S. Hrg. 109–548

NEUTRALIZING THE NUCLEAR AND RADIOLOGICAL

THREAT: SECURING THE GLOBAL SUPPLY CHAIN

HEARINGS

BEFORE THE

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MARCH 28 AND 30, 2006

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

NEUTRALIZING THE NUCLEAR AND RADIOLOGICAL THREAT:

SECURING THE GLOBAL SUPPLY CHAIN

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27–754 PDF 2006

S. Hrg. 109–548

NEUTRALIZING THE NUCLEAR AND RADIOLOGICAL

THREAT: SECURING THE GLOBAL SUPPLY CHAIN

HEARINGS

BEFORE THE

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MARCH 28 AND 30, 2006

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Chief Counsel 

TRINA D. TYRER, Chief Clerk 

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS 

NORM COLEMAN, Minnesota, Chairman 

TED STEVENS, Alaska 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

RAYMOND V. SHEPHERD, III, Staff Director and Chief Counsel 

BRIAN M. WHITE, Professional Staff Member 

ELISE J. BEAN, Minority Staff Director and Chief Counsel 

LAURA E. STUBER, Minority Counsel 

MARY D. ROBERTSON, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Coleman .............................................................................................. 1, 66

Senator Collins ................................................................................................. 4

Senator Levin .................................................................................................... 6, 70

Senator Domenici ............................................................................................. 8

Senator Lautenberg .......................................................................................... 10

Senator Akaka .................................................................................................. 12

WITNESSES 

TUESDAY, MARCH 28, 2006

Hon. Thomas Kean, Former Governor of New Jersey and Chairman of the 

9/11 Commission .................................................................................................. 14

Stephen E. Flynn, Ph.D., Commander (USCG, Retired), Jeane J. Kirkpatrick 

Senior Fellow for National Security Studies, Council on Foreign Relations, 

New York, New York ........................................................................................... 16

Eugene E. Aloise, Director, Nuclear and Nonproliferation Issues, Natural 

Resources and Environment, Government Accountability Office .................... 31

Gregory D. Kutz, Managing Director, Forensic Audits and Special Investigations, Government Accountability Office, accompanied by Keith A. Rhodes, 

Chief Technologist, Center for Technology and Engineering, Government 

Accountability Office ............................................................................................ 34

David G. Huizenga, Deputy Assistant Secretary, National Nuclear Security 

Administration ..................................................................................................... 42

Vayl Oxford, Director, Domestic Nuclear Detection Office, Department of 

Homeland Security ............................................................................................... 46

Jayson P. Ahern, Assistant Commissioner, U.S. Customs and Border Protection ........................................................................................................................ 48

THURSDAY, MARCH 30, 2006

Hon. Lindsey Graham, a U.S. Senator from the State of South Carolina .......... 62

Hon. Charles E. Schumer, a U.S. Senator from the State of New York ............. 63

Hon. Michael P. Jackson, Deputy Secretary, Department of Homeland Security ......................................................................................................................... 75

Christopher L. Koch, President and Chief Executive Officer, World Shipping 

Council .................................................................................................................. 91

Gary D. Gilbert, Senior Vice President, Hutchison Port Holdings, Oakton, 

Virginia ................................................................................................................. 94

John P. Clancey, Chairman, Maersk, Inc., Charlotte, North Carolina ............... 97

ALPHABETICAL LIST OF WITNESSES

Ahern, Jayson P.: 

Testimony .......................................................................................................... 48

Prepared statement .......................................................................................... 173

Aloise, Eugene E.: 

Testimony .......................................................................................................... 31

Prepared statement .......................................................................................... 128

Clancey, John P.: 

Testimony .......................................................................................................... 97

Prepared statement .......................................................................................... 212

Flynn, Stephen E.: 

Testimony .......................................................................................................... 16

Prepared statement .......................................................................................... 115

Page

IV

Gilbert, Gary D.: 

Testimony .......................................................................................................... 94

Prepared statement .......................................................................................... 205

Graham, Hon. Lindsey: 

Testimony .......................................................................................................... 62

Huizenga, David G.: 

Testimony .......................................................................................................... 42

Prepared statement .......................................................................................... 152

Jackson, Hon. Michael P.: 

Testimony .......................................................................................................... 75

Prepared statement .......................................................................................... 181

Kean, Hon. Thomas: 

Testimony .......................................................................................................... 14

Prepared statement .......................................................................................... 110

Koch, Christopher L.: 

Testimony .......................................................................................................... 91

Prepared statement .......................................................................................... 187

Kutz, Gregory D.: 

Testimony .......................................................................................................... 34

Prepared statement .......................................................................................... 143

Oxford, Vayl: 

Testimony .......................................................................................................... 46

Prepared statement .......................................................................................... 163

Rhodes, Keith A.: 

Testimony .......................................................................................................... 34

Schumer, Hon. Charles E.: 

Testimony .......................................................................................................... 63

EXHIBITS 

1. Photograph of the Port of Hong Kong ............................................................. 217

2. Photographs of radiation portal monitors: 

a. Port of Norfolk, VA; ................................................................................ 218 

b. Port of Oakland, CA; .............................................................................. 219 

c. San Ysidro, CA–Tijuana, Mexico Border; and ...................................... 220 

d. Karakalpakia, Uzbekistan ..................................................................... 221

3. U.S. Government Accountability Office (GAO) Report to Congressional 

Requesters, COMBATING NUCLEAR SMUGGLING—Corruption, Maintenance, and Coordination Problems Challenge U.S. Efforts to Provide 

Radiation Detection Equipment to Other Countries, March 2006, GAO–

06–311 ................................................................................................................ 222

4. U.S. Government Accountability Office (GAO) Report to Congressional 

Requesters, COMBATING NUCLEAR SMUGGLING—DHS Has Made 

Progress Deploying Radiation Detection Equipment at U.S. Ports-of-Entry, 

but Concerns Remain, March 2006, GAO–06–389 ......................................... 301

5. U.S. Government Accountability Office (GAO) Letter Report to the Honorable Norm Coleman, Chairman, Permanent Subcommittee on Investigations, Border Security: Investigators Successfully Transported Radioactive 

Sources Across Our Nation’s Borders at Selected Locations, March 28, 

2006, GAO–06–545R ......................................................................................... 359

6. High Risk Shipments and Exams for all CSI Ports, Feb. 2005-Feb. 2006,

chart prepared by the Permanent Subcommittee on Investigations Majority Staff .............................................................................................................. 370

7. High Risk Shipments and Exams Conducted at Selected CSI Ports. Feb. 

2005-Feb. 2006—CSI Ports: Hong Kong, Yokohama, and LeHavre, chart 

prepared by the Permanent Subcommittee on Investigations Majority 

Staff ................................................................................................................... 371

