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75–573 PDF 2012

EVALUATING INTERNAL OPERATION AND IMPLEMENTATION OF THE CHEMICAL FACILITY 

ANTI–TERRORISM STANDARDS PROGRAM 

(CFATS) BY THE DEPARTMENT OF HOMELAND 

SECURITY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENVIRONMENT AND THE 

ECONOMY 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

FEBRUARY 3, 2012 

Serial No. 112–111 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

Vice Chairman 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

CHARLES F. BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY

JOHN SHIMKUS, Illinois 

Chairman 

TIM MURPHY, Pennsylvania 

Vice Chairman 

ED WHITFIELD, Kentucky 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

JOHN SULLIVAN, Oklahoma 

CHARLES F. BASS, New Hampshire 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

BILL CASSIDY, Louisiana 

CORY GARDNER, Colorado 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

GENE GREEN, Texas 

Ranking Member 

TAMMY BALDWIN, Wisconsin 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

FRANK PALLONE, JR., New Jersey 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

JOHN D. DINGELL, Michigan 

HENRY A. WAXMAN, California (ex officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. John Shimkus, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 4 

Hon. Gene Green, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 6 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 7 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 9 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 10 

Hon. G.K. Butterfield, a Representative in Congress from the State of North 

Carolina, prepared statement ............................................................................. 49 

WITNESSES

Rand Beers, Under Secretary, National Protection and Programs Directorate, 

Department of Homeland Security ..................................................................... 11 

Prepared statement .......................................................................................... 13 

Answers to submitted questions ...................................................................... 54 

David M. Wulf, Deputy Director, Infrastructure Security Compliance Division, 

Office of Infrastructure Protection, National Protection and Programs Directorate, Department of Homeland Security ......................................................... 23 

Prepared statement .......................................................................................... 24 

SUBMITTED MATERIAL

Majority memorandum ............................................................................................ 50 

(1) 

EVALUATING INTERNAL OPERATION AND IMPLEMENTATION OF THE CHEMICAL FACILITY ANTI–TERRORISM STANDARDS PROGRAM (CFATS) BY THE DEPARTMENT OF 

HOMELAND SECURITY 

FRIDAY, FEBRUARY 3, 2012 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 9:33 a.m., in room 

2123 of the Rayburn House Office Building, Hon. John Shimkus 

(chairman of the subcommittee) presiding. 

Members present: Representatives Shimkus, Murphy, Pitts, 

Bass, Latta, Harper, Cassidy, Gardner, Barton, Walden, Green, 

Butterfield, Barrow, Pallone, Capps, Dingell, Waxman, and Markey. 

Staff present: Charlotte Baker, Press Secretary; Anita Bradley, 

Senior Policy Advisor to Chairman Emeritus; Jerry Couri, Senior 

Environmental Policy Advisor; Andy Duberstein, Assistant Press 

Secretary; Dave McCarthy, Chief Counsel, Environment and the 

Economy; Andrew Powaleny, Assistant Press Secretary; Chris 

Sarley, Policy Coordinator, Environment and the Economy; Peter 

Spencer, Professional Staff Member, Oversight; Alex Yergin, Legislative Clerk; Jacqueline Cohen, Democratic Counsel; Greg Dotson, 

Democratic Energy and Environment Staff Director; and Caitlin 

Haberman, Democratic Policy Analyst. 

Mr. SHIMKUS. The subcommittee will now come to order. We 

would like to welcome our panel, and I would like to begin with an 

opening statement. 

OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

In my time serving in Congress, I have learned, as oftentimes is 

the case, that the initial problem isn’t as big a deal to people as 

a poor explanation of a problem can be. Further, cover-ups are the 

best hope of people who know they are in the wrong and the worst 

move for those who get found out. People who try to hide problems 

or minimize their existence usually face a swifter and more ferocious corrective response from Congress and the public than if they 

had simply come clean. 

It is with great surprise and disappointment that I read the internal memorandum about the operation of the division impleVerDate Aug 31 2005 10:33 Aug 21, 2012 Jkt 037690 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\112-11~2\12-111~1 WAYNE
2 

menting the Chemical Facility Anti-Terrorism Standards Act 

(CFATS) and its program at the Department of Homeland Security. 

I, for one, have historically been a strong supporter of this program. I believe the statute is sound and the regulations reasonable. 

In fact, the Anderson Memo calls for only one legislative change: 

long-term extension of the program. 

The CFATS program was not meant to be another EPA-style program designed to fine people or a bureaucratic back door to overregulate chemicals. CFATS was meant to be a collaborative effort 

to secure ‘‘high risk’’ facilities with facility-appropriate measures 

based upon the risks presented. Congressional intent was that cooperation would get facilities into compliance; we did not intend to 

increase Federal revenues through enforcement actions. I hope 

DHS is not looking to abandon our original intent. 

Last March, I acknowledged CFATS was a work in progress, but 

I felt security was being enhanced and significant public and private investments were being made to implement the program. I 

still believe security at facilities with chemicals is much better 

today than before Congress gave DHS this first ever regulatory authority. Unfortunately, my confidence in DHS and the substantial 

amount Congress has given to it is not nearly as strong. 

Someone compared CFATS to an unmanned police car positioned 

at the side of the highway. It wards off speeders, but not much 

else. We need to be reassured that DHS’s CFATS program has a 

plan and intends to focus solely on correcting its internal problems, 

implementing the CFATS program as drafted in law, and not suggesting the CFATS program should take on any other additional 

responsibilities. I mean, they better first do the responsibilities designed under law than to take on additional ones, such as drinking 

water or IST issues. 

CFATS is an appropriate component of this subcommittee’s jurisdiction, and the days of matador oversight of this program are over. 

I urge all members of this committee to join me in that effort. 

As a fellow U.S. military officer, I have tremendous respect for 

Under Secretary Beers’ service to this country. That said, he and 

I have been taught that there are only three acceptable responses 

when questioned by an officer: ‘‘yes, sir;’’ ‘‘no, sir;’’ and ‘‘no excuse, 

sir;’’ or ‘‘sir, I don’t understand.’’ Four. I expect no less than that 

today. 

I want to welcome Under Secretary Beers and Deputy Director 

Wulf, who along with Director Penny Anderson showed great courage with the frankness of the internal memo. Mr. Wulf, both of you 

should know that the committee takes very seriously any evidence 

of undue pressure, influence, intimidation or retaliation whatsoever, because of your testimony today while we continue to investigate these important issues. In other words, we really do appreciate this internal memo. I think it has been very, very helpful and 

we want to ensure those who came forward are not penalized for 

that. Please let my committee staff know right away if you have 

any concerns. Retaliation and intimidation of Congressional witnesses is illegal and will not be tolerated. 

Mr. Beers, I trust you will ensure that you are in agreement with 

me that no retaliation should be tolerated, and we will hold you 

and any other White House officials accountable to that. 

3 

[The prepared statement of Mr. Shimkus follows:] 

4 


75573.001
5 


75573.002
6 

Mr. SHIMKUS. With that, I now yield to the distinguished ranking 

member from Texas, Mr. Green, for 5 minutes for the purpose of 

offering his opening statement. 

OPENING STATEMENT OF HON. GENE GREEN, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. GREEN. Thank you, Mr. Chairman, for holding the hearing 

today. 

Under Secretary Beers requested an internal memo on the status 

of the CFATS program and recommendations for improvement in 

the summer of 2011. This memo was delivered to Mr. Beers in November of 2011, and it leaked to the media and detailed in a story 

on December the 23rd, 2011. I must say, when I read the internal 

memo, I was surprised and dismayed by the level of dysfunction 

and the lack of progress within the CFATS program. I am also 

amazed that during this time, the subcommittee discussed CFATS 

program this year during our work on H.R. 908, the Full Invitation 

of the Chemical Facility Anti-Terrorism Standards Act. We were 

simply unaware of the severity of the situation within DHS and the 

CFATS program. The portion of the internal memo as related to 

challenges to implementing these priorities—I won’t go into all the 

details, but it seems to me the root of the problem lies with the fact 

that DHS has hired people that are unqualified for their positions 

and was prohibited from hiring appropriate and qualified individuals, and they had no training program to help those folks who 

were unqualified. These inappropriate hires, along with a lack of 

proper training of the employees, has forced DHS to instead of reassigning inappropriate employees, rely on contractors to do work 

that should be done by the Agency. 

The internal memo outlines several priorities of the program, including the process for the review of the site’s security plans. Unfortunately, at the time of the memo, DHS had received 4,200 site 

security plans and not a single plan was approved. 

I know that DHS is working to clear up all the Tier 1 facilities, 

but it has been 6 years since the program was enacted and we 

haven’t even cleared the low level facilities. They decide how to 

conduct compliance inspections and preparing staff to do the inspections. To date, DHS has conducted not a single compliance inspection. Not that any of my industries that I represent along the 

Houston Ship channel are looking for an inspector to come knocking on the door, but they are—they have been working to comply 

and they have made substantial private investment. In some cases, 

we actually were able to see grants through DHS for Homeland Security protection and our plant protection. 

But I must say that this proposal reinforces problems identified 

in the internal memo, which mostly revolve around the fact that 

DHS is constantly making things more complicated than they need 

to be, and not relying on existing systems, such as the TWIC card, 

to work. What I am speaking about is developing the personnel 

assurity programs. DHS transmitted a new personnel assurity program to OMB, and I have some concerns about this problem—this 

proposal, and will discuss that later. One, because at earlier hearings in this subcommittee, I felt like I had some assurances that 

the TWIC card would be used as a standard ID for someone workVerDate Aug 31 2005 10:33 Aug 21, 2012 Jkt 037690 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 F:\112-11~2\12-111~1 WAYNE
7 

ing whether it be in waterside or land-based industry under 

CFATS. My concern is additional personal security programs will 

make the duplication of the CFATS. So that is one thing our committee needs to look at. 

Last year at the subcommittee hearing, I asked Under Secretary 

Beers if the Department intended to integrate TWIC into the personnel assurity program and I received a positive response, and 

yet, the proposal does not make clear that TWIC is an acceptable 

background check. Quite frankly, now is not the time for DHS to 

go reinventing the wheel when implementing the personnel 

assurity program. The memo also includes the Agency’s planned response, including a plan of action for 85 items. 

I look forward to hearing from the witnesses today to confirm, 

but I believe several of the action items haven’t initiated or completed. To say the least, I am disheartened by the lack of progress 

in the CFATS program, which seems to stem directly from lack of 

appropriately assigned and trained employees and serious lack of 

moral in the program, which seems to stem from the fact that no 

one constantly knows if the program will be reauthorized by Congress. Chemical facility security is surely important to the protection of our public health, and particularly in the district I represent. I represent the Houston ship channel, which is the heart of 

the petrochemical complex that stretches from the Texas Gulf 

Coast and produces more products essential to modern life. It is 

also the largest petrochemical complex in the country. I can’t stress 

how important the success of CFATS is to my constituents who are 

the employees and live in the communities that surround these facilities. They deserve the best security standards possible to prevent the act of terrorism on U.S. soil. 

