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DIRTY BOMB VULNERABILITIES: FAKE COMPANIES, 

FAKE LICENSES, REAL CONSEQUENCES 

HEARING 

BEFORE THE

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

JULY 12, 2007 

Available via http://www.access.gpo.gov/congress/senate 

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 

(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

BARACK OBAMA, Illinois 

CLAIRE McCASKILL, Missouri 

JON TESTER, Montana 

SUSAN M. COLLINS, Maine 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

PETE V. DOMENICI, New Mexico 

JOHN WARNER, Virginia 

JOHN E.SUNUNU, New Hampshire 

MICHAEL L. ALEXANDER, Staff Director 

BRANDON L. MILHORN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS 

CARL LEVIN, Michigan, Chairman 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

BARACK OBAMA, Illinois 

CLAIRE McCASKILL, Missouri 

JON TESTER, Montana 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

PETE V. DOMENICI, New Mexico 

JOHN WARNER, Virginia 

JOHN E. SUNUNU, New Hampshire 

ELISE J. BEAN, Staff Director and Chief Counsel 

MADELYN CREEDON, Counsel to Senator Carl Levin, Armed Services Committee 

MARK L. GREENBLATT, Staff Director and Chief Counsel to the Minority 

MARK D. NELSON, Deputy Chief Counsel to the Minority 

TIMOTHY R. TERRY, Counsel to the Minority 

MARY D. ROBERTSON, Chief Clerk 

(III) 

C O N T E N T S 

Opening statements: Page 

Senator Levin .................................................................................................... 1 

Senator Coleman .............................................................................................. 2 

Senator Collins ................................................................................................. 5 

Senator Akaka .................................................................................................. 6 

Senator Carper ................................................................................................. 7 

WITNESSES 

THURSDAY, JULY 12, 2007 

Gregory D. Kutz, Managing Director, Forensic Audits and Special Investigations; Eugene E. Aloise, Director, Natural Resources and Environment; 

and John W. Cooney, Assistant Director, Forensic Audits and Special Investigations, U.S. Government Accountability Office ............................................. 9 

Edward McGaffigan, Jr., Commissioner, U.S. Nuclear Regulatory Commission ........................................................................................................................ 22

ALPHABETICAL LIST OF WITNESSES

Kutz, Gregory D.: 

Testimony .......................................................................................................... 9 

Joint prepared statement ................................................................................. 39 

Aloise, Eugene E.: 

Testimony .......................................................................................................... 9 

Joint prepared statement ................................................................................. 39 

Cooney, John W.: 

Testimony .......................................................................................................... 9 

Joint prepared statement ................................................................................. 39 

McGaffigan, Edward, Jr.: 

Testimony .......................................................................................................... 22 

Prepared statement with attachments ........................................................... 50 

EXHIBITS 

1. Dirty Bomb Vulnerabilities, Permanent Subcommittee on Investigations 

Staff Report ....................................................................................................... 75 

2. Comparison Of Valid NRC License And Counterfeit GAO License ............... 100 

3. Response to questions for the record submitted to The Hon. Edward 

McGaffigan, Jr., Commissioner, Nuclear Regulatory Commission ............... 101 

(1) 

DIRTY BOMB VULNERABILITIES: 

FAKE COMPANIES, FAKE LICENSES, 

REAL CONSEQUENCES 

THURSDAY, JULY 12, 2007 

U.S. SENATE,

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS,

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 9:03 a.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Carl Levin, Chairman of the Subcommittee, presiding. 

Present: Senators Levin, Carper, Akaka, Coleman, Collins, and 

Warner. 

Staff Present: Elise J. Bean, Staff Director and Chief Counsel; 

Madelyn Creedon, Counsel (Sen. Levin, Armed Services); Mary D. 

Robertson, Chief Clerk; Mark L. Greenblatt, Staff Director and 

Chief Counsel to the Minority; Timothy R. Terry, Counsel to the 

Minority; Ruth Perez, Detailee (IRS); Kunaal Sharma, Intern to the 

Minority; Adam Doyle, Law Clerk to the Minority; Rob Strayer and 

Leah Nash (Collins); John Kilvington and Tom Lawler (Carper); 

and Rick Kessler and Jodi Lieberman (Akaka). . 

OPENING STATEMENT OF SENATOR LEVIN 

Senator LEVIN. Good morning, everybody. I would like to welcome our witnesses this morning from the Government Accountability Office and the Nuclear Regulatory Commission. Senator 

Coleman, this hearing is a continuation of a topic on which you 

have worked diligently—ensuring the protection and control of material that could be used in a so-called dirty bomb. 

The material involved in the GAO sting operation that will be 

the subject of the hearing today is not plutonium or highly enriched uranium, the materials that could be used in a nuclear 

bomb. But the material that is the subject of the hearing is dirty 

bomb material—that is, radioactive material in sealed containers 

used for a variety of medical and industrial purposes that could 

also be put to nefarious purposes. The vulnerabilities that the GAO 

has identified, and that the Nuclear Regulatory Commission has 

acknowledged, are significant. 

Since September 11, 2001, the Nuclear Regulatory Commission 

has rightfully focused its efforts and attention on securing the most 

dangerous quantities of radioactive material—the quantities of radioactive material classified as Category 1 and 2 materials. AccordVerDate Aug 31 2005 09:23 Jun 20, 2008 Jkt 041129 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 P:\DOCS\41129.TXT SAFFAIRS PsN: PAT
2 

ing to the International Atomic Energy Agency, an individual who 

handled or who was in close proximity to Category 1 and 2 quantities of material would probably be dead or severely injured in a 

few minutes to a few hours. Category 1 and 2 radioactive materials 

are subject to extraordinarily strict licensing and security requirements. 

Smaller quantities of radioactive materials are classified in three 

additional categories—Categories 3, 4, and 5. An individual who 

handled Category 3 quantities could be permanently injured if he 

or she handled the material for many hours or days, with the possibility of death if exposure continues for weeks. Category 4 materials are unlikely to permanently injure people; and Category 5 

quantities would not permanently injure people at all. 

The ability of the GAO to creatively avoid the NRC restrictions 

on Category 4 materials in this instance by obtaining small 

amounts of materials that could be aggregated into larger quantities to get to Category 3 quantities of material is troubling, and 

that is what happened in this case. 

The NRC has recognized that the out-of-the-box thinking on 

GAO’s part did deceive current mechanisms to regulate materials. 

I note that one of the recommendations that Commissioner 

McGaffigan has included in his prepared testimony is that the 

NRC will ‘‘evaluate how to probe for other thus far undiscovered 

vulnerabilities in NRC and Agreement State materials licensing 

programs.’’ That is an important approach, a good way to try to anticipate problems in advance, and the result of this inquiry. It is 

also a positive note that the vulnerability that GAO has identified 

has resulted in prompt reaction by the NRC and that the NRC took 

steps to address the problem identified. 

I look forward to hearing from the GAO about the full scope of 

the vulnerabilities, the ways in which NRC is responding, and 

what more needs to be done. Senator Coleman, I commend you and 

your staff for the persistence that you have shown in this matter. 

As I know Senator Coleman and Senator Collins are aware, the defense authorization bill is on the floor, and as the manager of that 

bill, I will have to return to my floor duties fairly soon, so I am 

going to miss most of this hearing. I regret that I will miss it because it is an important hearing. Then that responsibility will be 

turned over either to a Democrat, if there is one here, if not, it will 

be turned over to Senator Coleman. 

We have two Ranking Members here this morning. I am not sure 

which Ranking Member has preference—the Subcommittee Ranking—— 

Senator COLLINS. Subcommittee. 

Senator LEVIN. Subcommittee, all right. In that case, Senator 

Coleman, it is your time. 

OPENING STATEMENT OF SENATOR COLEMAN 

Senator COLEMAN. Thank you, Mr. Chairman, and thank you, 

Ranking Member Collins. 

Today’s hearing provides a sober reality check. We turn our 

attention to the threat of a dirty bomb attack and whether our government’s efforts to prevent such a disaster are effective. This Subcommittee has been engaged in a 4-year effort to bolster the U.S. 

3 

1The See Exhibit No. 1, which appears in the Appendix on page 75. 

2 Exhibit No. 2 appears in the Appendix on page 100. 

Government’s ability to prevent a nuclear or radiological attack on 

U.S. interests. The Subcommittee’s efforts have been thoroughly bipartisan, and I appreciate Senator Levin’s continued dedication to 

this cause. 

Make no mistake: The threat of a dirty bomb attack is real. The 

executive director of the 9/11 Commission stated in 2004 that alQaeda ‘‘remains interested in using a radiological dispersal device 

or ‘dirty bomb.’ ’’ Even worse, he said that ‘‘[d]ocuments found in 

al-Qaeda facilities contain accurate information on the usage and 

impact of such weapons.’’ 

The aspiring terrorists that were arrested in London in August 

2004 sought to construct ‘‘a crude radiological dirty bomb.’’ In September 2006, the then-leader of al-Qaeda in Iraq reportedly called 

for ‘‘nuclear scientists and explosive experts’’ to help his terrorist 

group manufacture ‘‘unconventional weapons,’’ specifically including dirty bombs. Sadly, these are just a handful of examples to get 

a sense of the problem. 

In light of this threat, government oversight of radioactive materials has become more important than ever. The best way to prevent a dirty bomb attack is to stop terrorists from getting radiological materials in the first place. Our hearing today—along with 

the Subcommittee’s staff report 1—will explore some gaps in the 

Federal Government’s regulation of radiological materials. In particular, we will address weaknesses in the Nuclear Regulatory 

Commission’s administration of licenses for radiological materials. 

As part of its ongoing investigation into homeland security matters, the Subcommittee requested that the Government Accountability Office conduct a clandestine operation to determine whether 

a terrorist could use a phony company to slip under the radar and 

get a valid radiological license in his quest for a dirty bomb. The 

results are not encouraging. 

In short, GAO created two dummy corporations and applied for 

radiological licenses—one in West Virginia, where the NRC regulates radiological materials, and one in Maryland, a so-called 

Agreement State that regulates radiological materials on its own. 

Shortly after receiving the application, regulators in Maryland embarked on a 7-month review process, requesting a site inspection 

of the company’s facilities and interviews with its employees. GAO, 

knowing that this robust review process would expose their sting 

operation, withdrew the Maryland application. That is the good 

news. 

The bad news is that the application that went to the NRC was 

approved in short order. The NRC conducted a cursory review and 

gave a license to GAO’s phony company in just 28 days. 

As if that were not bad enough, GAO was able to counterfeit the 

NRC license—using ordinary computer software that any teenager 

could use—to remove the restrictions on the amount of radiological 

materials permitted under the license. In this exhibit,2 you can see 

the comparison of the valid NRC license on the left and the counterfeited version on the right, and essentially what you see is a 

4 

change in the restrictions on the amount of radiological materials 

that were permitted under the license. 

GAO investigators then used copies of the counterfeited license 

to execute contracts to buy enough radiological materials to meet 

the NRC’s definition of a ‘‘dangerous’’ quantity—enough, according 

to GAO, to build a dirty bomb. Perhaps more importantly, investigators could have easily prolonged their effort, generating dozens 

of fake licenses, visiting multiple suppliers, and stockpiling significantly higher amounts of this—and possibly other, more radioactive—material. The GAO states that it could have purchased 

‘‘substantially more radioactive source material’’—potentially 

enough to reach the NRC’s threshold of a ‘‘very dangerous’’ material. In other words, the modest amount of radiological materials 

that GAO sought to purchase was but a demonstration amount. 

There is no doubt—and I think the testimony will demonstrate— 

that they felt that they could have continued to counterfeit, continued to search out suppliers, and acquired an even larger quantity 

of radiological material. 

These weaknesses are not new. In fact, as detailed in the Subcommittee’s staff report, several entities—including the GAO, the 

NRC Inspector General, and this Subcommittee—have recommended over the past few years that the NRC improve its licensing 

procedures to ensure that radiological materials will be used as intended. 

To its credit, the NRC has shown a willingness to strengthen its 

licensing process. It made some changes in June 2007 in response 

to the GAO’s latest clandestine operation. Those changes are steps 

in the right direction—and I applaud the NRC for taking them— 

but I don’t think they go far enough. 

I am still concerned that the NRC does not fully appreciate the 

dirty bomb threat. They appear to be focused on the accident instead of the crime, on safety instead of security, on the good-faith 

actor in a world of bad-faith people. To be fair, focusing on health 

and safety is obviously a paramount concern, and the NRC should 

be commended for its responsible management of the most lethal 

radiological materials. But in this world of sleeper cells and suicide 

bombers, we must also be vigilant about the smaller-scale threat. 