8. High Risk Shipments and Exams Conducted at Selected CSI Ports. Feb. 

2005-Feb. 2006—CSI Ports: Durban, Gothenburg, and Rotterdam, chart 

prepared by the Permanent Subcommittee on Investigations Majority 

Staff ................................................................................................................... 372

9. Congressional Budget Office Analysis, The Economic Costs of Disruptions 

in Container Shipments, March 29, 2006 ....................................................... 373

Page

V

10. Boxes Containing Radioactive Material; Bill of Lading; and Nuclear Regulatory Commission Document, charts prepared by the U.S. Government 

Accountability Office, Office of Forensic Audits and Special Investigations ................................................................................................................... 405

11. Statement for the Record of Richard M. Stana, Director, Homeland Security and Justice Issues, U.S. Government Accountability Office, CARGO 

CONTAINER INSPECTIONS—Preliminary Observations of the Status 

of Efforts to Improve the Automated Targeting System, GAO–06–591T ...... 408

12. Statement for the Record of the Retail Industry Leaders Association ......... 427

13. Correspondence from Linton F. Brooks, Administrator, National Nuclear 

Security Administration (NNSA), Department of Energy, dated April 24, 

2006, to the Permanent Subcommittee on Investigations, regarding 

NNSA’s Management Decision on the Government Accountability Office’s 

Report GAO–06–311, COMBATING NUCLEAR SMUGGLING: Corruption, Maintenance, and Coordination Problems Challenge U.S. Efforts 

to Provide Radiation Detection Equipment to Other Countries ..................... 433

14. Inspectors: Security lags when traffic jams, March 29, 2006, Detroit Free 

Press ................................................................................................................... 436

15. Photograph and x-ray image taken at a Michigan port of a container 

carrying Canadian trash .................................................................................. 440

16. Department of Homeland Security, Office of Inspector General Report, 

Audit of Screening of Trucks Carrying Canadian Municipal Solid Waste, 

OIG–06–21, January 2006 ............................................................................... 441

17. SEALED EXHIBIT: Official Use Only U.S. Government Accountability 

Office (GAO) Letter Report to the Honorable Norm Coleman, Chairman, 

Permanent Subcommittee on Investigations, BORDER SECURITY: Counterfeit Documents Were Successfully Used to Transport Radioactive Material Across Our Nation’s Borders at Selected Locations, March 28, 2006, 

GAO–06–422SU ................................................................................................ *

18. Response to supplemental question for the record submitted to Gene 

Aloise, Director, Natural Resources and Environment, U.S. Government 

Accountability Office ........................................................................................ 463

19. Responses to supplemental questions for the record submitted to The 

Honorable Michael P. Jackson, Deputy Secretary, Department of Homeland Security ..................................................................................................... 465

20. Responses to supplemental questions for the record submitted to Jayson 

P. Ahern, Assistant Commissioner, U.S. Customs and Border Protection, 

U.S. Department of Homeland Security ......................................................... 485

21. Responses to supplemental questions for the record submitted to Vayl 

Oxford, Director, Domestic Nuclear Detection Office, Department of 

Homeland Security ........................................................................................... 487

22. Responses to supplemental questions for the record submitted to David 

G. Huizenga, Deputy Assistant Secretary, National Nuclear Security Administration ....................................................................................................... 492

23. Response to supplemental question for the record submitted to Cmdr. 

Stephen E. Flynn (USCG, Retired), Jeane J. Kirkpatrick Senior Fellow 

for National Security Studies, Council on Foreign Relations ....................... 498

24. An Assessment of U.S. Efforts to Secure the Global Supply Chain, Report 

prepared by the Majority and Minority Staff of the Permanent Subcommittee on Investigations ............................................................................ 501

(1)

NEUTRALIZING THE NUCLEAR AND RADIOLOGICAL THREAT: SECURING THE GLOBAL 

SUPPLY CHAIN 

TUESDAY, MARCH 28, 2006

U.S. SENATE,

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS,

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 9:32 a.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Norm Coleman, 

Chairman of the Subcommittee, presiding. 

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

Lautenberg. 

Staff Present: Majority: Raymond V. Shepherd III, Staff Director 

and Chief Counsel; Brian M. White, Professional Staff Member; Joanna Ip Durie, Detailee, ICE; Mary D. Robertson, Chief Clerk; Leland B. Erickson, Counsel; Mark L. Greenblatt, Counsel; Matthew 

S. Miner, Counsel; Cindy Barnes, Detailee, GAO; Kathy Kraninger 

and Allison Boyd (HSGAC/Collins); Henry Abeyta (Energy Comm./

Domenici); Minority: Elise J. Bean, Staff Director/Chief Counsel; 

Laura Stuber, Counsel; Richard Kessler (Akaka); Peter Vallario 

(Akaka); Madelyn Creedon (Armed Services/Levin); and Wendy Anderson (Lautenberg) 

OPENING STATEMENT OF SENATOR COLEMAN 

Senator COLEMAN. This hearing of the Permanent Subcommittee 

on Investigations is called to order. Good morning and thank you 

all for being here. 

Today we’ll be holding 2 days of hearings on perhaps the most 

important threat confronting our country: Terrorists acquiring and 

detonating a nuclear weapon in the United States. Have no doubt, 

this threat is real. 

The Director of National Intelligence, John Negroponte, starkly 

noted this threat in his public testimony last month. ‘‘Attacking the 

U.S. homeland, U.S. interests overseas, and U.S. allies,’’ he said, in 

that order, ‘‘are al-Qaida’s top operational priorities. . . . al-Qaida 

remains interested in acquiring chemical, biological, radiological, 

and nuclear materials or weapons to attack the United States, U.S. 

troops, and U.S. interests worldwide. In fact, intelligence reporting 

indicates that nearly 40 terrorist organizations, insurgencies, or 

cults have used, possessed, or expressed an interest in chemical, biological, radiological, and nuclear agent or weapons.’’

2

1See Exhibit 5 which appears in the Appendix on page 359. 

While the potential threat of a nuclear bomb is real, we cannot 

overlook the serious consequences that would result from a dirty 

bomb. For example, a dirty bomb constructed with Cesium–137, 

which is significantly less powerful than a nuclear weapon, detonated in New York, would wreak havoc, forcing millions to flee the 

city, and costing us billions in cleanup costs. It could close down 

Wall Street. 

A disturbing report from GAO that will be part of today’s hearing 

demonstrates significant vulnerabilities in our defenses against a 

dirty bomb and other terrorist’s threats.1 GAO investigators were 

able to smuggle enough radioactive source material to manufacture 

a dirty bomb across our northern and southern borders. 

