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28–265 PDF 2006

THE UNITED STATES COAST GUARD

AND THE FEDERAL MARITIME COMMISSION FY 2007 BUDGET REQUESTS

(109–50)

HEARING

BEFORE THE

SUBCOMMITTEE ON

COAST GUARD AND MARITIME TRANSPORTATION

OF THE

COMMITTEE ON

TRANSPORTATION AND

INFRASTRUCTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MARCH 1, 2006

Printed for the use of the

Committee on Transportation and Infrastructure

(
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-Chair

SHERWOOD L. BOEHLERT, New York

HOWARD COBLE, North Carolina

JOHN J. DUNCAN, JR., Tennessee

WAYNE T. GILCHREST, Maryland

JOHN L. MICA, Florida

PETER HOEKSTRA, Michigan

VERNON J. EHLERS, Michigan

SPENCER BACHUS, Alabama

STEVEN C. LATOURETTE, Ohio

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

FRANK A. LOBIONDO, New Jersey

JERRY MORAN, Kansas

GARY G. MILLER, California

ROBIN HAYES, North Carolina

ROB SIMMONS, Connecticut

HENRY E. BROWN, JR., South Carolina

TIMOTHY V. JOHNSON, Illinois

TODD RUSSELL PLATTS, Pennsylvania

SAM GRAVES, Missouri

MARK R. KENNEDY, Minnesota

BILL SHUSTER, Pennsylvania

JOHN BOOZMAN, Arkansas

JIM GERLACH, Pennsylvania

MARIO DIAZ-BALART, Florida

JON C. PORTER, Nevada

TOM OSBORNE, Nebraska

KENNY MARCHANT, Texas

MICHAEL E. SODREL, Indiana

CHARLES W. DENT, Pennsylvania

TED POE, Texas

DAVID G. REICHERT, Washington

CONNIE MACK, Florida

JOHN R. ‘RANDY’ KUHL, JR., New York

LUIS G. FORTUN ̃ O, Puerto Rico

LYNN A. WESTMORELAND, Georgia

CHARLES W. BOUSTANY, JR., Louisiana

JEAN SCHMIDT, Ohio

JAMES L. OBERSTAR, Minnesota

NICK J. RAHALL, II, West Virginia

PETER A. DEFAZIO, Oregon

JERRY F. COSTELLO, Illinois

ELEANOR HOLMES NORTON, District of

Columbia

JERROLD NADLER, New York

CORRINE BROWN, Florida

BOB FILNER, California

EDDIE BERNICE JOHNSON, Texas

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

ELIJAH E. CUMMINGS, Maryland

EARL BLUMENAUER, Oregon

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

LEONARD L. BOSWELL, Iowa

TIM HOLDEN, Pennsylvania

BRIAN BAIRD, Washington

SHELLEY BERKLEY, Nevada

JIM MATHESON, Utah

MICHAEL M. HONDA, California

RICK LARSEN, Washington

MICHAEL E. CAPUANO, Massachusetts

ANTHONY D. WEINER, New York

JULIA CARSON, Indiana

TIMOTHY H. BISHOP, New York

MICHAEL H. MICHAUD, Maine

LINCOLN DAVIS, Tennessee

BEN CHANDLER, Kentucky

BRIAN HIGGINS, New York

RUSS CARNAHAN, Missouri

ALLYSON Y. SCHWARTZ, Pennsylvania

JOHN T. SALAZAR, Colorado

JOHN BARROW, Georgia

(II)
SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

FRANK A. LOBIONDO, New Jersey, Chairman

HOWARD COBLE, North Carolina

WAYNE T. GILCHREST, Maryland

PETER HOEKSTRA, Michigan

ROB SIMMONS, Connecticut

MARIO DIAZ-BALART, Florida

DAVID G. REICHERT, Washington,ViceChair

CONNIE MACK, Florida

LUIS G. FORTUN ̃ O, Puerto Rico

CHARLES W. BOUSTANY, JR., Louisiana

DON YOUNG, Alaska

(Ex Officio)

BOB FILNER, California, Ranking Democrat

CORRINE BROWN, Florida

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

MICHAEL M. HONDA, California

ANTHONY D. WEINER, New York

BRIAN HIGGINS, New York

BRIAN BAIRD, Washington

JAMES L. OBERSTAR, Minnesota

(Ex Officio)

(III)

(V)

CONTENTS

TESTIMONY

Page

Blust, Hon. Steven R., Chairman, Federal Maritime Commission, accompanied by Paul Anderson, Commissioner, Howard Creel, Commissioner,

Bruce Dombroswki, Director of Administration, Austin Schmidt, Director

of Operations, and Rebecca Fenneman, Attorney, Office of General Counsel 6

Cross, Vice Admiral Terry, Vice Commandant, United States Coast Guard ..... 6

Welch, Master Chief Franklin A., Master Chief Petty Officer, United States

Coast Guard .......................................................................................................... 6

Winstead, David L., Commissioner, Public Building Service, U.S. General

Services Administration ...................................................................................... 6

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Filner, Hon. Bob, of California ............................................................................... 49

LoBiondo, Hon. Frank A., of New Jersey .............................................................. 52

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Blust, Hon. Steven R ............................................................................................... 36

Cross, Vice Admiral Terry ...................................................................................... 42

Welch, Master Chief Franklin A ............................................................................ 54

Winstead, David L. .................................................................................................. 60

(1)

THE UNITED STATES COAST GUARD AND THE

FEDERAL MARITIME COMMISSION FISCAL

YEAR 2007 BUDGET REQUESTS

Wednesday, March 1, 2006,

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, SUBCOMMITTEE ON

COAST GUARD AND MARITIME TRANSPORTATION, WASHINGTON, D.C.

The committee met, pursuant to call, at 10:00 a.m., in Room

2167, Rayburn House Office Building, Hon. Frank LoBiondo [chairman of the committee] presiding.

Mr. LOBIONDO. Good morning. The Committee will come to

order.

The Subcommittee is meeting this morning to review the Administration’s budget request for fiscal year 2007 for the Coast Guard

and Federal Maritime Commission and other Federal programs related to the maritime transportation system.

Let me just insert for the moment that obviously the budget for

the Coast Guard is extremely important. We had this scheduled

and decided to move forward with it on this topic. I am confident

that the discussion this morning will move into issues surrounding

Dubai. The hearing next week will be totally focused on that. So

we will be getting into it this morning, although we hope to be able

to talk a lot about the budget. The President has requested nearly $8.2 billion for the Coast

Guard for fiscal year 2007. This amount is approximately 1.6 percent more than the funding levels that were appropriated in fiscal

year 2006. However, this request also includes more than $130 million for

costs associated with increased fuel prices, mandatory pay increases, and the Coast Guard’s new mission to provide aerial defense for the National Capital Region. I have to tell you that I am

very concerned that when these costs are added up the Administration is actually requesting less money for the Coast Guard to carry

out its traditional port security missions in this next fiscal year. I

just do not see how that is going to happen.

The budget does, however, on the good side, include increases for

some of the Coast Guard’s most critical programs, including the

$934 million for the recapitalization of the Coast Guard vessels and

aircraft under our program called Deepwater. I am interested to

hear how funding at this level will affect the program’s proposed

asset mixture and completion time line under the revised implementation plan.
2

I also hope that the witnesses’ testimony will address the efficiencies and cost savings that could be gained by accelerating the

completion of the program. This is something that we have talked

about from time to time. The Subcommittee has supported and will

continue to support an acceleration of Deepwater to bring these

new, more capable assets online to bolster the Coast Guard’s capabilities to carry out all of its critical missions. The President’s budget also includes approximately $40 million

for Rescue 21, which will modernize and eliminate existing gaps in

the Coast Guard’s search and rescue communications system, but

which also has homeland security implications. This system is currently up and running in my home State of New Jersey and has

already improved the Coast Guard’s ability to conduct search and

rescue.

I hope that the witnesses this morning will be able to give us an

update on this program and tell us whether the requested level will

be sufficient to carry out the plans to expand the program. Under

our initial review, it doesn’t look like that is a good news story.

The Subcommittee remains concerned by the Administration’s

rush to relocate the Coast Guard headquarters to the campus of St.

Elizabeth’s in Anacostia without first providing Congress with a

plan on how such a facility will be accessed by Coast Guard personnel and how it will meet Coast Guard requirements. I hope we will

receive further information about this proposal this morning.

We all want to recognize once again, because we admire so much

the brave and selfless actions of the Coast Guard in response to

Hurricanes Katrina and Rita last year. But those thousands of

extra man hours and asset hours do have a cost. I am very concerned that the $69 million supplemental request will not cover all

emergency operating expenses and provide for sufficient basic

housing allowance to meet the service members’ needs, or insure

damaged and equipment repair. I am really interested to hear

whether this request is fully meeting the Coast Guard’s needs on

the Gulf Coast.

Something that has always concerned us in these supplementals

is that the Coast Guard ends up doing such a good job, and in the

case of the Gulf Coast, really the only bright light from the Federal

Government side we can point to with pride at this stage of time,

but the Coast Guard, by doing such a good job, always seems to

manage to do more with less. Those days are stretching the Coast

Guard very, very thin when we do these things.

The President’s budget for the Federal Maritime Commission

provides for a nearly 6 percent increase over the 2006 appropriated

level. The Federal Maritime Commission regulates international

maritime transportation, protects consumers of the system against

fraud, and ensures an efficient flow of goods in and out of our

ports. I look forward to hearing how the Commission’s recent decision to allow non-vessel operating common carriers to enter into

the confidential service arrangements with their customers is impacting the industry.

And lastly, I remain deeply concerned about the Administration’s

proposal to consolidate port security grant funding into a multi-sector program. This is a wrong move, it would always be the wrong

time. This is a very wrong move.
3

When we are looking at such a shortfall in port security grant

funding as we see what we have tried to accomplish since September 11th, and where we are heading, I am just having a hard time

believing that this proposal is actually being made. This is not the

time to divert funding or support from our port authorities’ efforts

to improve security at our ports. Port security is in the minds of

all Americans.

With the recent announcement of the acquisition of P&O Ports

by Dubai Ports, we have all expressed serious concern about the

matter and overall port security. This situation with Dubai has

helped refocus a lot of America and a lot of members of Congress

on our challenge of meeting the port security needs. I expect my

colleagues will be addressing this situation today as well. And as

I mentioned, we are going to be holding a Subcommittee hearing

next week specifically on that.

Since the enactment of the Maritime Transportation Security Act

in 2002, the Subcommittee has held eight hearings on port security, including a field hearing last month on the significant and inexcusable delay in the launch of the Transportation Worker Identification Credential. It is still hard to believe that this time line has

slipped to the degree that it has without any reasonable explanation of why we should be willing to accept this slippage in time.

This is going to be an issue that we are going to continue to

press on very hard. We are going to pursue aggressive oversight of

port security and try to get this Administration to understand the

critical need to provide sufficient funding to protect our ports.

Rhetoric does not protect our ports. Funding will help protect our

ports. Funding will help the Coast Guard. And we have to get beyond the rhetoric of saying we are doing everything we can, because at this point, we are not.

I would like to take this opportunity to thank our witnesses for

appearing before the Subcommittee, and in particular to our two

Coast Guard witnesses, who will be retiring this summer, after

long and distinguished careers. Both Admiral Cross and Master

Chief Petty Officer Welch have provided the Coast Guard with tremendous leadership throughout your years of service to the Country. This Subcommittee wishes to especially thank you for all that

you have done for the Coast Guard and for the Nation.