For instance, we think the NRC should regulate so-called Category 3 sources more stringently. Category 3 refers to the NRC’s 

scale for radioactive sources, which goes from Category 1 through 

5, with Category 1 being the most dangerous radiological source 

amounts and Category 5 the least. I think the Chairman laid this 

out in his opening statement. Category 3 sources are in the middle 

range and are designated as ‘‘dangerous.’’ 

Under the NRC’s previous rules, license reviewers were not required to visit the facilities of applicants seeking Category 3 

sources before issuing the license. Instead, the NRC would visit 

those facilities up to one year after the license was issued. 

Thankfully, the NRC changed some of its rules soon after GAO’s 

latest operation. While I applaud the NRC’s prompt response and 

recognize that this is a step in the right direction, I believe that 

their change does not go far enough. Although license reviewers are 

now required to visit with applicants seeking Category 3 licenses, 

that ‘‘visit’’ can be a simple meeting at the NRC’s offices. So the 

5 

problem is clear: Even with this recent change in procedures, the 

NRC license reviewers are still not required to visit facilities of applicants seeking Category 3 sources before issuing a license. I believe the NRC should require on-site visits—which Maryland apparently requires—not meetings at the NRC—before Category 3 licenses are issued. 

In addition, the NRC should evaluate whether to include Category 3 sources in the proposed National Source Tracking System, 

which will be designed to monitor the most lethal sources from cradle to grave. 

The NRC should also take steps to ensure that source materials 

can be obtained only in authorized amounts by legitimate users. 

For instance, the NRC should consider establishing a web-based licensing system so that suppliers can go online and check first, that 

a purchaser’s license is actually valid and second, how much radiological material the purchaser is authorized to obtain. 

These recommendations are designed to bolster our government’s 

efforts to prevent a radiological attack in the United States. It is 

clear that terrorists are interested in using a dirty bomb to wreak 

havoc in this country. In the words of one homeland security expert, the impact of such an attack—even a relatively simple and 

small dirty bomb—could be a ‘‘nightmare scenario.’’ 

The issue here is not the amount of lives that would be lost in 

the explosion itself, or even the amount of radiological material. It 

is the psychological and the economic impact of having radioactive 

material thrown about perhaps in a place like Wall Street or in the 

halls of Congress, and the impact that would have, the longstanding economic and psychological impact that would have. 

One critical step is to prevent America’s enemies from acquiring 

radioactive materials in the first place. To that end, the NRC 

should focus on ensuring that such materials can be obtained only 

in authorized amounts by legitimate users. These measures will 

help ensure that the ‘‘nightmare scenario’’ of a dirty bomb never occurs. 

I look forward to hearing the testimony from the GAO and Commissioner McGaffigan from the NRC today. I know the Commissioner is passionate about the NRC, and I commend his long tenure 

in government service. I look forward to discussing with him how 

we can work together to better protect America. 

Thank you, Mr. Chairman. 

Senator LEVIN. Thank you, Senator Coleman. Senator Collins. 

OPENING STATEMENT OF SENATOR COLLINS 

Senator COLLINS. Thank you, Mr. Chairman. Let me start by 

commending you, Mr. Chairman, and Senator Coleman for your 

work on this very important investigation. 

Since the terrorist attacks of September 11, 2001, I have had the 

privilege of working with the Members of this Subcommittee, particularly Senator Coleman, on bipartisan measures to strengthen 

security at our borders and at our seaports. We have made some 

real progress in preventing terrorists, explosives, biological and 

chemical weapons, and radioactive materials from penetrating our 

defenses. Those gains will avail us little, however, if homegrown 

terrorists can readily acquire deadly materials within our borders 

6 

to fuel their attacks. The enterprising work of the GAO investigators suggests that they could do exactly that with relative ease. 

The threat of a ‘‘dirty bomb’’ seeded with radioactive materials 

is widely recognized. The former head of Britain’s intelligence service has said it is ‘‘only a matter of time’’ before a dirty bomb attack 

strikes a country in the West. But we are not the only people feeling threatened: The Chinese Government has included a dirty 

bomb drill in its security planning for the 2008 Olympics. The consequences, as my colleagues have indicated, could be dire. 

A 2004 study published by the National Defense University concludes that a dirty bomb attack ‘‘is apt to cause mass panic and 

great economic damage,’’ even if it is unlikely to cause widespread 

fatalities. A new Canadian Government study concludes that exploding even a small dirty bomb in Ottawa could cause over $20 

billion in economic disruption, in addition to localized death and 

destruction. 

If it is indeed a relatively simple matter to obtain, alter, or counterfeit Nuclear Regulatory Commission licenses to acquire radioactive materials, then we face yet another challenge to achieving 

homeland security for our people. 

The GAO deserves great credit for giving us concrete evidence of 

this vulnerability, and, again, I want to comment Senator Coleman 

and Senator Levin for pursuing this investigation. This morning 

many of us woke up to the report talking about a possible diversion 

of an airplane. It is a useful reminder that indeed everything has 

changed since September 11, and this Subcommittee, I know, will 

continue its work to identify vulnerabilities and propose reforms to 

increase the chances of yet another attack. Thank you, Mr. Chairman. 

Senator LEVIN. Thank you, Senator Collins. Senator Akaka. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. Thank you, Mr. Chairman. I want to thank you 

for holding this timely and very important hearing. Despite the numerous measures designed to tighten domestic and international 

control over the last several years, high-risk radioactive sources are 

still vulnerable to theft and misuse. 

For the sake of bringing back some history of the work of this 

Subcommittee, I want to go back to the year 2000. I have been concerned about this threat for several years now, and as Ranking 

Member of the International Security Subcommittee at that time, 

I expressed my concern that we needed to be better prepared to respond to terrorist attacks. And this was in the year 2000. This led 

me in early 2002 to request that the Government Accountability 

Office investigate domestic and international control of radioactive 

sources, including the Nuclear Regulatory Commission’s licensing 

and control of radioactive sources. 

In an August 2003 report to me, GAO stated that the NRC did 

not know the precise number of sealed sources in use in the United 

States, that NRC had difficulty in accounting for generally licensed 

devices containing sources, and that the security of those devices 

varied at the State level. 

As a result, I introduced legislation in 2003 to safely and securely dispose of low-level radioactive waste. This finally became 

7 

law in the Energy Policy Act of 2005. The fact is that my legislation should not have been necessary. The NRC and the Department 

of Energy should have solved this problem. But, unfortunately, my 

legislation wasn’t enough. 

GAO testified in front of the Permanent Subcommittee on Investigations 3 years later that more work needed to be done. On 

March 28, 2006, Gregory Kutz, Managing Director of Forensic Audits and Special Investigations at GAO, one of our witnesses here 

today, stated that undercover GAO investigators were able to buy 

radioactive sources using a fake company and were able to transport the material into the United States using falsified NRC documents modeled after those they found on the Internet. 

The results of GAO’s most recent sting operation indicate that 

these vulnerabilities in the licensing process still exist. Clearly, 

more work still needs to be done if we are going to prevent a dirty 

bomb attack on U.S. soil. The critical first step in that process 

must be to ensure strong regulatory control over the material used 

to make such a bomb. 

If we are to believe the March 10, 2007, statement of captured 

al-Qaeda operative Khalid Sheikh Mohammad, in which he told a 

U.S. military tribunal that he was, ‘‘directly in charge . . . of managing and following up on dirty bomb operations on American soil,’’ 

then the risk of a dirty bomb attack by terrorists remains very real. 

We cannot allow the NRC licensing system to continue to fail, as 

it did during the two GAO undercover operations. 

In closing, I would like to remind this Subcommittee of another 

al-Qaeda operative, Dhiren Barot, who told a British court in May 

about his plans to attack the United States and the United 

Kingdon using a dirty bomb comprised of, and I am quoting, ‘‘a few 

grams of cobalt–60 with several pounds of explosives . . . enough 

to close off an area the size of Manhattan.’’ These words are 

chilling, but they remind us that we must remain vigilant. 

Mr. Chairman, I would once again like to thank you and Ranking 

Member Coleman for organizing this hearing, and I look forward 

to discussing what steps we can take to ensure that a dirty bomb 

attack on U.S. soil never happens. Thank you, Mr. Chairman. 

Senator LEVIN. Thank you very much, Senator Akaka, and thank 

you for your longstanding efforts in this area. They have made a 

notable contribution, and much of the work which you have just 

discussed is an important background for the work that will be discussed today. 

Senator Carper. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. Thanks, Mr. Chairman. Thanks for bringing us 

together today. Welcome to our witnesses and colleagues. 

The Nuclear Regulatory Commission has a monumental responsibility, and I can say with confidence that I believe they fulfill that 

responsibility admirably in most cases. 

When I was Governor of Delaware, I oftentimes said to my cabinet—I still say it to my staff here—‘‘If it isn’t perfect, make it better.’’ 

8 

When it comes to regulating the nuclear industry—from construction gauges to nuclear power plants—the NRC has to be perfect, or as close to perfect as they can be. 

As Chair of the Clean Air and Nuclear Safety Subcommittee, 

part of the Environment and Public Works Committee, oversight of 

the NRC is one of my top priorities. It is a priority that I share 

with Senator George Voinovich, who is the Ranking Member of 

that Subcommittee. In that capacity, we have closely monitored the 

NRC’s efforts to gear up for a renaissance in new nuclear power, 

and I have often warned the NRC that they cannot lose sight of 

their current responsibilities while preparing to deal with the enormous task of licensing a new fleet of nuclear power plants. 

When the NRC fails as significantly as they appear to have failed 

in this instance, it shakes the public’s confidence. I believe safe, reliable, new nuclear power is one of the keys to our Nation’s energy 

security and climate change concerns. However, a lack of public 

confidence in the NRC will undermine that opportunity before it 

even begins. 

This incident, coupled with the nuclear fuel spill last year, which 

was inexplicably kept from Congress for over a year, cannot be ignored nor simply brushed aside as small events that we hope will 

not happen again, because this is not just about public confidence 

in the Nuclear Regulatory Commission and nuclear power. This is 

about public safety. 

When I think about this episode, what is most distressing to me 

is the fact that we should have known better. Experts have been 

warning us for years now about the impact a dirty bomb exploding 

in an American city could have. There could be loss of life, of 

course, but the long-term impact such an incident would have on 

the economic and physical health of the community that was targeted are likely immeasurable. 

The psychological impact a dirty bomb explosion would have not 

only on the community that was hit but on the Nation as a whole 

cannot be discounted either. We can open the paper and turn on 

the news every day and see the impact conventional explosives 

placed in a backpack or in the trunk of a car have had in communities like Great Britain, Spain, Israel, and Iraq. Just imagine 

what would happen if those explosives were coupled with radiological materials. 

The fact is that a dirty bomb is likely the worst terrorist threat 

we face as a Nation today, and one of our major lines of defense 

against them did not hold up when tested. Luckily, this test was 

not a real test and, hopefully, we can learn from the mistakes that 

were made. 

The sin is not in making mistakes. The sin is not learning from 

those mistakes. A big mistake has been made here, I believe. We 

have got to learn from it. Thank you, Mr. Chairman. 

Senator LEVIN. Thank you, Senator Carper. 

We now welcome our first panel to the hearing this morning from 

the Government Accountability Office. We have Eugene Aloise, Director of the Nuclear and Nonproliferation Issues Unit at GAO; 

Gregory Kutz, the Managing Director of the Forensic Audits and 

Special Investigations Unit at GAO; and John Cooney, Assistant 

Director of the Forensic Audits and Special Investigations Unit. 

9 

1The joint prepared statement of Mr. Kutz, Mr. Aloise, and Mr. Cooney appears in the Appendix on page 39. 

Gentlemen, we welcome you, in some cases back to the Subcommittee. You have testified here many times before, and so you 

are aware that we have a rule under which all witnesses who testify before the Subcommittee are required to be sworn, and I would 

ask you at this time to please stand and raise your right hands. 

Do you swear that the testimony that you are about to give before this Subcommittee will be the truth, the whole truth, and 

nothing but the truth, so help you, God? 

Mr. ALOISE. I do. 

Mr. KUTZ. I do. 

Mr. COONEY. I do. 

Senator LEVIN. The timing system that we will use today will 

provide that the yellow light comes on 1 minute before your time 

is up. The light will change from green to yellow, which will give 

you an opportunity to conclude your remarks. Your written testimony will be printed in the record in its entirety. We would appreciate your limiting your oral testimony to no more than 10 minutes. 

Mr. Kutz, I understand that you are going to be presenting the 

GAO’s statement this morning. Is that correct? 

