the change. You're 
recognized.
    Mr. Waguespack. Thank you, Mr. Chairman. I also thank 
members of the committee for inviting the FBI to testify about 
the ANSIR program as the committee examines the topic of 
``Protecting American Interests Abroad.''
    While other agencies in the government have primary 
responsibility for protecting U.S. interests overseas, the FBI 
participates with them as appropriate and contributes to the 
overall government effort.
    The acronym ANSIR stands for ``Awareness of National 
Security Issues and Response.'' As part of its national 
security mission, the FBI has been providing awareness 
information in order to reduce the vulnerabilities of U.S. 
citizens, corporations, and institutions to intelligence and 
terrorist activities since the early 1970's. By knowing what 
intelligence services and terrorists do and how to frustrate 
their plans, American interests are better protected.
    The initial focus of this program in the 1970's was the 
protection of classified government information, property and 
personnel. At that time, the program was known as DECA, 
Developing Espionage and Counterintelligence Awareness.
    In the 1990's, several challenges occurred which led the 
FBI to decide that a larger audience should be receiving its 
national security message. First, foreign intelligence services 
expanded their targeting to include unclassified private sector 
proprietary economic information.
    Second, the threat of terrorist attack on American 
interests here in the United States and abroad escalated. 
Additionally, the serious problem of computer intrusion and the 
costly menace of the computer virus dictated the FBI awareness 
message should reach a broader audience in a timely fashion to 
protect harm.
    The FBI's ANSIR program's message is principally aimed at 
U.S. corporations, although other government agencies and law 
enforcement also benefit from it. The principal method of 
disseminating FBI information is through ANSIR e-mail which I 
will describe later. The ease of replicating e-mail 
communication accounts for the global nature of its 
dissemination.
    American interests abroad receive ANSIR communications 
primarily from their headquarters in the United States, which 
relay ANSIR e-mail to them, though on occasion the awareness 
message is delivered directly to those overseas.
    In addition to making potential targets of intelligence and 
terrorist activities less vulnerable through awareness, the FBI 
also has a unique capability to respond when these activities 
are identified in the United States. This response capability 
is a key part of the awareness message. The FBI does more than 
simply identify problems, it does something about them.
    Let me just talk briefly to the organizational structure of 
ANSIR. The ANSIR program is by any measurement of government 
programs a very small one. Currently, there is one supervisory 
special agent assigned as the national ANSIR program manager in 
the National Security Division at FBI headquarters.
    The ANSIR program also has at least one special agent in 
each of its 56 field offices assigned as the ANSIR program 
coordinator. This is actually a collateral duty assigned to 
take no more than 10 percent of the coordinator's time. The 
coordinator acts as the point of contact for request of 
assistance and inquiries generated by ANSIR.
    A special agent is assigned this duty because decades of 
experience with the ANSIR program has shown that the private 
sector prefers discussing national security issues with an 
individual who has operational experience.
    The ANSIR program has no membership. Rather, individuals, 
corporations, government agencies and organizations which 
request FBI national security awareness information may receive 
unclassified awareness information via ANSIR e-mail or through 
presentations conducted by ANSIR coordinators and other 
knowledgeable individuals that are arranged through the 
program. Presentations are given both at the classified and 
unclassified level.
    What is today the ANSIR e-mail program began as the ANSIR 
fax program in 1995. After the private sector shifted its 
principal means of communication to the Internet in 1996, ANSIR 
fax became ANSIR e-mail. The program uses the FBI's Law 
Enforcement On-Line [LEO], as its Internet service provider to 
ensure the security and integrity of ANSIR e-mail. This program 
was initiated to greatly improve the efficiency of 
disseminating the FBI's awareness message.
    While personal presentations, videotapes and mail all have 
their value, nothing is as efficient as Internet e-mail for 
quickly distributing an advisory whose value diminishes with 
every passing hour.
    Recently, the number of ANSIR e-mail subscribers was 
reported to be over 30,000. Each ANSIR e-mail advisory 
eventually reaches substantially well over this number 
depending on the content of its message. Key messages which 
members of Fortune 500 and large government agencies wish to 
pass on to their personnel have the largest international 
dissemination.
    The number of ANSIR e-mails disseminated annually vary 
depending upon the threat environment. In the calendar year 
2000, a total of 63 advisories were disseminated. Because the 
ANSIR e-mail has asked its subscribers which advisories within 
17 infrastructures they desire to receive, not all advisories 
are received by every subscriber. However, the majority of 
subscribers ask to receive advisories from all 17 
infrastructures.
    Let me talk briefly about the ANSIR program with regard to 
the counterterrorism effort. The role of the FBI's ANSIR 
program in the U.S. counterterrorism effort overseas is within 
the FBI's primary mission of preventing, deterring, and 
defeating terrorism activities in the United States. To this 
end, the ANSIR program provides terrorism awareness information 
valuable to public and private sector organizations.
    ANSIR e-mail is a component of the government's National 
Threat Warning System. The National Threat Warning System has 
established a protocol for the rapid dissemination of terrorism 
threat and warning information throughout the Federal 
Government, law enforcement, and the private sector. The 
protocols established by the NTWS provide uniformity in 
defining what constitutes a threat advisory which should be 
disseminated and the language used to describe it.
    Mr. Putnam. Sir, if you could conclude your remarks.
    Mr. Waguespack. Yes, sir.
    Mr. Putnam. We have a copy of your written testimony. We'll 
be able to derive our questions from that.
    Mr. Waguespack. In conclusion, then, I would just like to 
say that you can talk about the cooperation that exists between 
government programs concerning the protection of American 
interests abroad. The FBI's ANSIR program coordinates all 
overseas activity in which it is requested to engage with the 
Department of State. In fact, the FBI Deputy Director Thomas 
Pickard is a member of the Overseas Security Advisory Council 
Executive Board. As noted--would be noted in the written 
testimony, we have also been sponsored to present various 
programs through the Defense Security Service and other 
government agencies internationally.
    We think that the ANSIR program is a ``good news'' program, 
and I hope that this information is helpful. I look forward to 
answering any questions.
    Mr. Putnam. Thank you very much.
    [The prepared statement of Mr. Waguespack follows:]

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    Mr. Putnam. At this time, the Chair recognizes Ms. Diane 
Andruch, Managing Director, Overseas Citizens Services, Bureau 
of Consular Affairs, U.S. Department of State. Welcome.
    Ms. Andruch. Thank you, Mr. Chairman and members of the 
subcommittee. I have submitted my full statement for the 
record, which I will now summarize.
    The Bureau of Consular Affairs [CA], is charged with 
exercising the Secretary of State's responsibility to provide 
consular protection and services to U.S. citizens abroad. The 
Department has no higher priority.
    I will be speaking today about the work of my office, 
Overseas Citizens Services [OCS], to provide vital emergency 
and nonemergency assistance to U.S. citizens abroad on a daily 
basis. We help Americans in dire circumstances, including 
deaths, arrests, missing persons, medical evacuation and 
financial emergencies.