At this time, I will turn to Mr. Filner.

Mr. FILNER. Thank you, Mr. Chairman.

I have a statement for the record I would like to submit. And I

just echo your concerns about the port security issues. Clearly, the

firestorm that was ignited by the Dubai thing didn’t come up just

because of that particular situation, but because, certainly since 9/

11, you and many of us in the Congress have been talking about

the lack of security for our ports. This is the single most vulnerable

area after we bolstered our airports and airline security.

So I think the Dubai debacle follows upon other, much more

basic security concerns that all of us have had. I happen to represent San Diego, California. It is not a major commercial port, but

clearly it is a major port for our Navy and national defense. It is

probably the biggest Navy base in the world.

As we talked to Secretary Chertoff from our full Committee a

week or so ago, the concerns that we had for ports were not really
4

answered. Mr. Chairman, I don’t know if you were here at that

hearing, but I asked the Secretary about a briefing that some of his

officials had had with the Congressional delegation from San

Diego, where we wondered why San Diego was not considered a

high threat, that would need the kind of funding that was being

distributed in other parts of the Country. The homeland security

briefers said, ‘‘The military assets are invisible to us.’’ That is,

those assets are the concern of the military, not of homeland security.

I think that is a very shortsighted and a very difficult policy to

pursue. It flies in the face of common sense. We have three nuclear

carriers sitting in the harbor, which is equivalent to six nuclear reactors, a half dozen nuclear subs, a nuclear generating plant. It

seems to me that that is a threat, that is a risk or a threat that

a terrorist might look at. In fact, two of the 9/11 terrorists were

probably casing San Diego, lived fairly openly in San Diego for six

months or more before 9/11.

So I think we have a long way to go on this, as you suggested,

Mr. Chairman. We are concerned about it. The Dubai thing just

brought it out into the open. But I think you have scheduled a

hearing on that for a week from now or so. This is something we

have to explore. Frankly, those of us who do represent port areas

and understand how limited the security has been fear that this

will be the next focal point for attack.

I appreciate your concern with this and your emphasis on studying this further. I will have my full statement on the budget for

the record, sir.

Mr. LOBIONDO. Thank you, Mr. Filner. I was there for your part

of the hearing last week, and it really is incredible, if you stop and

think, with the nuclear capability that Homeland Security can’t

connect those dots. It is one of the reasons why, the more we focus

on this, the more questions we have and the more aggressive we

are going to be. I think we are going to take a whole new stance

on a lot of these issues from this point on.

Mr. Coble, do you wish to lead off with anything?

Mr. COBLE. Thank you, Mr. Chairman, I will be very brief. I have

another hearing, and I may not be here at the conclusion of this

hearing.

I just want to reiterate what you said regarding Master Chief

Welch and Admiral Cross, 30 and 36 years respectively, of distinguished service to this County and to America’s oldest continuous

seagoing service, of which I am a very proud supporter, as you

know. Both these gentlemen, Mr. Chairman, look too robust to be

retiring, although they have the same sort of hairline that I have.

They are still awfully young to be stepping aside. I am sure we will

see them subsequently.

Admiral, I want to extend best wishes to you and the Master

Chief, and thank you for your years of service. And I thank you,

Mr. Chairman.

Mr. LOBIONDO. Thank you, Mr. Coble.

Mr. Reichert, do you have anything, any opening statement? Any

opening statement, Mr. Mack?

Mr. MACK. Yes, thank you, Mr. Chairman, and thank you for

holding this important hearing today.
5

In light of what has happened recently, I think it once again

shines a light on the importance and the need for us to secure our

ports and do everything we can to make sure that our ports are secure. Being from Florida and having a relatively intimate knowledge of Port Everglades and the port in Miami, Tampa, Jacksonville, the State of Florida is particularly concerned when it comes

to port security because of all the potential threats that exist. I

want to say that the Coast Guard has done an exceptional job thus

far in protecting our ports and doing it on limited resources in a

lot of cases. So I commend you for what you do, and look forward

to working with you on ways that we can continue to make our

ports even more safe and more secure.

Again, coming from Florida, it seems to me that this is a vulnerable place for us. Mr. Chairman, I would love to work with you.

Last year when we had this hearing, I talked about Port Everglades being a unique location with an airport and a seaport and

a downtown of a city so close together. I look forward to working

with you and the Committee on ways to make our ports more secure and helping the Coast Guard do their job. Thank you.

Mr. LOBIONDO. Thank you, Congressman Mack.

Mr. Boustany.

Mr. BOUSTANY. Thank you, Mr. Chairman. I appreciate your

holding this hearing as well.

Vice Admiral Cross and Chief Welch, I just want to say on behalf

of Louisiana, my home State, thank you very much for the performance, the tremendous performance of the Coast Guard in the aftermath of Hurricanes Rita and Katrina. We have learned much about

response to these types of disasters from the way you operated during the course of this. So again, I thank you.

I also want to express my concerns about what is going to happen with port security and the potential for consolidating funding

for port security with some of these other types of measures. This

is something we need to very carefully think about as we move forward. I would favor maintaining port security as a separate funding stream and working with you as we go forward.

Also I would be interested in looking at how we can, in addition

to learning from the response of the Coast Guard in the aftermath

of these hurricanes, look at ways that we might expand the role of

the Coast Guard in this type of response effort.

So again, I look forward to your testimony, and thank you very

much.

Mr. LOBIONDO. Thank you, Mr. Boustany.

We are going to move to our witnesses for today, and then we

will get into questions afterwards. We are very pleased to welcome

Vice Admiral Terry Cross, who is the Vice Commandant of the

United States Coast Guard; Master Chief Welch, who is the Master

Chief Petty Officer for the United States Coast Guard; the Honorable Steven R. Blust, who is the Chairman of the Federal Maritime

Commission; and Mr. David L. Winstead, who is the Commissioner

of Public Building Service for the United States General Services

Administration.

Gentlemen, thank you for being here. Admiral Cross, please proceed.
6

TESTIMONY OF VICE ADMIRAL TERRY CROSS, VICE COMMANDANT, UNITED STATES COAST GUARD; MASTER CHIEF

FRANKLIN A. WELCH, MASTER CHIEF PETTY OFFICER,

UNITED STATES COAST GUARD; THE HONORABLE STEVEN R.

BLUST, CHAIRMAN, FEDERAL MARITIME COMMISSION; ACCOMPANIED BY: PAUL ANDERSON, COMMISSIONER, HOWARD CREEL, COMMISSIONER, BRUCE DOMBROSWKI, DIRECTOR OF ADMINISTRATION, AUSTIN SCHMIDT, DIRECTOR OF

OPERATIONS, AND REBECCA FENNEMAN, ATTORNEY, OFFICE OF GENERAL COUNSEL; DAVID L. WINSTEAD, COMMISSIONER, PUBLIC BUILDING SERVICE, UNITED STATES GENERAL SERVICES ADMINISTRATION

Admiral CROSS. Mr. Chairman, Congressman Filner, distinguished guests, good morning. It is a pleasure for me to be here

this morning in front of the Subcommittee.

First of all, I would like to acknowledge your thanks to Master

Chief Welch and myself for our service and just note that it has

been a pleasure for us to serve. One of the really terrific things

about being in the Coast Guard is the opportunity not to just work

with people that you like, but to work with people you admire and

can be proud of, and the opportunity to go to bed every night feeling good about yourself and the work that you do. So it has been

our pleasure, sir.

I know that we have submitted a written statement to your staff,

and with your permission, sir,I would like to have that included in

the record, and then I would like to offer a short oral statement

if I might.

Mr. LOBIONDO. Please proceed.

Since 1915, when the United States Coast Guard was established

by law as an armed service, it has been a military, multi-mission

maritime service, possessing a unique blend of humanitarian, law

enforcement, regulatory, diplomatic and military capabilities. During this past year, Coast Guard men and women have used these

capabilities and authorities to accomplish superior operational results.

Sir, I am not entirely objective about this. But from my perspective, America receives a terrific return on its investment from the

United States Coast Guard. During Hurricane Katrina, for example, Coast Guard men and women rescued more than 33,000 people

in a two week period; responded to 134 minor oil spills and 10 significant oil spills totaling more than 8 million gallons of petroleum

products. And to put that into context, the Exxon Valdez oil spill

was about 11 million gallons.

We also restored operational capability to more than 80 percent

of the aids to navigation that were either lost or destroyed by the

storm. Beyond Katrina, the Coast Guard was hard at work securing our maritime borders. In 2005, the Coast Guard, for the second

year running, seized a record amount of illegal drugs, including almost 300,000 pounds of cocaine. We stopped illegal migration of almost 10,000 people by sea. We improved the security of our ports

and those vessels visiting our ports by continuing to implement the

Maritime Transportation Security Act and the ISPS code.

Time and again, the Coast Guard delivered what the American

people expect and deserve from their Coast Guard. The President’s
7

2007 budget positions the Coast Guard to continue this record of

operational excellence. The 2007 budget requests investments that

strengthen maritime preparedness, improves awareness of the maritime domain and enhances capabilities to deal with current and

emerging threats. Each investment is critical to equipping the

Coast Guard, so that we can remain ready, aware, and capable of

being America’s first responders at seas.

For example, the 2007 request includes nearly $100 million in

operating expense funding to support the operation and maintenance of new assets, as well as addressing critical funding increases needed to close energy and maintenance shortfalls. In addition, $37.8 million are requested to complete final sustainment

projects for medium endurance cutters. Each of these components

of the request is critical to preserving Coast Guard readiness and

preparedness.

The 2007 budget request also includes $89 million to support

maritime domain awareness. Key initiatives among them are critical: C4ISR upgrades for our cutter fleet, development of a nationwide AIS infrastructure, and funding to support continued efforts

to leverage technologies and partnerships at the port level to improve our awareness of the people, vessels and cargo using our

ports and waterways.

Finally, the 2007 budget request once again makes the necessary

investment in enhancing Coast Guard capabilities and thereby our

ability to respond. Significant line items include: $418 million for

the national security cutter, equipped with the right post 9/11 capabilities; funding for one maritime patrol aircraft and the

missionization of previously purchased aircraft; support for the

modernization and conversion of our helicopter fleet and funding to

advance 10 years ahead of the original schedule the fast response

cutter.

The 2007 budget provides strong support for the Coast Guard.

The budget will strengthen maritime preparedness, significantly

improve awareness and security of the maritime border, advance

critical modernization and recapitalization of our key systems, and

ensure the Coast is able to respond with the right capabilities.

Sir, the Commandant is looking forward to working with Congress to ensure successful budget and operational outcomes for the

Coast Guard. I stand ready to respond to any questions you might

have.

Mr. LOBIONDO. Thank you, Admiral Cross.

Master Chief Welch.

Master Chief WELCH. Good morning, Mr. Chairman and distinguished members of the Subcommittee. I am very grateful for the

opportunity to appear before you for the final time to share my

views in support of the Coast Guard’s work force that I have been

so honored to represent.

Tangible mission results, positive publicity and an intensive internal focus on our work force has culminated in another year of

impressive work force statistics, not the least of which was a record

high year for the interdiction of maritime drugs and migrants and

our unprecedented search and rescue efforts in the aftermath of

Hurricane Katrina.
8

In addition to these unequaled operational results, we have also

benefitted from another remarkable year of recruiting and retention efforts. We slightly exceeded our 2005 active duty recruiting

mission and among the total of enlisted accessions, with the second

highest percentage of minorities and the third highest percentage

of women in the history of the Coast Guard. High quality accessions, our Commandant’s commitment to our people, and your work

to improve military compensation have all continued to positively

influence our retention rates. Current retention rates for our officer

enlisted work forces are an unprecedented 93 percent and 88.2 percent respectively. And even at the first term enlisted level, we are

retaining nearly 7 of every 10 accessions.