Mr. KUTZ. Yes. 

Senator LEVIN. Then you may proceed. 

TESTIMONY OF GREGORY D. KUTZ,1 MANAGING DIRECTOR, 

FORENSIC AUDITS AND SPECIAL INVESTIGATIONS; EUGENE 

E. ALOISE, DIRECTOR, NATURAL RESOURCES AND ENVIRONMENT; AND JOHN W. COONEY, ASSISTANT DIRECTOR, FORENSIC AUDITS AND SPECIAL INVESTIGATIONS, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. KUTZ. Mr. Chairman and Members of the Subcommittee, 

thank you for the opportunity to discuss our covert test of the NRC 

licensing process. The bottom line of our testimony is that we were 

able to obtain a genuine NRC license using bogus documents. This 

license could have been used to accumulate dangerous amounts of 

radioactive materials. 

Our testimony has two parts: First, our prior recommendation; 

and, second, the results of our covert test. 

First, in August 2003, GAO reported vulnerabilities in the NRC 

licensing process. We recommended that NRC strengthen its process to ensure that sealed sources could not be purchased by those 

with malicious intent. 

As shown on the posterboard timeline, NRC issued new guidance 

over 3 years after our recommendation. At the request of this Subcommittee, we performed covert testing of the revised NRC licensing process. 

Moving on to our second point, our test clearly shows that the 

revised NRC process did not work. Using bogus businesses and documents, along with a little social engineering, we were able to obtain a genuine NRC radioactive materials license. Let me walk you 

through what we did and what we found. 

For this investigation, we incorporated two bogus businesses— 

one in a State where NRC issues licenses, and one in an AgreeVerDate Aug 31 2005 09:23 Jun 20, 2008 Jkt 041129 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 P:\DOCS\41129.TXT SAFFAIRS PsN: PAT
10 

ment State. Those attempting to purchase radioactive materials—— 

Senator LEVIN. Would you stop there? I hate to interrupt you, 

but what is, for everyone’s understanding, an ‘‘Agreement State’’? 

Mr. KUTZ. Those are States that have been delegated licensing 

authority by the NRC to issue radioactive materials licenses. So either NRC issues them or Agreement States will issue them. 

There are 34 of these Agreement States, and as I mentioned, 

they have been delegated the licensing authority from the NRC. 

One of our tests was of the NRC process, and one of our tests was 

of a State process—as Senator Coleman mentioned, the State of 

Maryland. 

In February 2007, using the two bogus businesses and our fictitious owners and officers, we submitted one application to the NRC 

and one to the Agreement State. As with all of our undercover operations, we used only publicly available information, hardware, 

and software in making our applications. 

For the NRC application, we received two calls from the NRC reviewer asking for additional information. In both instances, we 

amended our application and faxed the additional information to 

the reviewer. As shown on the posterboard, in March 2007, 28 days 

after making our application, we received our NRC license. 

As shown on the next posterboard, and as Senator Coleman had 

showed, we altered our genuine NRC license to allow for the purchase of unlimited quantities of radioactive materials. We then 

faxed this altered license to two suppliers who committed to shipping us numerous machines containing radioactive materials. We 

did not actually buy the machines or radioactive materials, primarily due to safety and cost considerations. The material that we 

could have acquired from these two suppliers was sufficient to 

reach the International Atomic Energy Agency’s definition of Category 3. Category 3 sources are considered dangerous if not properly secured. More importantly, with patience and money, we could 

have accumulated substantially more radioactive material from 

other suppliers. 

To NRC’s credit, and as shown on the posterboard, after we informed them of our operation in early June 2007, they suspended 

their licensing program. Within a matter of days, they issued supplemental interim guidance. Although a step in the right direction, 

we continue to believe that this guidance should require a site visit 

before a license is issued. 

For the State application, the reviewer called to inform us that 

a site visit would be required. Since the company office and storage 

facility that we described and showed in our application did not 

exist, we chose at this point to suspend our application. We later 

informed the State that we would not be pursuing our license because of financial problems. 

In conclusion, 3 years after reporting NRC process vulnerabilities, we were able to beat the system with a basic ruse. Recent 

events in the United Kingdom have reminded us that terrorists 

will use whatever means are available to cause fear and economic 

harm and to kill innocent people. In this challenging environment, 

agencies like the NRC must continue to aggressive and proactively 

assess and address threats. Although we are encouraged by NRC’s 

11 

recent actions, closing the vulnerabilities discussed today will require additional actions and could take years. 

Mr. Chairman, Members of the Subcommittee, this ends our 

statement. Mr. Aloise, Special Agent Cooney, and I look forward to 

your questions. 

Senator CARPER [presiding]. Mr. Kutz, thanks very much. I am 

going to ask Senator Coleman, if you would like to lead off with 

questions, and then we will go to Senator Akaka and then to Senator Collins, and then I will follow her. 

Senator COLEMAN. Thank you, Mr. Chairman. 

Senator CARPER. You are recognized for 8 minutes. 

Senator COLEMAN. Mr. Kutz, looking at the timeline there, there 

was apparently a 3-year period from the 2003 report that Senator 

Akaka talked about, which indicated that there were concerns 

raised about the licensing process, and the guidelines issued. Do 

you have any reason why it took 3 years? 

Mr. KUTZ. Well, and I would ask other people on the panel to add 

in. I think that they did not take us as seriously the first time as 

they did based on our most recent sting, because in the most recent 

sting they revised their policies within a matter of 12 days. The 

first recommendation, it took over 3 years. So I believe that they 

took this sting more seriously. 

Senator COLEMAN. Was there any technical problem? I am still 

trying to understand, and they are maybe simply not taking it seriously, and we will certainly turn to the NRC. Are these complex 

technical issues that had to be reviewed and analyzed for a few 

years before new procedures were put in place? 

Mr. ALOISE. Senator, if I might? 

Senator COLEMAN. Mr. Aloise. 

Mr. ALOISE. Senator, there is a lot of what NRC does that we 

agree with, and we have a lot of respect for NRC. We have our differences, too, and this is one of the areas. In our view, NRC has 

not been aggressive enough in licensing and tracking radiological 

sources, the materials that can be used to make dirty bombs. And, 

in fact, one of their executives told us, ‘‘We are not good at deterrence in this area.’’ 

So we believe they need to be more aggressive in this area. We 

have for several years now. It is evidenced by the fact that it took 

them 3 years to develop guidance which we beat in 28 days. 

Senator COLEMAN. Some would suggest, some might argue that 

this issue was being hyped. How would you respond to that? 

Mr. ALOISE. We believe it is a very important issue and it needs 

their attention. Let’s just fix the system that is broken. 

Senator COLEMAN. Looking at the quantity of materials that you 

were able to counterfeit, how difficult was it to alter the license? 

What kind of procedures did you employ? Is this something that 

would require great technical expertise, or was it a simple process 

they used? 

Mr. KUTZ. It was a simple process, basic off-the-shelf hardware 

and software. And, actually, we probably used a more elaborate 

scheme than we needed to because we had to fax the license to the 

suppliers to get the actual shipment. So we could have probably 

just done a basic cut and paste and faxed it, but we actually took 

12 

the license, scanned it in, and modified those sections, and then 

faxed it to two suppliers, and it looked genuine at that point. 

Senator COLEMAN. When you faxed it to two suppliers, did Supplier 1 know that you faxed it to Supplier 2? 

Mr. KUTZ. I do not believe so. 

Senator COLEMAN. And if there were Suppliers 3, 4, 5, 6, 7, 8, 

9, and 10, would they have any—is there any system in place that 

would alert any of the other suppliers that, in fact, a single license 

was being used multiple times to obtain quantities of material in 

excess of the license’s ‘‘allowable amount’’? 

Mr. KUTZ. Not that we are aware of. As I mentioned in the opening statement, I think if we had been patient, taken our time, and 

had a little bit more money, we could have continued to purchase 

machines with radioactive materials. 

Senator COLEMAN. One of the recommendations in the report 

concerns the ability to counterfeit. You were able to change the 

quantities and material that is involved. You could have sent it out 

to multiple suppliers. I take it, from what we have seen in the past, 

that, for terrorists, getting and having money has not been a problem. 

I have talked about a web-based system. Can you respond to that 

recommendation? 

Mr. KUTZ. For the counterfeiting issue? 

Senator COLEMAN. Yes. 

Mr. KUTZ. Yes, that would be a better way to address the counterfeiting. I think the reason I mentioned in my opening statement 

that a solution may be several years away is I believe NRC’s documents are showing 2009 as the implementation date for a webbased system. So, in the meantime, that vulnerability will still 

exist unless they have other alternative means for suppliers to be 

able to look to determine that a license is counterfeit. 

Senator COLEMAN. And when we say web-based system, that 

would mean that you would have a single database that people 

would go to, that suppliers or others would have to go to the single 

database, and this database could indicate whether, in fact, multiple suppliers were being employed and whether the license was 

being used beyond its intended purpose? Is that correct? 

Mr. KUTZ. Yes, for the counterfeiting, we believe that the webbased system would have great potential. 

Senator COLEMAN. What is the application fee from the NRC for 

this license? And what is the application fee from one of the Agreement States, from Maryland? 

Mr. KUTZ. For NRC it was $1,200; for Maryland it was $1,000. 

Senator COLEMAN. So the NRC license, the application fee was 

a little more, and yet they didn’t require a site visit? 

Mr. KUTZ. Right. Maryland was going to actually visit our facility, tour the facility, and take 7 months for the process. The NRC 

process, as we mentioned, took 28 days, and so from a cost perspective, I would assume Maryland would have cost a little bit more 

to do that work. 

Senator COLEMAN. I am trying to understand why a site visit 

may not be recommended. In 2007, after the sting, the NRC did 

change the regulations and talked about a visit. Did that visit 

mean a site visit, or it could have meant some other kind of visit? 

13 

Mr. ALOISE. Are you talking about their new interim guidance? 

Senator COLEMAN. Yes, new guidelines. 

Mr. ALOISE. It is an either/or. They are either going to have a 

site visit or they are going to allow for a face-to-face visit in an 

NRC office, which we do not believe is as good as actually touring 

the site. 

Senator COLEMAN. So, in fact, you had to shut down your application when Maryland said they were going to tour the site because 

there was no site. 

Mr. ALOISE. There was no site. 

Senator COLEMAN. Is this a volume issue? Is the NRC so overwhelmed with applications that it is difficult or impossible for them 

to actually do site visits? 

Mr. ALOISE. There are always resource issues to be addressed. 

The States have to address them, too, but the States are able to 

make the site visits as well. 

Site visits are something that should be explored through contracting or however it needs to be done, but it needs to be done. 

Mr. KUTZ. Well, Senator, I would say, too, with respect to the office visit versus the site visit, certainly the office visit is an improvement from what we had because Special Agent Cooney received two phone calls. So on the phone, it is easier to engineer the 

situation than face to face. I am not discounting that an office visit 

would be tougher, but it is possible to beat an office visit. 

Senator COLEMAN. Senator Carper had a wonderful statement. 

He said, ‘‘If it isn’t perfect, make it better.’’ Clearly, a visit to the 

office is better than no visit, but a site visit to determine whether, 

in fact, there is a site is obviously better than a phone call or calling somebody into the office. 

Mr. KUTZ. Yes, we would consider that the gold standard. 

Senator COLEMAN. And as a result, do you believe that the June 

2007 interim guidance solved the problem? 

Mr. KUTZ. Well, no. Again, I think there are three parts to it. I 

think that the issue of office visit is only one element. The other 

issue you mentioned, counterfeiting, has not been solved. I think 

there is a third element here, the human capital element. Part of 

what we do in testing, oftentimes you have good policies on paper, 

but you are able to beat the people. And that is the other part of 

this, I think, that needs to be addressed. I think they have talked 

about additional training from the standpoint of security and how 

to recognize, and even in the guidance they had in 2006, there were 

certain steps that if someone had followed for our test, like done 

a Google, for example, they would have figured out that we do not 

exist. 

Senator COLEMAN. Let me talk about the amount of material. 

There are some who would argue that these are insignificant 

amounts. In fact, as I recall the Time Magazine report about the 

London terrorists, they were actually taking apart smoke detectors 

to try to create some kind of dirty bomb. 

Can you respond to the notion that we are really dealing with 

insignificant quantities here? And, again, it gets back to this issue 

that we are making this to appear to be a bigger problem than it 

really is. 

14 

Mr. ALOISE. Senator, of course, there is a lot of debate about this. 