    In times of crisis, such as natural disaster, civil unrest, 
political instability or transportation disasters, OCS 
coordinates the consular response in Washington and at our 
posts abroad, and provides a vital point of contact for 
Americans in the United States concerned about their relatives 
overseas.
    We try to make it easy for Americans to reach us. Our phone 
number is in every U.S. passport. Machine readable photo 
digitized U.S. passports issued since November 16, 1998 also 
include our Web site for our home page. We are available 24 
hours a day, 7 days a week, worldwide throughout our Embassy 
duty officer program.
    One of our primary objectives is to alert citizens to 
situations that may adversely impact their safety and security. 
The cornerstone of this effort is our consular information 
program. OCS prepares a consular information sheet for every 
country in the world, which includes basic information about 
local conditions. When the Department determines that it is 
unsafe for Americans to travel to a particular country, we 
issue a travel warning. We issue also public announcements 
which will cover short-term events, such as the potential for 
violent demonstrations. In 2000, we prepared 40 travel warnings 
and 138 public announcements.
    In addition, we issue worldwide caution public 
announcements on terrorism and threats against American 
interests abroad, such as the announcement issued on January 
1st of this year which remains in effect.
    American communities abroad are also alerted to threats 
through our Embassies' warning systems. These are through 
telephone, multi-fax and e-mail trees designed to share 
information quickly when there is imminent danger to Americans 
overseas.
    We get the word out about our consular information sheets 
and that program by disseminating them to our missions abroad, 
the media, the travel industry and other U.S. Government 
agencies and to e-mail list subscribers. We also place them on 
our Consular Affairs home page at www.travel.state.gov. Our 
home page has seen as many as 600,000 hits a day or 13 million 
hits in a month. In the year 2000, our home page received 96 
million hits. And we anticipate our first million hit day won't 
be too far in the future.
    For those without computers, our materials are also readily 
available by telephone recording, fax on demand, and by mail. 
Our home page also includes pamphlets and other detailed 
information on a wide variety of topics.
    Now I would like to talk a minute about the information 
contained in these documents that we've been discussing, how we 
obtain it; in particular, crime, safety and security 
information. For the most part, the information is provided by 
our Embassies and consulates abroad. Information on local 
crime, areas of instability and the overall political climate 
are provided with the input of various offices within the 
Embassy. If a threat applies equally to private and official 
Americans alike, it must be shared with both. This we referred 
to as our ``no double standard'' policy.
    Information about terrorist threats is obtained from a 
variety of sources: from the U.S. intelligence community, those 
of our allies, friendly sources, open threats and other 
sources. No matter what the source, though, all the information 
is taken seriously and put through a comprehensive evaluation 
process.
    Threats are evaluated based on evidence--on threat evidence 
alone, not on political or policy issues. Before the 
information is shared with the public, however, it must be 
specific, credible and noncounterable. This threshold precludes 
us from publishing unsubstantiating information and suffering 
the consequences of ``crying wolf.''
    The Department's Bureau of Diplomatic Security [DS], 
reviews this information pertaining to private Americans. 
Information obtained and analyzed by DS, in concert with 
another office of the Department, the Office of 
Counterterrorism, the Bureau of Intelligence and Research, and 
other sources in Washington is also shared and evaluated by our 
missions in the affected country or region.
    In addition to daily interaction among OCS in these 
offices, OCS chairs a weekly meeting with representatives from 
DS, INR and S/CT to review all outstanding threatening 
information. Our posts abroad also evaluate the threat 
information through their emergency action committees. These 
are usually chaired by the Ambassador and made up of the deputy 
chief of mission, the security officer, consular and other 
representatives of U.S. agencies at the post as necessary.
    If a threat is determined to be specific, credible and 
noncounterable, DS shares the information with our Bureau in 
Washington, and we evaluate whether it is adequately addressed 
in our consular information program or whether something else 
needs to be done.
    When the political situation in a country begins to 
deteriorate or other threats to the security of American 
interests are evident, the Department convenes the Washington 
Liaison Group [WLG], to alert the interagency community to the 
situation and coordinate interagency planning. This WLG 
typically includes representatives of other agencies throughout 
Washington.
    Mr. Chairman, the dangers that crime, security threats, 
kidnapping and terrorism pose for U.S. citizens abroad are of 
great concern to the Department of State. When an American 
citizen is taken hostage, for example, the Department and the 
Embassy in the host country work closely with the host 
government and with other U.S. Government agencies and family 
members of the victim as well to develop a strategy for the 
expeditious resolution of the hostage situation. Consular 
officers abroad serve as the key point of contact for family 
members and remains in regular contact.
    The State Department's Office of the Coordinator for 
Counterterrorism works closely with law enforcement agencies, 
including the FBI and military, to develop resolution 
strategies and may lead to an interagency foreign emergency 
support team known as FEST to support the chief of mission at 
that Embassy concerned.
    The FBI may dispatch hostage negotiation experts at the 
request of the host country government, and the FBI has 
responsibility for post-incident investigation and prosecution 
of those who kidnap American citizens.
    While the U.S. Government has a clear policy on the issue 
of hostage taking, we will make no concessions to terrorists 
holding American citizens hostages. We will use every and all 
opportunities and appropriate resources to gain the safe return 
of those American citizens being held hostage.
    In June 2000----
    Mr. Putnam. Ms. Andruch, I would also ask if you would 
summarize.
    Ms. Andruch. OK. If I may then just conclude by saying that 
I believe that we in the Department, and specifically the 
Bureau of Consular Affairs, are doing a good job in working 
with other agencies to recognize the needs--the needs of 
Americans traveling overseas. And I look forward to working 
with you and others to see if we can do an even better job. 
Thank you.
    Mr. Putnam. Thank you very much.
    [The prepared statement of Ms. Andruch follows:]

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    Mr. Putnam. At this time, the Chair recognizes Mr. Leonard 
Rogers, Acting Assistant Administrator, Humanitarian Response, 
U.S. Agency for International Development. Welcome.
    Mr. Rogers. Thank you, Mr. Chairman. It's an honor to 
appear before the subcommittee today.
    At the beginning of this new century, there are many places 
in the world where Americans are in constant danger, and there 
is no place where we can consider ourselves completely safe.
    Protection of Americans abroad is a challenge; however, 
it's a challenge we must meet. Our work overseas is important 
to our own interests and values and to all those who seek 
peace, prosperity and security. We cannot allow ourselves to be 
thwarted by terrorism and random violence.
    At this Agency for International Development, we are 
increasingly concerned about the risk to our own employees and 
to our private partners, the nongovernmental organizations 
which are so critical to implementation of our development and 
humanitarian assistance programs overseas, organizations like 
CARE, Catholic Relief Services, Mercy Corps, and Samaritan's 
Purse.
    In 1970, there were 81 U.S. private voluntary organizations 
registered with AID. Now there are 446. Together, with the key 
U.N. organizations, such as the World Food Program and UNHCR, 
they are the backbone of our work in the field. We simply could 
not be as effective without them.