However, there is both good news and bad news to this story. 

The radiation detectors correctly alarmed, signaling the presence of 

radioactive material. The Customs officers followed the proper procedures as well. This is the good news. 

The bad news, however, is that the officers were fooled by fraudulent documents and didn’t have the mechanisms to verify the documents. These are documents that my 20-year-old son could easily 

develop with a simple internet search using his computer at home. 

We cannot allow this potentially deadly material to transit our borders with such ease. 

Following this report, I am pleased to report that DHS has done 

the right thing. They have acknowledged the vulnerability and are 

taking corrective action to ensure that we close this gap. The Nuclear Regulatory Commission (NRC), however, does not appear 

ready to acknowledge that this is a problem, and I disagree with 

that. It is a problem when it is tougher to buy cold medicine today, 

after what we did with the Combat Meth Act—than it is to acquire 

enough material to construct a dirty bomb. 

Many experts, including one here this morning, believe that a 

maritime container is the ideal platform to transport nuclear radiological material or a nuclear device into the United States. Since 

90 percent of global trade moves in maritime containers, we can 

not allow these containers to be utilized to transport weapons of 

mass destruction. The consequences of such an event would be devastating to our way of life and our economy. 

Therefore, it is imperative that we look at these issues holistically, neutralizing the radiological and nuclear threat and securing the global supply chain. We must, first, secure, detect, and 

interdict nuclear and radiological materials, and second, ensure the 

global supply chain is secure. 

Our defenses against this threat must start overseas. The first 

line of defense is securing source material in Russia and the former 

Soviet Union states. Simultaneous to securing the material at the 

source, our second line of defense must be to detect and interdict 

this material if it falls into the hands of a terrorist or if an insider 

tries to sell this material to a terrorist or a terrorist network. 

These initiatives push our borders out, yet concurrent with these 

efforts, we need to secure material in the United States and detect 

and interdict material at our ports of entry. The borders of the 

United States must be the last line of defense. Collectively, this 

3

1See Exhibits 3, 4, and 5 which appear in the Appendix on page 222, 301, and 359, respectively. 

layered strategy will bring us closer to preventing the nightmare 

scenario—a terrorist with a nuclear weapon. 

For the past 2 years, the Subcommittee has conducted an extensive investigation into global supply chain security and our layered 

defenses against nuclear terrorism. Today, in the first of our twopart hearing, we will address this layered approach to detect and 

interdict potential smuggling attempts—both abroad and domestically—as well as our efforts to secure the material domestically. In 

the second part of the hearing, on Thursday, we will focus on global 

supply chain security. 

I want to take this opportunity to thank Ranking Member Levin, 

Chairman Collins, Senator Lieberman, and Representative Dingle 

for their support and interest in this important subject. Preventing 

nuclear terrorism and securing our Nation’s ports demands a bipartisan and bicameral approach. 

I will note that Chairman Collins will be conducting a hearing 

on the broader issue with the full Committee. She authorized the 

GreenLane Maritime Cargo Security Act. This is really the holistic 

approach, and I appreciate her leadership on this issue. And I appreciate the opportunity for this Subcommittee to take a piece of 

it. 

The Government Accountability Office has laid the groundwork 

for today with three superb reports.1 Collectively, the reports detail 

many positive steps taken by the U.S. Government to address these 

issues, but more importantly, note several gaps in our defense. Specifically, 41⁄2 years after September 11, less than 40 percent of our 

seaports have basic radiation detection equipment. This is a massive blind spot. Pervasive corruption poses a significant challenge 

to our detection efforts. 

And the Nuclear Regulatory Commission, I believe, remains in a 

pre-September 11 mindset in a post-September 11 world. For example, the NRC has yet to implement even the most basic of reforms 

to secure radiological material, which I believe the GAO set forth 

in 2003. And I anticipate asking the GAO about that today. 

These issues must be addressed with a sense of urgency. We 

must close the gap at our ports. The NRC must reform the processes by which anyone can acquire radiological material. And the 

National Nuclear Security Administration must continue to aggressively build safeguards against corruption. 

I would like to welcome Governor Kean, former Chairman of the 

distinguished 9/11 Commission, and Commander Flynn, to our 

hearing today. Our hearing will address the efforts to prevent the 

smuggling of nuclear and radiological materials, the disturbing fact 

that less than 40 percent of maritime containers entering the 

United States are screened for radiation, and the ability of undercover GAO investigators to use fraudulent documents to transport 

enough radiological material across the border to construct a dirty 

bomb. I look forward to your testimony and an engaging hearing. 

I would like to turn to my Ranking Member. I do know Chairman Collins has to be covering the floor on major legislation. But 

I’ll turn to, I think, Senator Levin. 

4

Senator LEVIN. Well, Madam Chairman, if you’re going to cover 

the floor, please go ahead. Thank you, though. Thank you, Mr. 

Chairman. 

OPENING STATEMENT OF CHAIRMAN COLLINS 

Chairman COLLINS. Thank you, Senator Levin, for your courtesy. 

As you’re aware, the Lobby Reform Act is on the floor today. We’re 

in the midst of trying to work out the final negotiations to allow 

us to finish that bill today. So I very much appreciate your courtesy. 

I want to commend both the Chairman and the Ranking Member 

for their efforts to strengthen the security of our ports by securing 

the global supply chain. If terrorists were to obtain nuclear material and smuggle it into this country, the consequences would be 

catastrophic: A tremendous loss of life and a crippling blow to our 

economy. 

As we learned after the attacks on our country on September 11 

when all commercial aircraft was grounded for a time, it is undoubtedly true that an attack on one port would result in all ports 

being closed for a period of time. That would quickly deliver a crippling blow to our economy. 

The Chairman’s work builds on the hearings that the full Committee has held on this challenge, beginning 3 years ago. And I 

commend you for your in-depth investigation into this issue. 

Many security experts, including the two experts that are before 

us on the first panel, have warned that a weapon of mass destruction is most likely to be smuggled into our country via a marine 

container. The number of containers entering this country continues to grow by more than 10 percent per year. In fact, Customs 

and Border Protection’s latest estimate is that the number arriving 

by ship exceeds 11 million. Just a couple of years ago when we 

were discussing this issue, it was 9 million. Now it’s more than 11 

million. 

Given current technology and the sheer volume of traffic, we simply cannot physically search every container without bringing trade 

to a standstill. The U.S. Government cannot follow every container 

throughout its global journey, nor can the government track every 

container and every piece of cargo along the roads, rails, and airways that bring them to the ports. 

What we need is a public/private partnership—that was the purpose of the C–TPAT program—and also a partnership with other 

countries, as we have with the Container Security Initiative (CSI). 