It is almost like asking how many sticks of dynamite it takes to 

make a car bomb. The point is once an explosion occurs, or a dispersal event happens, and first responders’ radiation detectors go 

off, the consequences start from there. You do not know what it is 

you are dealing with. You do not know how much. You do not know 

how dangerous the isotope is. So you are going to have to take actions like evacuating the area, shuting down businesses, closing 

down transportation. 

No one knows what the impact would be. That is why it is so important to prevent it. 

Senator COLEMAN. And there is no question in your mind that, 

with the phony license that you received for a bogus company, you 

would have been able to obtain enough material to construct a 

dirty bomb that, if exploded in a place like Wall Street or some 

other area, would have significant economic impact and psychological impact beyond just the loss of life that may or may not have 

occurred? 

Mr. ALOISE. We are absolutely convinced. 

Senator COLEMAN. Thank you, Mr. Chairman. 

Senator CARPER. You are welcome. 

Senator Akaka, you are recognized for 8 minutes. 

Senator AKAKA. Thank you very much, Mr. Chairman. 

First, I would like to thank GAO for their hard work over the 

years and their hard work for this Subcommittee on this issue. And 

I thank Senator Coleman and Senator Levin for keeping this issue 

in the spotlight. 

After hearing your testimony, Mr. Kutz, that GAO has made recommendations and also has reported results of your findings, and 

that you are recommending that NRC licensing be strengthened, 

although still early this year your covert process found that it did 

not work, so, Mr. Kutz, GAO has recommended that NRC consider 

the social and economic impacts of radioactive sources using a dirty 

bomb. Given the difficulty in measuring these aspects, my question 

to you is how NRC might do this? 

Mr. KUTZ. There are several elements of this. There is the site 

visit that we believe is important, and I know that even under 

their old process, the site visit was going to happen, but possibly 

a year after you actually got your license. We still believe a faceto-face site visit would be a good step before you issue a license. 

We mentioned the issue of counterfeiting. Even if you do the site 

visit, suppliers who receive a faxed copy of an NRC license that is 

counterfeited still today could possibly end up shipping to someone 

with malicious intent. So the counterfeiting issue needs to be dealt 

with. And as I mentioned, the human capital element of this, having people trained in whatever guidance exists, assuming the guidance becomes solid and good, are people trained in actually looking 

at this from a security standpoint in addition to the scientific and 

technical standpoint? We think that is also something that they 

need to consider from a training standpoint. 

Senator AKAKA. All right. Well, thank you very much. 

Thank you, Mr. Chairman. 

Senator CARPER. Thank you, Senator Akaka. 

Senator Collins, you are recognized for 8 minutes. 

15 

Senator COLLINS. Thank you very much, Mr. Chairman. 

Mr. Kutz, I was struck with how different the response was from 

the State of Maryland versus the NRC, and if you had asked me 

prior to this investigation which entity would have done a more 

thorough review, I would have guessed without hesitation that it 

would have been the NRC and not the State Government. So I 

think that is a very interesting finding because the scrutiny of the 

two applications was dramatically different to the point where 

GAO abandoned its plans to pursue the license from the State of 

Maryland. There are, however, 33 other States, in addition to 

Maryland, that have agreements with the NRC and, thus, the authority to issue licenses. 

Do you have any idea whether the quality of the review process 

in those other States is as stringent as it was in Maryland? 

Mr. KUTZ. I will let Mr. Aloise add, but I am not aware of that. 

I know that after we did our operation, NRC immediately held, I 

believe, a teleconference with all the States to tell them what we 

did, how we did it, to make sure that they were alerted, which was 

a positive step, we believe. But I would expect they are not following the exact same process in all 34 States. 

Mr. ALOISE. Senator, when we did our report in 2003 for Senator 

Akaka, we did not survey all the States, but we did come across 

a number of States that also made site visits. South Carolina and 

Georgia come to mind. And State officials told us that they thought 

a lot of other States were making site visits. 

Senator COLLINS. I just wonder—and I am very glad to hear the 

NRC shared the results of the recommendations. 

The Nuclear Regulatory Commission I would have expected to 

have the most stringent of all procedures, but I would suspect that 

smaller States with fewer resources—a State like mine, for example, which has tight budget constraints and perhaps limited expertise in this area—might not have the kind of intensive scrutiny 

that a larger State would have. 

Could you tell me more about how the Regulatory Commission 

licenses States or enters into this agreement? Could you tell me 

more about the process for allowing States to undertake their own 

licensing? 

Mr. ALOISE. They basically have to meet NRC’s requirements for 

taking over the licensing process, and then NRC reviews them periodically to make sure they are still operating the way they agreed 

to operate. 

But, in some cases there may not be all that many licensees involved. It depends on the type of material. In some cases, there are 

55 licensees for a specific amount and type of material, and in 

other cases there are more. It depends on the State, and, you are 

correct, State resources. 

But, again, when we met with the State organizations, most of 

them thought that they were—or a lot of them were—doing site 

visits. They believe it is that important. 

Senator COLLINS. Are the majority of licenses issued by the 34 

States or by the NRC? 

Mr. ALOISE. The 34 Agreement States have about 80 percent of 

the licensees. NRC has about 20 percent of the licensees. 

16 

Senator COLLINS. That is what my understanding was. That suggests to me that we should also take a look at how the States implement this. If the vast majority of licenses are being issued at the 

State level, perhaps we should do some sort of assessment or ask 

the NRC to do some sort of assessment testing the quality of the 

State regulatory schemes. 

The second issue I want to raise with you, Mr. Kutz, is how you 

went about counterfeiting the license that you received from the 

NRC. Did this take any special expertise? Were you able to use offthe-shelf software, or did you have special expertise that the average person would not have access to? 

Mr. KUTZ. One of the basic rules when we do these kind of operations is to only use publicly available information, hardware, and 

software. So what we did, we bought from public sources that anyone could buy from, whether it be the paper or the actual machines 

that we used. 

Senator COLLINS. That was a point that I wanted to emphasize 

because you were able to do this, it seems to me, very easily, so 

it does not take access to specialized equipment or esoteric software 

or a lot of expertise to undertake the kind of counterfeiting that 

you were able to accomplish. Is that correct? 

Mr. KUTZ. Yes. Well, not only that, we probably were much more 

sophisticated than we needed to be because at the end of the day 

all we had to do was fax this to a supplier. And, a fax copy is not 

as good as an original, so I think a cut and paste would have potentially even worked because over a fax you are not going to know 

the difference. 

Senator COLLINS. That is true. Yes, Mr. Cooney? 

Mr. COONEY. I would like to add that this particular license is 

really very easy to counterfeit. As you know, you can counterfeit 

anything. However, the NRC license in particular has really no security features in it. It has no watermarks. It has no microprinting. 

It has no holograms. So it begs the question to be asked even if 

there are any real counterfeits out there that we do not know about 

because it was such an easy item to reproduce. 

Senator COLLINS. And that raises an important question as well 

of whether the Commission ought to be reviewing licenses that 

have been issued and do some sort of security check, given how 

easily you were able to counterfeit it. 

Is there a role here to be played by the suppliers? You talked 

about that you faxed the counterfeit license to two suppliers, and 

the amount that you were able to order far exceeded the amount 

that you were licensed for. Is there a role for suppliers in reporting 

back to the Commission when there is a purchase? Is there any 

feedback loop that might allow the counterfeiting to be identified 

through the supplier providing information to the Commission? 

Mr. KUTZ. Yes. I would mention on the other one that NRC has 

said they are going to do a lookback to see if there are counterfeit 

licenses. Back to your prior point, I believe they are going to take 

a shot at looking back to see if something has happened in the 

past. 

With respect to suppliers, the interesting thing about the suppliers is that what they cared about the most from us was doing 

a credit check and whether we could actually pay for what we 

17 

wanted to buy. They were not as concerned—I mean, they assumed 

that since we had this license that it was genuine, and so they did 

not have any means to determine that it was not. So the web-based 

system that has been discussed would seem to me to be one of the 

solutions for the counterfeiting because again—and we found this, 

again, in all the operations we do when we are dealing with things 

like this. Entities like this, and I think Mr. Cooney can explain to 

you how disappointed they were when they found out that ours was 

not a legitimate order. This was big to some of these small businesses, so they were most interested in getting the business. The 

security feature was not that important to them. 

Senator COLLINS. Thank you. Thank you, Mr. Chairman. 

Senator CARPER. You bet. 

Gentlemen, thanks very much for your testimony and for your 

work. I was sitting here just thinking that I am glad GAO is on 

our side. We appreciate your efforts in this matter. 

Senator COLEMAN. Mr. Chairman, could I ask one follow-up question? 

Senator CARPER. Certainly. 

Senator COLEMAN. Were you going to dismiss the panel? 

Senator CARPER. No. I am going to ask some questions. 

Senator COLEMAN. OK. I thought you said you were done. 

Senator CARPER. Oh, no. Just warming up. [Laughter.] 

I want to go back to the last point that Senator Collins was making. The suppliers, the potential suppliers, the willing suppliers 

here, they are in this to make money like most businesses. Their 

primary responsibility certainly is not to safeguard these materials 

and to make sure that they are secure and do not fall into the 

wrong hands. 

I do not know if you have talked to the suppliers themselves. Do 

they feel any compunction at all with respect to—or any concern 

at all about these materials falling into the wrong hands? Or do 

they just figure show me the license, we believe you are good to go, 

send me your money, we will check your credit, and it is a done 

deal? What is their approach? What is their mind-set? Mr. Aloise. 

Mr. ALOISE. Well, that certainly describes the two we are talking 

about—we just dealt with the two in this test. I think Mr. Cooney 

can elaborate. They were interested in the size of the business and 

getting our money. 

Mr. COONEY. They were disappointed that they did not get our 

business, of course. However, when we spoke to them afterwards, 

they stated that they followed all their procedures that they were 

mandated by, and they—— 

Senator CARPER. Mandated by whom? 

Mr. COONEY. By their own internal protocols. But they felt that 

the NRC should guarantee in some way the license presented to 

them. They are looking at NRC to say that the license is good. It 

should not be on them, the business, in their defense, to have to 

determine that the person is legitimate if he possesses and presents them with an NRC license. They are assuming that the license is OK, and they are assuming that NRC has granted it under 

legitimate means. 

18 

Senator CARPER. I would say to my colleagues, that reminds me 

a little bit of the immigration debate with respect to employers, 

knowingly or unknowingly, hiring illegal aliens. 

Just a word or two, your thoughts with respect to the adequacy 

of their internal procedures for the suppliers. Any thoughts? 

Mr. KUTZ. Well, again, from a security standpoint, I think there 

is more that needs to be done. They were not really going to challenge anything. We could have done a much less elaborate process, 

taken a license off of the web page, the web basically, just counterfeited it and faxed it to them and potentially gotten the materials. 

So they really did not have a mechanism in place at this point. 

That is why, again, I think this web system has potential for a 

place where they can go from a secure perspective to determine 

whether the people they are dealing with are genuine and that the 

amounts that we are asking for are within the guidelines of the license that we have. 

Senator CARPER. Mr. Cooney, you mentioned that the suppliers 

were disappointed not to be able to make the sale. Were they willing to offer quantity discounts to GAO? 

Mr. COONEY. Yes, and in their quotes they gave us quite a discount based on volume. 

Senator CARPER. All right. Thank you. 

Mr. KUTZ. They actually offered us twice as many machines as 

we requested, so when we requested the first set of machines, we 

actually got a quote back for twice as many machines as we had 

actually requested. 

Senator CARPER. I would just say to my colleagues as an aside, 

I have been over in Iraq and Kuwait looking into contracting, some 

of the military contracting that goes on, a lot of them no-bid contracts, and we are paying a lot more money for stuff than we ought 

to be. We ought to put these guys to work on this and get them 

out there to get us some better deals on the legitimate contracting 

side for the Department of Defense. I say that with tongue in cheek 

not entirely. 

Mr. Aloise, the GAO identified a vulnerability that could be exploited to obtain nuclear materials, but just to be clear, are there 

any sort of guidelines used by the NRC that govern the amounts 

of material that could be used in dirty bombs as opposed to guidelines that deal with health and security? Let me just start with 

that, and then I will follow up. 

Mr. ALOISE. NRC probably could answer that better than I could. 

But I do know that they analyzed the amount we had, for example, 

to determine the potential consequences of the amount of material 

we could have gotten. They are very capable of doing that. 

But, again, our point is that the point of a dirty bomb is not its 

scientific aspects, or the amount of material that is being used, but 

the socioeconomic effects of the dirty bomb. 