I am exceptionally proud of the progress that we have collectively

made during our watch across a broad spectrum of important

issues. However, I would be remiss if I did not also share with you

the key challenges that our work force continues to face. Our legacy fleet of cutters continues to be the most problematic resource

issue that adversely affects our people and our readiness posture.

During fiscal year 2005, our legacy cutters operated less than half

the time without major equipment casualties, that in spite of a 100

percent increase in per day operational investments made during

the last six years.

Last year alone, our legacy fleet lost the equivalent of over four

fleet years worth of planned activities such as operational missions,

training and crew leave and liberty due to unscheduled maintenance and repairs. All of which—

Mr. LOBIONDO. Excuse me, would you just repeat that last one

again, for anybody who may not have been paying attention, what

was lost last year, four fleet years?

Master Chief WELCH. Yes, sir. Last year alone, Mr. Chairman,

our legacy fleet lost the equivalent of four fleet years, four ship

years, in one year, sir, all of which negatively impacts crew morale

and performance. The importance of our integrated Deepwater systems recapitalization project cannot be overstated. Our fleet is old,

the third oldest of 42 similar fleets throughout the world. And with

age comes unreliability, crew safety concerns, outdated technology

and a general lack of interoperability that can no longer be tolerated, considering the wide array of maritime threats that potentially face us today.

As with our fleet, our owned housing units are also old and outdated. Averaging 40 years of age and facing multi-year maintenance deferrals and a $211 million backlog of proposed housing

maintenance and construction projects, this situation will continue

to worsen without intervention.

In short, we simply don’t have the fiscal resources to adequately

maintain or recapitalize our deteriorating shore infrastructure.

Continued inattention to our family and our unaccompanied personnel housing units will soon lead to health and safety concerns

that are unacceptable to our work force and their families.

Health care is an issue that extends far beyond the organizational parameters of the Coast Guard. We continue to have difficulty securing participating Tricare providers and we will work

closely with DOD to manage those difficulties.
9

My chief concern is that providers are opting out of Tricare due

to low reimbursement rates and cumbersome referral and administrative processes. The reduction of Medicare reimbursement rates

stands to further exacerbate this problem, while at the same time,

DOD intends to raise Tricare rates for retirees under age 65. The

Coast Guard is particularly challenged with health care issues due

to inaccessibility by reasons of distance to military treatment facilities.

Child care costs and accessibility is also becoming a major issue

facing our families and our single or unaccompanied parents. Being

far removed from DOD facilities, Coast Guard families are again

forced to rely upon very limited and costly community resources

available to them. Less than 3 percent of Coast Guard children are

cared for by Coast Guard child care providers.

Recognizing the challenges of child care, we are pursuing partnerships with the General Services Administration and the National Association of Child Care Referral Agencies to reduce the

burden that is being placed upon our working military families.

In closing, I want to express my sincere appreciation for the time

and the terrific support that this Subcommittee has afforded me

and my service during my assignment as the Master Chief of the

Coast Guard. Your efforts have directly contributed to the operational performance and the morale and the general well-being of

our service members and their families. For that, I will remain forever grateful.

Thank you, and I look forward to answering any questions that

you may have, sir.

Mr. LOBIONDO. Thank you very much for your insightful and

powerful statement.

Chairman Blust.

Mr. BLUST. Good morning, Mr. Chairman, distinguished members of the Subcommittee. It is my pleasure to appear here before

you to present the President’s fiscal year budget for 2007 for the

Federal Maritime Commission.

With me today are two of our Commissioners, Commissioner

Paul Anderson and Commissioner Hal Creel, as well as a number

of members of our staff, including Bruce Dombroswki, Director of

Administration; Austin Schmidt, Director of Operations; and Rebecca Fenneman, Attorney in our General Counsel’s office.

The President’s budget for the Commission provides for a

$21,474,000 budget for fiscal year 2007. As you mentioned, Mr.

Chairman, this represents an increase of 5.8 percent, a little over

a million dollars over fiscal year 2006, and is in line with this Subcommittee’s authorization numbers of $21.5 million for fiscal year

2007.

I would like to take a moment and highlight for you some of the

Commission’s significant activities and recent accomplishments.

Mr. Chairman, one of the items you asked me to comment on was

NSAs, the non-vessel operating common carrier service arrangements that were put into place in January of 2005 to allow nonvessel operators the ability to do confidential service contracts with

their shipper customers, to make them in a more competitive arena

with the vessel operating common carriers who have been able to

do service contracts for a number of years.
10

In January last year, when we made the NSAs available to the

industry, it covered a portion of the business and excluded a part

because of pending litigation that was moving through the courts.

We did not initially allow NVOs to operate as shippers with other

NVOs or shipper associations that had NVO members to participate with another NVO under the NSAs. We had concerns about

the outcome of the court case, and when that was resolved, we

were able to move along.

And in October of 2005, we expanded the ability for NVOs to operate as shippers in relation to other NVOs and service and shippers associations which had NVOs as members to participate as

shippers with other NVOs in the NSA arena. So the only piece that

is still outstanding, as we have moved along and embellished the

program, is one small piece that is joint offering of service between

two NVOs offering common rates, because of our concern of antitrust issues.

There is a court case that is going on right now that may help

clarify it. In the meantime, we have asked the industry for comments about what they are looking for for joint service. We have

received those in December and our staff is currently evaluating

the comments that came in. We should be able to have a position

on that very shortly.

So it is moving along quite nicely. There are 207 NSAs that have

been filed with us, and more than 10 percent of all NVOs have registered to provide NSA service in the future. We are approaching

contracting year for this next year, and I expect we will see an increase in the numbers as we go along. It is a new tool and another

opportunity for them to provide competitive service to the shippers.

Another area that we have been actively involved in is our oversight of OTIs. Just recently, we were able to obtain an injunction

against nine, well, we did a formal investigation of nine household

goods moving companies and received an injunction against four

companies and three individuals who were providing service to the

shipping community, primarily individuals, who were moving personal effects and household goods overseas, to prevent them from

operating outside the lawful arena, outside the statues of the Federal Maritime Commission. We received over 250 complaints, which

prompted us to seek the injunction and proceed with the formal investigation. Since that time, we have received more, probably exceeding 300 complaints on these individual companies.

Our concern is that individuals, especially with the baby boomers

who are now moving on into retirement and moving overseas, either on a partial or full time basis, become victims to unscrupulous

operators out there in the arena. So we are very concerned about

it. Through our collaborative efforts within the organization and

working with law enforcement agencies, with local and with Federal Government, finding ways to stifle the activities of the unlawful operators and either bring them into compliance or get them

out of business. Because it is affecting a number of individuals, and

it is an area of concern and focus for us.

Another area that I mentioned last year, sir, was the outreach

initiatives that we have been taking at the FMC. We have reached

out, providing seminars to the industry, and we have invited the

industry to come in and meet with us to brief us on the important
11

issues. This last year, we had seven organizations visit the FMC

and brief the entire staff on key issues that are confronting them.

We included vessel operators, non-vessel operator OTIs, shippers,

ports, cruise lines, marine terminal operators.

And we should have another briefing later this month on the

equipment operators. There is a group called OSEMA that operates

equipment, and they are establishing chassis pools to allow freer

flow of business and ease of movement. They are going to provide

a briefing to us as to their activities. We expect that program to

continue on. It has been well received on both sides.

Finally, I would just like to briefly mention security from the

FMC’s perspective. While we do not have a direct, front line role

in security, we continue our efforts in providing support to the Department of Homeland Security, primarily the Coast Guard and

Customs and Border Protection, in providing expertise and advice

and support to them, and through our licensing and bonding capabilities, make sure that those individuals who have responsibilities

under our oversight, that they operate in a proper manner.

With that, Mr. Chairman, I will be happy to answer any questions that you may have. Thank you.

Mr. LOBIONDO. Thank you, Mr. Blust.

Mr. Winstead, please proceed.

Mr. WINSTEAD. Mr. Chairman, members of the Subcommittee, I

am David Winstead, Commissioner of the Public Building Service

of GSA. I assumed this position in October of last year, and I am

pleased to be given this opportunity to appear before you to discuss

GSA’s development of a new headquarters for the U.S. Coast

Guard, our client, at the St. Elizabeth’s west campus.

My full statement is submitted to the Subcommittee, which I ask

to be made a part of the hearing record. With your permission, I

would now like to make a brief statement.

Mr. LOBIONDO. Without objection.

Mr. WINSTEAD. Mr. Chairman, we are very pleased to work with

the Coast Guard as our client in meeting both their current and

future space needs, and doing so at a best value to them as well

as the American taxpayer. The St. Elizabeth’s west campus is a national historic landmark, located in southeast Washington. It is a

176 acre site with 61 buildings containing 1.1 million square feet

of current space, and it features landmark open space and campus,

a historic Civil War cemetery and stunning views of the surrounding National Capital region.

GSA acquired this campus in December of 2004 as a transfer of

the U.S. Department of Health and Human Services at no cost to

meet the significant future needs for secured Federal office space

over the next decade. I would like to address two issues pertaining

to this site that you addressed in some opening remarks, and that

is occupancy and transportation.

GSA is excited in developing this new headquarters complex for

the U.S. Coast Guard. We feel that we can work and are working

very closely with them to prepare a master plan and as we begin

to do design work on this facility. I also will address other issues

and needs, such as the child care, which was mentioned earlier.

This new secured campus will combine new construction with the

re-use of some historic buildings that will consist of 1.3 million
12

gross square feet of space, excluding parking and occupancy. Planning for occupancy is to begin in 2010.

Given the size of the campus, we are working with DHS in indicating and identifying other DHS elements that could locate on the

site, thus increasing the total amount of occupied space to over

about 4.5 million square feet, again exclusive of parking.

Also, I know the Committee has asked questions of the Coast

Guard, and we have been addressing those, in terms of transportation. The Committee should be assured that we are developing a

detailed plan to manage all transportation issues and to provide

road access to the site well before the Coast Guard begins occupancy of the campus.

Presently, the west campus is only accessible from Martin Luther

King Avenue. While Interstate 295 and Suitland and South Capitol

Street are nearby, none of these provide direct access to the site.

However, two Green Line Metro stations serve the campus, Anacostia, which is a quarter mile away, and Congress Heights, which

is a half mile away. Currently, we are working with the Coast

Guard to prepare a transportation management plan. We have

gathered data from Coast Guard employees and will continue that

process as we continue to design the site planning.

We will also be gathering data from employees of other DHS elements as they are identified and we are already aware of significant interests amongst Coast Guard employees to find alternatives

to driving to work. GSA is actively engaged in meetings with local

transportation and transit agencies in the National Capital region.

We hope to provide a multi-faceted program to improve transportation access and service to the neighborhood, as well as to the to

the St. Elizabeth campus. This plan will be finalized as a part of

our campus master plan and is a part of our environmental impact

statement, both projected for completion by August of 2010.

There are several transportation improvements underway and

planned that are covered in my testimony, but we intend to acquire

land and construct access roads at the northwest and southwest

corners of the campus. Depending on funding, the D.C. Department

of Transportation has scheduled roadway improvements along

South Capitol Street and Suitland Parkway to include new interchanges and intersection improvements.