But previous work done by this Committee and by this Subcommittee have shown that those programs, while well-conceived, 

have been flawed in their implementation. Indeed, through CSI, 

only 17.5 percent of high risk cargo targeted for additional inspection actually receives it before being loaded onto ships and sent to 

our shores. 

We are making some progress in deploying radiation portal monitors at our ports. I recently visited the Port of Seattle and saw the 

trucks rolling through these monitors. I was impressed with the 

speed. There are quite a few false positives, sometimes caused by 

kitty litter and marble, but they certainly are a step in the right 

direction. 

5

But as I watched the trucks with the containers rolling through 

the nuclear detectors, I couldn’t help but think that it’s too late by 

that point. If there is nuclear material or the makings of a dirty 

bomb in one of these containers in Seattle, we have failed. We need 

to install radiation detection equipment overseas, at the ports of origin. That is just critical. 

But we must be mindful that even if the equipment is functioning properly and in the right place, if it’s not administered effectively, the program will not be a success. We see evidence of this 

concern in the Government Accountability Office reports that the 

Chairman has commissioned. These reports indicate that corruption and the use of false documents are a problem overseas—findings that are very troubling. It tells me that we need to have more 

of our own agents and inspectors stationed at foreign ports, and we 

need to make this a priority. 

Again, Mr. Chairman and Senator Levin, thank you for your 

courtesy in allowing me to proceed. I will be watching the hearing 

from afar as I continue the negotiations. Thank you. 

[The prepared statement of Senator Collins follows:]

PREPARED STATEMENT OF SENATOR COLLINS 

Thank you, Mr. Chairman. I commend you for your efforts to strengthen the security of our ports by securing the global supply chain. If terrorists were to obtain nuclear or radiological material and smuggle it into this country, the consequences 

could be catastrophic: a tremendous loss of life and a crippling blow to our economy. 

Your important work builds on hearings the full Committee has held on this challenge beginning three years ago. 

Many security experts, including notably Governor Kean and Dr. Flynn, who will 

testify this morning, warn that a weapon of mass destruction is most likely to be 

smuggled into our country via a marine container. The number of containers entering this country by sea continues to grow by more than 10 percent per year. In fact, 

Customs and Border Protection reports that in fiscal year 2005, the number arriving 

by vessel was more than eleven million. 

Given current technology and the sheer volume of traffic, we cannot physically 

search every container without bringing trade to a standstill. The United States 

government cannot follow every container throughout its global journey, nor can it 

track every container and every piece of cargo along the roads, rails, and airways 

that bring them to ports. No one nation can secure the international supply chain. 

For that reason, executive branch agencies engage in global initiatives to detect 

and interdict the illegal transport of nuclear and radiological materials through programs such as the Department of Energy’s Second Line of Defense. The deployment 

of radiation detection equipment overseas, at the borders of nations that are the 

most likely source of illicit nuclear materials, is a proactive investment in our national security. It is in every nation’s best interest to stop smuggling efforts as close 

to their source as possible. 

The United States has set a policy of zero tolerance for the arrival of weapons 

of mass destruction at our borders. That includes a plan to deploy radiation detection technology at all 380 sea, land, and air ports of entry. The intent is to scan 

all containers and vehicles entering our country for radiation by 2009. I am interested to hear from our witnesses today about the appropriate mix of detection technologies deployed overseas versus at domestic ports of entry. Clearly, we should detect and interdict these dangerous materials as far from the United States as possible. It may well be too late if a weapon of mass destruction were discovered at 

one of our major seaports, such as Seattle or Los Angeles. 

Just a few weeks ago, I visited both of those ports. The physical size of these facilities and the amount of activity that takes place are startling. So too is the proximity of these ports to major population centers. The Port of Seattle is in the midst 

of a large urban population, with two stadiums nearby and ferries carrying thousands of passengers each day. The consequences of an attack at a port like Seattle 

would be catastrophic. 

In improving port security, we are always mindful of the need to avoid hampering 

the flow of legitimate goods. While in Seattle, I watched a line of trucks pass 

6

through the portal monitors exiting a terminal. I was impressed with the speed at 

which the trucks were able to move. While the current technology is not perfect, 

CBP has proven that radiation monitors can be deployed without significantly impeding the flow of commerce. I also noted the small footprint required to install the 

equipment, which seemed to fit naturally into the flow of the traffic. While terminal 

operators use every inch of possible space to move more containers, they need only 

travel to Seattle and other places where the equipment is installed to see that security can be increased without sacrificing commercial flow or space. 

While progress has been made in deploying a global network to detect and interdict nuclear materials, we will hear today from the Government Accountability Office about continuing challenges. Clearly, in order to be effective, equipment deployed must be properly used. Reports of corrupt personnel at certain foreign border 

stations and ill-functioning equipment undermine the effectiveness of these programs. 

In closing, I wish to voice my support of Secretary Chertoff’s decision to make nuclear detection and interdiction a priority through the creation of the Domestic Nuclear Detection Office last year. The GAO’s preliminary findings indicate this office 

has made positive contributions already. Its mission is too important to fail.

Senator COLEMAN. Madam Chairman, again, thank you for your 

leadership on this issue. And, I know it’s going to make a difference. This Subcommittee is pleased to be doing its piece, its 

small piece. But we really do applaud your overall leadership. So 

I want to thank you for that. 

Ranking Member Levin. 

OPENING STATEMENT OF SENATOR LEVIN 

Senator LEVIN. Mr. Chairman, thank you particularly for the 

great leadership that you’re showing in an area which is of critical 

importance to our Nation, and for your focus of this Subcommittee’s 

attention on the smuggling of nuclear and radiological materials 

across international borders. 

The International Atomic Energy Agency has estimated that as 

of the end of December 2004, there were approximately 660 known 

attempts to smuggle nuclear or radiological materials across borders worldwide. Now, those efforts were the ones that have been 

discovered, and logic dictates that many other attempts have been 

made and may have succeeded. And just how many is unknown. 

The damage which a small amount of nuclear material can do is 

incredible. Plutonium metal the size of this water glass can destroy 

a city. It can be easily carried, without danger to the carrier until 

it is part of a nuclear explosion, so that a very easily carried hunk 

of plutonium this size can destroy Washington, or any other city, 

and can be easily transported without danger to the person who is 

carrying it. 

So the vulnerability of our country is clear. The Government Accountability Office will testify today that on two occasions during 

the last year, using personnel posing as importers, it managed to 

transport radioactive sources across our Nation’s border. And the 

ease with which the GAO was able to move these materials into 

the United States should be an alarming wake-up call to all of us, 

in particular to the Department of Homeland Security, but to all 

Americans, about the extent of our vulnerability. 