Our role today is to listen to our witnesses and get a better understanding of the problem, and see how Congress can assist. The 

Agency recommends several legislative fixes, and I am hoping we 

have—we on the committee can work together and find a compromise on how to assist DHS, after hearing their suggestions and 

hearing from our stakeholders. The program is too important to our 

national security to be this much in distress. 

Mr. Chairman, thank you for the time and I yield back. 

Mr. SHIMKUS. The gentleman yields back his time. 

The chair now looks to the—to my colleagues on the right, if anyone would like time for an opening statement. Hearing none, the 

chair would like to recognize the ranking member of the full committee, Mr. Waxman, for 5 minutes. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you, Mr. Chairman, for calling on me, and 

more importantly, for holding this hearing to examine the implementation by the Department of Homeland Security of the Chemical Facility Anti-Terrorism program, or Standards. The letters 

have been made into a shorthand called CFATS. This program is 

intended to address the threat of terrorism to the Nation’s chemical 

facilities. We will hear testimony about its successes. But we are 

also going to hear about the program’s many challenges. 

8 

The CFATS program was established in 2006. Now, almost 6 

years later, it is clear that implementation has stumbled because 

of serious challenges and limitations in the program. 

Under Secretary Beers will testify about a detailed report that he 

received in November of last year. This report takes the form of a 

memorandum, and DHS has also provided it to the committee. It 

paints a stark picture of this program. According to this memorandum, the program has been plagued by personnel issues, budget 

issues, and statutory limitations. 

The challenges described in the memo are serious, and they must 

be addressed. 

Department of Homeland Security has a plan to address the 

identified problems, and that plan deserves our careful scrutiny. 

This is a crucially important effort and we must get it right. 

In some ways, the odds have always been stacked against this 

program. This program was created by a provision not authorized 

by this committee, but a rider on an appropriations bill. The program was not established with carefully crafted legislation that defined its mission and forged a vision for its implementation. 

It did not have adequate enforcement authorities, enforceable 

deadlines, or clear procedures for approving or disapproving site security plans. It never even had an authorization. 

And in some ways, it is fortunate that we have learned of these 

problems when we have, because this committee can now return to 

this issue and do the hard work of understanding where the problems are and determining how to fix them. 

It is stunning to realize that this committee of Congress, which 

has jurisdiction over this issue, reported legislation that simply 

rubber-stamped the current program for 7 additional years. We 

didn’t really know how the program was working. We didn’t give 

it any guidance. We didn’t do our job, and that legislation needs 

to be revisited in light of this new information. 

I look forward to the testimony of Under Secretary Beers and 

learning more about the Department’s efforts to get this program 

on track. The Department can take constructive actions, but it can 

only do so much. They cannot address shortcomings in the underlying statute. That task falls to us as the committee of jurisdiction 

and the committee that should have been involved in crafting the 

original provision. That is a responsibility we must take very seriously. 

I hope today’s hearing will be part of an ongoing effort by this 

committee to address these serious challenges facing our chemical 

facility security program. This is an important issue. It deserves 

our attention. 

In the last Congress, when I was chairman of the committee, we 

were working on a bipartisan basis. We brought in all the stakeholders to craft legislation to authorize the program. It was a major 

undertaking. We brought in industry, we brought in labor, we 

brought in everybody else that had a concern about this issue. We 

were consulting everyone throughout the process. That is the type 

of undertaking we should begin anew, because what we saw this 

last year was not a furtherance of examination of the program, but 

simply saying oh, it is already in effect for 6 years. We will continue it down the road and we hope it will do a good job. We have 

9 

got more work to do than just sending our best wishes for the long 

period of authorization without doing a thorough examination to 

figure out how we can make this program work the way we intended it to and the way it must to protect the security of the 

American people. 

Thank you, Mr. Chairman. I yield back the time. 

Mr. SHIMKUS. And I thank you, Mr. Waxman, for your statement. 

I would like to yield, with the permission of the committee, to 

Mr. Barton for 5 minutes, but before I do, I would just like to say, 

based upon my opening statement, I think Mr. Waxman’s response 

was pretty much what I said. When problems are hid, you are 

going to face a swifter and more ferocious corrective response by 

Congress, and that is really part of that concern. I would also say, 

we did have a hearing prior to the markup of that bill where Department of Homeland Security said things were going well. Obviously—and industry——and obviously, that is not the case, either. 

So with that, I would like to yield 5 minutes to the chairman 

emeritus, Mr. Barton. 

OPENING STATEMENT OF HON. JOE BARTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BARTON. Thank you, Mr. Chairman. I am not sure I will take 

that time, and if I don’t, I am happy to yield it to anybody else that 

you wish it to be yielded to. I do appreciate you for holding this 

hearing, you and Mr. Green, on the Chemical Facility Anti-Terrorism Standard Program, which has the acronym CFATS. 

Back in March of last year, we discussed the concerns and dissatisfaction that the program had not met its goals. This program 

was set up to serve and protect the companies and the general public against the potential threat of terrorist activity. I was chairman 

of this committee back in the 109th Congress, and one of the authors of the Chemical Facility Anti-Terrorism Standard Act that 

was included as Section 550 of the Department of Homeland Security’s appropriation act for 2007. 

The intent was very clear. It was for the safety of the Nation’s 

businesses and its citizens against the threat of terrorism in these 

types of facilities. I understand that the program has got many facets and that the orchestration of a thorough implementation plan 

at an expedited pace could have challenges. What I don’t seem to 

understand is how the Under Secretary could be so unaware for so 

long of so many of the internal problems. Why have employees 

been hired in managerial positions who don’t have the skill set to 

fulfill their jobs? Why has it taken 3 years to start addressing the 

internal managerial staff training and implementation problems? 

The industry has invested billions of dollars to upgrade security to 

meet the CFATS requirements. This is beyond disappointing. You 

have totally mismanaged this program, Mr. Under Secretary. We 

have spent about $90 million a year, and we have no well-developed direction and no plan. 

It is my understanding that you have received over 4,200 site security plans to date, but not even one has been approved. Now, we 

have our differences on this committee and this subcommittee, and 

there were differences between the Democrats and Republicans 

10 

when this bill was put into law, but there is nobody, no one, regardless of political affiliation that says if you receive 4,200 site security plans, you don’t even get one approved? Not one? I mean, 

when I read that a couple of days ago, I was just astounded. Your 

own national protection and programs directorate have prevented 

you from hiring personnel with the experience and qualifications to 

review these programs and to conduct the compliance inspection. 

You have allowed the hiring of inappropriate staff and have not 

taken control of your own infrastructure security compliance division to fix this problem, and it has been 3 years. The administration of the CFATS program must be fixed immediately to provide 

stability to the program and regulatory assurance to thousands of 

covered facilities, many of whom are members of the Society of 

Chemical Manufacturing and Affiliates Alliance, SOCMA. They 

have invested heavily in security measures over the past 5 years 

to attempt to be in compliance. 

I have to say one good thing. Your office has been open and candid and transparent in providing the internal memoranda for committee staff to review. That is one positive checkmark in your column. Having said that, everything else is in the negative and everything else is black. It is time to get this thing done. If you can’t 

do it, resign. If there are things that need to be fixed, tell us and 

we will try to do it. I think Mr. Waxman’s opening statement was 

very good, as was Mr. Shimkus’s, which I wasn’t here to hear, but 

I did read. 

With that, Mr. Chairman, I have got a minute left if you want 

me to yield it. 

Mr. SHIMKUS. Let me reclaim that time and look to Chairman 

Emeritus Dingell to see if he would like to use the remainder of 

your time. 

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. DINGELL. Most briefly, Mr. Chairman. Thank you. 

I want to welcome our two witnesses and our panels today, Secretary Beers and Mr. Wulf, and I want to commend you for having 

this hearing. I want to note that it is being conducted in a bipartisan fashion, something which merits high praise around this 

place. Having said that, I look forward to the results of the hearing 

today. I would note that I have a number of these facilities in my 

district, and when they let go, as one did not long back, it causes 

lots of excitement and can cause significant numbers of casualties 

and enormous hardships on the communities in which the facility 

might exist. So your labors and your leadership, Mr. Chairman, are 

much appreciated and I look forward to the hearing going forward 

in the spirit in which it has begun, and in the hopes that we will 

be able to see to it that we get these programs of widely differing 

character under different agencies in the point where they are pulling together and working together to accomplish the great purpose 

of seeing to it that we have safety and security for the country. 

Thank you, Mr. Chairman. 

Mr. SHIMKUS. Thank you, Mr. Dingell. 

11 

With that, the chair calls forward today’s witnesses, the Honorable Rand Beers, the Under Secretary of National Protection and 

Programs Directorate at the Department of Homeland Security, 

and Mr. David M. Wulf, who is Deputy Director of Infrastructure 

Security Compliance Division, Office of Infrastructure Protection, 

National Protection and Programs Directorate at the U.S. Department of Homeland Security. 

As you know, the testimony that you are about to give is subject 

to Title 18, Section 1001 of the United States Code. When holding 

an investigative hearing, this committee has the practice of taking 

testimony under oath. Do you have any objection to testifying 

under oath? 

The chair then advises you that under the rules of the House and 

the rules of the committee, you are entitled to be advised by counsel. Do you desire to be advised by counsel during your testimony 

today? 

In that case, if you would please rise and raise your right hand, 

I will swear you in. 

[Witnesses sworn.] 

Mr. SHIMKUS. You may now be seated, and it is my understanding that the only opening statement will be given by you, Mr. 

Secretary, and Mr. Wulf is here to answer questions with regard 

to the internal? They are both going to give it, OK. Change in direction from last night, so Mr. Beers, if you would then—you are 

recognized for 5 minutes to give your opening statement. 

TESTIMONY OF RAND BEERS, UNDER SECRETARY, NATIONAL 

PROTECTION AND PROGRAMS DIRECTORATE, DEPARTMENT 

OF HOMELAND SECURITY; AND DAVID M. WULF, DEPUTY DIRECTOR, INFRASTRUCTURE SECURITY COMPLIANCE DIVISION, OFFICE OF INFRASTRUCTURE PROTECTION, NATIONAL PROTECTION AND PROGRAMS DIRECTORATE, DEPARTMENT OF HOMELAND SECURITY 

TESTIMONY OF RAND BEERS 

Mr. BEERS. Thank you, Chairman Shimkus and Ranking Member Green, and distinguished members of this committee. I am 

pleased to be here before you today to discuss the Department of 

Homeland Security’s efforts to regulate the security of high-risk 

chemical facilities under the Chemical Facility Anti-Terrorism 

Standards Act. 