    Yet, the nature of our humanitarian assistance has changed 
radically. Once we concentrated on natural disasters such as 
hurricanes and earthquakes. Now our work is heavily weighted 
toward complex emergencies in places like Kosovo, Sudan, 
Afghanistan and Somalia. So our challenge is to balance the 
need for field presence in dangerous places against the need to 
do everything we can to assure our NGO partners are as secure 
as possible.
    There are several steps we at USAID are taking to strike 
the right balance. First, working with InterAction, we are 
developing and funding security training programs for both NGO, 
staff and executives. This will help ensure our people in the 
field are as prepared as possible.
    Second, we finance security equipment such as radios and 
appropriate security staff as part of all our grants. And in 
approving new grants, we attempt to ensure that each NGO has 
fully considered the security needs of all of its staff.
    Third, we are reaching for consistency in security 
operations across the entire community working in these 
dangerous countries, including the U.N. and other donors. This 
helps ensure a common approach and backstops support in an 
emergency. USAID and State Department's Refugee Bureau also 
directly fund U.N. security operations in select separation 
situations.
    Fourth, we finance research and studies on current security 
issues as they affect NGO's. For example, we help determine how 
best to provide appropriate insurance for NGO staff in 
dangerous settings.
    Finally, we provide our humanitarian assistance based on 
principles of neutrality and impartiality. This means our NGO's 
are not seen as favoring one side or another in a conflict, and 
there is no basis for retaliation against them by partisans.
    Nevertheless, there are limits to what we can do. We must 
recognize there is an inherent risk in working in developing 
countries. To illustrate the dangers of this environment, since 
1992 the United Nations has lost 189 civilian personnel to 
accidents and to random targeted violence. U.S. and 
international NGO's face this same violence and suffer similar 
losses.
    The countries our NGO and U.N. colleagues work in must be 
held accountable for protecting humanitarian workers. We must 
insist that governments bring to justice those who commit 
crimes against humanitarian workers. Otherwise, we can expect 
these risks to continue to escalate.
    Mr. Chairman, the American people give high priority to our 
development and humanitarian aid programs. U.S. NGO's are 
critical to our successful delivery of assistance in the field. 
We will continue to take their security needs seriously. We 
will continue to work through the USAID security director with 
OSAC to improve security for all Americans overseas.
    Thank you, Mr. Chairman. I would be happy to answer 
questions.
    Mr. Putnam. Thank you, Mr. Rogers.
    [The prepared statement of Mr. Rogers follows:]

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    Mr. Putnam. At this time, the Chair recognizes the 
chairman, Mr. Shays.
    Mr. Shays. Given my not being present for all the 
testimony, I'm happy to follow at the end. I thank the chairman 
and would yield to Mr. Gilman.
    Mr. Putnam. Mr. Gilman from New York.
    Mr. Gilman. Thank you, Mr. Chairman. I thank Chairman Shays 
for yielding his time.
    I would first like to especially welcome Peter Bergin, 
Director of Diplomatic Security Service. Mr. Bergin's agents 
around the world have provided highly professional protection 
details for Members in Congress whenever our colleagues are out 
traveling abroad. We thank you for allowing one of your 
personnel to be assigned to our International Relations 
Committee, Pat Durkin, who has done an outstanding job. And 
your former members have been of great asset and service to us. 
I hope you will continue in that direction.
    I want to thank our panelists all for their instructive 
information. A number of--Peter Bergin, a number of the 
investigative personnel at-risk analysts provide good 
information to us. How many do you have working in that area?
    Mr. Bergin. We have six.
    Mr. Gilman. Six in the whole world.
    Mr. Bergin. They cover all areas of the whole world.
    Mr. Gilman. I think you need a lot more.
    Mr. Bergin. Well, our budget for the OSAC program is about 
$1 million. If you look at the number of constituents that we 
have in OSAC, a number close to 2,000, that's really about $500 
a constituent. And $500 goes a long way in terms--if we can 
provide people information which will save someone's life or 
save from being injured, I think it's money well spent.
    One of the problems that we have is that, for example, if 
we send a risk analyst to South Africa to deal with an issue of 
the private sector community there, there's no backup. So we 
would be looking to increase it probably by putting an 
additional analyst for each region of the world.
    Mr. Gilman. I hope you'll let us know about your request 
for that additional personnel.
    Mr. Bergin. We will, sir. Thank you.
    Mr. Gilman. You mentioned in November an annual briefing at 
the U.N. for security purposes where you invite private 
organizations and security people. Is there any congressional 
involvement in that meeting? If not, I would urge you to----
    Mr. Bergin. I don't believe so.
    Mr. Gilman. I would urge you to expand it and include them, 
and particularly in this committee. I think we would all be 
interested in some involvement.
    Mr. Bergin. We would be delighted, sir.
    Mr. Gilman. Your publications, how available are they to 
the public?
    Mr. Bergin. Well, sir, they are available on the Web site. 
They're available to all the public. They're free. And if using 
the Web site, they call into the OSAC office, we can send them 
hard copies. So they're readily available.
    Mr. Gilman. I would hope that your bulletin--I don't know 
how regularly you put out an OSAC bulletin.
    Mr. Bergin. It's every day.
    Mr. Gilman. Would you make that available to this 
committee?
    Mr. Bergin. We would be happy to, sir.
    Mr. Gilman. Thank you very much. Now, with regard to 
training, which it has been emphasized there's need for greater 
training, what do you do with regard to training? I know you 
have some training sessions.
    Mr. Bergin. Yes. As I mentioned, sir, we have held four 
sessions in the past year. These are actually provided by the 
State Department's Overseas Briefing Center. The Overseas 
Briefing Center for the State Department provides training to 
State Department employees and other agency employees who are 
assigned overseas. This is an opportunity to provide employees 
of NGO's, corporations, universities, an opportunity to get the 
same training that U.S. Government employees get prior to their 
assignment overseas. And the subjects are personal security, 
cultural security, awareness of those kind of issues.
    Mr. Gilman. Is that done here at the UN?
    Mr. Bergin. No, sir. It is done here in Arlington at the 
National Foreign Affairs Training Center.
    Mr. Gilman. Mr. Waguespack, we welcome the FBI being here. 
How many ILEAs are there, the international training programs, 
around the world today?
    Mr. Waguespack. I'm sorry, sir.
    Mr. Gilman. How many ILEAs are there in place today.
    Mr. Waguespack. One ILEA in place in Budapest.
    Mr. Gilman. What about the one in Thailand? I visited that 
when they opened it.
    Mr. Waguespack. Sorry, sir.
    Mr. Gilman. You're not familiar with that one?
    Mr. Waguespack. I am not involved in that part of our 
program, so I don't have all the specifics on the numbers out 
there.
    Mr. Gilman. And I understand you're exploring one for South 
Africa; is that correct.
    Mr. Waguespack. Sir, again, that is not an area of my 
expertise. I haven't been involved in those. I can't answer 
that question for you.