We also hope that D.C. DOT has secured and received funding

to replace the 11th Street Bridge and the Frederick Douglass

Bridge. Express bus service and park and ride lots from suburban

areas will access the campus from the transportation facilities at

the Metro stations. We are also working with the Bolling Air Force

Base and Anacostia Naval Air station in developing comprehensive

transportation solutions for that area.

Mr. Chairman, and members of the Committee, I am very

pleased to be here as part of this panel. I know there are many important issues before you today. But we are committed, as GSA, to

continue to develop this campus plan and to create a first class, secured headquarters campus for the U.S. Coast Guard. Part of that

commitment is to ensure that their employees have safe, convenient and efficient access to and from their jobs. We will continue

to explore these options and to share with this Committee our

plans in that regard.
13

Thank you.

Mr. LOBIONDO. Thank you very much, Mr. Winstead.

We are now going to move into some questions. I am going to

start off, Admiral Cross, with you. On the topic that has just dominated the media for the last two weeks or so, on Dubai and port

security, we have so many questions that seem to remain unanswered. But I know I speak for the Committee and many of my colleagues in the serious concerns that we have.

I would like you to discuss with us the Coast Guard’s role in the

original review of this proposal, and if possible, can you give us any

time line of when you were first asked to look into this and any

information surrounding that?

Admiral CROSS. Yes, sir, I think I can provide some information

on that.

The Coast Guard’s role, first of all, the Coast Guard is not part

of the Committee on Foreign Investment in the United States. The

Department of Homeland Security is in fact the member of the

committee, and then we work to provide information and input into

the Department. Those efforts started in early May of 2005 at the

staff level within the Coast Guard. Then the meetings continued

for some time, both within the Department, and Coast Guard members were also present at certain interagency meetings as well.

Mr. LOBIONDO. So DHS requested the Coast Guard to provide security analysis of the proposal, is that the way it took place?

Admiral CROSS. They were just looking for our input into the

proposal, yes, sir.

Mr. LOBIONDO. So you were really not asked specific questions?

You were just asked to give your overall opinion?

Admiral CROSS. I’m sure that in the meetings, and I wasn’t in

the meetings, but I’m certain that in the meetings that those staff

officers representing the Coast Guard were asked questions. I don’t

think any notes were taken at the meetings. So I can’t be more specific.

Mr. LOBIONDO. I would hope that at our hearing next week we

could be more specific with these particular issues.

The Administration has sort of belatedly implemented the additional, more stringent 45 day review of this proposal, which remains somewhat questionable about what this review means, since

the financial end of it looks like it is moving forward this week. I

am not sure whether this is a pat on the head to try to get Congress to back off, or whether it is a real postponement for review.

But will the Coast Guard be involved in any more comprehensive

second review in this process, to your knowledge?

Admiral CROSS. I don’t think the process for the second review

has been announced. So I really can’t speculate as to what our role

might be. My presumption would be, is that we would participate

in much the same way that we did before. But I will speculate that

perhaps the representatives will be at a more senior level.

Mr. LOBIONDO. Again, possibly by next week we can have someone be asking DHS what involvement they would expect of the

Coast Guard in this second review.

Additionally, does the Coast Guard require foreign port terminal

operators to implement security measures beyond those that are required by current law?
14

Admiral CROSS. Do you mean the overseas ports, sir?

Mr. LOBIONDO. Yes. When they are operating the ports in the

U.S.

Admiral CROSS. Oh, you mean the foreign operators of terminals

in the U.S.

Mr. LOBIONDO. Yes.

Admiral CROSS. No, sir, they are required, as are all the port and

terminal operators, they are governed by the requirements of the

Maritime Transportation Security Act of 2002.

Mr. LOBIONDO. Let me move for a minute to the port security

grant issue. I think that the, and I know that the Coast Guard, the

budget is not directly responsible for this. But with the Coast

Guard’s responsibility for port security, you are very intimately involved. I am just astonished at the Administration proposal in

terms of the numbers and in the proposal to consolidate these port

security grants with the multi-sector transportation infrastructure

program.

Let me just remind everyone, I believe it was the Coast Guard’s

assessment in a previous hearing, that in order to come close to implementing our port security needs, we would be talking in terms

of $7 billion. I think I am pretty close on that number, correct me

if I am wrong.

The current proposal, which could be diluted if the Administra- tion gets its way, accounts for about $125 million this year. Now,

math wasn’t my strong suit, but I think that takes us 60 or 70

years out, not accounting for any additional increases. I don’t think

we can find anybody in or out of Government that has any degree

of expertise that will make any kind of a statement saying that we

are anywhere close to where we need to be with these port security

grants or our overall effort with port security.

Now, the Coast Guard probably has maximized and stretched our

dollars that we have spent just because of your expertise and your

excellent service. But can you tell me, does the Coast Guard support this proposal to eliminate dedicated funding to secure our

ports and move it into a new area?

Admiral CROSS. Yes, sir. I think this is an effort on the part of

the Secretary to address what are seen as the highest risks first.

Maybe another comment would also be appropriate. I think that $7

billion figure, that didn’t necessarily just apply to Federal funding.

I think that was what we estimated was the total cost.

For example, industry has borne much of the cost to implement

MTSA in terms of the development of facility plans, the hiring of

people to be security officers at facilities, and the same for ships,

by the way. Then also the upgrades, security upgrades that were

required on ships and port facilities in order to comply with the

Act.

Mr. LOBIONDO. Well, I appreciate that. My $7 billion number

was at the low end, because I think actually the estimate was between $7 billion and $11 billion. So I am accommodating the industry component of that for the other $4 billion, which still leaves us

tremendously short.

I don’t want to dominate initially here too much, so I am going

to move over to Mr. Filner, and then I will be back with some more

questions.
15

Mr. FILNER. Thank you, Mr. Chairman.

Admiral, I didn’t understand, when you answered the Chairman’s first question, you said you were asked in May of 2005? I

mean, this stuff didn’t start until November.

Admiral CROSS. No, sir, it was November that we were asked,

November 7th. If I said May, I misspoke.

Mr. FILNER. I don’t know if you saw, if you get the clips on this

stuff, in yesterday’s San Diego Union Tribune, which is our daily

paper in San Diego, the headline said on the paper, on the first

page, it said Coast Guard Raise Concerns on Port Deal, sub-headline, Homeland Security Unaware of Warning. The article says,

‘‘The Coast Guard warned within the past three months of the proposed takeover of some U.S. port operations by a state owned company raised intelligence gaps and made it difficult to assess the

deal’s possible threat to national security. The cautions did not

trigger a 45 day investigation, which would have been required if

a cabinet level agency had raised such a concern.’’

Later on the article says, ‘‘It is unclear when the Coast Guard

issued its warning, but Stewart Baker, the DHS Assistant Secretary of Policy, told Senators he never saw the Coast Guard’s admonition, because it never circulated outside the Coast Guard.’’ Is

that true, to your knowledge, that you just wrote something for

your own great reading pleasure and nobody else bothered to read

it?

Admiral CROSS. Sir, perhaps if I could add some clarification to

this entire issue, it might be useful. From 2000 to 2002, I was the

Assistant Commandant for Operations. As part of that assignment,

I had oversight for the entire Coast Guard intelligence program, so

I have seen a lot of intelligence reports.

We try to follow what I used to call the Colin Powell process for

developing intelligence reports.

Mr. FILNER. Did we start in November 2005, or—

Admiral CROSS. No, sir. I will get there. But it is, tell me what

you know, tell me what you don’t know, and then tell me what you

think. So much of that report involved what we know, and that

part remains classified. The gaps that were talked about specifically highlighted those things that we didn’t know and weren’t able

to find out within the time frame.

And then the conclusion of the report, which I will quote, ‘‘DP

World’s acquisition of P&O, in and of itself, does not pose a significant threat to U.S. assets in continental United States ports.’’

That’s what we think.

Mr. FILNER. I asked you, did this circulate outside the Coast

Guard, to your knowledge?

Admiral CROSS. There is a process for intelligence reports. I do

know that it was put on a SIPERNET site where other intelligence

agencies had access to the report. I think that was in December

that we did that.

Mr. FILNER. So Mr. Baker, when he told the Senators, this report

never circulated outside the Coast Guard, is untrue?

Admiral CROSS. People outside the Coast Guard had access to

the report.

Mr. FILNER. But apparently your cabinet level whatever didn’t—

do you see reports like this that say people never read your report?
16

I mean, what is your reaction to that? They say they never saw it.

These are your superiors up there.

Admiral CROSS. I don’t know if Mr. Baker saw the report or not.

My understanding is they were relying on the Coast Guard representatives in the meetings to communicate any concerns we

might have.

I should also add that action was taken on those concerns. The

assurances that were written into the agreement to allow DPW to

take over the P&O operations addressed two of the concerns that

we had, and the last concern was subsequently addressed. So we

actually have no concerns at this time.

Mr. FILNER. So all those vital concerns were resolved, as far as

you are concerned?

Admiral CROSS. Let me be specific. Two of the concerns involved

information that we did not have regarding certain backgrounds of

certain personnel and employees of DPW, and another about certain elements of their operation that we didn’t have information on.

In the assurances that were written into the agreement, they have

agreed to provide that information. We don’t yet have it. But they

have agreed to provide it.

Mr. FILNER. And the third? The foreign influence?

Admiral CROSS. Yes, sir, the third issue had to do with foreign

influence. And in subsequent discussions with other intelligence organizations in town, within the Government, we have received additional information. We are no longer concerned about that.

Mr. FILNER. I am really confused now. You said that the agreement assured the United States we would have that information,

although we don’t have it yet, is what you just said. So you might

say, you assure us we are getting a budget today, but we haven’t

seen your numbers, but we are going to get them, so I don’t have

to worry about anything. Is that what you are saying?

Admiral CROSS. No, what I was saying is, when the agreement

is concluded, they have agreed to provide us the information. If

they don’t provide us the information—

Mr. FILNER. But the problem is, we have problems with the security based on that information. I mean, what you are saying is, as

long as they provide the information, no matter what it says, we

are happy. That is what you seem to be saying.

Admiral CROSS. Well, once they provide us the information, we

would have an opportunity to vett the information. But we—

Mr. FILNER. But the agreement has already been passed. So

what if you get the information, of course, it won’t be circulated

outside the Coast Guard anyway, so what is the difference?

I just don’t understand—there were two offers to buy those ports,

one by this Dubai Ports World and the other by PSA, owned by the

government of Singapore. Did you evaluate that one, too?

Admiral CROSS. I don’t know if the offer from anyone other than

DPW was evaluated by the Coast Guard.

Mr. FILNER. Of course, back in November, when you said you

started, both corporations made offers, and you only did one of

them?

Admiral CROSS. My presumption is that the offers would have

been made to the current owners, P&O, not to the U.S. Govern-
17

ment. Then P&O would have decided which offer best served their

corporate interests.

Mr. FILNER. Right.

Admiral CROSS. Then after they decided that, the issue would

have been passed to SIFIUS.

Mr. FILNER. Pardon me, Mr. Chairman, I know I’m beyond time.

But you said you were asked in November. At that time, two offers

were on the table. And it was only a few weeks ago really that the

offer was increased sufficiently that P&O decided to accept the

DPW bid.

I don’t understand the process. Number one, what were you

asked to do, for which corporations, why nobody outside your agency knew anything about them and why you are so, why these

issues were resolved so quickly for you? If you can comment on any

of those four things, I would be happy to hear it.

Admiral CROSS. I am not aware that we did any analysis on PSA.