As you all are aware, the Department’s current statutory authority to implement CFATS came about, as mentioned earlier, in Section 550 of the fiscal year 2007 appropriations act, and it has been 

amended recently to extend that authorization until October 4 of 

2012. I believe strongly in the CFATS program, and I welcome the 

opportunity to continue to work with this committee, with the Congress, and levels of government and the private sector to further 

improve this vital national security program. 

Since the inception of CFATS, we have issued a basic rule, we 

have defined chemicals of interest, we have jointly conducted two 

surveys with industry to define the facilities that have a substantial enough quantity of chemicals that caused them to be determined could be at high risk. After receiving the initial submissions 

12 

from more than 40,000 facilities that might potentially be under 

the program, we have narrowed that down now to about 4,500 covered facilities. And in the process of doing that, more than 1,600 

facilities which would have fallen under the program and 700 facilities—1,600 facilities have totally removed their chemicals of interest and 700 have reduced them to the point that they are no 

longer under the program. So I think we can say that these actions 

represent some of the successes have happened with respect to this 

program and the adoption of the regulation. So I think we can say 

that there has been a reduction in risk throughout the Nation, and 

that the Nation has correspondingly been made more secure. 

The Department has done much work over the past few years to 

establish and implement this unprecedented program, but as the 

report suggests and as we acknowledge, CFATS still has a number 

of challenges to address. In recognition of this and upon the arrival 

of Penny Anderson and David Wulf, I asked both of them to provide for my consideration the views on the successes and challenges 

of the program. Candid, honest assessments and challenges to the 

program. These kinds of assessments are extraordinarily valuable 

tools that we need in order to evaluate progress and to determine 

where improvement is needed. Furthermore, in an unprecedented 

program like CFATS, course corrections are to be expected and ongoing decisions will need to be made. 

In late November of 2011, a detailed report was hand delivered 

to me. It is important to note that in addition to the referenced 

challenges, the report also proposed for my consideration a charted 

path that will address those challenges. Specifically, the report included an action plan with detailed recommendations for addressing the issues identified, and we have shared those recommendations with this committee. Since my receipt of this report, each of 

the nearly 100 items in the action plan have been assigned to a 

member of the program’s senior leadership team and I have already seen progress on these issues. For accountability planning 

tracking purposes, the members of the leadership team have been 

asked to provide milestones and a schedule for completion of each 

task assigned to them. The program’s acting chief of staff will monitor that progress. In addition, program leadership now meets with 

my principal Deputy Under Secretary, Suzanne Spalding, at least 

once a week to provide status updates to this program. 

Mr. Chairman, let me assure you, there will be no retaliation to 

the people who wrote this report who have served me and you and 

this Nation by frankly telling us where we had challenges and 

what we need to do about it, nor will I tolerate any retaliation between me and the office director and her deputy. You have my 

pledge on that and I expect to be held accountable to that issue. 

The Department does take its responsibilities for CFATS and the 

Nation’s security seriously, and we are going to move forward both 

quickly and strategically to address the challenges before us. 

Again, we believe that CFATS is making the Nation safer and we 

are dedicated to its success. We will make the necessary course directions to improve the program to protect the Nation. 

Thank you for holding this important hearing, and I will be 

happy to answer any of your questions. 

[The prepared statement of Mr. Beers follows:] 

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Mr. SHIMKUS. Thank you. 

Now I would like to recognize Mr. Wulf for 5 minutes. There 

might be a button. There you go. 

TESTIMONY OF DAVID M. WULF 

Mr. WULF. I would also like to thank the members of the committee for the opportunity to testify before you today. 

In July of last year, Penny Anderson and I assumed our positions 

as deputy and deputy—director and deputy director, respectively, 

of the Infrastructure Security Compliance Division, or ISCD, the 

division within NPPD that manages the CFATS program. In response to the Under Secretary’s request that we provide a fresh 

perspective on the program, Penny and I produced an internal assessment of what we see to be the essential priorities, challenges, 

and action items necessary to the success of the program. Both 

Penny and I feel strongly that while the challenges we have identified are not insignificant, they also are not insurmountable. I welcome the opportunity to answer any questions you might have on 

the background and context behind the challenges we cited, but I 

would also like to echo the Under Secretary’s focus on the action 

items. 

We have already made tangible progress in addressing some of 

the challenges in the report. One issue identified in the report is 

ISCD’s ability to complete facility’s site security plans—site security plan reviews in a consistent, reasonable, and timely fashion. 

To help overcome past difficulties in meeting this challenge, ISCD 

is utilizing an interim review process that allows the Department 

to authorize Tier 1 facility plans in a more effective and timely 

manner. Using this interim approach, over the past few months 

ISCD has been able to more than quadruple the number of conditionally authorized plans. Specifically, throughout all of 2010 and 

through November 28, 2011, we had conditionally authorized 10 

site security plans. In the subsequent 2 months leading up to January 23 of this year, we conditionally authorized an additional 43 

Tier 1 site security plans. ISCD expects to complete our review of 

all Tier 1 site security plans and to notify the facility’s of ISCD’s 

decisions on those plans within the coming months. ISCD also expects to begin issuing authorizations to Tier 2 facilities during fiscal year 2012. While this interim review process is underway, we 

are also working on an even more efficient long-term approach to 

site security plan reviews for facilities in Tiers 2, 3, and 4. 

This is one example of how we have identified programmatic 

issues such as the lack of an efficient site security review process 

and found workable solutions to ensure near-term improvements 

and progress, as well as the long-term success of CFATS. While not 

every action item will have a near-term or simple solution, what 

I can tell you is that I am very proud to represent the hardworking 

men and women of the CFATS program and I am confident in our 

ability to address these challenges together. 

I welcome your questions and look forward to working together 

to further the success of this important national security program. 

[The prepared statement of Mr. Wulf follows:] 

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Mr. SHIMKUS. Thank you, Mr. Wulf. What I would ask—I am 

looking also at the staff, I don’t think we have a copy of that and 

some members may want to refer to that, so if I can get staff to 

grab a copy of that and get it copied so that we can distribute it, 

because we did have the Under Secretary’s opening testimony for 

the record. 

With that, I would like to recognize myself for 5 minutes to begin 

questions. I am going to bounce around a little bit, but the first 

one, we are in a very fiscally constrained environment, Under Secretary, as you understand, and with the challenges that are going 

to occur to our military, 45 billion to 90 billion a year that could 

be cut, we at the national level are going to be looking for everywhere we can go to try to adjust dollars so that we can meet the 

needs of the primary role of some of the Federal Government’s operations. 

So let me start with just this whole—this budget type question. 

The Anderson-Wulf memo states on page 15 that ISCD lacks a system for tracking the usage of consumable supplies which creates an 

environment for fraud, waste, and abuse. Our concern is this not 

an IG or GAO saying that, this is a program manager describing 

their own program. How can a member of Congress choose to fund 

a program that is so self-described? 

Mr. BEERS. Let me begin the answer to that question and turn 

to my colleague here. The report notes these deficiencies in the program. We had asked for a management review of the program in 

December of last year. That program review was completed while 

this particular report was being prepared and was incorporated 

into the report, and the comments that you see are part of an effort 

by management at the most senior level—that means me—asking 

to make sure that, in fact, this program was working properly. 

I want to turn to Mr. Wulf now to talk about what we are going 

to do about these findings. 

Mr. WULF. I would just add that, you know, we did not find any 

actual indication of fraud, waste, or abuse with regard to the purchase and tracking of supplies. We found that a system was not in 

place, and it is something we have already moved forward to address. We—— 

Mr. SHIMKUS. Let me reclaim my time, and I—we know there are 

action items. We are going to move forward. But that is obviously 

a major concern that the—that we are going to have to deal with, 

not just the committee ourselves but our colleagues in this whole 

debate. So we will go ahead and follow this. I do appreciate the fact 

that you in July brought Ms. Anderson and Mr. Wulf on board. 

I guess a question would be since you have been on board, Under 

Secretary, since June 19, 2009, what took you so long to have an 

overview of this program? 

Mr. BEERS. The initial indications of concern surfaced in the following year. Prior to that, I had definitely had the sense that the 

program was an evolving program, that changes were being made, 

but they were being made in due course with appropriate diligence 

by the program managers. In July of 2010, I discovered a discrepancy in the way that people were being paid within the program, 

and moved at that point to correct it. In the fall of 2010, we posted 

an announcement to—— 

27 

Mr. SHIMKUS. And let me—not to be disrespectful, just to move 

to another question, because the timeline is kind of important for 

us because you testified before us March 31 of 2011 and statements 

were made. Again, that is—my comments back to Mr. Waxman 

was, you know, we were given a pretty good signal that things 

were going well. There were small problems but nothing major. 

One of the questions I asked you was about the high-risk tiering 

process and the reasons for a drop in the number of those facilities 

tiered. This is—at that time, I was not aware of any mis-tiering 

problem. Were you? 

Mr. BEERS. No, I was not, sir. 

Mr. SHIMKUS. And that is—if not, when did you first learn about 

the tiering problem? 

Mr. BEERS. I first learned about the tiering problem in the beginning of June of this last year. 

Mr. SHIMKUS. Was it the earliest time, to your knowledge, that 

DHS personnel discovered that some facilities have been mis-tiered 

was the month that you had given? Was there—in other words, 

were there other folks within the Department that knew that this 

tiering process was all messed up? 

Mr. BEERS. There was an indication in May of 2010 that there 

might be a problem with respect to tiering. The individuals within 

the office looked at the problem and felt that they had resolved the 

problem and informed people up the chain of command. I did not 

know that there was a problem at that point in time. I was not informed of that, and the program went forward from there. 

In 2011, with a new acting director of the office, he asked for a 

review of the program and he discovered that—or rediscovered this 

discrepancy issue and asked for a much deeper dive into that. That 

deeper dive is what resulted in the problem being identified to the 

assistant secretary and immediately to me. And that was in June 

of 2011. 

Mr. SHIMKUS. And my time is expired. Just so we can move forward, we are going to continue—obviously we are going to have to 

continue to do oversight over this process and I hope, if there are 

any relevant activities that folks within—under your office that 

have not been doing their job, that through the legal process of removal that some people can be held accountable, because I do think 

there are probably—if there wasn’t waste, fraud and abuse, there 

may have been. There may be theft and that would be helpful to 

understand that the government can correct bad actors. 

Now I would like to recognize Mr. Green for 5 minutes. 

Mr. GREEN. Thank you, Mr. Chairman. Secretary Beers, thank 

you for being here. 