    Mr. Gilman. Well, training has been emphasized in this 
hearing, and it would seem to me that the FBI can provide a 
great service by encouraging more ILEAs around the world. I 
know your Director, Mr. Freeh, has been very cooperative and 
very supportive of doing that. And I would hope you could tell 
us of any others that are being considered.
    Mr. Waguespack. Yes, sir, I will be glad to take that for 
the record.
    Mr. Gilman. Ms. Andruch, your Overseas Citizens Services, 
what is the public's access to your bulletins where you talk 
about a travel warning?
    Ms. Andruch. We have those. Those are published on our Web 
site as well as being made available through travel agencies 
and through the media. We also, for people who may not have 
access to an Internet, we provide them by mail if they call us. 
We have an officer--someone available to the public 24 hours a 
day if they should wish specific information about a country.
    Mr. Gilman. What about the media? Do your travel warnings 
go out to the media?
    Ms. Andruch. Yes, sir, immediately. As soon as they are 
issued, they go out. At the time they go on the Web, they go to 
the media, and they go to the travel agencies.
    Mr. Gilman. How about to your Congress people?
    Ms. Andruch. Would you like to get special copies on them?
    Mr. Gilman. I think it would be important for you to 
circulate that to all of the Members of the Congress and the 
Senate, since we're always in touch with our constituents. I 
know my office has continual requests for is it safe for me to 
travel to this part of the world.
    Ms. Andruch. Yes, sir.
    Mr. Gilman. So we would welcome if you could make those 
travel warnings available to us.
    Ms. Andruch. We would be happy to. We might be able to--I'm 
not very technical, but we might be able to look at something 
like a hot link to our Web page if that would be helpful.
    Mr. Gilman. Well, whatever could help us in disseminating 
that information.
    And, Mr. Rogers, we welcome you from AID. What are you 
doing about training the NGO's about security? I notice you 
indicate there are hundreds of NGO's out there working with 
your agency. What do you do to train them for security?
    Mr. Rogers. Well, we do two things, Mr. Chairman. First we 
work with InterAction, which is the umbrella group for NGO's, 
provide resources to them for their security training program. 
And then in the field, we work with the international community 
onsite. Normally, we have a disaster assistance response team 
that's in the field that will work with the NGO's in the field, 
work with the U.N. and their security officers, work with the 
Embassy and the regional security officer to provide 
information and alert the NGO's to current conditions in the 
country.
    Mr. Gilman. Well, thank you, Mr. Rogers. I want to thank 
our panelists. I know my time is up. Thank you, Mr. Chairman.
    Mr. Putnam. You're welcome, Mr. Gilman.
    Mr. Otter, I apologize for having to cut you short on the 
last panel, but feel free to fire away at this one.
    Mr. Otter. Does that mean I have a whole bunch of extra 
time on this one?
    Mr. Putnam. Sure. Why not?
    Mr. Otter. The victims. Thank you very much, Mr. Chairman.
    In my previous life, prior to coming back here to D.C., Mr. 
Rogers, I was--1983, I guess it was, President Reagan then 
appointed me to a task force. It was the Task Force on 
International Private Enterprise. There were 17 of us, as I 
recall, and we traveled to different parts of the world.
    As a result of that 18-month experience, I ended up on the 
World Bank's advisory committee for agricultural loans. You 
know, all the testimony that I heard today, not only from this 
panel but the first panel, never once in consideration of a 
loan to a foreign participant was the environment, was human 
rights, were any of those things ever brought up.
    Is it the practice of the IMF or the World Bank or any 
other agency that AID has a participatory program with, is it 
their practice now to assess these environmental and human 
rights factors in the international marketplace?
    Mr. Rogers. Yes. Certainly. The--it's actually the Treasury 
Department that has the representative that works with the 
World Bank. But each one of the World Bank's loans, in fact, 
the loans of each one of the multilateral banks, is reviewed 
against a variety of criteria. And certainly the U.S. 
Government's view about the environmental practices of the 
recipient country, about the environmental impact of the loan 
itself, are all factors that are considered, and the human 
rights performance of the country is also considered.
    Now, we are one among many countries that sit on the 
executive board of the World Bank. So there are other voices to 
be heard as well. And occasionally there's controversy over 
individual loans.
    Mr. Otter. Are these decisions made in a democratic 
process? The 50 percent, the 51-plus--or 50 percent plus 1 
wins?
    Mr. Rogers. I'm not sure what the voting rules are for the 
Bank itself, but there is some process that people go through 
to assure that the views of the executive directors are heard.
    Mr. Otter. Let's just say for a moment, Mr. Rogers, that 
I'm back in the international marketplace, and I'm trying to 
develop products and plants overseas in order to develop 
markets, mostly because of proximity. It's closer to my market 
than my plant in Idaho. Maybe it's the natural resources. I can 
duplicate the quality and the nature of the natural resources, 
renewable resources, farm resources in that foreign country 
that I can in Idaho. And, you know, maybe the energy is a 
little cheaper in this day and age because California is not 
stealing their electricity like they are from Idaho. You know, 
maybe it's any one of these factors.
    When I make this decision, the thing that I do or did is, I 
would go to one of these agencies that AID obviously has a 
working relationship with, and I say I want to invest $30 
million--I want to invest $30 million in Ishmir, Turkey. We 
built a plant in Ishmir, Turkey to supply french fries for the 
McDonald's in Europe.
    I want to know what the process is now then that this 
agency, whether it's the World Bank or the IMF or whoever, 
would make funds available to me now. Do I have to comply with 
OSHA in Ishmir? Do I have to comply with EPA? Do I have to 
comply with affirmative action? Do I have to comply with all 
the rules and regulations we have in the United States in order 
to put this site in Ishmir, Turkey?
    Mr. Rogers. I believe that you would be obliged to comply 
with the local regulations, and then the Bank would have its 
own standards if it were financing this program. But basically 
the local standards would apply, plus whatever standards the 
multilateral lending institution would have.
    Mr. Otter. So the rule of law, then, that Mr. Cilluffo 
talked about in panel one, the rule of law certainly then 
entertains the rule of law of the host country, right?
    Mr. Rogers. Absolutely.
    Mr. Otter. Thank you. That's all I have, Mr. Chairman.
    Mr. Putnam. Thank you, Mr. Otter.
    I have a couple of questions. First of all, to build on 
what Mr. Otter's point was with the first panel, in your 
opinion, are Americans, both governmental employees and 
American tourists abroad, safer today overseas than they were 
20 years ago?
    We'll start with Mr. Rogers and work on down. All right.
    Mr. Rogers. My opinion is definitely that they are not. I'm 
not 100 percent sure what the reason is, but since the end of 
the cold war, we seem to have this proliferation of very 
vicious political and ethnic conflicts, and they seem to be 
affecting our interests more widely than they did in the past.