If that is in fact the case, we will certainly provide that information

to the Committee.

Mr. FILNER. Did you ever ask Mr. Baker why he didn’t read your

report?

Admiral CROSS. I am not sure that Mr. Baker hasn’t read it, but

no, I haven’t talked with him about the report.

Mr. FILNER. He told the Senate he didn’t know about it. I think

you should worry whether the people upstairs are reading all this

work that you are doing. I may come back to that.

Thank you, Mr. Chairman.

Mr. LOBIONDO. Mr. Coble.

Mr. COBLE. Thank you, Mr. Chairman.

Admiral, when we heard the words search and rescue, we synonymously think Coast Guard. When we hear the words port security, we synonymously think Coast Guard. And after 9/11, I made

the statement, along with hundreds of others, I am sure, that when

these murderers come back calling again, they likely will come calling by water, port or harbor.

Having said that, Admiral, how do you feel about our port security, security now as opposed to pre-9/11?

Admiral CROSS. Congressman, I do not think there is any question that our ports are far more secure now than they were prior

to 9/11. If you will permit me, I have a list of some of the activities

and actions that we have taken over the course of the last few

years. First of all, we implemented or increased the time for an advance notice of arrival from 24 hours to 96 hours for all crew information, passenger information, cargo and vessel history. This gives

us a chance to vett that information across a series of data bases.

We fielded 12 Maritime Safety and Security teams consisting of

more than 80 boats and the crews that go with those boats. Those

teams also have explosive detection dogs. They have an underwater

detection capability and divers to help manage that underwater detection capability.

With the Congress’ help, we have purchased and fielded 14 new

coastal patrol boats and acquired for use 5 Navy 179 foot patrol

boats. We stood up two maritime intelligence infusion centers, one

on each coast. We have placed field intelligence support teams in

most of our major ports.
18

Mr. COBLE. Let me reclaim my time, because I want to beat that

red light.

Admiral CROSS. Okay, I am sorry, sir.

Mr. COBLE. But the point is, you feel fairly confident, I take it?

Admiral CROSS. I am confident that we have done a great deal

and we are far safer than we were. I think much work remains to

be done.

Mr. COBLE. I concur on both counts.

Admiral, the President requested $417 million to bring the first

three national security cutters to full operational capability and to

construct a fourth one. Why did the Coast Guard choose to acquire

the national security class prior to other Deepwater cutter classes?

Admiral CROSS. Sir, if you take a look at the age of our fleet, the

larger ships that we have are the oldest. You can make the case

that they are also, well, they are clearly the most capable. So when

we get those new national security cutters online, we are not only

going to have new cutters, we are going to have far more capable

cutters, especially in the C4ISR realm, which we think is absolutely the key to improving port security.

At the end of the day, preventing terrorist attacks is about having the ability to collect, analyze, synthesize and act on information.

Mr. COBLE. And I think cost savings and operational benefits

also likely will accrue, will they not?

Admiral CROSS. What we do know we are going to do is avoid

substantial maintenance costs on our current 378 fleet, the high

endurance cutters, which are going up every year. And also the

operational days that we are losing, that is what Master Chief

Welch was talking about, 731 days, I believe was the number last

year of scheduled deployment days that were lost to unscheduled

maintenance.

Mr. COBLE. Finally, Admiral, let me put a three part question to

you. The Administration’s budget proposal reclassifies drug interdiction as a non-homeland security mission. My three questions are

these, Admiral. Will this designation affect resources and funding

that is dedicated to the Coast Guard drug interdictions? B, do you

know why the Administration proposed this reclassification? And

finally, how did the diversion of personnel and air assets due to the

hurricane response efforts affect the Coast Guard’s drug interdiction capabilities in calendar year 2005?

Admiral CROSS. Let me see if I can answer those in order. Will

it affect the resources? I think over time it could potentially result

in smaller budget allocations for the Coast Guard.

The second question is, do I know why. I think that was a standard that was applied across all the agencies in Government, with

an effort to increase those parts of the budget that were dedicated

to national security.

And the third part of your question had to do with, did the diversion of people and air assets to Katrina affect counter-narcotics. I

think in some way that it did. Primarily that way would have been,

I think you may know that at one point we have somewhere between 35 and 40 percent of all the aircraft that we own were in

New Orleans or Mobile, Alabama. So little question in my mind

that we probably did not deploy, some of the ships that deployed
19

for counter-narcotics that would have had helicopters on board

probably did not. But otherwise, I think for the most part, that

would have been the impact.

Mr. COBLE. I thank you, Admiral. Good to have all of you with

us. Thank you, Mr. Chairman.

Mr. LOBIONDO. Thank you, Mr. Coble.

Congresswoman Brown?

Ms. BROWN. Thank you. Later, in a different forum, would you

please give me an update on the status of the dormitories in Connecticut? I visited there, I was very impressed with the men and

women there, but it needed substantial work. I need to know what

is the status of that.

Let us get down to what everybody is concerned with, and that

is port security. I want to commend you all because you have taken

what is a lemon and made lemonade, you have done the best with

what you have had and you have stretched the dollar. Thank you

very much. And of course, I fought very hard that you all kept

some independence under the Homeland Security.

But as always, the Bush Administration is misleading the public.

Everybody gets a comfort level when we think that the Coast

Guard is responsible for port security. And they think you are

doing a lot more than what you are doing. You list a lot of things

that you are doing.

But I come from Florida. I have 14 ports and I know exactly

what you are doing as far as port security is concerned. Now, you

said earlier when the Chairman asked you a question about combining the grants program after 9/11, if it wasn’t for this Committee, the ports would have gotten not a dime from this Administration. We spent $4.4 billion in aviation security, but only $36 million

in all surface transportation.

So now, it is misleading the public to say that the Coast Guard

is responsible for port security. You play a very important part. I

have nothing wrong with you playing an additional part. But you

cannot do it when your operational budget has been cut.

Now, I need to know, what role do you all play in port security?

And I know you can’t tell us what kind of funds you actually need.

But it is misleading the public to say that the Coast Guard is responsible for port security when of course the operators that operate the port are responsible. And in Jacksonville, we hire the sheriff’s department that is there protecting the port.

Now, you do waterside, some protection based on the amount of

dollars that you have.

Admiral CROSS. Yes, ma’am. Maybe I should start by saying,

Florida is near and dear to my heart as well. I was born in

Broward County General Hospital in Fort Lauderdale.

Ms. BROWN. I live there.

Admiral CROSS. And maybe I should correct one thing. Since

2001, the Coast Guard has grown by about 5,000 people. And we

have seen our operating budget increase by a little over 65 percent,

and our capital acquisition budget is—

Ms. BROWN. Sir, I agree. But also, your duties and responsibilities have increased. Okay?

Admiral CROSS. Yes, ma’am.

Ms. BROWN. You get a free ride on that one.
20

Admiral CROSS. No, I do not want a free ride. I wanted to clarify

the record.

I do not think we have ever suggested that only the Coast Guard

is responsible for port security.

Ms. BROWN. No, sir you have not. But in the television and in

the news, it is out there, the Coast Guard is responsible for the

port. This is the first I have heard it from you. But I knew it was

misleading, lying, however you want to call it.

Admiral CROSS. Well, I think we are the leaders for port security.

Ms. BROWN. Oh, you are.

Admiral CROSS. The captains of the ports head the local port security.

Ms. BROWN. Do you verify the operation? Tell us, please tell us

what exactly does the Coast Guard do?

Admiral CROSS. Let me offer some examples. We have implemented the Maritime Transportation Security Act passed by this

Committee. So we have now validated the fact and looked at and

approved 6,200 ship security plans and 3,200 facility security

plans. We also—

Ms. BROWN. Excuse me, that is wonderful. Now, you have okayed

what is written on a piece of paper. What kind of oversight? What

kind of verification? Where is the budget for that? I can say anything on a piece of paper. But if there is not oversight, if you can’t

go in there and verify, there is a problem.

Admiral CROSS. Ma’am, we can go in and verify. And to date,

since July of 2004, we have detected over 700 violations of which

44 of those were deemed to be major violations. When we say major

violation, that oftentimes results in a stoppage of cargo operations

or in some cases, we actually closed down facilities until they met

the requirements of the Act.

This is not just in U.S. ports. As well, we also inspect ports overseas for compliance with the International Ship and Port Facility

Code. So far, we have inspected 44 ports overseas, 37 passed, 7 did

not. So those 37 that passed represent about 80 percent of all the

goods that are shipped into the United States. The seven that

failed are in the process of being notified that ships arriving in

U.S. ports from those ports will be subject to additional scrutiny.

Ms. BROWN. Oh. I have a minute left.

Mr. LOBIONDO. You are over by a minute.

Ms. BROWN. Are we going to have a second round, sir?

Mr. LOBIONDO. Yes, we certainly will.

Ms. BROWN. I am ready for it.

[Laughter.]

Mr. LOBIONDO. Mr. Simmons.

Mr. SIMMONS. Thank you, Mr. Chairman. I want to thank Representative Brown on two counts, one for mentioning Chase Hall

and the renovations at Chase Hall. We have some very fine young

men and women up in the dormitory at the Coast Guard Academy.

But that hall needs renovation, just for safety’s sake. And I thank

her, because she visited the facility a couple of years ago, and saw

with her own eyes what we need to do, and I thank her for that.

I also wish to mention, under Coast Guard R&D, on page 6 of

our handout, that the R&D facility is very important to Coast

Guard. When Coast Guard was passed to Homeland Security, the
21

idea was it would be passed intact. I think that’s what the language of the law said. And yet, in each cycle, since we created the

Department of Homeland Security, an effort has been made to take

the funding for R&D out of Coast Guard and give it to Homeland

Security.

I oppose that, I think other members of the Subcommittee oppose

that. I will continue to oppose that.

But the point I want to make now is that the Coast Guard R&D

has been in World War II buildings at Avery Point for a long time.

They deserve a better spot. Boston GSA has done a wonderful job

trying to assist in locating a site at the Fort Trumble property in

New London. We have a site available. It is not encumbered by

eminent domain in any fashion. It gives line of sight to the water.

I would just hope that, I know GSA is here today to testify on

the St. Elizabeth’s site, but I would hope that you would give highest priority to providing a suitable building on the Fort Trumble

property adjacent to the Coast Guard station, adjacent to Fort

Trumble, which is the original Coast Guard facility ashore, adjacent to what we know will be the National Historical Coast Guard

Museum. This will become a center of excellence for Coast Guard,

and I think this is a very important project. I hope GSA Washington will help GSA Boston with this project.

That being said, I would like to switch to again the subject that

was raised by my colleague, Representative Brown of Florida,

which is port security. My understanding is under the provisions

of the Maritime Transportation Security Act of 2002, requirements

were set for the checking of cargo, both looking in cargo containers

in facilities and checking the container seals. People that I know

that are working the piers and working the docks and working the

ports are telling me that only a very small percentage of these

checks are being done.

I guess my question is, if the budgets are adequate for this purpose, why are we not checking a higher percentage of containers

and seals? There has been a big hoo-ha over DOHA and who

should be managing our ports. That is an interesting issue. It is

a related issue.

But the bottom line to me is right now, and I have not as many

as Ms. Brown, but I have a port in my district, why are we only

checking 4, 5, 6 or 7 percent of the containers, if the money is adequate? And what does this Subcommittee and our full Transportation Committee and the Congress need to do to address this important homeland security issue?

Admiral CROSS. Yes, sir. The inspection of containers is, it is not

a Coast Guard responsibility. That is primarily managed by Customs and Border Protection. I think it would be wrong for me to

try to answer that question. I would prefer that we provide that

question for them.