Senator CARPER. All right. And to follow up, I believe NRC has 

focused on Category 1 and 2 quantities, larger quantities. How do 

these quantities differ from the quantities of material that GAO 

was aiming to obtain or could have obtained? 

Mr. ALOISE. Well, Category 1 and 2 materials require more stringent controls. They are more dangerous so obviously they have 

19 

more controls. However, we think, if we had pursued this further, 

we probably could have got up to Category 2 levels. 

Senator CARPER. Do I understand that Category 4 is the lowest, 

the least—— 

Mr. ALOISE. Category 5 is the lowest. 

Senator CARPER. OK. And you were lining up to obtain—get 

somewhere at a low level Category 3? 

Mr. ALOISE. I think we reached the bottom of Category 3. 

Senator CARPER. Thanks very much. 

Mr. ALOISE. I might add, Senator, we have surveyed other countries and how they track materials. We surveyed 20 countries in 

another report. Fourteen of those countries track at least Category 

1 through 3 quantities of materials. NRC is right now concentrating on Category 1 and 2. And nine of those countries track all 

the way down to Category 5. So other countries take this seriously 

as well. 

Senator CARPER. Good. Well, I suspect we will, too, in the future 

thanks to your work. 

Let me talk with you for a moment about stolen materials. We 

are discussing here today the prospect of a real company, a supplier, a legitimate company, being willing to make a sale in this 

case to a sham operation that you guys started because you presented what appears to be a legitimate license and request for that 

material. What do we know about the safeguards that are in place 

to prevent materials from being stolen that might be stolen from 

a legitimate business. They could be from someone maybe who 

works for that legitimate business or simply just stolen from a 

business from the outside. Can you help me on that? 

Mr. ALOISE. Of these devices we are talking about, I think our 

report in 2003 said that over a 5-year period there were about 

1,300 of these devices stolen in the United States. About 250 a year 

were stolen, lost, or abandoned. NRC reports that most of those 

were reclaimed. A lot of these are left at a construction site. Those 

kinds of things occur. But they usually take prompt action, and 

once they are notified of that and try to get it back. 

Senator CARPER. All right. I have a couple more questions, but 

before I ask those, let me just yield back to Senator Coleman. Or, 

Senator Collins before she walks out of the room, do you have any 

other questions you would like to ask of this panel? 

Senator COLLINS. I do not. Thank you. 

Senator CARPER. OK. Senator Coleman. 

Senator COLEMAN. Just actually a quick follow-up to Mr. Cooney. 

The difference between the interview—the site visit versus an office interview. I know my staff has been talking to the NRC about 

this, and I think they would say that—first of all, they are Ph.D. 

reviewers who review these applications, and I think they may say 

that those reviewers would ‘‘eat a phony applicant’s lunch’’ in an 

interview, that they would be able to spot them in the interview. 

Do you think an interview with an NRC regional office would have 

exposed you or blown your cover? 

Mr. COONEY. Senator, I am quite confident, having dealt with the 

gentleman I dealt with in the review process, that had I met him 

on a one-to-one basis I could have got through the process fine. 

Early on in our discussions, I determined that he was more interVerDate Aug 31 2005 09:23 Jun 20, 2008 Jkt 041129 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 P:\DOCS\41129.TXT SAFFAIRS PsN: PAT
20 

ested and focused on the process of how to fill out the application 

rather than to determine the legitimacy of my use for the application. So I believe with the training that I had online, taking the 

RSO course, and my learned experience on the machines that we 

received through the Internet, that I would have been able to successfully get through that interview. And also, as you know, Senator, last year on the other case we did coming across the border, 

we were also face to face with law enforcement people, and we got 

through there also. 

Senator COLEMAN. And in that case, the good news is they found 

the materials; the bad news is that after they found it, with phony 

documents you were able to get it through. 

Mr. COONEY. Correct. 

Senator COLEMAN. And so, Mr. Kutz, I go back then to the difference between an office visit versus a site visit. You are of the 

opinion that a site visit would be a much more effective way to discover whether something is bogus or not? 

Mr. KUTZ. It would be the most effective way, yes. 

Senator COLEMAN. Absolutely. Thank you. Thank you, Mr. Chairman. 

Senator CARPER. You bet. 

Gentlemen, let me ask you a couple more questions and then we 

will excuse you and bring on our second panel. I would like to have 

us discuss NRC’s responsiveness to your investigation, to your 

sting operation. I find it troubling that ICE apparently cited concerns in, I think—was it 2003? And it took NRC some 3 years to 

improve their licensing process. After they had done that, it took 

you all about a month or less to, I guess, thwart the newly improved process. 

In your mind, was it legitimate for NRC first of all to take 3 

years to respond to your initial concerns? And how long should it 

take the NRC to respond fully to the concerns that you have raised, 

I guess to the lessons learned and the recommendations that you 

have made? How long is long enough? 

Mr. KUTZ. Well, I will respond first. With respect to what it appears, the first step was a good step requiring a site visit or an office visit. What they have done on the training front we do not 

know. But the one that looks like it is going to take the longest is 

the web-based system, which they now say is 2009. And whether 

there will even be an implementation period over several years, 

that could even be further than that, so added years. 

Senator CARPER. How would that web-based system work? 

Mr. KUTZ. Well, one element of it could be related to the suppliers you talked about. The suppliers could get a secure way to get 

into that system to determine within a matter of minutes whether 

someone ordering materials from them has a genuine NRC license 

and whether or not they are authorized to purchase the type of materials that they are submitting an order for. That has potential to 

deal with the counterfeiting issue. But that is several years away. 

Senator CARPER. I do not pretend to be an expert about these 

things, although I did spend last night in a Holiday Inn Express. 

[Laughter.] 

Not really. I spent last night at home in Wilmington. 

21 

Two years seems like a long time to put up a system like that 

to a lay person. Your thoughts? You guys maybe know more about 

this stuff than I do. You probably do. 

Mr. ALOISE. Senator, again, we made this recommendation in 

2003. We are not clear on why it took 3 years to address it, and 

then address it with procedures that we were, as you point out, 

able to beat in 28 days. 

I know NRC will argue with this, but in our view, they do not 

take the threat of these materials as seriously as we and others do. 

It is not that they discount the threat. I am not saying that. But 

if they took it as seriously as we did, they would have closed this 

gap in less than in 3 years. 

Senator CARPER. All right. I think I am going to stop there, and 

let me just conclude. Senator Coleman, my understanding is that 

this is an issue you had more than a little bit of interest in over 

the years, and I commend you for that. 

I especially want to commend our folks at GAO for the work that 

you have done in this regard, and I look forward to our next panel 

to hear from the NRC to hear their side of the story and what they 

have been doing in response to your recommendations. 

I would just close this first panel by observing that this is a different world than we live in today, different from the kind of world 

that we grew up in and even the kind of world that we had when 

I was Governor of Delaware and about to come here to the U.S. 

Senate in 2001. Like it or not, our world has changed, and the nature of the threats we face has changed as well. We have to be 

more vigilant when we make mistakes like we have here, and those 

mistakes have been identified, and we have got to act promptly, 

with dispatch, to address them. 

Thank you for your work in this regard, gentlemen, and we look 

forward to continuing to work with you in the years ahead, and we 

also look forward to our next panel. Thanks so much. 

Commissioner McGaffigan, I am going to ask you to rise and 

take an oath, please. Do you swear that the testimony you will be 

giving before this Subcommittee will be the truth, the whole truth, 

and nothing but the truth, so help you, God? 

Mr. MCGAFFIGAN. I do. 

Senator CARPER. Thank you. Please be seated. 

Commissioner McGaffigan, it is always good to see you. Today I 

am glad you are here, but I wish you did not have to be here. I 

wish, frankly, none of us had to be here. But since this issue is before us and I know this is an area that you have a lot of interest 

in and a lot of background, we are pleased that you could be here 

to respond on behalf of the NRC. 

You will be recognized for 10 minutes, and I would ask you to 

begin your statement. Once that is completed, we will probably be 

calling on Senator Coleman for questions and then Senator Akaka. 

Thank you. Please begin. 

22 

1The prepared statement of Mr. McGaffigan with attachments appears in the Appendix on 

page 50. 

TESTIMONY OF EDWARD MCGAFFIGAN, JR.,1 COMMISSIONER, 

U.S. NUCLEAR REGULATORY COMMISSION 

Mr. MCGAFFIGAN. Thank you, Senator Carper, Senator Coleman. 

I am not going to go through my full statement because I want to 

save some time to talk about some of the issues that have been 

raised. 

The early part of my statement, my background section, was intended to convey what we believe we have done since 2001 to deal 

with the dirty bomb issue. We feel that we have been a world leader on almost all of these things. The Code of Conduct renegotiation 

that occurred in 2003 was heavily influenced by an NRC DOE report. We got the right radionuclides and we got them in the right 

quantities in defining Categories 1 and 2 in the Code of Conduct. 

We did not wait 3 years, as one of the slides will show, to implement the 2003 GAO recommendation for high-risk sources in Categories 1 and 2. We did that starting in 2003, I believe, with the 

large panoramic irradiators and continuing in 2004 with manufacturers and distributors and then broadening it further in 2005. So 

for high-risk sources, this sting would not work. For high-risk 

sources, if you are trying to buy a gamma knife for a hospital, if 

you are trying to start a large panoramic irradiator to sterilize 

medical equipment or food, a sham company would be caught instantly. And a sham company would have been caught instantly a 

long time ago. We give those applicants very tight scrutiny. 

GAO did find a flaw in our system, and we, as soon as we understood it, dealt with it. NRC has the interim guidance that the GAO 

witnesses have described, and they believe that guidance solves 

most of the problem, and I can talk about the mandatory site visit 

perhaps in questions or later. 

We appreciate GAO telling us about this vulnerability in late 

May and early June of this year, and almost immediately we took 

some initiatives, and within 2 weeks we had interim guidance that 

we really think solves the problem in the short term. We have 

longer-term solutions like this web-based licensing that we are 

aiming to do, and going to Category 3 sources is something that we 

are studying. I personally favor it, but to do rulemaking in this 

country, we have to follow the Administrative Procedures Act, and 

we have to have data. And we are gathering that data. 

I suggested last year in one of my votes that we not just go to 

Category 3 sources but we go to one-tenth of the lower end of the 

Category 3 threshold, which would be a factor of 10 above the top 

threshold of Category 4. And only if I go to that, to one-tenth of 

Category 3, would I have caught this particular sting by GAO. 

So we are serious about this stuff. Most people in the world regard us as a world leader. I cannot imagine any country having the 

resources that the GAO witness just suggested to follow Category 

5 sources. The number of exit signs in America, the number of 

home smoke detectors in America do not lend themselves to that 

degree of scrutiny. So these countries have to have exempt levels, 

and they have to have levels where they provide minimal attention, 

or else they are literally following hundreds of millions of devices. 

23 

The NRC, as I said, took this seriously. We have a game plan 

to go forward. We intend to expand our scrutiny of source security 

issues to lower-risk souorces, but we clearly in the past few years 

have had to work on first things first. We have to work on the 

gamma knives and the large panoramic irradiators and other highrisk uses of these materials. 

I would say that one of the points made—and we are guilty ourselves in this point. One of the points made by GAO in their 2003 

report was that there are hundreds of sources lost every year. Dealing with Americium, for example, the threshold in the NRC quarterly report for determining whether a lost source must ve reported 

in 30 days is ten-billionth of a curie. The threshold for reporting 

a lost source immediately is one-millionth of a curie, the amount 

in a smoke detector. These are quantities that are not relevant to 

dirty bombs, and the Commission has very recently directed the 

staff in the future to use Code of Conduct category levels to report 

these sorts of events. The fact is that in the last 11 years that I 

have been with the Commission, the only high-risk sources that 

have ever been lost and not recovered are devices used in oil and 

gas exploration using iridium–192, a radionuclide that has a relatively short half-life of 74 days. 

The number of those sources lost and not recovered is in the 

handful in the 11 years I have been at NRC, and because they 

have such short half-lives, you just wait a while and they decay 

away. Sometimes they are lost in the Gulf of Mexico. Sometimes 

they are lost in deep waters. And they are very hard to recover. So 

we do not lose significant sources and not recover them. Even small 

sources such as moisture density gauges—when they are lost, we 

or the State do everything we can to recover them rapidly because 

somebody could, if they unshield the material, get themselves a significant dose, and we do not want that to happen. 