As I said in my opening statement, it seems like the problems 

with—for the last 6 years is the inability to hire quality individuals 

and the lack of morale. I think some of that comes from having 

year to year reauthorization. Mr. Wulf said in his statement, but 

I apologize, none of us have a copy of your statement, Mr. Wulf, 

what has been done since the memo was released or since mid-December or since it was released on the 23rd, there has been some 

action that has been done that we haven’t heard about except this 

morning. 

28 

Mr. Beers, do you know Mr. Wulf’s statement about some of the 

things that have been done in the last month or so? 

Mr. BEERS. Yes, I do, sir. I want to start this response, but I also 

want Mr. Wulf to respond as well. We have looked at the training 

issues that were identified in the report. We have removed the impediment for hiring training officers within the program so that 

that can go forward, and we have begun to look at the training requirements in order to take the people who were hired who may 

not have adequate training for that position that they are in. But 

lastly, the other thing that we need to focus on here is we have to 

define what it is we, in fact, expect from our inspectors when they 

are doing the final site authorization inspections and when they 

are doing compliance inspections. David? 

Mr. WULF. I would add that, you know, we are very excited about 

the progress we have made in the past couple of months on the review of the Tier 1 site security plans. I believe the progress we 

have made in that regard and the statistics I mentioned are included in the written testimony as well. 

We have a very aggressive plan to move forward with the review 

of the site security plans and to conduct outreach and to get into 

the reviews of the lower—— 

Mr. GREEN. OK. I know you gave some hard numbers. I only 

have 5 minutes; in fact, it is down to 3 now almost. 

You gave some hard numbers on what has been done in the last 

30 days. Could you reiterate that? 

Mr. WULF. Absolutely. We started 2 months ago with 10 Tier 1 

site security plans that had been authorized. We are now at 53. 

Mr. GREEN. OK, and that is the only hard number that you gave 

in your testimony? Like I said, we don’t have your testimony and 

it is hard to go over something outside—— 

Mr. WULF. Absolutely, absolutely. So we have done—we have authorized 43 or conditionally authorized 43 additional Tier 1 site security plans. 

Mr. GREEN. OK, and—— 

Mr. BEERS. All those were taken from my testimony. Those facts 

are all in my written testimony. 

Mr. GREEN. OK, but was that based on actually site visits or is 

that from what has been provided by the companies? 

Mr. WULF. That is based on what has been provided by the companies, in some instances following compliance assistance visits 

conducted on the sites by our chemical security. 

Mr. GREEN. OK, let me get to another issue I have talked about. 

I mentioned about the personal security program which was submitted on June 14 of last year by OMB and listed as the third priority in the DHS memo. I am aware that we need to screen individuals against the terrorist screening database. As the proposed personnel security program would require each facility to submit background information on all existing personnel within 60 or 90 days 

upon implementation for existing personnel, any new unescorted 

individuals will not be classified as personnel will need, if they 

have a TWIC card, their information submitted to DHS within 24 

or 48 hours. 

In the real world, we went through a big roll out of the TWIC 

card a few years ago, and it was not as smooth as we would have 

29 

liked. In fact, I think there are 260,000 TWIC cards issued in our 

district in the port of Houston. And so when you are going to overlay it with a personal security requirement, what did the TWIC 

card not cover that you think we need now under the personnel 

assurity? Because I am concerned about reinventing the wheel, 

even though like I said, it wasn’t—the wheel didn’t run too well 

earlier, but it is running pretty well now. 

Mr. BEERS. Sir, let me clear up some perhaps misunderstanding 

of the way we intend to use the TWIC card. We will accept the 

TWIC card as a proof of a background check. We would like to 

know the names of the individuals who come onto the site who 

have TWIC cards in order to determine that the TWIC card is, in 

fact, still valid, but anybody who possesses a TWIC card, that will 

be the standard—that will be an acceptable standard, and anybody 

who might have access to getting a TWIC card can do so to use 

that in lieu of any other background check. 

Mr. GREEN. OK. I want to make sure that is what was submitted, because I have some concern about that. Sometimes what 

we hear and what even passes in law doesn’t get to the final stage. 

Was that submitted that the TWIC card would be the ID when 

submitted to OMB? 

Mr. BEERS. David? 

Mr. WULF. The leveraging of TWIC and other existing credentials is part of the—was part of the information collected and was 

submitted to OMB. 

Mr. GREEN. Well, I would feel comfortable seeing in writing what 

you said, Secretary Beers, about the TWIC card because again, we 

have thousands literally, I don’t know how many hundreds of thousands around the country that we don’t want to also have a breakdown in redoing something. And I know working with the industry 

and the bargaining units and everything else is something that 

ought to be important. 

And I know I am over my time, Mr. Chairman. I have a number 

of other questions I would like to submit if we don’t have time 

today. 

Mr. SHIMKUS. Without objection, I thank my colleague and I 

would like now to recognize Mr. Murphy from Pennsylvania, the 

vice chairman of the committee, for 5 minutes. 

Mr. MURPHY. Thank you, Mr. Chairman. 

Secretary Beers, the memo states that CFATS must build on— 

in its ability to critically evaluate itself and conduct mid- and longrange planning. So to that end, let me ask for your candid responses. Why was this not done until now? 

Mr. BEERS. I beg your pardon? By whom, sir? 

Mr. MURPHY. Why was some of this not done until now in terms 

of really evaluating itself? Was there anything that stood in the 

way of delaying this kind of self-evaluation? 

Mr. BEERS. No, sir, there wasn’t anything that prevented it. As 

I indicated to the—earlier, we have had several reviews. This is the 

most extensive one which we have asked for, but we have had several reviews over the course of the program since I became the 

Under Secretary. 

Mr. MURPHY. Let me—just for clarification, who sets the CFATS 

goals and objectives for each year? Who is responsible for that? 

30 

Mr. BEERS. I am sorry, sir? 

Mr. MURPHY. Who sets the CFATS goals and objectives for each 

year? Who is responsible for doing that? 

Mr. BEERS. Sir, the program directors provide those goals. They 

go up the chain of command to the assistant secretary and on to 

me. Ultimately, I am responsible for them. 

Mr. MURPHY. Are those public information, in terms of those annual goals and objectives? 

Mr. BEERS. I will have to check, sir. I don’t know whether that 

is public information. 

Mr. MURPHY. OK, and how do you measure those goals and objectives? Is that something you have in terms of internal documentation of how you review those? 

Mr. BEERS. Sir, let me ask David Wulf to answer that. 

Mr. WULF. There are established performance metrics that we 

prepare and send up the appropriate chains. The performance is 

measured with respect to things such as numbers of inspections 

conducted, percentage of inspections conducted as compared to the 

totality of the regulated community. 

Mr. MURPHY. Well clearly from the evaluations, things that you 

are talking about—and I add my comments to the chairman’s in 

terms of we appreciate getting your candor on these. But in addition is who would like know, are these factors—are these evaluations somehow factored into employee compensation, such as raises 

or bonuses? 

Mr. BEERS. Sir, as a general matter with respect to the entirety 

of NPPD performances factored into the issue of bonuses or promotions, Dave, do you want to add anything specifically? 

Mr. WULF. I would echo the Under Secretary’s sentiments. Meeting our performance goals is and will be a significant measure for 

us in assessing allocation of bonuses. 

Mr. MURPHY. Do you know if any of the CFATS employees or superiors received a bonus since 2009? 

Mr. WULF. I am sorry, sir, could you repeat that? 

Mr. MURPHY. Do you know if any of the CFATS employees or supervisors or superiors received any bonus since 2009? 

Mr. WULF. I don’t have that information. We could—— 

Mr. MURPHY. Would you let—it may be helpful to this committee 

if you would let us know in conjunction with some of the information given. We would appreciate that. 

Let me also say, the Anderson-Wulf memo that you have states 

that employees felt uncomfortable delivering bad news to superiors. 

So to what extent does the failure to inform you caused by this 

chill work environment, and who chilled the environment that— 

was it you, someone else? Who in the chain of command had that 

effect? Secretary Beers? 

Mr. BEERS. Sir, let me start in answering that. I have said as 

a management principle based on my 40 years in government that 

I appreciate hearing bad news and I don’t want to hear bad news 

from anybody else. This particular issue has been used as a teaching moment by me for the entirety of my workforce, because no 

one, no one should feel that they can’t tell me bad news, because 

bad news is usually something that we can do something about, 

and if we don’t hear it, we can’t do anything about it. I can’t speak 

31 

to the culture within the office that—and the words in the report, 

but I want you to understand that to all of the people who work 

for me, I say that time and again. I am perfectly prepared to hear 

bad news, and I really don’t want to hear from somebody outside 

the organization. 

Mr. MURPHY. As a Navy officer, I admire a Marine officer saying 

that. I recall the former chairman of the Joint Chiefs of Staff, Admiral Mullen, saying that as he climbed the chain of command the 

food got better and the news got better, too. Unfortunately, it is important to have that bad news coming up. 

So are you confident now that you are getting full accurate information, full disclosures on CFATS information? 

Mr. BEERS. Sir, I have complete confidence in Penny and David 

making sure that that information comes to me, and they know 

that I want to hear it and they know that I want to fix problems 

that they surface to me to the extent that I have the power to fix 

it, so yes. 

Mr. MURPHY. Mr. Chairman, I am over my time. Could I ask Mr. 

Wulf to give an answer to the same question? 

Mr. SHIMKUS. Yes. 

Mr. WULF. Sir, I can confirm that Director Anderson and I received the message the Under Secretary was just discussing that 

he wants the bad news within the first week or two of our arrival 

on the job, and that is very much the spirit in which this report 

was written for him. Yes, within the organization I can’t necessarily speak to how the culture evolved, but I can tell you that 

Penny and I have gone to great lengths to create a culture of transparency, a culture in which our employees are not afraid to raise 

issues that they view as problems. We have an open door policy. 

We have all hands on meetings on a regular basis, and we have 

made it clear that we don’t tolerate repression of concerns that 

folks may wish to bring up. 

Mr. MURPHY. Thank you very much, Mr. Chairman, I yield back. 

Mr. SHIMKUS. Let me, before I yield to the chairman emeritus, 

Mr. Dingell, let me ask unanimous consent for 5 days for members 

of the subcommittee to submit opening statements for the record. 

Without objection, so ordered. 

Now I would like to recognize Mr. Dingell for 5 minutes. 

Mr. DINGELL. Mr. Chairman, thank you for your courtesy. 

Secretary Beers, why did you commission a top-to-bottom study 

of this program? 

Mr. BEERS. Sir, when it became evident to me that, one, we had 

a re-tiering issue that was brought to my attention in June, and 

that we had had an issue about locality pay and we had had a 

slowness in terms of the approval of site security plans, that I 

needed to make sure that the new management which we had 

brought in to take over the program and make sure that it was 

running solidly brought their full attention to giving me as accurate a picture as possible in this program. 