    The United States is interested still in being engaged in 
those countries. We provide humanitarian assistance to those 
countries. Americans want sometimes to travel to those 
countries. So, all in all, I would say we are at much greater 
risk, even setting aside the apparent rise in terrorism. So I 
would say the answer is the environment is much more dangerous 
than it was 20 years ago.
    Mr. Putnam. Ms. Andruch.
    Ms. Andruch. Yes. I think I would have to bow to the 
experts on security as to actually if we're safer now than we 
were 20 years ago. But I think just the availability of travel 
and the increasing number of Americans both residing and 
traveling overseas makes it more likely that Americans would be 
the victims of some sort of disaster overseas.
    Having said that, however, I also think that technology 
being what it is, and the availability of information to 
everyone, that we do have the opportunity now to get out 
information so that the travelers, if they avail themselves of 
that information, can make a much better informed decision on 
where and when they travel. Thank you.
    Mr. Waguespack. I think Americans abroad are at greater 
risk today than they were 10 years ago, 20 years ago, primarily 
because of the increased terrorism threat, but also because of 
the increased risk to collection activities on the part of 
intelligence services for proprietary economic information as 
well, and that's something that we should not lose sight of, as 
well as from a criminal element. So I think, across the board, 
Americans in various parts of the world are at greater risk 
than previously.
    Mr. Putnam. Mr. Bergin.
    Mr. Bergin. Yes. Since the East African bombings, Mr. 
Chairman, I have never seen as much information about threats 
in my 28-year career in diplomatic security. There is 
considerable amount of ground noise regarding threats. The 
specificity is certainly questionable. That's one of our big 
jobs during the day is to--when that threat window is opened, 
we've got to close it. We've got to make sure that we've 
covered all the bases there.
    I would second what Ms. Andruch said about information. I 
think information today in terms of what we provide the public 
and to our diplomats is much more accessible than it was 20 
years ago. I will recount for you, when I was in Cairo as the 
RSO, we spent a considerable amount of time during the Gulf 
crisis briefing not only diplomats and their families, but also 
engaging the private sector.
    Our philosophy and that of the American ambassador was that 
the American public in Cairo, in Egypt, needed to know what the 
Embassy knew with respect to threats that entire community 
faced. That's basically what we've evolved to in OSAC, and with 
the assistance of the Bureau of Consular Affairs, that the 
American public know what we know in terms of American threats 
abroad.
    Mr. Putnam. Well, addressing that point, and it was raised 
in the first panel as well, separating the wheat from the chaff 
and determining what is noise and what is valuable information, 
are our various information gathering agencies integrated and 
coordinated enough to make those determinations, and are the 
bulletins that are then posted or the information that is then 
passed on, is it as accurate and valid as it should be or could 
be?
    Ms. Andruch and then Mr. Bergin.
    Ms. Andruch. Yes, sir. I think our--the cooperation among 
the various agencies in Washington and certainly the bureaus 
within the Department is excellent. I think, you know, on a 
daily basis, we talk to DS probably at least three or four 
times. And whenever there is any information that they've 
heard, they've gotten from a source, whether it be in 
Washington or at the post abroad, that information is shared. 
And we have contacts on--you know, in other agencies, including 
the intelligence community. So I think, yes, it is.
    Mr. Putnam. Do you coordinate with ANSIR?
    Ms. Andruch. Yes, we do. We talk to FBI. We talk to the 
agency. We talk to everyone, you know, who might have some 
input on it.
    One of the--on the first panel, someone mentioned something 
about the classification of information and sort of alluded 
that was sometimes a problem. I, in fact, don't think it is, 
because when there is something that's out there and it's 
determined to be credible information, we find a way of working 
together to get that information to the public. And having the 
security officers and other people, other agencies represented 
at Embassies abroad makes it--it's so much easier in a way 
because there's a little bit of built-in redundancy. That same 
information that DS and other agencies overseas are gathering 
for possible use by the Embassy and the official community 
overseas is always shared with the private community.
    Mr. Putnam. Mr. Bergin.
    Mr. Bergin. Yeah. I would say, Mr. Chairman, that one of 
the most powerful lessons that we've learned out of the East 
African bombings is that no agency can do it by itself in terms 
of protecting Americans abroad. Diplomatic Security can't do it 
by itself. The intelligence community can't do it by itself. 
DOD can't do it. But if we work together--and I have seen an 
improvement, a terrific improvement in the last 2 years--if we 
work together, we stand a better chance at deterring and 
preventing terrorism against official Americans as well as 
private American citizens. But you've got to work together, and 
there has to be wise integration of all of our national assets 
to this end.
    And I believe, for example, I can pick up the phone and 
call J34 over at DOD and get assistance, both logistical and 
people assistance, to augment what we're trying to do overseas 
when a threat is identified. So I'm comfortable that 
externally, you know, beyond the State Department, we're 
working closely with the agency, the FBI, DOD to protect all 
Americans abroad.
    And I would say one of the things that was mentioned in the 
first segment was that we needed to introduce the private 
sector to the host country security police officials. We do 
that on a regular daily basis. RSOs are doing that all the time 
so as to advance the interests of the private sector abroad, 
because we feel we're obligated to do that.
    Mr. Putnam. Did anyone else want to answer that on the 
panel?
    Mr. Waguespack. I would just say from the perspective of 
the FBI, certainly within the terrorism threat warning arena, 
our focus--if I leave the committee with nothing else but this 
point, is that our focus is, when we get a credible threat, our 
focus is to get that information out as quickly as possible and 
to share it with the community.
    Mr. Putnam. Thank you. Mr. Shays.
    Mr. Shays. Thank you very much, Mr. Chairman. First, let me 
thank you for chairing this hearing. You were supposed to do a 
good job, not a great job. And I appreciate that you are very 
capable, and thank you very much for doing that.
    I also, before concluding this hearing, want to recognize 
Alex Moore, career Foreign Service officer who is currently 
working with the subcommittee under the auspices of the Pierson 
Fellowship Program. At the State Department, Mr. Moore has 
served as a special agent in the Bureau of Diplomatic Security 
since 1985. As part of his yearlong fellowship, Alex was 
responsible for all the research and preparation for this 
hearing. We appreciate his help on previous hearings as well. 
We're grateful for his very good work and trust he will return 
to the State Department with a deeper understanding of the 
legislative oversight process. Alex, thank you very much.
    I also want to welcome our witnesses. I'm sorry I didn't 
get to personally greet you, but you have been in very good 
hands.
    I would like to know, how does the U.S. Government 
differentiate between terrorists and criminal incidents? Maybe 
we can just run straight down.
    Mr. Bergin. I think that's something that's quite blurred. 
I think when you----
    Mr. Shays. I'm going to ask you to talk a little louder, 
too.
    Mr. Bergin. I would say that's something that's quite 
blurred in terms of whether an incident is terrorism or whether 
it's criminal. For example, the incident down in Ecuador where 
these folks held Americans and foreigners in the last--since 
November and released them in March--is that crime? Is it 
terrorism? It's a difficult thing because perhaps some of them 
have relationships with known terrorist groups. But maybe they 
are--you know, they've separated. It is a very, very difficult 
thing.