If I could, can I just make a comment on your two other issues?

Mr. SIMMONS. Please.

Admiral CROSS. Two years ago, not only was I Assistant Commandant for Operations, but by virtue of being in that position, I

was also on the Coast Guard Academy Board of Trustees. I had an

opportunity to visit the barracks on a number of occasions, barracks that I lived in for four years as a cadet. Quite frankly, I was
22

appalled at the condition of the barracks. So we would seek this

Committee’s support for helping us to continue to fund the renovation of Chase Hall. It is a very high priority for us. We are started,

but we really need full funding of those funds that we have asked

for to continue.

With regard to the R&D Center and the location, we agree with

you. I think it was actually the Coast Guard that asked GSA to

help us take another look at the facility over at Fort Trumble.

What we were hoping is that, we walked away from that initially

because the price was going to be exorbitant. We think that might

have been because the developer we were talking to, they really develop hotels. We think maybe the technical requirements for an

R&D center might have caused them to factor a great deal of risk

into the price and maybe if we talk to the right people we can get

the building modified for a reasonable cost.

Mr. SIMMONS. I appreciate those comments, Mr. Chairman. And

again, the building being renovated, Building 2, I agree with you,

adopting that to your purpose is probably going to be more expensive than necessary. But there is land available within that complex unencumbered by eminent domain issues, with line of sight

where a new building could be constructed, designed specifically to

the Coast Guard’s needs, probably cheaper than converting the existing building to that purpose. I would urge that GSA work with

the Coast Guard on that. Because again, this becomes a center of

excellence for the Coast Guard at that location.

Thank you, Mr. Chairman.

Admiral CROSS. I know the Commandant is looking for an opportunity to meet with you to discuss kind of a broad range of issues

in New London.

Mr. LOBIONDO. Thank you, Mr. Simmons.

Mr. Reichert.

Mr. REICHERT. Thank you, Mr. Chairman.

Thank you for your service. Most of us on this Committee do not

have Coast Guard backgrounds, but there is one gentleman, who

just left, who does. Most of us, I come from a law enforcement

background and I spoke to the Navy League last week in my district is near Seattle and also to a group of Coast Guard members

at a luncheon a couple of weeks ago. I asked them to forgive me,

because I am a member of the Air Force in my younger years.

I do not understand everything the Coast Guard does. But I have

a good understanding of what you do. I would just for the record

ask you to, if you could, describe your mission as it relates to our

port security.

Admiral CROSS. Yes, sir. First of all, we love the Air Force.

[Laughter.]

Admiral CROSS. We certainly wouldn’t hold that against you, although it would be our pleasure to escort you on a visit to a Coast

Guard facility some time, so you can get a better idea about what

we do. We have extensive facilities down in the Hampton Roads

area where you could do just about everything the Coast Guard

does in a fairly short period of time.

Port security, just like everything the Coast Guard does, is multifaceted. It is not just about maritime safety and security teams or

boat crews driving boats in order to collect information or just pro-
23

vide a deterrent capability. It is also about inspections, it is about

implementation of the Maritime Transportation Security Act, and

the International Ship and Port Facility Code, which we have

worked very diligently with the International Maritime Organization part of the United Nations to get passed.

It is about collecting information. A lot of the money, and in

some cases, elements of different line items in our budget are requested to help us improve our maritime domain awareness. Once

again, that is not just a Coast Guard effort. That is an effort that

we are working very, very diligently with Customs and Border Protection, other Federal agencies, importantly with the Department

of Defense and NorthCom, so that we will be able to jointly—that’s

a word you should recognize—

Mr. REICHERT. Yes.

Admiral CROSS. Jointly collect this information, synthesize it and

use it and employ the most appropriate asset to go interdict any

threats to not just our ports, but to our Country in general, but of

course primarily we are worried about ports.

Mr. REICHERT. And you are the lead agency in that effort as far

as—

Admiral CROSS. We have been designated the lead agency for

maritime homeland security, as opposed to homeland defense, in

which case we are supporting role for the Department of Defense.

In that role, I think it is appropriate to point out that captains of

the port are all Coast Guard officers. They have unique authorities

in that regard. For example, they can refuse to allow ships to come

into port. They can retain ships in port. They can cause ships to

be moved around when they are in port. Coast Guard people have

the authority to board and inspect any vessel in a U.S. port, actually U.S. vessels anywhere in the world, and foreign vessels within

12 miles of our shore.

Mr. REICHERT. And I am sure that they work in close concert

with the locals, port authorities, as my colleague mentioned, the

sheriff’s office in Florida at one port. I happen to have been the

sheriff of Seattle, did not have that responsibility but worked closely with the port authority. So your captain of the port certainly

would be a close partner of any port authority and also any company that might have some authority there for security. Is that not

correct?

Admiral CROSS. Yes, sir. The level of cooperation between Federal agencies, State and local agencies and industry is higher than

it has ever been. For example, the captain of the port, I think I

mentioned earlier, is chairman of the port security committee. But

all those entities that you talked about would be represented on

that committee.

Oftentimes we do joint boardings. Increasingly we do joint

boardings with Customs and Border Protection. I think you are

going to see that evolve as standard procedure in the not too distant future.

But also in selected ports, where they have the forces and are interested, we also have local authorities as part of the team. So it

is very much a team effort.

Mr. REICHERT. Thank you. I have one quick question, I know I

have just a few seconds left. The Healy, as you know, is based in
24

Seattle. We are happy to have her stay. The funds to support the

Coast Guard polar icebreakers have been transferred to NSF. Recently, NSF has spent some of their money to contract with a Russian flagship.

Can you comment on that contract? Is that a benefit to the Coast

Guard to have that sort of contract in place? I know that the Russian ship had some mechanical problems and failed to complete its

mission. I think the Polar Star had to come to its rescue. Thank

you.

Admiral CROSS. Yes, sir, I can tell you how that operation went

this year. You are correct. I think in an effort to reduce costs, the

National Science Foundation did contract with the Russian icebreaker. They had a problem with one of their props, and as a result of that, they requested that we get the Polar Star underway.

I think it was more as an insurance than anything else. Because

as it turned out, the Russian icebreaker was able to complete most

of the mission, although the Polar Star arrived on scene and did

for about four or five days actually groom the channel, as much to

help prepare the ice for next year as anything else.

With regard to how the entire transaction has affected us, we

have received the funds from the National Science Foundation to

do the required maintenance on the Polar Sea, so they will be able

to deploy next year. So what has essentially happened in the short

term is that the program has remained in limbo. I think we are

waiting for a final report from the National Academy of Sciences

on just how and who should operate the Nation’s icebreakers.

They did issue a preliminary report in which they noted that at

the very minimum, the Nation should have one polar icebreaker,

one Antarctic icebreaker and one for the Arctic. And that especially

the one for the Arctic should address not just scientific concerns

but also national security and economic concerns.

So we are anxiously awaiting the final report and working with

the Congress to determine a way ahead.

If I might, I am just going to make one more comment. The

whole reason for transferring these funds in the first place, and it

happened because the Coast Guard actually proposed decommissioning the two polar icebreakers in one of our budgets, and it is

because we simply weren’t getting the funding we needed to properly maintain the icebreakers. We were year after year having to

take funds that were meant to support other ships in order to

maintain the icebreakers. So that was the basis for the study and

the transaction that took place.

Mr. REICHERT. Thank you. Thank you, Mr. Chairman.

Mr. LOBIONDO. Thank you, Mr. Reichert.

Master Chief, you went through a list of challenges that the

Coast Guard has, some of them related to operational assets involving Deepwater, which unfortunately we have talked about a lot.

But you also listed outside of the Deepwater operational concerns

a number of other issues that are challenges in health care and

personnel issues with the Coast Guard. It is a difficult question for

today.

But if you can, I would like for you to follow up with a written

response on what you think the dollar requirements to meet that

list that you outlined would be. And if it is not too much trouble,
25

minimally and optimally. There probably is a bare minimum we

need to do that would require X number of dollars beyond where

we are, because I think you have highlighted an important aspect

of what we are talking about as far as the budget is concerned,

where my concerns are raised not only with Operation Deepwater

and a lot of the Coast Guard operational responsibilities, but with

some of these other issues that if morale is not good, we have bigger problems down the road.

So I would appreciate that. I am assuming you want to get back

to me on that.

Master Chief WELCH. Yes, sir. Just to give you a number, Mr.

Chairman, so you know the magnitude of what we are talking

about, our shore infrastructure that I spoke about, as you know,

extends far beyond the world of housing. I was just focusing on

housing and the $211 million backlog associated with that.

When you look at our total shore infrastructure, the backlog is

significant, in the billions and billions of dollars. But I would be

happy to quantify the issues and the amounts that I believe would

be required to make incremental progress, sir.

Mr. LOBIONDO. Thank you.

Mr. Boustany, you are up.

Mr. BOUSTANY. Thank you, Mr. Chairman.

Hurricanes Rita and Katrina left a lot of debris in the Gulf of

Mexico. Admiral, I would like it if you could provide a status report

on the cleanup of that debris. Do you have sufficient funds to deal

with it, and do you anticipate more needs possibly with the upcoming supplemental? I know that is probably not a question that can

be answered right now, but if you could provide a written response,

I would greatly appreciate it.

A question about fuel costs. The President’s request has $30 million in additional fuel costs. Is this adequate? Is this going to meet

your needs?

Admiral CROSS. Sir, that is our best estimate right now. As anybody who buys gasoline for their car knows, fuel prices have been

all over the map lately. But we think within the context of the

budget that that is a reasonable estimate for now.

Mr. BOUSTANY. Okay. With regard to the Oil Spill Liability Trust

Fund, clearly the hurricanes had an impact on this. Are Stafford

Act funds still available and are they still being used? Do you anticipate the need for further funds here? And one last question with

regard to that, if payments temporarily go beyond the fund balance, can you borrow?

Admiral CROSS. That is a very interesting question, and a good

question. My understanding is that to date, all of our costs have

been met through the Stafford Act and we have been reimbursed.

What we are concerned about is the potential for claims. We have

not received any yet. But we estimate that the potential for claims

could run as high as $800 million. If that occurred, then we would

have to, it would likely bankrupt the fund and we would have to

come back to the Congress. There are provisions for us coming back

to the Congress for additional funds.

Now, we do not know that is going to happen. It may not. We

are trying to watch it very, very closely.
26

Mr. BOUSTANY. Okay. And one last question, sort of along the lines that the Chairman just asked. I know that there is $53 million for increased personnel costs. Are you looking at any increase

in personnel or is that purely health care and housing and the miscellaneous things that you mentioned earlier?

Admiral CROSS. Yes, I think the majority of that just has to do

with cost of living increases and pay raises. This budget does call

for a slight increase in the work force, and I apologize, I do not

have that number off the top of my head. I should have it.

Mr. BOUSTANY. And I too express the concern that even with this

budget request, there is a potential for a decline, or the ability to

maintain current services at this 2006 level. It sounds to me as if

personnel costs and some of these other things are really going to

kind of hit you pretty hard, to the point where you are at current

operational levels or possibly even below.

Admiral CROSS. I think we will be at least at current levels of

operation. In fact, there are some other up sides. Part of the request for HC130J funding for example, would buy us an extra

2,000 flight hours. So that would be helpful. One of our larger

shortfalls is in maritime patrol aircraft, and of course, that is why

we are trying to bring the COSIS on as quickly as we can. That

2,000 hours would be very important to us.