The Chairman and Senator Collins have described the dangers 

and the threats to U.S. security by these materials, and I will not 

repeat this. And I only regret that I’m going to have to leave in a 

few minutes for a White House commitment or else I surely would 

want to be here for the entire hearing, Mr. Chairman. 

7

But again, I just want to ask that my entire statement be made 

part of the record. 

Senator COLEMAN. Without objection. 

Senator LEVIN. And thank you for your ongoing and your continuing leadership in this and so many other areas. 

[The prepared statement of Senator Levin follows:]

PREPARED STATEMENT OF SENATOR LEVIN 

I commend the Chairman for his leadership in focusing this Subcommittee’s attention on the smuggling of nuclear and radiological materials across international borders, which is a real and ongoing threat to the national security of the United 

States. The International Atomic Energy Agency has estimated that as of the end 

of December 2004, there have been approximately 662 known attempts to smuggle 

nuclear or radiological materials across borders worldwide. These efforts are the 

ones that have been discovered. Logic dictates that many other attempts have been 

made and may have succeeded—just how many is unknown. 

The vulnerability of the United States to this threat is clear. The Government Accountability Office will testify today that, on two occasions during the last year, 

using personnel posing as importers, it managed to transport radioactive sources 

across our nation’s borders. GAO’s ease in moving these materials into the United 

States should be an alarming wake-up call to the Department of Homeland Security 

and to all Americans about the extent of our vulnerability. 

Smuggling nuclear and radiological materials presents two distinct threats to U.S. 

national security. The first and the most serious threat is that weapons grade nuclear material in quantities sufficient to build an improvised nuclear explosive device are smuggled undetected into U.S. territory. An improvised nuclear device constructed and detonated by individuals with technical knowledge could result in massive casualties and widespread physical and economic damage. 

The second threat is smuggled radiological materials which are incorporated into 

a dirty bomb which, when detonated, could cause widespread contamination. Immediate casualties resulting from a dirty bomb would probably be those killed or injured as a result of the explosion itself. A secondary consequence would be that the 

radiological material would likely contaminate a large area and result in major economic damage, disruption, and an expensive cleanup. 

These serious consequences demand that serious effort be taken to prevent nuclear and radiological materials from falling into the hands of terrorists, criminals, 

or other non-state actors. 

Since the fall of the Soviet Union, the Departments of Energy, Defense and State 

have worked to secure and consolidate nuclear and radiological materials in Russia 

and the States of the former Soviet Union. More recently, the United States, Russia 

and the International Atomic Energy Atomic Agency, have expanded their efforts to 

address radiological and nuclear materials at risk around the world. Governor Kean 

notes in his prepared testimony a concern about the slow rate at which these nuclear weapons and materials have been secured. The data suggests that it will take 

another fourteen years before the material in just the former Soviet Union is fully 

secured. 

In 1998, after recognizing the possibility that materials could be stolen or illegally 

diverted, even from secure sites, DOE, DOD and the DOS, working with Customs, 

initiated the Second Line of Defense program to detect and interdict nuclear and 

radiological materials at border crossings. These are the programs which will be discussed today. 

More recently, the Department of Homeland Security has worked to improve U.S. 

capabilities to detect and interdict nuclear and radiological materials at U.S. land 

borders and seaports, and initiated new programs, such as the Container Security 

Initiative (CSI), and the Customs Trade Partnership Against Terrorism (C-TPAT), 

which will be the subject of Thursday’s hearing. 

Today, we need to understand the nature of the threat, including who is working 

to smuggle these materials into the United States and elsewhere, where is the material coming from, where are the vulnerabilities and greatest risks, what is being 

done, and what more can be done to stop the smuggling. One note of caution is that, 

as we consider how to stop nuclear smuggling by inspections and other means, we 

must also consider the needs of legitimate commerce to keep goods moving. 

The GAO reports show that much more can and should be done to secure nuclear 

materials where they are stored, and to prevent these materials from moving across 

international borders illegally. The nuclear threat is one of the gravest facing this 

country and the world. The Administration and Congress must provide more reVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00015 Fmt 6633 Sfmt 6621 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
8

sources, more effective attention to the problem, and more international cooperation 

with our friends and allies to stop the illegal trafficking of nuclear and radiological 

materials worldwide.

Senator COLEMAN. Thank you, Senator Levin. I want you to 

know I have a newfound appreciation for the concern about garbage being transported into Michigan after reading the report and 

listening to your concerns. And I am hopefully that of all the issues 

we address, it’s one that wasn’t high on my radar screen until I 

kind of looked at pictures of material coming in where you couldn’t 

see anything. 

And sometimes the most obvious stuff is the stuff we ignore until 

it’s too late. So I just wanted you to know that you have awakened 

the consciousness of this Chairman on an issue that I know has 

been of great concern to you. 

Senator LEVIN. I really appreciate that. Thank you, Mr. Chairman. We’ll get into that on Thursday. 

Senator COLEMAN. Senator Domenici. 

OPENING STATEMENT OF SENATOR DOMENICI 

Senator DOMENICI. Senator and Mr. Chairman, I came today and 

probably would not be able to spend as much time as I would like. 

But I thought I would share a few thoughts on this issue of supply 

chain. 

It might not be within the immediate recollection of even our distinguished Chairman that the supply chain of dangerous components as part of a nuclear bomb’s potential really fell upon the 

world when Russia and the United States decided that the Cold 

War was over. There was a period of time when nobody knew how 

badly Russia had turned loose the controls they had over material 

that was dangerous. I mean, it was, Mr. Chairman, literally beyond 

belief. 

The way the Russians secured things was to have a secret city 

in which all of these items of danger were cast about and used. 

And the security was not like what we worry about. It was a ring 

of soldiers. So in other words, a general was in charge of securing 

it with the troops. 

And, the troops at a point in time started disappearing. I think 

you all remember that. You even alluded to it one time in a speech 

that there were no more soldiers guarding these places. They just 

decided to go home. 

Well, literally, the supply chain was open. And it was open for 

a long time. And frankly, the United States didn’t know what to 

do about it, to be honest. We had a strange philosophical dilemma 

up here. Maybe I would say neo-conservatives would say don’t pay 

the Russians anything to clean up their mess; you’re giving them 

our money. You know that. You know who they were. Others said, 

it is so risky, we’d better pay them. Even if it’s our money going 

to them and they’re not necessarily our friends yet, we’d better do 

something. 

I give you this background because to get where we are, we have 

gone through the passage of a law called Nunn-Lugar which we 

just plunked down upon this issue as I just reviewed it for you. 

And we said, we’ve got to do something about the issue. 