One other point I want to make. We talk about dirty bombs as 

being ‘‘weapons of mass disruption.’’ I personally think that we contribute to that, that this psychological fear that we have is a combination of threat inflation on the part of the terrorists’ capabilities, combined with lack of knowledge of real radiation effects, and 

I can go into that in the questioning. But we should not aid and 

abet terrorists by fearing things that are the equivalent of working 

in the Capitol or in the Library of Congress where you can get 100 

millirems a year, or the radon in your home, if you have not ameliorated it, can give you 400 or 500 millirems a year, or getting a 

CT scan of your chest and abdomen, which might give you 2,000 

millirems in one dose. The American people I do not think are that 

fragile. Franklin Roosevelt said, ‘‘The only thing we have to fear is 

fear itself.’’ We have to do a better job of having a dialogue with 

the American people about which of these threats is severe and 

which are not. And in this instance, I honestly think that we have 

people who hype threats. On one of the TV news shows last night, 

there was a fellow who is always hyping threats who wants to 

clean up things to one-millionth of background radiation. 

That would not be sane public policy. If we can have a dialogue, 

it should be about the Department of Homeland Security’s guidelines. The Department of Homeland Security has put out protective 

action guidelines for what happens after a dirty bomb attack. 

24 

Those guidelines were strongly supported by the States. They are 

strongly supported by us at the NRC. They are supported by EPA. 

They are derivative of EPA guidelines. 

If we can follow those guidelines during an RDD event, there will 

not be the sort of panic that everybody assumes. We have done one 

exercise. In 2002, TOPOFF II, a very senior exercise of the U.S. 

Government, looked at a very large dirty bomb, factors of 1,000 or 

10,000 larger than the material GAO was able to potentially procure. And the mayor of Seattle, where this bomb was assumed to 

go off, was given a choice of following the then-EPA, the now-DHS 

Protective Action Guides, or letting his city be paralyzed potentially for years to try to get to perfection cleaning it up to one-tenth 

of the dose in the Capitol, in the entire city. He chose to put his 

city back to work. He chose to restrict the very small area that had 

been contaminated to a large degree and where it really was unsafe 

to be there, people would get more than a CT scan of their chest 

and abdomen if they were there all year. And that is the EPA PAG. 

I know my time is expired, and I hope I have said a few provocative things. But we have to have a better national dialogue about 

dirty bombs than we have had thus far. 

Senator CARPER. Commissioner McGaffigan, thank you for contributing to that dialogue this morning with your statement and for 

your willingness to be here. 

I need to slip out and go meet with Senator Voinovich, ironically, 

and so I am going to turn the gavel over to Senator Akaka. But 

before I do, I will just repeat something I have said to you and to 

the other members of the Nuclear Regulatory Commission before. 

Everything that I do, I know I can do better. And I always say to 

my staff, ‘‘Everything that we do, we can do better.’’ I said that as 

Senator and as governor and any other roles I have played. The 

same is true with the NRC, as you know, and to the extent that 

we have identified some weaknesses here, things that need to be 

corrected, we expect you to address them. We realize there has to 

be some priority. Those that are most acute we need to address 

most readily. Those that are least critical we can address later. But 

to the extent that we in the Congress can be of support to you, and 

particularly Senator Voinovich and myself—I think I can speak for 

him as well—you need to let us know because we want to make 

sure these concerns are addressed. 

Mr. MCGAFFIGAN. Sir, as you know, that has been my philosophy 

since I came to NRC. We have constantly improved and we have 

not reached perfection. We are going to make things better, whether it is in our oversight process for reactors or any part of our business. 

I would tell you that the greatest challenge we face with these 

information technology systems such as web-based licensing is 

getting the right people to work for us. It is almost impossible on 

government salaries to get the people that really are information 

technology experts. We are the best agency in government in many 

respects. We have been voted that. 

Senator CARPER. I know. 

Mr. MCGAFFIGAN. But we are one of the worst agencies in government at buying information technology. 

25 

I do not have a solution to that. We go out and we try to attract 

people at the senior level service level, which is what I get paid, 

and we have trouble. We are obviously not unique. The FBI, the 

Pentagon, the FAA, and others have had enormous difficulty in 

this area. But we try very hard to attract the right people. The government hiring system—they can get paid so much more in the private sector if they are really good. We someday have to have more 

flexibility in the government system than we have today. 

Senator CARPER. All right. Thank you for that comment, and 

with that I am going to recognize Senator Coleman for questions 

and pass the gavel over to Senator Akaka. Thank you so much. 

Senator COLEMAN. Thank you, Mr. Chairman. 

Mr. McGaffigan, let me just start by identifying three areas 

where I am in agreement, and I think it is important to stress your 

first comment about tracking Category 5 and the difficulty, just 

some practical limitations we have here. 

The Subcommittee staff report, which focuses on Category 3, says 

the NRC should consider including Category 3, and we use the 

word ‘‘consider’’ very carefully rather than ‘‘require.’’ We want you 

to look at that. That needs to be looked at. The fact that 14 other 

countries apparently do that I think carries some weight. We recognize that certainly at Category 4 and Category 5 it may not be costeffective. But as you look at Category 3, that is the issue here, and 

so ‘‘consider’’ is the word, and we hope they have fully considered 

that. 

Mr. MCGAFFIGAN. Sir, we will. Category 3 sources are dangerous, 

as I have said in my votes on these issues over the years. And I 

would like to expand, but you have the Administrative Procedures 

Act that I am sure this Committee decades ago put into law, and 

we have to have the data to prove that benefits exceed costs to 

start that rulemaking. 

I believe we will get that data, and as I say, I personally would 

go to one-tenth of Category 3 in terms of the licensing so that we 

would have greater defense in depth in that area. 

Senator COLEMAN. The other area of agreement I want to mention in is the concern over getting technical folks, IT folks, to 

change systems. I had a conversation yesterday with the Commissioner of the IRS. Why can’t we, for 501(c)(3)s, which has been taking up to 6 months to look at an application, why don’t we have 

a web-based system to deal with that? And the answer was just 

what you said: It is difficult to get folks who are top-notch in IT 

to do this kind of work, and as a result, they are looking to 2009. 

That does not make me very happy. It does not make me very 

happy at all, and I think we have to accelerate this. But I do want 

you to know that I recognize the limitations that we are facing, and 

it is very frustrating. 

Mr. MCGAFFIGAN. It is one of the great weaknesses in our system. Why doesn’t DOD have a better system for getting security 

clearances through? Why doesn’t the FBI have better ability to 

share data among analysts? Dealing with information technology, 

everybody talks about off-the-shelf technology. There is nothing offthe-shelf because it has to fit within the systems that the agencies 

already have, and it is just very hard. The Federal Information Security Management Act is a very good act. It probably came out of 

26 

this Committee. But it is very hard to get contractors who fully understand how to do that. 

In the National Source Tracking System, we are working with 

Lockheed Martin, and you would think that they could do the job 

and do it well. We are having problems. 

Senator COLEMAN. Again, there is a lot of frustration, and we 

need to accelerate the pace at which we get this done. 

Let me raise a third issue, which is kind of the overarching issue, 

and that is the danger of a dirty bomb. And I agree with you that 

we have to do a better job of a dialogue with the American people. 

The concern about a dirty bomb, as you are well aware, is not the 

death toll from the explosion itself. It is not even the amount of radiation sickness that would occur. It is the psychological and economic impact of radiological material being spread around a public 

place and the toll that would take. And so I do not think we are 

in disagreement over that. 

The concern that I have here and that this investigation reflected 

is that there is the ability to at least move into Category 3, and 

I do not think we have a chart. I am looking at NRC Licensing of 

Sealed Radioactive Sources, your document. 

Mr. MCGAFFIGAN. Yes. 

Senator COLEMAN. The IAEA Code of Conduct that identifies 

Categories 1 through 5 for both-what is it, Americium? Is that how 

you pronounce that? 

Mr. MCGAFFIGAN. Americium. 

Senator COLEMAN. Americium, and then Cesium–137. But what 

troubles me, what concerns me is that Category 2, Americium, is 

16 to 160 curies, and Category 3 is 1.6 to 16 curies. In other words, 

there is a thin line between the top end of Category 3 and the bottom end of Category 2. But there is a bright line in the procedures 

that the NRC employs in reviewing Category 2 versus Category 3 

and tracking Category 2 versus Category 3, and deciding to issue 

a license to Category 2 versus Category 3. 

Do you find that troubling? 

Mr. MCGAFFIGAN. I do not think the line is as bright in practice. 

The particular license that GAO was attempting to obtain was for 

the lower end of Category 4 of Americium. The lower end of Category 4 is 16 millicuries. They were attempting to obtain a license 

for 200 millicuries. They were attempting to do so in a State—West 

Virginia—where there is a very active industry that needs to make 

sure that when concrete and asphalt are laid that there are not 

holes in them. I am not trying to apologize for our licensing officer. 

We should have done better. But it probably sounded like a new 

small business trying to get into business. 

What I am actually more concerned about is the other two suppliers. There is a very limited number of suppliers of these moisture density gauges, and asking for 45 at once for a new business 

you have never heard of before, there should have been some bells 

going off. It should not have been, ‘‘Oh, my gosh, I am going to 

make a quarter of a million dollars on this sale,’’ which is probably 

about what they were quoted. I do not know the exact quote. 

Maybe my GAO colleagues could tell you. Instead of getting excited 

about, ‘‘Oh, my God, somebody is buying a quarter million dollars 

in gauges. It must be the biggest firm in West Virginia that someVerDate Aug 31 2005 09:23 Jun 20, 2008 Jkt 041129 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 P:\DOCS\41129.TXT SAFFAIRS PsN: PAT
27 

how just landed on the Earth,’’ they might have asked a question 

or two. They might have called back to us, and we are going to reinforce, I believe, the guidance to those folks and the manufacturers and distributors that we want to know about such transactions, 

please call us. 

But, yes, we have to have greater defense in depth in our system, 

and I would add to the points that are in my testimony that we 

are going to have to do a better job with these manufacturers and 

distributors to make sure that they are not putting the dollar 

ahead of the American people. 

Senator COLEMAN. One of the concerns, the highlight of the investigation, is, ‘‘Does the right hand know what the left hand is 

doing?’’ So in this case, you have suppliers who saw a profit with 

no requirement to authenticate licenses where the web-based system would. What can you do in the short term to ensure that if, 

in fact, there were a terrorist group that was well funded that 

looked at the system and said, ‘‘Hey, right now, at least before any 

changes, we could go to a multiple source of suppliers.’’ By the way, 

not just in West Virginia. Could they have gone to other States? 

Mr. MCGAFFIGAN. The company was an alleged West Virginia 

company. The suppliers are limited. There are not a lot of people 

who try to make money off—there are essentially two, right?—two 

companies that they sought bids from. There are not a lot of other 

companies in this business. 

I do have some trouble with the notion that they could have accumulated 450 of these gauges. If that supplier is so profit-motivated that they would sell 450 moisture density gauges, which is 

probably about as many as could possibly be used in West Virginia, 

Virginia, and North Carolina in this business, I think—I would 

hope that they might give us a call. But we will enforce that. We 

will reinforce that through messages to these people in the future. 

Senator COLEMAN. Because the concern is not limited to just one 

source. The GAO folks are figuring that it is pretty easy to get a 

license here. In fact, they think they could have just created one 

by just going on the web. And then you are going to fax it, so now 

if you could do it for this item, you could probably do it for another 

item or another item. 

Mr. MCGAFFIGAN. There are a limited number of items in Categories 3 and 4 that we have to be careful about. We are going to 

look at that. 

Senator COLEMAN. That is what I am looking for. In other words, 

even pre-web-based systems, I would hope that what we would see 

would be a lookback with suppliers and others so that you cannot 

simply counterfeit a license, change the quantity of material you 

are authorized to buy, and then go to various sources to get that, 

to give you then the capacity to do something that could be devastating if used by bad people in a bad way. 

Mr. MCGAFFIGAN. We have been looking since February—and I 

should have, before coming here today, gotten updated as to what 

data we have, probably not full at this point. But we have been 

looking at these devices that are a factor of 10 below the Category 

3 lower threshold, a factor of 10 above the Category 4 upper 

threshold. And we need to just understand how these radionuclides 

of concern are used in real devices in those categories and how 

28 

much of a burden it is going to be to deal with. I suspect the burden is not going to be large, and we probably already have interim 

data, and I would be happy to share that with you once we fully 

understand it. 

I do also want you to understand that getting this material does 

not get you an effective dirty bomb. We design these moisture density gauges so that the Americium inside is encapsulated in two 

different layers so that people cannot get at it easily, cannot hurt 

themselves. GAO would have had to taken the material out of 

those 45 devices, gotten through those two layers. They would best 

do that with at least some sort of glove box where they are protecting themselves, or else they will kill themselves. And then they 

would have to figure out how to disperse it optimally. 