As I said earlier, we had already commissioned a management 

study which was completed during the time that the report was 

prepared, and that was part of the report as well. So the final request of Penny Anderson and David Wulf was the result of an inVerDate Aug 31 2005 10:33 Aug 21, 2012 Jkt 037690 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 F:\112-11~2\12-111~1 WAYNE
32 

creasing concern on my part that the program was not running 

well. 

Mr. DINGELL. Thank you, Mr. Secretary. 

Now, is Department of Homeland Security working to engage the 

industry in helping to get this program successfully implemented? 

Yes or no. 

Mr. BEERS. Absolutely yes. 

Mr. DINGELL. Mr. Secretary, I know there has been some controversy recently regarding some misclassified facilities. Can you 

assure me and the members of this subcommittee that you have 

properly addressed this issue and that you have correctly identified 

high-risk facilities? Please answer yes or no. 

Mr. BEERS. Yes. 

Mr. DINGELL. Now these questions to Mr. Wulf. 

Mr. Wulf, as your internal memo points out, there have been a 

number of challenges in implementing this program. Do you believe 

that the program is fixable? Yes or no. 

Mr. WULF. Yes. 

Mr. DINGELL. You do agree or believe it is? 

Mr. WULF. Absolutely. 

Mr. DINGELL. Thank you. 

What are the top two or three things that need to be addressed 

to bring this about, in your opinion? The top two or three things. 

Mr. WULF. I would say the SSP, the site security plan review 

process, which we have already begun to move forward considerably over the last 2 months, and preparing our inspectors and 

our—the rest of our team to move forward and conduct authorization and compliance inspections. 

Mr. DINGELL. Now what progress have you and the Department 

made in addressing these issues? 

Mr. WULF. We have quadrupled the number of Tier 1 site security plans that we have conditionally authorized just over the last 

2 months. We have commissioned an inspector tools working group 

as well to develop the standard operating procedures, other policies, and to determine what tools our inspectors will need as we 

move forward to the next stages of this program to actually conduct 

authorization inspections and to get into the regular cycle of compliance inspections moving forward. 

Mr. DINGELL. Thank you, Mr. Chairman. You will note I returned 1 minute and 27 seconds. Thank you. 

Mr. SHIMKUS. Thank you, Mr. Dingell. 

Now I would like to recognize the gentleman from New Hampshire, Mr. Bass, for 5 minutes. 

Mr. BASS. Thank you very much, Mr. Chairman. 

I am not as familiar with the substance of this program and its 

history and so forth. I don’t have a lot of facilities in my area. I 

am, however, very concerned about this memo. We have oversight 

responsibility, and to some extent, we are as vulnerable, if you will, 

to criticism for failure to be—to perform adequate oversight and be 

vigilant about the use or abuse or alleged abuse of taxpayers’ 

funds. And that is why this memo is bipartisan, because we all 

know that we have a responsibility to make sure that the government is run well. 

33 

I am also a businessman, and have over my life hired and fired 

people to do things. I don’t like to fire people, but it happens. Mr. 

Beers, if you were in my position, looking at this report, would you 

consider yourself to have done a good job on your role to date? 

Mr. BEERS. Sir, as I have said publically before, I hold myself responsible for this—these sets of problems, and I am committed to 

fixing them. 

Mr. BASS. If you were your own boss, would you keep you on the 

job? 

Mr. BEERS. I can’t answer that question, sir. 

Mr. BASS. I mean, do you—have you considered the possibility 

this might not be the right role for you, and it might be time for 

you to step aside? Mr. Barton referred to it in his opening statement. 

Mr. BEERS. Sir, I consider that every day I work for the Federal 

Government. I swore an oath of office on at least three occasions 

to protect and defend the Constitution of the United States, and I 

believe in that. And if I believe I can’t do the job, then I will walk 

away from it as I have done before. 

Mr. BASS. Do you think it is unusual to have an action memo 

that for all intents and purposes, you are not really disputing, with 

70 different recommendations, a lot of which are noted in progress? 

You also noted in your testimony or answered a question a minute 

ago that you could address these issues ‘‘to the extent that I have 

the power to fix it.’’ Do you have the power to fix these—all of 

these problems? 

Mr. BEERS. As far as the issues within this particular action 

plan, yes. 

Mr. BASS. So would you—— 

Mr. BEERS. But with respect to Mr. Green’s comment about 

TWIC cards, no, I can’t make the TWIC card be broader than the 

current authorization of the TWIC card, which means that you 

have to be a transportation worker. 

Mr. BASS. All right. Well, Mr. Beers, this is a disturbing memo. 

We appreciate the fact that it has come to our attention, and I certainly hope that we—that you understand that most of us haven’t 

seen anything like—this is a very unusual and unusually poorly 

run agency. If it is not going to—if at any time you believe that 

you are not the right person to turn this troubled agency around, 

that maybe there ought to be a different managing structure. 

So having made that point, I think—I hope that the committee 

will carefully watch the progress in this action plan, because the 

American taxpayers are not going to stand for this kind of alleged 

or perceived incompetence in management for this very important 

agency to our Nation’s security. 

Mr. SHIMKUS. Would the gentleman yield to me—— 

Mr. BASS. Yes, sir. 

Mr. SHIMKUS [continuing]. For the remainder of your time? 

I want to follow up on this. We really got to get a handle on this 

card issue, and we would like for you to provide us your legal opinion of why you cannot deal with this TWIC card. We think you can. 

We, and that is the Energy and Commerce Committee, have been 

in discussions with Homeland Security for months trying to resolve 

this. We think it is within your jurisdiction and if it is not, we 

34 

would like to see the legal reasoning why it is not so that we can 

change the law. We think it is within your power now, and I think 

my friend, Mr. Green, would be very pleased if we can get a handle 

on this. So help—work with us. This is an issue, again, that was 

brought up in the March—in March of last year’s hearing that we 

thought we were moving in some direction, and there have been 

multiple consultations with Homeland Security, and we are not any 

further than we were in March of 2011. 

I would like to yield to my colleague. 

Mr. GREEN. If the chairman would yield? I know we went 

through this last year, and because the TWIC card is under Department of Transportation and Coast Guard, I know there is an 

issue with Homeland Security. I just don’t want to reinvent the 

wheel, because so many times those same workers that work on 

the dockside are also at an inland plant. And so that is why I 

would hope with interagency agreement, although in 908 earlier 

this year our committee passed, we gave that authorization there 

language, but it hasn’t passed and hadn’t passed the Senate, so we 

need to work on it. 

Mr. SHIMKUS. And reclaiming the time, I would just say that 

Coast Guard is under Department of Homeland Security. This 

should not be difficult to do. 

Now I would like to recognize Mr. Pallone, my colleague from 

New Jersey, for 5 minutes. 

Mr. PALLONE. Thank you, Mr. Chairman. 

We are here this morning to discuss issues facing the Chemical 

Facility Anti-Terrorism Standards, or CFATS, program, and we are 

talking about this leaked DHS internal memo from 2011 that clearly shows that DHS faces serious implementation problems with the 

CFATS program, most notably that the Department has received 

4,200 site security plans but has yet to approve a single one. The 

CFATS program was enacted as a rider to the 2007 Homeland Security appropriations bill in order to give Congress time to enact 

comprehensive legislation, and we did just that in the 111th Congress by passing H.R. 2868 in the House. That bill provided a comprehensive security program to protect Americans living near these 

facilities, but unfortunately the Senate did not take it up. 

I am not here to claim that H.R. 2868 would have magically fixed 

all the problems outlined in the DHS memo, but it certainly provided a much stronger framework to protect the more than 100 

million Americans that live in the danger zone of a chemical disaster. 

Last May, this committee had the opportunity once again to exercise its jurisdiction and set forth a full authorization of this program to replace the vague and inadequate CFATS program enacted 

in 2007. Unfortunately, the committee decided not to address shortfalls with the CFATS program, and just moved a simple extension 

of the current law. 

Mr. Chairman, in New Jersey we have the unfortunate combination of both a large number of chemical facilities and a high population density, so the consequences of insufficient security are dire. 

I regret that this committee has not taken a more proactive approach to securing these facilities, and I will continue to push for 

35 

a more comprehensive security program to ensure the safety of my 

constituents living in the shadow of these facilities. 

Now to questions. The November 2011 DHS report begins to explain why nearly 5 years after these regulations went into effect, 

not a single site security plan has been approved. It reveals that 

this committee was rash, in my opinion, in passing legislation to 

rubber stamp the program for 7 years without investigating or addressing the program’s shortcomings. Many of us have heard from 

those in the business community that the CFATS program is still 

strong and that businesses have done everything that they are required to do under the program. According to industry representatives, we should be comforted to know that companies have acted 

prudently and are prepared for compliance inspections, should the 

Department ever begin to conduct them. 

I hope this is true, but our national security is inherently a governmental function. Many members of this committee have worked 

for years to establish a robust regulatory structure for chemical facility security, and none should be satisfied with the suggestion 

that approvals and inspections are insignificant or that the role of 

the Department in this program is insignificant. 

Now Under Secretary Beers, do you think that the Department 

of Homeland Security should play a role in ensuring that our chemical facilities are secure? 

Mr. BEERS. Sir, I strongly believe that the Department has a role 

and that the office that is tasked with doing that can play that 

role. 

Mr. PALLONE. Do you think that the Department must play a 

role? I mean, do you think that it is absolutely necessary that they 

play a role? 

Mr. BEERS. I am sorry, sir? 

Mr. PALLONE. Do you think that the Department must play a 

role, that it is absolutely crucial that they play a role? 

Mr. BEERS. I think that the original intent of the Act is absolutely appropriate, and yes, the Department must play a role. 

Mr. PALLONE. Would you say that site security plan approvals 

and compliance inspections are necessary and important to ensure 

chemical facility security? 

Mr. BEERS. I think that they are absolutely essential to making 

this program work effectively. 

Mr. PALLONE. Well, I mean, I agree with everything you have 

said, and I think the failure of the Department to complete security 

plan approvals and compliance inspections is a very serious issue. 

I am glad to see that the Department is treating it as such, and 

I welcome the opportunity to work together towards a strong and 

effective program. 

But I guess the point I am really trying to make here is that this 

committee has a responsibility to put together an appropriate comprehensive authorization bill, and not simply rely on this paragraph or whatever it is, I mean, it is like this long, in an appropriations bill that really doesn’t give you sufficient guidance or mandates or inspection or enforcement capability to do what you have 

to do. So I am not—I understand that there are all kinds of problems with the Department, but I think a big part of the problem 

is that you never had a comprehensive authorization bill to tell you 

36 

what to do and to give you the authority what to do. I mean, we 

could sit here all day and talk about how bad you are, and you 

know, there certainly are problems, but I think that it is our responsibility to do something more comprehensive to provide the 

guidance, Mr. Chairman. That is my only point. Thank you. 