    But one of the things that we try to do in, at least in the 
State Department, is we provide antiterrorism assistance 
training to governments all over the world. In the last year, 
we've trained about 20,000 police and security officials. And 
the multiplier effect of that is significant, because the 
Embassy--it's difficult beyond the walls of the Embassy to 
provide security. But if you can engage the host government, if 
you can train them to standards of the United States, Americans 
who travel and invest abroad benefit significantly.
    Mr. Shays. Thank you.
    Mr. Waguespack. Again----
    Mr. Shays. Do me a favor. I'm just curious. My ears must 
be--just tap your mic a second. It's not picking up all that 
great. But talk a little louder, if you would, sir.
    Mr. Waguespack. Again, I would agree with Mr. Bergin. I 
think there is very definitely a blurred line between pure 
terrorism and criminal activity. The two go hand in hand. 
Terrorist groups commit criminal activity. They commit crimes. 
And certainly from the FBI's perspective, as we go after 
terrorist groups, much of what we look at is what is their 
criminal activity as opposed to just, you know, setting off 
bombs, whatever. Many of these groups are engaged in all sorts 
of criminal activity to further whatever their objectives and 
goals are. So the two are very much intertwined, and you can't 
really segregate counterterrorism or terrorism purely from 
criminal activity.
    Ms. Andruch. Yes, I agree. And I would like to add, though, 
that from the consular perspective, our concerns for and 
response to victims of crime or terrorism are the same. And one 
of the things that we've been very fortunate in working with 
the Department of Justice, we now in the Office of Overseas 
Citizens Services, have a crime victims specialist.
    What we're trying to do is ensure that victims of crime 
receive the same sort of counseling and have the same sort of 
resources available to them overseas that they would have if a 
similar thing happened to them in the United States.
    So we don't make that distinction, although we recognize 
that there is a difference from what we see. The effect on the 
person is the same, and so we react to that in the same way. 
Thank you.
    Mr. Rogers. We would rely on the State Department to draw 
the line in terms of a definition. But I would say that it 
seems somewhat more likely that Americans would be the victims 
of terrorists, whereas common criminal activity would tend to 
be more random and perhaps a bit easier to prepare for than 
terrorism.
    Mr. Shays. You kind of answered this, so I'm not asking for 
a redundant answer, but if you have something you want to 
amplify--how does the U.S. Government respond to terrorist 
threats differently than criminal threats?
    Mr. Bergin. Well I think, given the political dimension of 
terrorism, I think there is a tendency in the U.S. Government 
to react considerably to a terrorism threat. If it's crime, I 
think that crime is endemic. And having served in places where 
crime is a critical problem for us, I mean, we spend--the 
Embassy, the RSO, spends a lot of time with country councils 
and the private sector to ensure that they have the commonsense 
general awareness of crime.
    But in terms of a criminal threat, for example in Ecuador, 
the United States engaged the FBI and a number of Defense 
Department assets to resolve that issue, which could be either 
viewed as a criminal act against the United States or a 
terrorist act.
    Mr. Shays. OK. Thank you.
    Mr. Waguespack. Again, from an FBI perspective, the 
terrorism program is part of our tier one strategic program. 
And so much of our resources in the FBI are focused first and 
foremost on the national security aspects, the terrorism/
counterterrorism part of what we do.
    In addition to that, obviously on the international 
criminal side, international organized crime, those kinds of 
issues, while we worked in the international scene, we're 
looking primarily at what the impact is in the United States, 
on the United States, but realizing that you can't work solely 
within the United States; we do have to work on the 
international scene.
    But from a strategic standpoint in the FBI, terrorism and 
what we're looking at from a national security standpoint is 
our priority tier one program along with the national foreign 
intelligence program.
    Ms. Andruch. Our consular information program, which I 
mentioned briefly in my testimony, has information. The 
consular information sheets that we have available on each 
country has specific information devoted both to crimes, trends 
in crime, and in terrorism when that is known. The public 
announcement and travel warnings that we will put out on an 
individual country are more often for terrorism threats because 
those are the ones that we will hear about through the 
intelligence community.
    Mr. Rogers. I don't have anything to add.
    Mr. Shays. I have another round of questions, but I'm happy 
to defer to the gentleman.
    Mr. Putnam. You can just continue.
    Mr. Shays. Let me just ask you, what countries do the best 
job of protecting American interests overseas and which do the 
poorest job? I don't want to create a national incident here, 
but----
    Mr. Bergin. It is definitely uneven, sir. I mean, I don't 
have a list of the most prominent in terms of countries that 
provide us protection, but certainly our aim is to ensure a 
baseline of service.
    Mr. Shays. Right. I understand. But let's try to get to the 
question, though, I mean with all due respect. There are some 
countries that you have a better relationship than others, and 
who would those be?
    Ms. Andruch. On an individual basis, I would have a hard 
time answering that as well, but I think in countries where we 
have a very small presence, I think our--we're hampered then to 
the extent of, you know, having fewer people to get the 
information out.
    And someone on the first panel also mentioned NGO's, of 
course, tend to go to the countries where there is perhaps a 
primitive infrastructure, if any at all. In those countries, 
then, our work will then be that much more difficult.
    Mr. Shays. See, I have a theory that the only one who tops 
the State Department in terms of responding to a question as 
carefully as Alan Greenspan, that he talks--he talked--in fact, 
I fear that his training came from the State Department.
    But maybe you could answer the question this way: What are 
the factors that affect a foreign government's responsiveness 
to American security concerns the most? What--when are they 
most--what are the issues of the--the factors where they may be 
more responsive to our concerns? When they may get drawn in? 
When they may be embarrassed? I mean, what would that be? Is it 
that we have worked out better relations with those countries 
or we've had longer contacts? What tends to make a country more 
responsive?
    Mr. Bergin. I think it definitely comes down, sir, to the 
strength of a relationship between the United States and a 
particular country. For example, in Egypt, there was definitely 
a concern about their ability to provide security to Americans 
because of the number of incidents there stemming from the 
Achille Lauro. And what we did was the Congress created the 
Antiterrorism Assistance Program. Basically what this did is it 
gave the State Department a tool----
    Mr. Shays. To reach out.
    Mr. Bergin [continuing]. To which they could engage the 
Egyptians and train them on how to protect. For example, in 
Luxor, we had an incident in 1997 where you had a number of 
western tourists killed as a result of terrorist incidents. The 
security forces----
    Mr. Shays. It wasn't too good for the tourist trade, was 
it?
    Mr. Bergin. Absolutely not. And clearly that is something 
vital--it's a $2 billion industry in Egypt. But clearly that's 
not in the interest of Egypt to do that. Nor is it in the U.S.' 
interest. So what we did is flux the ATA program to provide 
training to police officers in upper Egypt, and we haven't had 
an incident yet. And they're much more vigilant today than they 
were 2 years ago.
    Mr. Shays. OK. Anyone else want to respond?