9

And believe it or not, although it worked, anybody that has read 

its history will know that it had a devil of a time working. And if 

you were reviewing it now, Mr. Chairman, you would find that it 

had so many failures because of bureaucracy that it would frighten 

you—who stopped it, who started it, who wouldn’t do it. 

Then we had the issue of who pays for it. Well, you understand 

much of your testimony is we need more money, as I read what you 

have to say. Well, we had a problem of the Defense Department 

wasn’t quite sure that as this grew, that it should come right out 

of the defense budget to pay for cleaning up the stockpile of the Soviet Union and to build security apparatus so you couldn’t steal 

their stuff and circulate it around the world. Why should the military pay? We have now spent more than $10 billion, if you’re interested, 

on that, and we have invented a whole new system for them that 

we have put in place through the Material Protection Control and 

Accountability. It is literally an American-built system that says to 

the Russian—that’s where most of this stuff is, you understand; 

that’s where it came from—it says, let’s build ways that we can at 

least know where the equipment is. Take stock of it. 

I had an incident—I was there once and they were showing me 

that we now do have some cameras to take pictures that show you 

who came in, who came out. And I looked up, and there was a neat 

little camera there. And I saw the little purchase—little thing advertising it, and it said, ‘‘Made in Albuquerque, New Mexico.’’ 

Which probably meant the Sandia Laboratory guys were doing a 

good job building cameras and things. 

In any way, that concluded with an astronomical effort on the 

part of the United States, and I was very pleased to lead it, where 

we decided to purchase, for $350 million 500 metric tons of highly 

enriched uranium. Now, that’s highly enriched. And you’ve got to 

down-blend to use it. It’s ready for bomb work. 

We bought it. It is what is feeding our nuclear power plants in 

the United States right now. We bought it. We get it from them 

under a great agreement. They get paid. But the United States is 

paying a lot of money into the Russian coffers to get that. But 

guess what it did? It prevents the building of 20,000 warheads. 

That’s what that did. 

Now, that’s not your problem of stealing it across borders. That’s 

a big macro global problem. But that’s pretty good work. We also 

bought 38 tons of pure plutonium at the same time in that same 

deal and said, if we can change its form so it can never be used 

in a bomb again, we’ve done something to inhibit the supply chain 

in a dramatic way. 

So my advice, for what it’s worth, to those who observed this, 

and you, Mr. Chairman, as you work on this, is to make sure you 

try to understand how difficult it is for those who you’re calling 

upon to be participants to find their role within their departments. 

Because they have to find the money, too. And they have to justify 

it. 

It’s still there as to who wants to voluntarily come up with the 

money and who’s saying, why should I come up with it. And I think 

we’re coming full circle again, and I’m not there yet but I’m saying 

close, as to how much of our money should we be giving them to 

10

do their cleanup and to do their security work when they’re doing 

pretty well now with lots of oil and gas money. 

That’s going to come into battle, and it probably is being felt 

there in the State Department and probably impacting on some of 

the things you think might be happening. Thank you very much. 

Senator COLEMAN. Thank you, Senator Domenici. 

Senator AKAKA. Oh, I’m sorry. I didn’t see Senator Lautenberg. 

OPENING STATEMENT OF SENATOR LAUTENBERG 

Senator LAUTENBERG. As all of us are called upon for so many 

other things, this is great importance and we’ve got to be able to 

devote some time for it. But we are being—I want our expert witnesses to know that the distinguished Chairs do not suggest a lack 

of interest. But Mr. Chairman, I thank you for calling this hearing 

and having this focus on what’s described as the greatest threat to 

our national security in the nuclear materials that could be used 

for weapons of incredible destructive destruction. 

As the report issued by the 9/11 Commission—we’ve just turned 

on the clock, Mr. Chairman; that’s a note of interest, if you don’t 

mind. Thank you—I’m the first among equals here—that Governor 

Kean, a dear friend and colleague in government for so many years 

and who has made such a great contribution to our country by his 

leadership on the 9/11 Commission as well as so many other things 

that go on in our State and our country, the report card that was 

issued by the 9/11 Commission last year gave the Bush Administration a grade of ‘‘D’’ for its efforts to secure nuclear materials 

around the world. 

The Commission’s report said, ‘‘Countering the greatest threat to 

American security is still not the top national security priority of 

the President and the Congress.’’ And I recall, Mr. Chairman, when 

we were talking about budget for DHS and I made reference to 

Governor Kean’s suggestion or recommendation that money for security grants be distributed based on risk, well, we had a vote on 

this Committee and the issue lost 15 to 1. Guess who the one was. 

So the question is: How seriously are we going to take these 

threats? How much political interest is entered into the equation? 

I think a lot. But these nuclear terror threats are still out there, 

and nuclear materials could be smuggled into our countries 

through one of our greatest vulnerabilities, our ports. 

And if you look at the port of New York and New Jersey and see 

the activity there, you just know that there’s a momentum created 

by the transfer of materials that could obscure or hide lots of 

things that we wouldn’t like to see in our area. Some 9 million 

cargo containers enter our ports every year, and almost 3 million 

in the port of New York and New Jersey alone. But we still inspect 

only 5 percent of these containers. Five percent. Unacceptable, 

given the threats that we face. 

And I share the belief that we need to inspect or scan all containers that enter our country. And no longer is it a thought that 

it can’t be done. It can be done. We’ve seen it in places like Hong 

Kong, and we see it in other areas where attempts to create scanning machinery are bearing fruit. 

And I strongly support the amendment that my colleague, Senator Menendez, offered to the budget resolution to require 100 perVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00018 Fmt 6633 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
11

cent screening. The alternative is to continue to rely on intelligence, the same intelligence that President Bush relied on in determining whether Iraq had weapons of mass destruction. And we 

now know that we can’t afford to be wrong again. 

One nuclear device smuggled into Port Newark in New Jersey 

could threaten the lives of 12 million Americans. Threats from 

other weapons of war, like chemical, biological, could similarly create havoc in unimaginable proportion. But we know that this item 

under discussion can certainly do that. 

Since 1991, the United States has invested approximately a billion dollars a year to monitor reactors in the former Soviet bloc 

from illegal transfer of nuclear materials. Today those reactors are 

considered relatively secure, but it’s believed that almost 50 reactors in other countries still lack adequate security. And most of 

them are in China, Ghana, Pakistan, and Uzbekistan, according to 

a list compiled by the International Atomic Energy Agency. There 

are also research reactors in countries hostile to America, including 

Iran and North Korea. 

Mr. Chairman, our Nation can do better than a grade of D. We 

know that we can do better than inspecting 5 percent of cargo 

containers. The Administration needs to heed the warnings of the 

9/11 Commission and make this a top national security priority 

with the funding and the mandate that accompanies that. Thank 

you very much. 