Mr. BOUSTANY. Thank you very much.

Mr. LOBIONDO. Mr. Filner.

Mr. FILNER. Thank you, Mr. Chairman.

I am still a little puzzled by your testimony, Admiral. Again, let

me just quote from the memo, I don’t know who wrote it, but the

Coast Guard assessment of the DPW purchase. It says ‘‘There are

many intelligence gaps concerning the potential for DPW or P&O

assets to support terrorist operations that preclude an overall

threat assessment of the potential DPW and P&O ports merger.’’

You didn’t have enough information. ‘‘The breadth of the intelligence gaps also infer potential unknown threats against a large

number of potential vulnerabilities. And these gaps include, but are

not limited to, operations, personnel and foreign influence.’’

You said in your testimony, as I understood it, correct me if I am

wrong, you said, these questions need to be answered. And DPW

has agreed to answer them. But you don’t have the answers to

those, right? We as a Nation don’t have the answers to those.

There is something about the information will be provided.

Admiral CROSS. That is correct, yes, sir.

Mr. FILNER. But the deal will already be closed by then. What

if we had information that ten of their personnel had been trained

in Al Qaeda camps or something? Are you satisfied that whatever

information they give us is going to answer these questions?

Admiral CROSS. I think the sequencing is important here, sir.

Those assurances are part of the agreement. Therefore, the agreement could not be finalized until they provided the information

that they promised us.

Mr. FILNER. But the information—we do not know what that information is, which you so appropriately point out there. There is

no way to evaluate the threat unless we have that information.

And they still have not provided it. They have assured us that they

will provide it. But the deal will already be closed, I think.
27

So these are important questions. I don’t see any answers to

them, frankly. In your testimony, you distinguish between the first

two and the third concern. Can you just explain what was the difference?

Admiral CROSS. Yes, sir. The first two issues—

Mr. FILNER. You got assurances.

Admiral CROSS. Yes, sir, there were assurances. And the third

issue, we have vetted with other organizations, intelligence organizations with the Federal Government who have access to that information that we did not have. We are very comfortable with

where we are on that now.

Mr. FILNER. So, you asked a very important question. Is there

foreign influence on DPW or P&O operations that affect security

and other major decisions; if so, what countries and to what degree? Important questions, which is what the Congress is asking.

That information is not available to us, as far as I know, or to the

American people. So those are really important questions, I am

glad you raised them. I wish they would be more public and we

would know what the answers are.

As Ms. Brown pointed out, the Administration says, have no worries, American people, because the operations control has nothing

to do with security. I, just as Ms. Brown, I cannot buy that at all.

For example, in the Maritime Security Act that you referred to, it

says that there shall be background checks on individuals who

have access to the secure areas of the marine terminals. That is

part of security. But it is also what operations is involved with.

We have not started that process, have we, of checking, of background checks of those who have access to terminals?

Admiral CROSS. No, sir. That is affiliated with the Transportation Worker Identification Card project, which has come very,

very near the top of the priority list for the—

Mr. FILNER. But it is several years and we still haven’t done it,

right?

Admiral CROSS. What we have done is conduct two prototypes,

one in Florida and one in Delaware.

Mr. FILNER. You are testing the kind of cards, but you are not

actually doing any background checks.

Admiral CROSS. I do not believe, no, sir, the checks have not—

Mr. FILNER. You see, that is where operations and security

merge to assure us that there is security done. And as you pointed

out several times, you didn’t point out, I inferred, I was not for this

conglomeration that is under DHS. But the argument was, we are

going to have all this coordination.

So in one answer today, you said, well, we are not responsible

for the containers, it is Customs, which doesn’t exist any more, and

Immigration, which doesn’t exist any more. So even within the Department, like we had before hand, you are pointing at each other.

And now you are saying this is TSA’s job and they have not done

it.

So I am not convinced that there is any kind of cross checking

here. When your own, when the Department’s own spokesman

says, hey, I never read what the Coast Guard wrote, I mean, there

are problems here that this issue is raising. As the Chairman said

in his opening statement, every time we have a question, more
28

questions arise. We don’t know what the answer to your very important questions are. We are getting evidence that the various elements of DHS are not even talking to one another, and everybody

is pointing to everybody else for doing it.

Frankly, as someone who represents a port which I think has a

lot of threats to it, even though your Department sees us as a little

sleepy fishing village, I don’t have any confidence that we are

meeting these security concerns. Do you want to give me any more

confidence?

Admiral CROSS. Sir, I would offer, first, the general statement

that I did Congressman Coble. I think we are a lot more secure in

our ports than we were prior to 9/11. I will not dispute the fact,

in fact, I often say that we have, much work remains to be done.

I would point out, though, that the fact that we have Customs

and Border Protection responsible for containers and other aspects

of the cargo coming into the Country and TSA has other responsibilities, that is not necessarily a whole lot different from the way

the Department of Defense operates. You have the Army responsible for some elements of defense, the Navy for other elements.

And the level of cooperation between agencies within the Department, once again, I know it is not where we want it to be, but it

is dramatically increased and improved over where it used to be.

Mr. FILNER. I wish I could take your word for it. But I don’t see

any amount of evidence for it. And in answer to Ms. Brown and

others, what we seem to be getting is, you are able to verify, paper

verification of things, we are looking at systems, we are looking at

things, but we are not actually doing the security, we are not doing

the background checks. We have assurances that there is a security

plan, but there is not a lot of checking. It is 1 or 2 percent of containers are checked. And the technology for doing that is not very

sophisticated, as far as I could tell, by looking at San Diego.

So you leave me a lot of insecurity about our security.

Mr. LOBIONDO. Admiral Cross, help me understand how the facility security officer at a port interacts with the port terminal operator in working with the Coast Guard for that individual port security issue, issues that may arise.

Admiral CROSS. In the implementing regulations for MTSA, various standards were set for the level of security in ports. As I think

you know, when we implemented those regulations, our effort was

not to be descriptive in terms of how the security had to be made.

So many of the ports arrive at an acceptable level of security in different ways.

But the facility security officer is required to be trained, and he

is responsible for ensuring that the agreed-upon security standards

in any given port or facility are in fact being met. And he is the

person that the captain of the port representatives would meet

with and tour the facility with when we go back to check and make

sure that the facility is in fact doing what they said they would do.

Mr. LOBIONDO. Who does the facility security officer answer to?

Admiral CROSS. Ultimately, he would answer to whoever is running the port. In most instances that is a port authority. And in

some cases, there are private entities.

Mr. LOBIONDO. So the facility security officer is hired by the port

operator, is paid by the port operator. So ultimately, if there is a
29

concern that the Coast Guard raises or the port authority raises,

the facility security officer, in order to accommodate whatever is required, would have to go to his or her boss, which is the port operator. And what guarantees or assurances do we have that under this

Dubai deal or any other deal that those recommendations, those orders or whatever it is, will be carried out the way we want them

carried out, according to the best interest of our homeland security?

Admiral CROSS. We actually check to make sure that the facilities are secured in accordance with the requirements. And if they

are not, depending on how serious the violation is, if it is a minor

violation, we may say something like, okay, you have two weeks to

fix this. Then we will come back and ensure that the additional security elements are in place.

If it is a serious violation, and there have been 44 of those since

July of 2004, we have gone as far in some cases to actually close

down the facility until the fixes were put in place.

Mr. LOBIONDO. I think there is reason to believe that in a rapidly unfolding situation at a particular port, with intelligence leads

or some other agencies coming together to say, there is something

very specific that is really worrisome, that is a big threat here, that

this facility security officer would have access to sort of the highest

level intelligence on that particular incident at that port, is that

correct?

Admiral CROSS. Yes.

Mr. LOBIONDO. So it would be safe to assume that that facility

security officer would be sharing that information with his or her

boss?

Admiral CROSS. Potentially. I mentioned earlier in response to a

question from Congressman Filner that we were not doing background checks as yet, or TSA is not doing background checks as

yet. When I said that, I was referring to just typical employees at

the port. We are in the process, in fact, of doing background checks

on people with security responsibilities. Not all of those have been

completed, but we are in the process of doing that.

Mr. LOBIONDO. But in this particular situation, with a very rapidly unfolding security threat for a terrorism incident at one of our

ports, which is not that far out of the realm of reality, the facility

security officer, interacting with the Coast Guard or other Federal

agencies that could be involved with DHS on this particular issue,

probably would be sharing with the port operator whatever that information is, however sensitive it may be.

The point I am getting to that raises particular concern for me

is that in the most recent incident we are concerned about is that

in essence we would be sharing potentially some very sensitive intelligence information with United Arab Emirates, because they actually own the corporation. Unfortunately, that is what I thought.

I have another round of questions, but I am going to move to Ms.

Brown again.

Ms. BROWN. Thank you, Mr. Chairman.

Let me just say that you all are the only bright spot in the Administration. Basically, after 9/11, you had a program, you were

out protecting our bridges within five minutes after 9/11. So thank

you.
30

When Katrina took place, FEMA was a disaster. Everybody in

this Country knows it was a disaster. The only bright spot was the

Coast Guard, the only bright spot. It was like our Government was

not present. They get an F.

So my question to you is, given your expanded role and your initial roles that you have as far as drugs and all of this, most people

feel that, coming from Florida, with 14 ports, I have visited all my

ports in Florida, but I have visited ports around the world on my

Transportation Committee. And you say you have inspected 44 foreign ports, 7 didn’t meet the standards.

But when you say inspection, tell me, what are you talking

about? Because I have talked to some of these operators. And I am

not convinced that the kind of security we think is taking place is

taking place. Let me just give you my quick questions and then you

can answer all of them. Most people feel, when I talk to my port

operators, the only funds available is this port security money. I

had to go back in there and make sure that there was special provision given for these ports that have military bases there and military equipment going to our men and women.

So now, if we do not have this grants program and it is balled

into one and ports is as the bottom and all other security, we put

$4.4 billion for aviation and just $36 million for all of security, not

just talking about ports, we are talking about ports, rail, transit.

So I want to know when is this Administration going to stand

up for the American people. When? When are we going to stand

up? When is this Congress going to stand up?

We talk a great talk. But we do not put the funds where they

need to be. What improvement do you feel is necessary to protect

the U.S. ports? I live in Jacksonville. We have a football stadium

right there on the water. The terrorists don’t have to be there. We

have all the cargo, all these cars coming through there. Put something in one of those cars. Blow it up and I’m halfway around the

world.

What are you all doing to make sure that does not happen? We

are not doing our duties as members of Congress to have some illusion out there that the U.S. Coast Guard is taking care of us. You

are doing the best you can based on what meager funds you get.

And you are the only bright spot in this Administration. FEMA is

a disaster. The only bright spot during Katrina, you rescued how

many people, while the rest of the Government was missing in action.

I know you cannot tell us the truth. We need somebody else here,

but it is not you all. You are doing the best you can. We have a

lot of frustration here. We have an Administration that does not,

does not respect the Congress. Does not respect the Congress. One

hundred twenty-nine years, I am the first African American. I care

about all the people of Florida. And it is a disgrace that we talk

about terrorism and protecting other people and we are not doing

it here.

One thing this port discussion has done is to shine the light on

the fact that we are not adequately funding the infrastructure security in the United States of America. So maybe you can answer

some of my questions in writing or say something, whatever they

told you you could say.
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Admiral CROSS. I am glad you clarified early on when you were

talking about the bright spots, Congresswoman.

Ms. BROWN. You are.

Admiral CROSS. I thought you might be talking about Chief

Welch’s and my haircuts here.