From what I have seen of al-Qaeda thus far—there was a lot of 

reference to this 2004 paper. That 2004 paper is scientifically inept, 

to be honest with you, and I hope al-Qaeda is still there. It may 

not be. And we do not assume they are inept. But it does go to this 

issue of—there are several steps they have to go through to get to 

a dirty bomb, and then the effectiveness of that dirty bomb is something I would be happy to talk about. 

Senator COLEMAN. I have some other questions. What I will do, 

since I am over my time, Mr. Chairman, I will end this line of 

questioning and, Senator Akaka, I would like another opportunity 

then if we could just have a second round. I have some follow-up 

questions. 

Senator AKAKA [presiding]. Fine. Thank you very much, Senator 

Coleman. We will have another round after this. 

Commissioner, you mentioned something about staffing, and I 

would like to ask about NRC staffing and, in particular, the types 

of people you hire. We have heard from GAO that NRC license reviewers could easily be fooled by a sham company even in person. 

Do you believe it is time to hire NRC staff with other skills that 

enable them to assess the less tangible aspects of a license request? 

Mr. MCGAFFIGAN. Sir, I believe we have one of the most competent staffs in any agency in the Federal Government. You have 

a staffer who once worked for us, and we have had very high hopes 

for her. We are the training ground for a lot of other agencies, and 

we have been named the best agency in government. 

Because we have such a challenging mission, we tend to attract 

some of the best and brightest in our population. The numbers of 

PhDs and master’s degree holders in our staff would match any 

other agency in the government. So it is not a matter—we just got 

fooled in one case, and we will probably never get fooled again. The 

GAO staffer might have gotten past that person in our Region I office near Philadelphia. I have my doubts. But that is an experiment 

that was not done. 

Getting past that person today in an office visit will be enormously harder, and ‘‘once bitten, twice shy,’’ as the old saying goes. 

NRC staffers are not going to get burned a second time with that 

particular scam. Our people are going to be very alert to it. The 

issue is, and what I commit to in my testimony, is we are going 

to do more red-teaming of ourselves in this area. We are going to 

look at our own vulnerabilities. We are going to be more vigilant 

on these lower-risk sources. And we intend to try our absolute best 

29 

to find vulnerabilities and fix them before GAO points them out to 

us in the future. 

That is not a challenge to the GAO, but that is—— [Laughter.] 

Mr. MCGAFFIGAN. But that is what our intent is, and we have 

various ideas. The Chairman has some ideas about bringing DTRA, 

the Defense Threat Reduction Agency, in to look at our licensing 

process. We are going to red-team ourselves more seriously. 

I do not think we have vulnerabilities—I hope we do not—at the 

top end of the spectrum because we have so much defense in depth 

there. But we have less defense in depth on these lower-risk 

sources, and we are going to find our vulnerabilities. That is a commitment. 

Senator AKAKA. Well, as you heard, GAO identified a troubling 

vulnerability. 

Mr. MCGAFFIGAN. Yes. 

Senator AKAKA. On the other hand, the use of radioactive sources 

is a necessary aspect of everyday life. We use these sources in medicine, as you mentioned, at hospitals and what we might call common places for diagnostic and cancer treatments and a wide variety 

of industrial uses. 

How do you balance and how does Congress balance the need to 

use the sources without significantly increasing costs and yet ensure that dangerous quantities of those materials are not easily 

available for use in a dirty bomb or other sources here? 

Mr. MCGAFFIGAN. Senator, that is a very good question. There 

are some very complex cases I could give to you. We will not let 

anybody use cesium in a large panoramic irradiator. We absolutely 

will not let them do that. There is an ongoing National Academy 

of Sciences report that is looking at smaller blood irradiators used 

in hospitals throughout the Nation. There are two blood irradiators 

at George Washington University Hospital a half-mile from the 

White House where the Vice President goes for care. Those are 

Category 2 sources under the Code of Conduct, and we have increased security on those sources. 

But the dispersability of the cesium–137 within them is a question—it is something that we are trying to fix. There are ways that 

we can make those sources more secure, less attractive to terrorists. But there are potentially tremendous costs involved for the 

hospitals and for the manufacturers, and we have a National Academy of Sciences study due to the 2005 Energy Policy Act where 

they are trying—and they are going to report to us in September. 

They are trying to balance that cost/benefit calculation. How do we 

make small improvements, perhaps, at low cost to make those 

blood irradiators much less attractive to a terrorist? 

These are not easy issues, and we struggle with that routinely. 

Our bias is toward security, where security is effective but not 

overly costly. We do not protect the blood irradiators with guards 

and guns and gates and sensors. We protect them with a much 

tighter connection with local law enforcement. The hospitals today 

in a post-September 11 world have recognized this vulnerability. 

We have told them how to put extra sensors in. But we have also 

told them we are not going to have gun battles at George Washington University Hospital. We are going to make sure that you 

30 

can summon the police, a lot of law enforcement real fast, if somebody tries to come in and attack those blood irradiators. 

It is a balance. 

Senator AKAKA. Well, you mentioned, Commissioner, that the 

American public needs to understand better radiation, what it is 

and what are the effects of that. How do we, how does Congress, 

how do you, and how does the NRC do this? 

Mr. MCGAFFIGAN. It is something that every agency in government that deals with radiation, not just us but EPA, Health and 

Human Services, the Department of Homeland Security, and DOE, 

could do a better job at. EPA has a website where you can go and 

find out what extra dose you would get if you move to Colorado, 

which has much more uranium and thorium in the soil and you get 

much higher doses from that. In Colorado, it would also tell you 

that you would get a little bit of a higher dose from the altitude. 

It would tell you the extra dose if you live in a brick house as opposed to a wood house, or the extra dose from granite tabletops in 

your kitchen. 

But it is a dialogue that does not happen—it is pretty boring information. Should you have your home tested for radon? Should 

you accept your doctor’s judgment that you should get a CT scan 

of your chest and abdomen? Should you avoid the Capitol? Senator, 

because you go back to Hawaii so often, you get a very large dose 

flying from here to Hawaii. The most exposed people in America, 

on average, in a large group are not the people who work at nuclear power plants. They are the people on airline crews who fly 

long distances. They get doses per year that are in the hundreds 

of millirems range, and we do not even badge them. In Europe they 

do. But we have not had this conversation with the public. I can 

tell you my personal view and what NRC regulates to and what 

other agencies regulate to. The annual dose for workers is 5,000 

millirem. That is our limit. A CT scan of the chest and abdomen 

is about 2,000 millirem. The average medical dose of Americans is 

about 340 millirems per year for diagnostic procedures. When your 

child gets braces, they will probably get about 50 millirems when 

the whole-mouth x-rays are done in preparation for the braces 

being placed. In the Capitol and the Library of Congress, where 

there is lots of granite, people get 80 to 100 millirems per year if 

they work 2,000 hours, the typical work day, and most people work 

for longer in the Capitol. 

When my son was a page for Senator Warner back in 2001 before 

September 11, in the spring of 2001, we mapped the Capitol using 

a radiation detector, and Tom Daschle’s office was the hottest place 

we found. Just outside of his office at the time, it was about 40 

microrems per hours. 

So what is a dangerous amount given that we live in a radioactive universe? That is the way it was created. It would not exist 

if it were not radioactive. And what is a dangerous amount? There 

are different views on that, and the government has a view, EPA, 

NRC, DOE, Health and Human Services. But certain other members of the public have a starkly different view, a much more 

alarmist view as to what happens if you take a plane flight or if 

you work in the Capitol, I guess. And the media tends to believe 

the truth is somewhere in between. One of the TV shows that I 

31 

was on last night—I was on two TV news shows last night very 

briefly. That increased my total number of career TV news appearances to three. I had been on TV once before in my career. But the 

media tends to believe the truth must lie somewhere between what 

the government experts say, who obviously love gamma rays in 

their lives, and these alleged experts, one of whom was on one of 

the shows I watched last night, one of the TV news shows. And 

that person truly believes that we have to clean up Mother Nature, 

I believe, that we should get down to hundredths of a millirem per 

year doses when we clean up things. 

So there is a difference, and I hope that in an emergency, as the 

mayor of Seattle did in 2002, in the Top Officials 2 exercise, that 

the mayor of Seattle will listen to the Federal Government experts 

and will try with the help of the State of Washington experts who 

were totally with us, to persuade the public that the risks they are 

taking are not large if they follow the Department of Homeland Security and Environmental Protection Agency guidelines. I hope that 

that will be the result. 

Senator AKAKA. Well, thank you. I am going to pass it on to Senator Coleman for further questions. I will follow up after he is done 

with more questions. 

Mr. MCGAFFIGAN. OK. 

Senator AKAKA. But here is one that can speak from the mayor’s 

perspective. 

Senator COLEMAN. And I thank you, Senator Akaka. As a former 

mayor, these are issues that we have to have a better conversation 

with our citizens about because, at some point in time, this country 

is going to experience a dirty bomb attack. I cannot tell you this 

year or next year, but that is the world in which we live and the 

nature of the threat, and we cannot stop every bad thing from happening to us. And so it is all about how we respond and prepare. 

And perhaps out of this conversation, Commissioner, there is a 

dialogue that will help in that discussion. 

Mr. MCGAFFIGAN. I agree. I once tried to talk to the National 

Governors Association and I got blown off, several years ago, not 

exactly on this subject but on radiological threats. But the National 

Mayors Association, if they come to Washington, maybe we should 

have not me but Craig Conklin, say, from the Department of 

Homeland Security, who led the effort that resulted in the Department of Homeland Security’s guidance, talk to them so that we are 

talking not in the middle of a crisis, but we are talking to them 

about our recommendations as the Federal Government and we are 

talking to mayors. 

The trouble is that the radiation experts are oftentimes many 

layers below the elected official, and they may agree with us, but 

they get to see the mayor never or once every 4 years. 

Senator COLEMAN. I will work with you and with the NRC to 

make that happen. 

There are two areas I just want to follow up on. How many Category 3 licenses does the NRC issue during the course of a year? 

Mr. MCGAFFIGAN. Well, we issue a total of 200, and Category 3 

portion has got to be a very small number. 

32 

Senator COLEMAN. I want to get back to this issue of site visits. 

Why not simply say we are going to do site visits for Category 3 

licenses, as Maryland does? 

Mr. MCGAFFIGAN. Well, the data—we could do site visits. When 

we are doing applications, whether it is with power reactors or 

with Category 3 licensees, we tend to try to put the cost on the applicant rather than on the American people. But we could probably 

do that. It is probably a relatively small reprogramming of money. 

We will take that into consideration. 

The number of site visits to applicants seeking Category 3 material or even a factor of 10 below Category 3, well into Category 4, 

which would have been needed to get this particular application 

that the GAO put before us, the fraudulent application, is probably 

not a large expenditure of money, and we will look at that. 

We may get pushback. We have 34 Agreement States. Some of 

them are very large, and they may find other ways to check the 

bona fides of applicants. Some of these large States—I worked for 

Senator Bingaman from New Mexico. They are large but it seems 

everybody knows everybody. And there are ways to check out people without necessarily making the visit. And our budgets, NRC 

budgets, are more generous than many of these State budgets. 

We have to talk not only about our own actions but the actions 

of 34 other States. My understanding is, for your information—and 

it is probably not good for you—is that Minnesota was following 

our guidance in this area prior to the GAO sting—which made the 

visits discretionary. And our information is only five States that we 

have thus far gotten an answer from—including Maryland, act like 

Maryland and do mandatory visits. And they may be the more compact States. 

So we will consider your recommendation and see where we go 

with it. For the NRC it is possible. 

Senator COLEMAN. Let us have that conversation because I think 

it is clearly worthwhile. Again, we want to get as close to perfect 

as we can. There is not a lot of room for error here, and I do appreciate your reflection that fooled once, shame on you, fooled twice, 

shame on me, that clearly the level of alert has been raised and 

the warning levels have been raised. But I think systematically we 

should have something in place that moves us as close to perfection 

in this area where the risk of failure can be so great, so catastrophic. 

I just want to make one other comment. When you talked about 

the technical capacity of al-Qaeda, you did not diminish it, but you 

did question it. We’re talking here about what it would take to 

move this material into a dirty bomb. I just have to say, knowing 

what we are dealing with in Iraq today with IEDs, the Defense Department asked for $6.4 billion in February of this year to counterIED’s, to counter the technological abilities of folks on the ground 

in Iraq. And I can tell you, having been there a number of times, 

we move to Level A and they go to Level B, and we go to Level 

C and they then go to Level D. And I think it would be a terrible 

mistake to underestimate the technological capability of this 

enemy. It would be a terrible mistake. And all you have to do is 

look at what we are dealing with, with IEDs, to understand the 

33 

simplicity and complexity coming together and the devastating impact of that. 