Mr. SHIMKUS. The gentleman yields back his time. 

The chair now recognizes the gentleman from Ohio, Mr. Latta, 

for 5 minutes. 

Mr. LATTA. Thank you, Mr. Chairman, and gentlemen, thanks 

very much for being here today. We have such short little time to 

ask all these questions, but if I could, first, is it my understanding 

and am I correct in hearing that we spent about—$480 million has 

been appropriated for the program since its inception? Is that correct? 

Mr. BEERS. Yes, sir, I believe that is the right number. I can give 

you the exact number if you want. 

Mr. LATTA. OK, but that is a ballpark. Thank you. 

And as Chairman Emeritus Dingell does, he is very good at getting his rifling in on his questions, yes or no, but one thing I want 

to go back to is the question about working with industry. You said 

that you are working with industry, but you know, as we—reading 

the report that came through and looking at the site security plan 

that, you know, again as has been said a little bit earlier, that we 

have received—that you have received about 4,200 SSP submissions and that none have been approved. 

Did you ever hear from industry during this timeframe that gee, 

what is going on? These things have been submitted but we are 

never hearing back from the Department. 

Mr. BEERS. Yes, we did receive inquiries from the industry about 

when they were going to be approved. 

Mr. LATTA. Do you know how many inquiries you have been receiving? 

Mr. BEERS. I don’t have that information at the tip of my fingers, 

sir. 

Mr. LATTA. Do you know when you might have received the first 

inquiry? 

Mr. BEERS. Excuse me? 

Mr. LATTA. Do you know when you might have received the first 

inquiry from industry as to when they might have these approved? 

Mr. BEERS. No, I can’t tell you precisely when, but I can get you 

that information. 

Mr. LATTA. OK, because again, going back to the earlier testimony that when you are looking at, you know, those 5–1/2 years 

since the enactment of CFATS, and that is also the stats of the 

statute itself, and 4–1/2 years since the final rule. It kind of—I 

really would like to find out when these—the industry that was 

being regulated was finding out if they were or not being approved, 

because you know, there is quite a timeframe there. 

Let me go to the other thing that Mr. Wulf had brought up a little bit earlier saying that, you know, there is going to be an—and 

I am sorry, again, I don’t have it in front of me but I just kind of 

wrote it down—saying that you are going to have an open door policy and not afraid to raise issues. The reason I bring this up is I 

was a county commissioner for 6 years, years back, and we had 

37 

about 1,100 employees in the county. We regulated all kinds of 

things. We had a lot of different departments. It wasn’t unusual for 

an employee that worked in one of those departments that served 

underneath the Board of Commissioners to bypass their supervisors and call me at home, or being from, you know, a county of 

125,000, they would run into you at the county fair, they would 

talk to you at the grocery store, or they would say can I talk to you 

someplace else? Did you all get any contact from anybody at any 

time saying gee, I would like to talk to you about something that 

we think there is something wrong going on with the program? 

Mr. BEERS. Sir, on this particular program, yes, and that is part 

of the reason that some of the efforts in order to investigate problems took place in the past. 

With respect to bypassing the chain of command, in order to prevent that particular problem, we in management and I in particular have meetings with either individuals or groups of people 

throughout NPPD that are well down in the chain of command in 

order to elicit their thoughts and suggestions so that we can improve the program overall. 

Mr. LATTA. OK, let me ask you this question. Do you know when 

you might have started first getting an inclination that there was 

something wrong with people contacting you, going—bypassing the 

chain of command to say, you know, there is something really 

wrong here in personnel or the way the program is being run? 

Mr. BEERS. —that I can report to you on is in the—excuse me. 

The first instance that I can report to you that this occurred would 

be in the summer timeframe of 2010 when it came to our attention 

because of a report by an individual that there seemed to be a 

problem with the locality pay. As soon as we found out that that 

was an issue, we took that on and went through the process to determine what had gone wrong in terms of the appropriate pay to 

the individuals involved. 

Mr. LATTA. So this would be actions. So the first inclination 

would be a couple of years after the program was put in place, 

would that be correct? 

Mr. BEERS. Yes, sir. 

Mr. LATTA. OK, thank you. 

And just real quick, I know my time is running out, Mr. Chairman, but if we could get some of that information back because 

again, you know, I really, really hope that that open door policy 

really does exist and that folks aren’t afraid to come forward, because this has got to work. Again, when you look at the number 

of—with 4,200 SSPs that have been submitted and trying to get 

these things caught up, it is very , very important not just for the 

Department itself, but for all those industries out there trying to 

comply. 

And with that, Mr. Chairman, I yield back. 

Mr. SHIMKUS. Gentleman yields back his time. 

The chair now recognizes the gentleman from Georgia, Mr. Barrow, for 5 minutes. 

Mr. BARROW. I thank the chair. I would like to yield my time to 

the ranking member of the subcommittee, brother Green from 

Texas. 

38 

Mr. GREEN. Thank you. I am going to revisit the personnel 

assurity, but Mr. Wulf—and I appreciate the update that you had. 

I saw your testimony and I am going to encourage the chair that 

maybe two or three months from now, we invite you back to enjoy 

our hospitality again and see how far along we are, because this 

is such an important issue or a lot of areas. I know Mr. Pallone 

and mine, we have substantial chemical facilities that are not waterside based. 

Let me get back to personnel assurity program, because that is 

something that is sensitive, because I have plenty of plants on the 

water, but also plenty of plants that are not. The same company 

owns them, and often times they transport personnel back and 

forth. My concern is what was submitted from the OMB that the 

OMB did not recognize that the TWIC card, from what you said in 

your testimony, would be used. And I can understand why something regulated by your agency can’t apply for a TWIC card. But 

it seems like in the Federal Government we could use the same 

database. The Coast Guard, Department of transportation, the 

TWIC card, and use the same database for the background and the 

TWIC card would be interchangeable. 

And my idea, and I can tell you, you know, some of my folks are 

going to be frustrated if they end up having to pay another few 

hundred dollars to get a second card because their company transfers them some where and not all companies are really nice and 

they say no, that is part of your requirement for the job. You have 

to have your driver’s license to drive the company car. So that is 

my concern. The proposed personnel assurity program will require 

facilities to submit background information on all existing personnel within 60 or 90 days upon the implementation, and any new 

unescorted individuals who are not classified as personnel would 

need—even if they have a TWIC card, their information submitted 

to DHS 48 hours in advance. Was that part of the submittal to 

OMB, because that doesn’t sound like you are getting TWIC cards 

consideration. 

Mr. BEERS. Sir, I believe that is part of the submittal to OMB, 

and what I am trying to convey here is that we are looking at all 

of the opportunities to leverage the various cards and want very 

much to go in the direction that you want to go. 

Mr. GREEN. OK. Well—and I know there may need to be an 

interagency memorandum to work together, and I know sometimes 

our Federal agencies don’t like to do that, but we have—it is redundant information if we are using the same database. And I don’t 

understand why DHS, as we proposed in two separate legislations 

earlier, harmonized TWIC with the leverage and the operational— 

the background checks. Is there a justification or an incident that 

I am not aware of that have existed within the TWIC system that 

would require DHS to go beyond TWIC? 

Mr. BEERS. I am not aware of any, sir. 

Mr. GREEN. OK. And it seems to be—because I try and stay pretty close to the ground there with a lot of my folks, and I have not 

heard on. In our area, people may not like some of the chemicals 

that we produce, but they are things that we don’t—they produce 

them because somebody needs them in our country, and we want 

to make sure they are safely produced both for the people that live 

39 

around it, but the folks on that plane. Every time I talk about the 

issue with DHS, you assure me they incorporate TWIC. I just want 

to make sure it goes forward from that, and I think maybe we will 

even contact OMB and express that concern that don’t reinvent the 

wheel, even though we have two separate Federal agencies and 

hopefully that would come from both agencies, including Department of Transportation. They use the same database that you 

have. 

Mr. Chairman, I don’t have any other questions. I would be glad 

to yield back to my colleague from Georgia, and I appreciate his 

courtesy. 

Mr. SHIMKUS. The gentleman from Georgia yields back his time. 

Chair now recognizes the gentleman from Mississippi, Mr. Harper, 

for 5 minutes. 

Mr. HARPER. Thank you, Mr. Chairman, and I certainly thank 

the two of you for being here today, and Mr. Wulf, I want to thank 

you and Ms. Anderson for the work that you have done on this. 

This may come as a shock, but you know, it is not always surprising to us to learn that an agency may be dysfunctional. So this 

is not always a surprise. 

But we appreciate the candor and no one should ever be criticized or subject to anything for being very open, which you and Ms. 

Anderson have done, so I thank you for that. I believe that gives 

us some input. 

But I wanted to ask you a few questions, if I may, Mr. Wulf? 

You know, as I looked through the report, one of the things that 

you spent some time on was the issue of unions within the organization. Can you tell me when the workforce in the division was 

unionized? 

Mr. WULF. I can’t give you an exact date on that. It was before 

Ms. Anderson’s and I arrival, but I want to say spring of last year, 

maybe March. 

Mr. HARPER. Well let us—can you tell me, does each worker have 

to cast a vote in order for their votes to be recorded, as far as do 

you know how the process works? Non-voters are considered voters 

to unionize, how that is counted? 

Mr. WULF. I am not completely certain about that process. 

Mr. HARPER. Can you get me that information? 

Mr. WULF. Absolutely. 

Mr. HARPER. That would be great. Can you tell me how many 

employees there are in the CFATS program, and how many are eligible to be represented by government unions, and how many affirmatively voted to be represented by unions? 

Mr. WULF. I don’t have the totals on the voting, and I will say, 

there are approximately—and I don’t have the exact numbers in 

front of me—a little more than 200 Federal employees in the 

CFATS program. Of those who would be eligible for union—or to 

vote in a union membership, that would be our field force, non-supervisory field force, so a little bit under 100 of those. 

Mr. HARPER. At the time of unionization, were all programmatic 

and accountability measures and job descriptions in place that applied to that workforce? 

Mr. WULF. As we noted in our report, we are continuing to refine 

the requirements for the sections and—— 

40 

Mr. HARPER. Well, explain what—when you started out in your 

report and you said that the presence of the union at this stage in 

the program will have a significant negative impact, explain that. 

Mr. WULF. I appreciate the opportunity to provide a little additional context to that. 

Mr. HARPER. Yes. 