[The prepared statement of Senator Lautenberg follows:]

PREPARED STATEMENT OF SENATOR LAUTENBERG 

Mr. Chairman, thank you for calling this hearing and giving us an opportunity 

to learn more about the greatest threat to our national security—nuclear materials 

that could be used to build weapons of mass destruction. 

The report card issued by the 9/11 Commission last year gave the Bush Administration a grade of ‘‘D’’ for its efforts to secure nuclear materials around the world. 

The Commission’s report said, ‘‘Countering the greatest threat to America’s security is still not the top national security priority of the President and the Congress.’’

Nuclear terror threats are still out there—and they could be smuggled into our 

country through one of our greatest vulnerabilities: Our ports. 

Some nine million cargo containers enter our ports every year—almost three million in the Port of New York and New Jersey alone. 

But we still inspect only five percent of these containers. Five percent. That is 

unacceptable given the threats we face. 

I believe we need to inspect or scan all containers that enter our country. The 

alternative is to continue to rely on intelligence—the same intelligence that President Bush relied on in determining whether Iraq had weapons of mass destruction. 

We can’t afford to be wrong again. One nuclear device smuggled into Port Newark 

in New Jersey could threaten the lives of 12 million Americans. 

Since 1991, the U.S. has invested approximately one billion dollars a year to protect reactors in the former Soviet bloc from illegal transfer of nuclear materials. 

Today, those reactors are considered relatively secure. But it is believed that almost 50 reactors in other countries still lack adequate security. 

Most of them are in China, Ghana, Jamaica, Pakistan and Uzbekistan, according 

to a list compiled by the International Atomic Energy Agency. 

There are also ‘‘research’’ reactors in countries hostile toward the United States, 

including Iran and North Korea. 

Mr. Chairman, our nation can do better than a grade of ‘‘D.’’ We can do better 

than inspecting five percent of cargo containers. 

The Bush Administration needs to heed the warning of the 9/11 Commission, and 

make this a top national security priority. 

Thank you, Mr. Chairman.

Senator COLEMAN. Thank you, Senator Lautenberg. Senator 

Akaka. 

12

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. Thank you very much, Mr. Chairman. I want to 

commend you for holding this hearing, which is very important to 

me and to all of us. I want to tell you it’s a pleasure in welcoming 

our distinguished and qualified witnesses this morning. 

Mr. Chairman, I have a longer statement, and I’ll ask that it be 

entered into the record. 

Senator COLEMAN. Without objection. 

Senator AKAKA. I’m pleased that we are addressing the critically 

important issue of nuclear and radiological security. Over the past 

few years, I’ve requested several GAO reports that have identified 

insufficient efforts by the Federal Government to secure and dispose of radioactive sources, both domestic and internationally. 

Going back to early 2003, GAO reported to me problems with the 

Nuclear Regulatory Commission’s documentation and licensing, 

which according to GAO’s testimony remain a problem to this day. 

This is shocking. And I will be discussing with the NRC why this 

is so and why haven’t they implemented the corrective regulations 

they pledged to do at that time. I also successfully added a provision to the Energy Policy Act of 2005 designed to help secure radiological sealed sources in the United States. 

I have some continuing concerns. I’m particularly concerned 

about the nuclear and radiological security at our Nation’s ports 

because commercial harbors play a critical role in the economy of 

my home State of Hawaii. My State receives 98 percent of the 

goods it imports via sea. Hawaii has been successfully using radiation portal monitors at its seaports and airports to screen international cargo and mail. 

However, identifying radioactive sources at our borders and ports 

of entry must be our last line of defense in a layered approach that 

begins overseas. To be secure, we must identify, interdict, and secure radioactive sources and nuclear materials at their point of origin before they ever reach our shores. 

However, as I looked over the findings GAO will present today, 

I am troubled about the lack of accountability for programs and 

duplication of effort. The Federal Government has spent more than 

$178 million to provide 36 countries with radiation detection technologies that are not being used as efficiently nor as effectively as 

they should. Congress needs specific performance measures, cost 

estimates, and timelines for international nuclear detection programs. 

I’m also concerned about the possibility of duplicative programs 

in the newly established domestic nuclear detection office and the 

National Nuclear Security Administration in the area of radiation 

detection technologies. The new DNDO runs the risk of becoming 

another layer of bureaucracy on a crowded organizational chart, 

duplicating technologies being developed elsewhere in the Federal 

Government, and siphoning off scarce science and technology funds 

from other programs. 

Mr. Chairman, I look forward to hearing the testimony of our 

witnesses. Thank you very much. 

[The prepared statement of Senator Akaka follows:]

13

PREPARED STATEMENT OF SENATOR AKAKA 

Thank you, Mr. Chairman. It is a pleasure to see so many distinguished and 

qualified witnesses appearing before the Subcommittee today. 

I am pleased that we are addressing the critically important issue of nuclear and 

radiological security. Over the past few years, I have requested several Government 

Accountability Office (GAO) reports that have identified insufficient efforts by the 

federal government to secure and dispose of radioactive sources both domestic and 

internationally. 

In early 2003, the GAO reported to me problems with the Nuclear Regulatory 

Commission’s (NRC) documentation and licensing, which according to GAO’s testimony, remain a problem to this day. This is shocking, and I will be discussing with 

the NRC why corrective regulations have not been implemented, as they pledged to 

do. 

I also successfully added a provision to the Energy Policy Act of 2005 designed 

to help secure radiological sealed sources in the United States. 

However, today we are here to discuss the potential of radiological material crossing our borders. And, according to the testimony GAO will present today, as a nation the federal government isn’t doing enough to protect our citizens against this 

threat. 

A nuclear or even a ‘‘dirty bomb’’ attack on American soil would cause unimaginable destruction to our society. I am particularly concerned about the nuclear and 

radiological security at our nation’s ports because commercial harbors play a critical 

role in the economy of my home state of Hawaii. My state receives 98 percent of 

the goods it imports via sea. Hawaii has successfully been using radiation portal 

monitors at seaports and airports to screen international cargo and mail. However, 

I am troubled that the Department of Homeland Security’s plan to deploy additional 

detection technologies has been delayed, and now faces a projected $342 million 

overrun. 

Detection technologies used at US ports are the last layer of defense. The simple 

fact is that if a nuclear device is already in the US, it’s too late. Furthermore, many 

of these detectors can be defeated by effective shielding techniques. The difficulty 

associated with detecting nuclear or radiological materials and responding to these 

threats when they are already present in the United States underscores the importance of preventing these dangerous materials from being smuggled into the United 

States in the first place. 