[Laughter.]

Admiral CROSS. Let me just offer a couple of comments if I could.

Early on you asked about what we were doing in the overseas

ports. I think it might be useful to clarify that we actually have

teams of Coast Guard people who travel overseas and visit these

ports. Typically, it is more than one visit, especially a lot of ports

that are not major ports. Because early on, we found a fairly large

number of discrepancies. Then we work with the ports, explaining

to them what they have to do, then we go back and recheck. That

is to the point now of the 44 that we have checked.

Ms. BROWN. When you say rechecked, you don’t actually check

the cargo, you are checking the papers.

Admiral CROSS. No, ma’am, this is not about cargo at all. This

is about port security, facilities within the port.

Ms. BROWN. Who checks the cargo?

Admiral CROSS. Customs and Border Protection would be checking cargo. And in some cases, they are doing a great deal of that

overseas as well.

Ms. BROWN. How do they check it? When you say they check it,

what do you mean?

Admiral CROSS. I do not want to speak for them, so let me just

speak generally. First of all, they have partnerships with various

shippers. And they get manifests in advance. And if they see, then

they run the manifest through a risk based model, very sophisticated computer model.

Ms. BROWN. It sounds good.

Admiral CROSS. They use that to decide which ones they open

and inspect. Others are scanned using sophisticated sensor devices.

I don’t think I want to go beyond that. I think that is a question

that is best answered by Customs and Border Protection.

Ms. BROWN. But I mean, I know as a lay person that the system

is flawed. I am sure that the terrorists know it, too. What can we

do to help you with your additional roles? And answer the question,

if we don’t have the port grant program, what will they do? What

will they do?

Admiral CROSS. I think maybe that is a question we should try

to help answer. Because I think a lot of the funding we were talking about was supposed to go through other entities than the port

grant program. For example, part of this would be increases to the

Coast Guard’s budget and CBP’s budget. And then of course, as I

mentioned earlier, those costs borne by industry.

I am not trying to tell you that that is going to get anywhere

near the $7 billion to $9 billion that the Chairman talked about.

I am not sure we are measuring apples and apples here.

Ms. BROWN. So we are talking about reducing, really, security to

our ports. That is what we are talking about. That is what this Administration is talking about. That is what they are telling this

Congress to do, based on the budget that they sent over.
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Admiral CROSS. Well, I guess I would disagree with that. I think

we have made steady progress toward improving the security in

the ports.

Ms. BROWN. And I think you have, on paper.

Admiral CROSS. I know you visited, as you mentioned, a number

of ports.

Ms. BROWN. And talked with the operators of the ports, talked

to the foreign government and just in some instances felt like they

didn’t feel they had a clue as to security of the ports, making sure

that the fences were properly taken care of, that the cargo is inspected. In some areas, we have a large shipment, we know who

is ordering it, if we are talking about Wal-Mart or whatever.

But in other instances, it is dangerous. As I said, when we have

those cars coming in at a football game, and someone can blow up

100,000 people just like that at one of those ports.

Admiral CROSS. You may have already done this, but if you have

not, I would offer a visit to you to the port of your choice. I think

we could arrange to have a joint team of Coast Guard people and

Customs and Border Protection people and perhaps some of the

port industry people to give you a complete tour of a facility. You

pick the facility. I think that would give you a better idea of what

is being done and perhaps of what is not being done. That might

be useful.

Ms. BROWN. Sir, you can rest assured that I have done that, and

I will do it again. I think every member on this Committee has

done that. And we talk to the teams. And the talk is wonderful.

But I need to know, where is the beef?

I think the system, even though on paper it looks good, but the

cargo is what I am concerned with, I am really concerned with. The

fact is the amount of tonnage and cargo that is coming into this

Country that we are not inspecting. And even some of this going

out, that comes into the port. Everybody on this Committee, they

have visited the ports, they know what is going on.

What concerns me more than anything else is the Bush Administration misleading the public that the Coast Guard, which you are

doing the best you can with the dollars that you get, is out there

protecting the ports. And you do not have complete responsibility,

because you just explained to us, it is a team effort, and I do know

that there are some problems with part of your team.

What about your communications system? Have we beefed that

up? Can you all talk to each other?

Admiral CROSS. Yes, ma’am, we can. And as elements of our

Deepwater program and Rescue 21 program, we are going to be

much improving our ability to talk to each other.

Ms. BROWN. Can you talk to the other agencies? We saw what

happened on 9/11, and we saw what happened with Katrina. One

of the major problems was communication. Is the system online?

Admiral CROSS. The new Rescue 21 project that is ongoing is

going to give us the ability to do that much better than we can do

it now. In fact, a really bright spot in that particular project was

the fact that we deployed a number of mobile communication sites

into Louisiana and Mississippi and other locations. We were very,

very pleased at how well those mobile sites worked for us.
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Ms. BROWN. Thank you, Mr. Chairman. I want to say again that

you are the only bright spot in this Administration.

Mr. LOBIONDO. I want to get back on the Transportation Worker

Identification Card for a moment. We recently had a Subcommittee

hearing focusing in on this. I still can’t understand the reason for

the delays. Admiral Cross, you stated that you believe this is one

of the highest priorities, did I understand you right?

I don’t know if you can give any insight. I know that you are not

directly responsible for this in the Coast Guard. But once this is

implemented, you would be the enforcing agency, if there is a violation at a port?

Admiral CROSS. I don’t know that, sir. I will be happy to answer

that for the record.

Mr. LOBIONDO. You, you meaning the Coast Guard, how involved

are you or were you with the implementation of the pilot projects

in setting up this TWIC card?

Admiral CROSS. Sir, I don’t know how involved we were. I am not

sure we were or not.

Mr. LOBIONDO. So you are not aware of the reasons for the major

delays in the implementation of this?

Admiral CROSS. No, sir, I am not.

Mr. LOBIONDO. If there is anything you can get back to us on

from a Coast Guard perspective with Coast Guard input to TSA

over this whole issue, because I respectfully disagree with you that

is their highest priority. If it were their highest priority, we would

not have been delayed up to this point. If it were their highest priority, they would have funded it in the budget and not just asked

for funding for writing of the rules and regulations. There is no

funding in place.

This is a fundamental, I think, pretty simple and fundamental

requirement for port security that right now, if I understand you

correctly, while you have been doing some background checks, folks

who are coming into our ports, what identification are they showing? Does Coast Guard have any responsibility in checking anything in that respect?

Admiral CROSS. The identification in most ports is simply a picture i.d. from a State or Federal agency. I think that is what we

are using in most ports.

Mr. LOBIONDO. That is not very comforting.

Chairman Blust, in light of the discussions we have had concerning homeland security and how you all fit into this, did the Federal

Maritime Commission participate in any way or comment on the

highly publicized sale of these port operations that we are discussing, to your knowledge?

Mr. BLUST. Mr. Chairman, as far as the SIFIUS side of it, no,

we did not. That was handled by the lead administrative groups.

I do not recall that any requests were made to us for additional information. We, in our normal monitoring of the industry, watched

the bidding process and the conclusion of the agreement to purchase. I can tell you that P&O ports, the existing company in the

U.S., has been most cooperative in working with us and information that we have asked, they have been willing to provide.

Mr. LOBIONDO. Mr. Filner, do you have anything additional at

this point?
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Mr. FILNER. No, thank you, Mr. Chairman.

Mr. LOBIONDO. Commissioner Winstead, your testimony stated

that the GSA is planning for the Coast Guard to occupy the new

facility at St. Elizabeth’s by 2010. And yet also states, at the same

time, GSA plans to acquire land to construct access to the facility

only in 2010 to get through 2015.

Have the agencies, you talked about the planning, but I am still

unclear, have the agencies developed plans to provide reliable and

efficient transportation access to the new facility? That is of great

concern to this Committee.

Mr. WINSTEAD. Sure, Mr. Chairman. Let me just mention, being

a part of this hearing and obviously hearing the critical role the

Coast Guard has, knowing of it, we are here obviously to provide

and move forward on this planned new headquarters in a very cost

effective manner, to do so to provide both a new facility and to do

so with as little burden as we can to the Coast Guard budget.

In regard to the site itself, we do, as you mentioned, we have had approved both fiscal year 2006 funding for two activities, about $24

million to begin design for the 1.3 million square foot headquarters

and also about $13 million to begin repairing and upgrading infrastructure on the site. In my testimony, I mentioned the substantial

effort being put to coordinate with D.C. DOT, WMATA Metro,

Maryland as well and other road authorities, to look at and actual

improvements going into place to meet those new access.

There are basically four that I would mention, some of which are

funded, fully funded, some of which we are getting funding for. One

is the 11th Street Bridge and replacement. That is fully funded at

a quarter of a million dollars, completion by the year 1011. South

Capitol Bridge replacement and roadway improvement, which is

partially funded, there is $148 million that has been appropriated,

and a total cost of about $365 million. Those projects, the draft

EISs are expected this summer, summer of 2006, and completing

those projects by 2015.

Also access to Martin Luther King, negotiating currently with

the National Park Service, and access to the Firth Sterling, which

we anticipate we will be requesting $5 million for land acquisition

and road construction for that portion. So we are going to be requesting that in fiscal year 2008, to meet those improvements, to

have them in place before we would open the campus.

Mr. LOBIONDO. Thank you.

Master Chief, can you tell us a little bit about what you believe

the Coast Guard’s personnel priorities are at this point?

Master Chief WELCH. Yes, sir, I can, Mr. Chairman. Our primary

responsibility to our work force is to ensure that they are of the

right size and that they are properly equipped to perform their

mission safely and efficiently and repetitively. We have made great

progress on those two fronts with the support of this Subcommittee.

Aside from the right size of the work force and the right equipping of our work force, we have several quality of life initiatives

that are very important for us to pursue. I mentioned the major

ones in my verbal statement. Housing is a very large issue. Our

housing authorities are going to expire next year. Without those

authorities, or authorities commensurate to what DOD has, we are
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not going to be able to make progress in our pursuit to privatize

our housing, for example.

Child care is problematic. That is not just a Coast Guard issue,

that is a nationwide issue that is going to require some tough decisions within the base if we are ever going to have any hopes of providing some relief to our people with children. And we will do that.

But those are clearly the top of the top, Mr. Chairman.

Mr. LOBIONDO. Thank you.

I guess we are coming to a conclusion with this. In closing, let

me say that we have a great deal of frustration, not so much with

the Coast Guard, but with the overall implementation of our port

security measures, because it is a conglomeration of agencies that

are involved.

The emphasis that has been put on aviation security, maybe

rightfully so, but if we total everything up, we are probably at the

$20 billion, $25 billion range altogether. We are less than $1 billion

with port security grants. I am very disappointed that the Administration has not forced TSA to fully fund the TWIC implementation,

that we are not recognizing the port security grant needs and those

things that are necessary for the Coast Guard to fully implement

the challenges that we have laid out for you.

I want to reiterate that you have done a magnificent job with the

resources you have been given. But some of these issues where we

just can’t seem to get answers, I am hopeful that this renewed

focus on port security and maritime anti-terrorism in light of the

proposed sale to Dubai will help focus other members of Congress

on the overall needs of the Coast Guard and our need to demand

some answers and some action on some very important issues.

Admiral Cross and Master Chief, I am sure you will miss sessions like this after you are gone. We will certainly miss you. But

we will, the Subcommittee will pick up next week on further questioning on the Dubai situation and the Committee stands adjourned.

[Whereupon, at 12:12 p.m., the subcommittee was adjourned.]
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