Mr. WULF. The report was not intended to be a statement concerning whether unions and Federal workforce are good or bad, but 

rather a recognition of the fact that this is a program that is very 

much in its emerging stages, and we are very much in the midst 

of putting into place policies and procedures for the conduct of inspections, for the operation and review of site security plans, and 

so forth. 

So it certainly adds a layer of complexity that wouldn’t otherwise 

exist. That said, though, along with the union we have very much 

a shared interest in moving the program forward in a collaborative 

relationship. 

Mr. HARPER. Certainly. We have an overall big picture here of 

an issue of national security that we have now kind of gotten 

bogged down and does it not make it more difficult, though, after 

the unionizations take place to implement some of these policies? 

Are you not already seeing that even on the reference that you had 

to the mileage reporting? 

Mr. WULF. It does add a layer of complexity, but it also, I think, 

adds voices in the development of policy that will allow us to develop more sustainable processes moving forward. 

Mr. HARPER. What was it, 16 weeks that you reported for the 

mileage requirements to be done? 

Mr. WULF. I believe that was the estimate. 

Mr. HARPER. While I understand the need, everybody has got to 

work together. The fact is that this has caused delay, has it not? 

Why don’t I not make you answer that question. I think we know. 

I appreciate your time, Mr. Wulf, and for you and Ms. Anderson 

to be so candid with your situations. Thank you. 

Mr. SHIMKUS. The gentleman yields back his time. 

The chair recognizes the gentlelady from California, Ms. Capps, 

for 5 minutes. 

Mrs. CAPPS. I thank the chairman for recognizing me, and I 

apologize for the state of my voice, but I am feeling well. I am 

pleased to be here and I think you both for your testimony. 

The internal Homeland Security report from November, 2011, 

provides new support for concerns that problems in the statutory 

language creating the CFATS program hindered its successful implementation. And of course, we are talking about Homeland Security here. According to the report, CFATS personnel have not yet 

determined how to systematically review site security plans. Although the Department has set up an interim process to try to get 

these plans reviewed, staff are still working to develop a process 

to be used over the long term. Apparently, many initial site security plan reviews have to be redone. The November reports states 

that they have been found to be, and this is a quote, ‘‘inconsistent 

with the spirit and intent of the program’s mandate.’’ 

Mr. Beers, can—would you please elaborate on what the report 

meant when it stated that site security plan reviews had not been 

41 

conducted consistently with the spirit and intent of the statutory 

mandate? 

Mr. BEERS. Madam, I can’t specifically speak to the reason behind that. I can give you some broader context about what happened with respect to the efforts to get site security plans that, in 

fact, met the requirement. 

As the program was rolled out and as it evolved, the guidelines 

for the information that needed to be provided in the site security 

plans failed to elicit appropriate responses from industry. Some of 

that undoubtedly was or could have been done better if the guidelines that we had put out had been more clear and some of it was 

simply on the part of industry not providing that information. I 

don’t mean to suggest in any way that that was an intentional act, 

but it required us to go back to those particular facilities and ask 

for more information in order to be able to get to a site security 

plan that, in fact, appeared to meet what we needed to have in 

order to have a site security plan. That iterative process ended up 

taking time when those site security plans were initially filed, and 

that is part of what I regard as the due diligence that we and industry need to undertake together in order to ensure that a plan 

that is finally authorized and approved is a plan that is capable of 

providing the kind of security that you all have charged us to build. 

But let me turn to Mr. Wulf about the specific comment—— 

Mrs. CAPPS. And I wanted—yes, briefly if you would, please, so 

I can go on to another question. 

Mr. WULF. About the site security plan review process specifically? 

Mrs. CAPPS. Well, it is just why—I am very concerned that these 

delays have occurred. 

Mr. WULF. Yes, we have taken steps to address those through 

the implementation of our interim review process, and as the 

Under Secretary and I have mentioned, you know, we, in the last 

2 months, quadrupled the number of SSP—of site security plans we 

have been able to authorize, and I think the future is bright moving forward on that path. 

Mrs. CAPPS. I thank you for that, you are trying, and I appreciate the Department is working to address these issues and establish a consistent site security plan review process. 

I am concerned, however, that flaws in the law make ambiguity 

and consistency in the review process unaffordable. I mean, you 

may have taken care of this one, but it is going to pop up again. 

That is because Section 550 grants discretion to the Secretary to 

approve site security plans that fail to meet the risk-based performance standards under this program. The law says only that the 

Secretary may disapprove a plan that fails to meet those standards. 

As many of this committee will perhaps recall—I recall it well, 

because I offered an amendment during the markup of H.R. 908 

that would have changed that word ‘‘may’’ to a ‘‘shall’’ to require 

that site security plans be disapproved if they failed to meet performance standards. That word ‘‘may’’ is what causes the ambiguity and the having to go back and re-question, and time is of the 

essence when we are talking about Homeland Security. 

42 

So Mr. Beers, back to you again. Do you agree that site security 

plans failing to meet the standards should be disapproved? 

Mr. BEERS. Congresswoman, our objective here is to get the yes, 

so the notion of disapproval doesn’t necessarily accomplish that. 

The point is, when we say we are not prepared to approve it, that 

is the functional equivalent thereof. But what we want to do is 

have a cooperative relationship—— 

Mrs. CAPPS. Right. 

Mr. BEERS [continuing]. With industry in order to say whether 

or not a plan requires more information or more clarification. 

Mrs. CAPPS. And industry needs to have this as well. May I just 

finish one sentence? 

Mr. SHIMKUS. We are trying to get these in before the votes on 

the floor. 

Mrs. CAPPS. Well, I believe that it should be a requirement so 

that industry is clear about what they need to do. 

Mr. SHIMKUS. The gentlelady’s time is expired. 

The chair now recognizes the gentleman from Louisiana, Mr. 

Cassidy, for 5 minutes. 

Mr. CASSIDY. Thank you. The memo is—one, let me just commend you for asking it be drawn up. On the other hand, obviously 

it paints a disaster in terms of acquisition, inventory management, 

attitudes, I mean, it is just a total indictment. Now, as a guy that 

represents an area with lots of PETRA chemicals, lots of businesses 

and workers dependent upon this, if I concede the argument that 

your job is important for safety, it frankly seems not just an indictment of your organization, but it frankly seems to place my constituents at risk. 

Now that said, how many employees does this particular division 

of DHS have? 

Mr. WULF. I want to say 206. 

Mr. CASSIDY. Two hundred and six? 

Mr. WULF. I believe so. 

Mr. CASSIDY. Now, this problem seems so endemic. How many 

have been fired? I mean, it seems like an easy target because they 

speak consistently of people being hired because they know somebody. People who are—I mean, you list—you can almost write 

somebody’s name in here if you only have 206 people. So clearly, 

it wasn’t how many have been fired. How many are going to be 

fired? 

Mr. BEERS. Sir, with respect to the issue about the re-tiering—— 

Mr. CASSIDY. No, I mean, just a simple question. I mean, clearly 

there is an endemic problem here, and it is rife. How many have 

been fired? It is a pretty simple question if you only have 206 employees, and how many do you have on the chopping block? 

Mr. WULF. Sir, with respect to the leadership of the organization, 

the people who were in the leadership positions in the organization—— 

Mr. CASSIDY. I only have 3 minutes. Can I have a number? 

Mr. WULF [continuing]. Have moved on. 

Mr. CASSIDY. How many? 

Mr. WULF. That is two people. 

Mr. CASSIDY. OK, so two out of 206, one percent, and yet we have 

people here hired, apparently, because they know somebody, proVerDate Aug 31 2005 10:33 Aug 21, 2012 Jkt 037690 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 F:\112-11~2\12-111~1 WAYNE
43 

moted because they know somebody, apparently fudging on their 

gas reports. We only have two, only one percent? It seems like the 

organization—and I don’t mean this to be kind of snitty, but I am 

just amazed that we are tolerating this level of incompetence. 

Now I am struck. In your document here, you say that—I am 

quoting from page nine—‘‘We have yet to approve a site security 

compliance inspection. Moreover, we have not yet determined what 

it will look like. And yet, since this report was reported in the 

news, we have quadrupled the number of compliance reports 

issued.’’ Is that my understanding, or do I understand incorrectly? 

Mr. WULF. It is—what we quadrupled is the number of site security plans we have conditionally authorized, which the step that 

precedes the conduct of an authorization inspection, which then 

leads to the final approval of a facility’s site security plan, sir. 

Mr. CASSIDY. OK. So the indictment of the report stands that we 

are 6 years into this, and we have yet to come up with a compliance inspection program. I just don’t know what to say. 

Now, I do know what to say. Clearly, there are ways to contract 

this out. I don’t know how you just don’t start over with this program, but I understand the Coast Guard has the authority to use 

an alternative security program. Can we use an alternative security program? I understand, again, you have this authorization already. Can we use that now since it looks like the current program 

is so dysfunctional to be beyond restitution? 

Mr. BEERS. Sir, the short answer is yes, and I will let David describe what we have done with respect to that. 

Mr. WULF. We do already have some alternative security programs that have been submitted by industry stakeholders, and we 

are working very aggressively in partnership with our industry 

stakeholders to develop some templates that can be used. We can’t 

prescribe a specific template, but we are going to work through 

some templates that will—the hope is allow for more expeditious, 

speedy review and approval of—— 

Mr. CASSIDY. But this does not include contracting out this function, correct? Can you go to a third party to conduct these inspections? I mean, what you describe here is a staff which is poorly 

hired, poorly trained, and has a poor attitude and has a sense of 

law enforcement wanting to clear—be called commander and wear 

pistols as opposed to actually go through and look at something in 

terms of compliance. 

Mr. BEERS. Sir, compliance inspection is an inherently government function. We have to have the people who do that be Federal 

employees. 

Mr. CASSIDY. Now it is my understanding, though, that the Coast 

Guard actually has an alternative standard, and frankly, Bummerd 

now has it, the whatever they call the offshore for the oil rigs. They 

have a third party that is inspecting oil rigs. 

Mr. BEERS. I can’t speak to the Coast Guard, sir. I am not aware. 

Mr. CASSIDY. OK. I have much more to ask. 

Mr. SHIMKUS. The gentleman yields—they also have some contractors doing TSA function at some of the airports. It is worth 

looking into. 

I would like to yield now 5 minutes to the ranking member of 

the full committee, Mr. Waxman, for 5 minutes. 

44 

Mr. WAXMAN. Thank you, Mr. Chairman. 

None of us can be happy about this memo that came out last November, showing how poorly this program is serving the American 

public. This is a serious matter. This is a matter of national security, possible attacks by terrorists on chemical plants. I note that 

all of us are concerned, not just the people here in the Congress, 

but Mr. Beers and others in the administration. We have a stark 

and troubling picture, but perhaps there is a silver lining, because 

it appears to me that the Department is taking the situation clearly. 