    Ms. Andruch. I wish I--I would like to say that I wish I 
was as good at predictions as Alan Greenspan, because then we 
wouldn't have as many problems as we do.
    Mr. Shays. No, no, no. The thing with Alan Greenspan is 
that when you're done, everybody thinks that he agrees with 
them. So both sides leave content. It's quite a skill.
    Ms. Andruch. I'll do my best. One of the things--I just--
you know, in individual countries with consular officers 
overseas, I think one of their main responsibilities is to do 
the outreach and sort of the public diplomacy with the law 
enforcement people in that particular country.
    So I think that responses from those people are generally 
good. I think when they--when they are less good is if there's 
something in the political situation at the time that makes 
them sort of want to use a particular case as a hammer.
    Mr. Shays. OK. Mr. Chairman, I just have three more 
questions.
    I want to know these two. I'll ask them the same. What is 
the U.S. Government's policy in kidnapping, and what is the 
FBI's role in cases of kidnapping overseas? Start with the FBI.
    Mr. Waguespack. Normally, in kidnapping situations overseas 
involving an American person, the normal procedure would be for 
a coordinating subgroup at the NSC to----
    Mr. Shays. I really am sorry. I'm having trouble hearing 
you.
    Mr. Waguespack [continuing]. A coordinating subgroup at the 
NSC to bring together all the components of the U.S. Government 
to look at the U.S. Government response. Depending on what 
comes out of that interagency forum in terms of how we as the 
U.S. Government should best respond to that particular 
situation, the FBI may be brought in to provide advice, to 
provide assistance. But, again, it depends. It's on a case-by-
case situation. And in many cases, in most cases, we normally 
will send agents to assist. But, again, it's done on a case-by-
case basis in an interagency forum.
    Mr. Shays. Does the FBI define the U.S. Government's 
response to kidnapping? Can the State Department provide me any 
difference or----
    Mr. Waguespack. Well, again, it's an NSC-led forum. So it 
brings together the various components of the government, and a 
collective view of that forum decides what is the best 
government response.
    Mr. Rogers. In the case of nongovernmental organizations, 
we would consider strongly their preferences as well. There's 
an incident now in Sudan where four ADRA staffer members, the 
Adventist Relief Agency, which is a U.S. private voluntary 
organization, were kidnapped. The preference there was the 
United States not step in, that they allow the U.N. and the NGO 
to see if we could negotiate the release of these individuals.
    Mr. Shays. When I was in the Peace Corps, I always felt 
that I had kind of the government behind me. When I think of 
the volunteers who serve in nongovernment organizations, but in 
the same capacities as teachers and so on, working in nursing 
care, health care, would the response for someone in a 
nongovernment agency be treated the same as a government--
someone who is not a government employee be treated the same 
way as a government employee?
    Mr. Waguespack. To the best of my knowledge, there would be 
no differentiation.
    Mr. Rogers. Except to the extent that the NGO wanted to 
express a preference. If they felt they could handle it better 
if the U.S. Government was not involved, then normally we would 
stand back and allow them to take that course.
    Mr. Shays. Thank you, Mr. Chairman, for being so generous 
with the time, and I thank the panel.
    Mr. Putnam. Thank you, Mr. Chairman.
    Mr. Otter, do you have any further questions?
    Mr. Otter. No. No.
    Mr. Putnam. I'm curious what the U.S. Government's role, 
security role, will be in the upcoming Olympics in Athens in 
2004.
    Mr. Bergin. Well, I know the Ambassador in Athens is 
engaged with the Greeks on this matter. I know that, for 
example, we sent a couple of agents to Athens in February to 
discuss with the Greeks what sort of security arrangements they 
were planning for the Olympics and how the Embassy would 
interface with the Greeks in terms of providing security, not 
only for the teams and the USOC, but also private American 
citizens who would be visiting Athens during that time period.
    Mr. Waguespack. Again, I can only speak limited to that 
particular area, since I am not engaged in the counterterrorism 
division, but I know that our counterterrorism personnel were 
certainly engaged in looking at the issues and working with 
their counterparts abroad on that issue. But in terms of the 
specific details, I'm not familiar with the specifics.
    Ms. Andruch. The Bureau of Consular Affairs will be sending 
out additional consular staff for that, as they do with any 
time there is a large gathering of Americans, hopefully there 
will not be any large terrorism events or anything of a major 
crime, but just for the usual kind of problems that arise with 
Americans traveling in large numbers.
    Mr. Putnam. Are there current bulletins on Greece as we 
speak?
    Ms. Andruch. No, sir, I don't believe so.
    Mr. Putnam. Mr. Rogers.
    Mr. Rogers. I'm not aware of any.
    Mr. Putnam. The previous panel in written testimony had 
indicated that perhaps we are too quick to issue bulletins and 
travel advisories, in essence getting back to this 
differentiation between noise and sound or the difference 
between information and real positive data.
    I'm curious. If you were evaluating the United States, 
would you issue a travel bulletin?
    Mr. Waguespack. It depends on what city.
    Ms. Andruch. I guess that's me. I think there are 
countries, in fact, who do warn their travelers, their 
tourists, against certain areas in the United States. I know, 
for example, when there were--people were being murdered after 
they rented cars in Miami because the cars were sort of--you 
know, pointed out tourists. That became a problem for many 
countries. So I think the answer would probably have to be yes.
    Mr. Putnam. There's a big problem in my State.
    Ms. Andruch. You know, one thing, though, if I could turn 
that back not to your initial question about, you know, our 
sort of issuing perhaps too many warnings or travel warnings or 
public announcements. We take our responsibility concerning the 
safety and welfare of Americans very seriously, and it is the 
State Department's No. 1 priority.
    Fortunately for us, that is our primary concern. So while 
it is unfortunate that in some--you know, there may be 
countries who suffer a loss of tourism, or travel agencies who 
aren't selling quite enough tickets or quite as many tickets as 
they had, and we're sorry for that. But at the end of the day, 
you know, if we have information that we believe is credible 
and there is a threat out there, it's our responsibility to get 
the word out.
    Mr. Putnam. Thank you. Mr. Otter.
    Mr. Otter. Mr. Chairman, I do have a couple of questions 
that I would like to ask.
    First, of the FBI. Do you rate foreign law enforcement 
agencies?
    Mr. Waguespack. Do we rate them?
    Mr. Otter. Do you rate them? The gentlemen was--geez, we 
want to introduce these NGO's to the foreign law enforcement 
agency when we get in there, and we want them to know that 
they're there. How do I know whether they're the good guys or 
the bad guys if you don't rate them? Would you know? Is there 
any reason that you or the CIA would know?
    Mr. Waguespack. Do you know in terms of rating like 1, 2, 
3, 5, 5, A, B, C, D, E? Is that----
    Mr. Otter. No. Like these are good guys or these are bad 
guys.