So I just want to put that statement on the record. 

Mr. MCGAFFIGAN. I appreciate that, Senator. I spent most of my 

career—I have been in government for over three decades—working on defense issues. We also have to guard against threat inflation. During the Cold War, inflation of the Soviet threat, the notion 

that the Soviets could march to the English Channel at a moment’s 

notice and overwhelm NATO’s capabilities was never real. They did 

not have the sustainability to do that. They did not have the cohesion. They did not have the training. But it was a tenet of our policy and it consumed large amounts of money to beat that threat 

that was being grossly exaggerated. 

So we also have to guard against threat inflation. We cannot 

make these people DOE National Laboratory capable. They have 

not evidenced that. Jose Padilla thought depleted uranium was 

something he could use in a dirty bomb, and that is not true. That 

2004 paper talked about buying smoke alarms. It would take 2.3 

million smoke alarms to get to the amount of material that GAO 

says it could have gotten. At $6 apiece, maybe you get a discount 

to $4, that would be pretty large sum of money. And then you 

would have to go through 2.3 million devices and try to get that 

little amount of Americium out. 

If that is where al-Qaeda was in 2004, sort of surfing the Internet—I am not trying to underestimate them, but they have a learning curve to go through to get to the point where we assume competence. We assume competence in attacking George Washington 

University Hospital. But we do not assume that they have the 

same degree of competence that the best National Laboratory 

would have. 

Senator COLEMAN. Again, we will not debate this, but I would 

think it would be a tragic mistake to underestimate the learning 

curve. And it is not only al-Qaeda, Padilla or whatever. There are 

others in this world who do not like us, who have great capacity. 

The IEDs that we are seeing in Iraq, there is real concern that Iranians are producing highly technical, highly sophisticated weaponry and putting it in the hands of folks who are killing American 

soldiers. And it would be a terrible mistake to underestimate the 

technical capacity of the enemies of this country who would have 

the ability to get radiological material and then to combine it in an 

explosive device. I really want to stress that. 

Mr. MCGAFFIGAN. I understand. If there is state help for the terrorists—— 

Senator COLEMAN. And there is no reason to assume that this 

would not be the case in the world in which we are living today. 

We are seeing it on the ground right now where American soldiers 

are being killed by highly technical explosive devices that are being 

used on the ground by terrorists who did not think them up and 

make them themselves. 

Mr. MCGAFFIGAN. Right. We have to go after those countries if 

they ever do that, and I think we will be able to trace—if there is 

an RDD or a dirty bomb that ever gets set off in this country—— 

Senator COLEMAN. And we have to presume that they are capable of doing it and do everything in our power to make sure that 

34 

there is not a dirty bomb attack. We have to prevent it rather than 

just respond to it. We have to assume that the capability is there. 

And I think that is the correct assumption and that, when the GAO 

says you do not take it as seriously, you need to take it seriously. 

Mr. MCGAFFIGAN. We take it very seriously. If we are up against 

states—— 

Senator COLEMAN. But you have to have the frame of mind that 

we have people who want to hurt us, who have the technical capacity, and assume the technical capacity and then make sure that we 

do all those things to make it more difficult, more difficult than it 

was when this sting took place, to get the material and then to inflict the damage. And I just think that is the mind-set that we need 

and the NRC might not be there yet. My sense, even in this discussion, is that I still think there needs to be a reflection, a greater 

reflection as to the danger that we face. 

Mr. MCGAFFIGAN. If states start aiding al-Qaeda in designing 

RDDs that, in the case of Americium—— 

Senator COLEMAN. I will tell you today, Mr. Commissioner, that 

there are states aiding al-Qaeda. We know that in Iraq. 

Mr. MCGAFFIGAN. I understand. If there are states that do that 

and they use Americium, which is very hard to detect with the detectors that we have at our borders, that is a problem. That is a 

problem that the NRC cannot solve. Because it will have been 

brought into America covertly. But that is an act of war, in my 

view. 

Senator COLEMAN. Let us be prepared. I thank you for your efforts, Commissioner. 

Mr. MCGAFFIGAN. Thank you. 

Senator AKAKA. Thank you very much, Senator Coleman. 

I want to just comment that Senator Coleman is correct to remind us that we have a thinking and learning enemy. And when 

Senator Coleman talks about prevention, it takes anticipation to 

deal with that and try to outthink or think beforehand what may 

be coming. I know in our country we do have a lot of young people 

who are doing so well in this area, and we need to use them well. 

Mr. Commissioner, we heard from GAO that suppliers do not believe it is their job to assess the validity of a license or licenses. 

I happen to disagree. Can you tell me if the NRC has any plans 

to require suppliers to make sure a licensee or its license is legitimate? 

Mr. MCGAFFIGAN. We have given guidance in the past. It probably has been at the Category 1 and 2 level. We definitely need to 

expand it to these sorts of devices. But we have given manufacturers and distributors very clear guidance in the past that they need 

to verify Category 1 and 2 materials, the legitimacy of the person 

seeking to buy, say, the gamma knife for Hospital X. 

As I said earlier, I am disappointed. Forty-five moisture density 

gauges being requested by a company that you have never heard 

of before should not have just set off dollar signs, $250,000 dollar 

signs in these people’s head. They should have done some checking. 

That is a lot of moisture density gauges for a start-up company to 

buy. And if GAO had tried to buy 450, I hope and pray—and they 

had the $2.5 million to do it—that they would have said, ‘‘My God, 

35 

this is insane. Something is wrong here,’’ and they should come to 

us. 

There is a limited number of people in the nuclear business dealing with devices at the Category 4 level, and including radionuclides of concern, not things like tritium that goes into exit signs, 

hear from the NRC. And we need to communicate with them. You 

are right, Senator Coleman is right. We need to make sure that 

they are alert and check with us if they have any doubt about the 

quantities being asked for of such devices. 

I do not expect them to call me when someone is buying one or 

two moisture density gauges, but 45 should have set off some bells 

and 450 should set off the largest bells we have in Washington. Everyone should be ringing. 

Senator AKAKA. Mr. Commissioner, in a March 12, 2007, letter 

to the Environmental and Public Works Subcommittee on Clean 

Air and Nuclear Safety, Chairman Klein stated that one of the recommendations from the August 2003 GAO report on NRC control 

of radioactive sources remained open. That recommendation pertained to evaluation of the costs and benefits of requiring owners 

of generally licensed devices to apply for specific licenses and 

whether those costs are commensurate with the devices’ risks. 

Chairman Klein said that the NRC would start the process of 

drafting a new rule for fiscal year 2007 that would look at which 

devices containing radioactive materials should be generally licensed and which were more dangerous and should be more tightly 

controlled through a specific license. 

Can you comment on the status of that initiative and what you 

believe the results might be? 

Mr. MCGAFFIGAN. I mentioned earlier the Commission has asked 

the staff to look at one-tenth of Category 3’s lower threshold and 

to give us data on how expensive it would be, not just for us but 

for the 34 Agreement States, to license that. 

Generally licensed devices can go down well into the Category 5 

range. We ask people to pay annual fees if they use generally licensed devices containing, say, Americium or cesium or cobalt. We 

are not really looking at going down into Category 5 quantities, 

even though we sometimes ask people to pay if they have something that is even down in the high part of Category 5. 

But we have something underway. Staff is going to give us recommendations. We are in the midst of the data gathering in 2007. 

I think decisions by the Commission are likely to be made next 

year. And as I said, my bias is to specifically license to one-tenth 

of the lower threshold of Category 3, so halfway through Category 

4 is my bias as I go into that, as we wait for the data to be collected. That is where we are headed, I think. 

Senator AKAKA. When you say general licenses, I wonder whether that would mean you may have less what you may call ‘‘specific 

licenses.’’ 

Mr. MCGAFFIGAN. We have general licenses for things that we 

think are safe. The amount of material in the home smoke detector 

is about one-millionth of a curie of Americium. We worry down to 

ten-billionths of a curie of Americium. That is where the threshold 

is for certain reporting requirements, but despite the reporting requirements, you absolutely do not have to worry about such small 

36 

quantities being useful in a dirty bomb. So we expect smoke detectors which are designed to our specs to be safe for your use in the 

home. We expect the exit signs that contain tritium around here, 

they have about 10 curies of tritium in them. That sounds like a 

lot since we have been talking about micro- and millicuries, but 

you really need about 500,000 or a million curies of tritium to have 

any sort of dangerous quantity. And you still cannot do an RDD because tritium is heavy hydrogen that rises rapidly. It would be like 

a hydrogen balloon. I hope al-Qaeda is working on tritium RDDs, 

because it will be a great day, you will see a lot of balloons go up 

in the air, I guess. 

There is a rationality to what we do, where the thresholds are 

for these various radionuclides and where we feel it is safe for use 

in the home or use in the Capitol or wherever, and where additional controls are necessary, that is where we specifically license. 

Senator AKAKA. Mr. Commissioner, I would like to ask a question 

that is not about how well NRC regulates who can buy a radioactive source, but about material that is even more accessible to 

terrorists, and that is lost or abandoned radioactive sources. And 

you mentioned there was a problem about these lost sources. 

In an August 2003 report, the GAO said that the NRC did not 

have a good record of how many sources were being used around 

the country because at that time no State or Federal agency 

tracked individual sealed sources. Instead, NRC and the Agreement States tracked numbers of specific licensees. 

Mr. MCGAFFIGAN. Right. 

Senator AKAKA. However, in November 2006, NRC issued its 

final rule regarding establishment of a National Source Tracking 

System, a web-based system to enhance accountability for radioactive sources and provide a means for licensees to report the 

transfers of nationally tracked sources. 

What about sources that were being used prior to the establishment of the NSTS? How does the NSTS help the NRC Agreement 

States that the lost or abandoned radioactive sources may be sitting in, in an abandoned building or hospital, on the back of a stolen truck, or laying in an open field for anyone to pick up? So how 

does this work? 

Mr. MCGAFFIGAN. Sir, we have had since 2003 an interim database of Category 1 and 2 sources that has gotten better and better 

each year. We used it during the hurricanes in 2005 in Louisiana, 

and it was very helpful to us and highly accurate in terms of where 

Category 1 and 2 sources were. So the high-risk sources, we think 

we know where they are, even if they are sitting in a university 

and not being used at the moment. 

As somebody mentioned earlier, the Department of Energy is 

now very aggressively trying to gather sources of any category that 

people no longer want. What NRC did before September 11, 2001— 

thanks to Greta Dicus, one of our previous Commissioners—we 

have jacked the fines up so that it is more expensive to pay our 

fines than to properly dispose of the source. Abandoning a small 

source can be a very expensive proposition. The classic case was in 

a steel mill, which would get contaminated because a small source 

would come in with a lot of other scrap. 

37 

So we first tightened that, but then—and we were trying to make 

the responsibility be the licensees, the people who had these small 

sources, make them pay for the proper disposition. There are a lot 

of companies who will take them back. But we have pretty much 

abandoned that now, and DOE will pay for getting anybody’s 

sources back from them, and that is a post-September 11 change. 

And DOE does a very good job of it, in my view, their orphan 

source recovery program. We had some old sources left in even high 

schools that were sitting in closets, and this high school just could 

not justify sending it to J.L. Shepherd in California for whatever 

price J.L. Shepherd would charge them from taking the source off 

their hands. So they beat us, they outwaited us, and they now get 

DOE to do it for free. That is probably the right thing in a postSeptember 11 world. We may have been trying to put responsibility 

where responsibility has been shirked before September 11. After 

September 11, we put the responsibility on government. If you 

have a source you want to have recovered, DOE prioritizes it. We 

help them find them. The Agreement States help them find them. 

And I think the quantity of orphan sources in this country has 

gone down a very large amount because of DOE. It is only because 

we do not know about it that an orphan source would be sitting out 

there nowadays. 

Senator AKAKA. Commissioner McGaffigan, I want to thank you 

so much for all of your responses and your patience here. I also 

want to thank Senator Coleman for his patience here. Do you have 

any further questions? 

Senator COLEMAN. I have nothing further, Mr. Chairman. 

Senator AKAKA. Well, I have other questions that I will submit 

for the record. I just want to note that the record will stay open 

for 15 days for questions for the record, and this Permanent Subcommittee on Investigations of the full Committee on Homeland 

Security and Governmental Affairs is now considered adjourned. 

[Whereupon, at 11:18 a.m., the Subcommittee was adjourned.] 

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