But I want to talk about Congress’s role. It is easy at a hearing 

like this after we get a report of a failure to beat up on the people 

running the program. But Congress has a responsibility as well. 

This program was established in an appropriations bill, not a bill 

that came out of this committee. It was a rider on an appropriations bill. Mr. Beers, is there a provision in Section 550 that addresses personnel hiring? 

Mr. BEERS. I am not aware of it, sir. 

Mr. WAXMAN. Is there a provision that addresses use of travel 

cards or purchase cards? 

Mr. BEERS. No, sir, I am not aware of that. 

Mr. WAXMAN. How about a provision that details how inspections 

are to be conducted? 

Mr. BEERS. No, sir. 

Mr. WAXMAN. Is there a provision that explains how background 

checks should be conducted? 

Mr. BEERS. No, sir. 

Mr. WAXMAN. Are there any enforceable deadlines in this law 

that are written in the appropriations bill? 

Mr. BEERS. No, sir. 

Mr. WAXMAN. The answers to these questions are all no, and the 

reason is that this committee never held a hearing or conducted a 

markup on legislation to create this program. So the problems we 

see today were never contemplated by this committee, and no direction was provided. Now I understand Mr. Barton said you ought to 

resign, but Mr. Barton was the chair of the committee at the time 

this law was adopted through an appropriations bill. We tried to 

get the people who have a stake in this to work out legislation, and 

the Democrats were in power and I was chairman. We had the 

chemical industry and others with us. When the Republicans came 

to power on this committee, they said let us just extend this for 7 

years. We will just kick this thing down the road for 7 years. 

Now, one of the proponents of doing that was the chemical industry. They were troubled by some of the ideas that we would have 

further inspections and we would have further deadlines and we 

would make sure that things happened, but while they participated 

with us in trying to change the law, they said all they wanted to 

do this last year was extend the existing law for 7 years. Now this 

existing law doesn’t have much of a requirement on you. 

You have established a working group, Mr. Beers, in the Department to look at legislative and regulatory changes and whether 

they are necessary, is that correct? Speak into the mic and be sure 

it is on. 

45 

Mr. BEERS. I am sorry. Yes, sir, with respect to the entirety of 

the Department. 

Mr. WAXMAN. And the November report identified several statutory limitations on the program that limits effectiveness and includes a rigid and limited enforcement authority. For example, a 

facility could violate requirements 20 times and they would—and 

you wouldn’t have the authority to take any more action based on 

repeat violations. That means that they can repeat these violations 

over and over again, and you couldn’t do anything about it. Is that 

right? 

Mr. BEERS. Sir, that is an element of the report that we have 

looked into as a result of the report. While it is true that just on 

the face of it the answer to that is yes, we believe we could use 

our administrative order authority to have some action against—— 

Mr. WAXMAN. Excuse me, you are going to have to use your regulatory authority to do something that should have been said in the 

law by Congress. I hope this working group will examine that. 

The report calls into question the adequacy of the program’s performance standards. That memo said ‘‘Without testing to evaluate 

the effectiveness of the performance standards, adequacy of the 

standard often is more a matter of opinion or fact.’’ Will your working group give us some recommendations on that issue? 

Mr. BEERS. Sir, as we come to recommendations, yes, we will 

give those to you. We, as you know, have to go through a very formal process. 

Mr. WAXMAN. Are you going to examine that issue, I presume? 

Mr. BEERS. We will. 

Mr. WAXMAN. Well Congress should have examined it as well. 

So my point to you is, well, we are pointing fingers at you and 

you are saying you have excuses and everybody says we are going 

to do better. I think we all have a burden to bear in the failure, 

and Congress didn’t do its job and we hoped you would have taken 

up the slack and done the job that Congress should have directed 

you to do, but I think it is awfully premature for members of this 

committee to try to put the whole blame on you and say you ought 

to quit. Maybe some members of Congress ought to quit if we aren’t 

doing our job, or be replaced. 

I yield back my time. 

Mr. SHIMKUS. The gentleman’s time is expired. 

The chair now recognizes the gentleman from Colorado for 5 minutes, and we are going to try to get this done and then adjourn the 

hearing after he is through. They did just call votes. 

Mr. GARDNER. I thank the chairman for the recognition, and 

thank you as well to the witnesses for being here today. 

When I first read this memo, it was a little bit like Jerry 

McGuire meets the Titanic. You have got—just some of the words 

and phrases used in this memo: unnecessary expenses, unqualified 

personnel, unsuited for the work, problems with how money spent, 

foul language, ineffective hiring, unauthorized expenses, inappropriate work behavior, catastrophic failure, perceived cronyism, favoritism. How would you grade your performance on a scale of 1 

to 100? 

Mr. BEERS. I think this report is a clear indication that the program needs a whole lot of work on it, but I don’t think it entirely 

46 

recognizes what we have done, and I am not being an apologist, but 

I do think that it indicates that we have some major challenges 

which we are prepared to address. 

Mr. GARDNER. Unauthorized use of money, problems with how 

money is spent, are criminal activities taking place here? 

Mr. BEERS. Sir, those are issues that we are looking into. When 

we discovered them—— 

Mr. GARDNER. You are looking into criminal—possible criminal 

activity? 

Mr. BEERS. If that turns out to be the result of these reviews, 

the answer to that, of course, is yes. We have an obligation to you 

and to the American public to do that. 

Mr. GARDNER. Do you—I mean, in terms of what you are facing, 

what else are we missing from this memo? I mean, is this a comprehensive memo or are there other issues that you are finding, 

other issues that need to be addressed? 

Mr. BEERS. Sir, you are asking me to say what the unknowns are 

here. I am not saying that this memo is the entirety, and I don’t 

think that David would say that. But it does represent a commitment to make sure that we understand the problems as we know 

them and to come up with solutions to fix that. David? 

Mr. WULF. I would just add that I would echo the Under Secretary’s sentiments. I would say that the report was focused, you 

know, as it was intended to be, an internal candid assessment. It 

was focused very much on the challenges side of the equation. It 

did not focus as much on the program’s successes and opportunities. You know, I would add, too, that we have a very talented and 

committed workforce within ISCD. We have very committed folks 

at both headquarters and in the field, all eager to move the program forward. And I think, as I mentioned earlier, you know, the 

problems we identified in the report are certainly not insignificant, 

but they are by no means insurmountable, and we are looking forward. We have a nearly 100 point action plan that is in progress. 

We are meeting on a weekly basis with Deputy Under Secretary 

Spalding to review progress on those items, and you know, we anticipate continued progress. 

Mr. GARDNER. The report identifies several issues with the 

unionization, the challenges you faced with the union. Can you 

name any other agencies or offices who deal in anti-terrorism security, national security, who placed a union in the picture before 

most accountability measures were put in place? 

Mr. WULF. I am not aware of any, but—— 

Mr. GARDNER. OK. Let us talk a little bit about the budget. The 

memo talks on page 15, and I quote, ‘‘ISCD lacks a system for 

tracking the usage of consumable supplies, which creates an environment for fraud, waste, and abuse.’’ This isn’t an Inspector General report, it is not the GAO saying this. It is the program managers describing their own program. So how can a member of Congress choose to fund a program that is so self-described? 

Mr. WULF. We recognize some administrative shortcomings in 

the tracking of funds, and recognizing, too, that this is a relatively 

new program, relatively new organization, we have put into place 

safeguards relating to the receipt of goods. As I mentioned earlier, 

we didn’t identify actual fraud, waste, or abuse, just that there 

47 

were additional processes that needed to be put into place to ensure that that does not—— 

Mr. BEERS. And sir, a point of clarification here. That part of the 

report is actually taken from another review that was accomplished 

during, started before, and finished during the period in which they 

prepared that, and it was our own compliance unit that did that, 

that discovered that. They didn’t discover any charges to be laid, 

but they said that the procedures were inadequate, as the report 

correctly says. 

Mr. GARDNER. Is there—DHS has an Inspector General, correct? 

Mr. BEERS. We have an Inspector General and we have also—for 

the whole department, and we have an office of compliance and security within our own NPPD, and that is who looked into this issue 

at the Assistant Secretary and my request. 

Mr. GARDNER. So the Inspector General has looked into this? 

Mr. BEERS. The Inspector General has access to these reports, 

yes, sir, but this was not done by—— 

Mr. GARDNER. Have you had conversations with the Inspector 

General? 

Mr. BEERS. With respect to this report? 

Mr. GARDNER. Yes. 

Mr. BEERS. I can’t speak to that. I have not personally had that 

conversation. 

Mr. GARDNER. But he has this memorandum? 

Mr. BEERS. As with all of these kinds of reports, yes, they are 

available. 

Mr. GARDNER. They are available or he has them? I mean, have 

you sent it to him? 

Mr. BEERS. I will have to confirm that to you, sir. 

Mr. GARDNER. Thank you. And another question I would have, 

just based on the authorization, would a multi-year authorization 

give you the surety that you need to pursue programmatic improvements? Would it be helpful for you to be assured that legislatively 

the program can’t change? 

Mr. BEERS. As the report says and as we have said for some 

time, a long-term authorization of this program is vital, both to the 

workforce and to our security partners and stakeholders in this 

program. It gives us a longer term stability that a year-to-year unfortunately doesn’t provide us. 

Mr. GARDNER. On the issue of re-tiering, there are a number of 

sites that were tiered last fall—— 

Mr. SHIMKUS. I would remind my colleague that we are getting 

close to the votes being already called. 

Mr. GARDNER. I have some additional questions I will get over 

to you. I yield back my time. 

Mr. SHIMKUS. Gentleman yields back his time, and I appreciate 

that. 

Let me just say in follow-up, I think Mr. Beers testified he would 

like the law to have been made permanent at the last—at the 

March hearing, so—but let me also just again thank you, Mr. 

Beers, for your long career of public service. And this is a part of 

your portfolio, not your entire portfolio: Marine Corps officer in 

Vietnam, foreign service, obviously did stuff at the Department of 

State, Middle East, Persian Gulf, international narcotics and law 

48 

enforcement. We get caught up in the heat of battle. We expect you 

to address these issues and fix them, and that will make further 

hearings go well. 

And just in response to my friend, Mr. Waxman, I love his founding father quote, ‘‘Where good laws do well, good men do better.’’ 

So you can’t pass a law for total compliance. It is really the people 

that make things work, and I think you are going to get a handle 

on it. I just wish that the people who have left the Department did 

not get a move, but probably would have been held more accountable to their activities. 

With that, I would like to adjourn this hearing. Thank you for 

your service. 

Mr. BEERS. Thank you. 

[Whereupon, at 11:17 a.m., the subcommittee was adjourned.] 

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