    Mr. Waguespack. Well, certainly. I mean, again, as we look 
at, as we have expanded our ``leg atts,'' for example, around 
the world, our legal attaches, our whole purpose in doing so is 
to be able to work with the local and national police 
authorities in those countries and to build relationships with 
those entities.
    Another aspect of what we have done in terms of our 
National Academy, we have brought more and more foreign 
nationals into the National Academy for training as we normally 
train our U.S. police officials. Director Freeh has taken this 
on as one of his priorities, is to bring foreign national 
police officers in for this training.
    So from that perspective, absolutely. I mean, we would have 
a much better sense of who we can work with because of the 
relationships that have been developed as a result of the 
National Academy training, as a result of our interaction 
through our legal attache program.
    Certainly from that perspective, sure, we know that certain 
individuals, certain governments, certain organizations, are 
more inclined to work with us than others. So, in that sense, 
yes.
    To be able to give you a rating, say this one is better 
than that one, much better, less, I am not prepared to do that 
right now. But certainly in our interaction with these 
individuals, with the organizations and these environments, 
absolutely.
    Mr. Otter. Let me give you an example, and maybe this--
that's what I should have done in the first place. In the late 
1970's, we had an operation down in Colombia in a little town 
called Tumaco. And Tumaco is right out on the West Coast. It 
was a lumbering operation. We actually bought it from another 
outfit, Potlatch Corp. I don't know if you can do commercials 
here or not. But, anyway, we bought it from Potlach, and we 
were operating it for a while. In fact, we were doing so well 
with it we decided to put in another lathe. It was a plywood 
manufactory, so we decided to put in another lathe.
    Fortunately for us, we went to the Colombian Government, 
through the World Bank or IMF or some other agency. We got 
about $300,000 to buy this lathe. We got it down to Tumaco, 
which is tough to get to, and we had it on the dock. And one 
more $25,000 payment to the local police would have gotten it 
off the dock, but my boss said no. He said, once you start 
that, that's just a down payment. He said, we got the money 
borrowed there. We ended up, in fact, walking away from the 
entire asset, which is about an $18 million asset.
    What could I have done? Now, admittedly, this is 30, 
almost--well, 25 years ago. What could I do today to ensure my 
capital sources that are willing to loan me the money for this 
capital, what could I do today to ensure that--anybody--what 
could I do today to ensure them that says my government agency, 
one of you folks, tells me it's going to be safe if we put it 
down there?
    Mr. Waguespack. In that particular environment, I don't 
know that anybody could assure you that your capital would be 
absolutely 100 percent safe.
    Mr. Otter. Well, let me just tell you that one of the first 
things I always did, if I could not borrow the money in that 
country, I didn't go to it.
    Mr. Putnam. Mr. Shays.
    Mr. Shays [presiding]. It helps to have real-world 
experiences.
    This is a question that I would like to throw out. What is 
the fundamental difference between the FBI's awareness of 
National Security Issues and Responses--is that called ANSIR.
    Mr. Waguespack. ANSIR.
    Mr. Shays. The ANSIR program and OSAC, the Overseas 
Security Advisory Council Program. And I specifically am 
interested to know, are we not duplicating efforts with these 
two programs?
    Mr. Waguespack. Let me just say from the ANSIR program, our 
program, as I indicated in my opening statement, is a small 
program. We are focused with ANSIR to provide threat and 
warning information through e-mail to----
    Mr. Shays. I'm really sorry. I'm having trouble hearing 
you. You've got to pull the mic closer to you. I really want to 
hear what you're saying here.
    Mr. Waguespack. Our main focus is to provide threat warning 
information through e-mail, because we have found that is the 
most efficient way of getting information that needs to be 
gotten out in a timely manner to as many customers, 
subscribers, as possible. It is only a small part of the 
overall outreach program that the U.S. Government has. Within 
the U.S. Government, there are any number of outreach programs. 
OSAC is one of them. OSAC is a much bigger program in terms of 
the outreach to the private sector, especially overseas.
    Our primary constituency is in the United States with the 
ANSIR e-mail. But it does get out internationally as we get 
this information out to the headquarters components of U.S. 
corporations here in the United States. If they have a presence 
abroad and they feel that the information is relevant to their 
international presence, then they can get the information out 
through their headquarters. On occasion, we will send it out 
directly if we have more specific information that relates to 
an international component of a U.S. corporation or U.S. 
entity.
    So ANSIR e-mail is simply that, getting threat warning 
information out to as many subscribers who want the information 
and the individuals who come into us indicating that they are 
interested in getting this information. And we have about 
30,000 subscribers currently that we send this information out 
to.
    In addition to the e-mail, we also provide threat 
briefings, both classified and unclassified, to individuals, 
companies, corporations, that are interested in more specific, 
more focused briefings relative to their specific areas of 
concern.
    So it really isn't outreach for us specifically in the 
United States, but it does have an international dimension as 
we work with these corporations that have outlets 
internationally, as well as working with OSAC and other 
entities of the U.S. Government such as the Defense Security 
Service, working specifically with other private sector 
entities like the American Society for Industrial Security. We 
work with them. We've gone out at the request of specific 
corporations, for example, giving threat briefings to companies 
abroad as well. So that's really our focus of our program in 
ANSIR.
    Mr. Bergin. OSAC, sir, is--it's international. It's a 
council created by then-Secretary George Shultz who recognized 
that there was a potential for displacing the risk back in 1985 
when we had the bombings in the Embassies in Beirut and Kuwait 
and the Marine Barracks, that there was a potential for 
diverting that risk to softer targets and the American business 
overseas.
    So when it was created, the focus was the American business 
abroad. And it has evolved over the years to include 
nongovernmental institutions, universities and educational 
institutions. But the focus is clearly overseas. And it's 
infrastructure, which consists of two diplomatic security 
special agents, six regional security experts who provide 
threat assessments to the private sector, is--which has about a 
$1 million budget--is centered on how can we as a government 
respond to the needs of the American private sector around the 
world?
    And as a component of that is a membership which consists 
of 30 entities, and they range from AOL to Cargill to the 
Church of Latter Day Saints. But 30 of these members really are 
the workers. It's their council. The government is basically 
the steward of a council run by the American private sector, if 
you will. And its design is to make it safe for Americans to 
travel and invest abroad.
    It's that simple. There is no competition. It's cooperation 
and collaboration. And in the 2 years that I've been the 
chairman of this thing, it's really--it's unbelievable, I don't 
like the word ``synergy,'' but there is a multiplier effect 
there where people are actually networking so--and transcending 
competition between them all to make it safe for all of them to 
work overseas. But it's an overseas program, sir. It's not 
domestic.
    Mr. Shays. Thank you, Mr. Chairman.
    Mr. Otter. You're the chairman.
    Mr. Shays. I am the chairman. I had the gavel. See, if I 
had the gavel, I would have asked you to speak louder, and I 
would have gotten you to do that. I guess with the power 
invested in me, I can adjourn. With the power invested in me, 
thank you all very much, this is adjourned.
    [Whereupon, at 1:10 p.m., the subcommittee was adjourned.]

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