Identifying radioactive sources at our borders and ports of entry must be our last 

line of defense in a layered approach that begins overseas. To be secure, we must 

identify, interdict, and secure radioactive sources and nuclear materials at their 

point of origin before they ever reach our shores. However, as I read over the findings GAO will present today, I am troubled about our lack of capability in this area. 

My first concern is one of accountability. Our nation has spent more than $178 

million to deploy radiation technologies overseas at strategic locations. The Departments of Defense, State, and Energy have programs with foreign governments in 

36 countries to provide detection technologies at screening locations in order to reduce nuclear smuggling efforts. While there have been some successes, detection 

technologies are not being used as efficiently nor as effectively as they should, according to GAO. The additional threat of corrupt border officials in some foreign 

countries further undermines our security. The GAO also found that federal agencies have fallen short in their ability to coordinate with one another. As GAO notes, 

we need specific performance measures, cost estimates, and timelines for our international nuclear detection programs. 

I am also concerned about the possibility of duplicative programs in the newly established Domestic Nuclear Detection Office (DNDO) and the National Nuclear Security Administration in the area of radiation detection technologies. These technologies must be both effective at detecting nuclear or radiological materials and 

they must operate efficiently enough to expedite and not impede the flow of commerce. The new DNDO runs the risk of becoming another layer of bureaucracy on 

a crowded organizational chart, duplicating technologies being developed elsewhere 

in the federal government, and siphoning off scarce science and technology funds 

from other programs. 

Lastly, we need a comprehensive understanding of the threat at the federal, state, 

and local levels. Intelligence, analysis, and information sharing play a critical role 

in combating nuclear and radiological smuggling efforts. Our intelligence community 

must be capable of sharing information rapidly with first responders at the state 

and local levels. 

I look forward to hearing the testimony of our distinguished witnesses. Thank 

you, Mr. Chairman.

14

1The prepared statement of Governor Kean appears in the Appendix on page 110. 

Senator COLEMAN. Thank you, Senator Akaka. And again, thank 

you for your leadership on this whole issue of nuclear and radiological security. I know how important it is to your State. 

I’d now like to welcome our first witnesses to this morning’s important hearing: The Hon. Thomas Kean, former Governor of New 

Jersey, and Chairman of the 9/11 Commission. Governor Kean, it’s 

truly an honor to have you with us this morning. I’d also like to 

welcome back to the Subcommittee retired Coast Guard Commander Stephen E. Flynn, a Jeane J. Kirkpatrick Senior Fellow for 

National Security Studies at the Council on Foreign Relations in 

New York City. Commander Flynn testified before the Subcommittee last May at our hearing on Container Security Initiative, or CSI, and the Customs-Trade Partnership Against Terrorism, or C–TPAT. 

I appreciate your attendance at today’s hearing and look forward 

to your testimony and perspective on perhaps the most important 

threat confronting the United States, and that’s nuclear terrorism. 

As I stated earlier, today’s hearing will kick off 2 days of hearings on Neutralizing the Nuclear and Radiological Threat: Securing 

the Global Supply Chain. Today we’ll assess U.S. efforts to detect 

and interdict radiological and nuclear material domestically and 

abroad. Governor Kean has championed the importance of this 

issue from his perch at the 9/11 Commission and at the Public Discourse Project. Commander Flynn is one of this Nation’s preeminent supply chain and homeland security experts. 

I look forward to hearing both of your thoughts on this critical 

issue. As you’re well aware, pursuant to this Rule 6, all witnesses 

before this Subcommittee are required to be sworn. I ask you to 

stand and raise your right hand. 

Do you swear the testimony you are about to give before this 

Subcommittee is the truth, the whole truth, and nothing but the 

truth, so help you, God? 

Governor KEAN. I do. 

Commander FLYNN. I do. 

Senator COLEMAN. Thank you. Governor Kean, we’ll have you go 

first, followed by Commander Flynn. And after we’ve heard your 

testimony, we’ll turn to questions. Governor Kean, please proceed. 

TESTIMONY OF THE HON. THOMAS KEAN,1 FORMER GOVERNOR OF NEW JERSEY AND CHAIRMAN OF THE 9/11 COMMISSION 

Governor KEAN. Mr. Chairman, distinguished Members of the 

Permanent Subcommittee on Investigations, it’s an honor to appear 

before you today with Commander Flynn, who’s done so much in 

this area to make the country safer. And this Subcommittee, under 

both its past and current leadership, has made a profound contribution to the security of the United States. 

Your investigative and oversight work on the question of the 

safety, secure storage, and interdiction of nuclear materials continues to be a vital part of the Nation’s nonproliferation efforts. 

And I would commend you, sir, for your leadership and the leadership of this Subcommittee. 

15

We made 41 recommendations from the 9/11 Commission. We 

think every one of those recommendations is important. But we 

worked very hard, and I think all 10 of us believe this: The most 

important of all our recommendations is to prevent terrorists from 

getting access to nuclear weapons because these are the weapons 

Osama bin Laden promised to get and promised to use. 

And we know that he and the leadership of al-Qaida have been 

working over the years to acquire them, for more than a decade. 

And we document this in our report. Testifying in a Federal courtroom in early 2001, an al-Qaida member explained his mission: It’s 

easier to kill more people with uranium. 

Now, we know al-Qaida’s intent. We know they’re patient, and 

we know that bin Laden and al-Qaida plan very carefully. We’re 

not saying, nor do we believe, that a nuclear event is the most likely. Attacks of the kind we probably saw in Madrid or London mark 

the most likely pattern. But a nuclear event is possible, and it 

would have profound and incalculable consequences. 

It would put millions of lives at risk. It would devastate our 

economy and change, we believe, our way of life. It must be elevated, therefore, above all problems of national security because it 

represents, simply put, the greatest threat to the American people. 

The Commission’s report could not be more clear: Preventing the 

proliferation of these weapons warrants a maximum effort. 

Now, how are we doing in this area? What progress are we making? Are we keeping weapons out of the hands of terrorists? The 

Commission believed, and I know Senator Nunn believes as well, 

that it is most important, if we can, to secure these materials at 

their source. The Cooperative Threat Reduction Program, better 

known as the Nunn-Lugar program, is carrying out very important 

and useful actions to secure nuclear materials at their source, and 

in some cases to take these materials and transport them to a secure location. People in government, especially at the Defense, 

State, and Energy Departments, are working hard to implement 

these programs, and I commend them for this important work. 

So there are on this policy some positive signs. President Bush 

and President Putin made an agreement in Bratislava last year, 

and that gave the bureaucracy a push. American inspectors now 

have additional access to weapons storage sites in Russia. Liability 

issues, which had delayed efforts to eliminate plutonium from dismantled weapons, seem, as I speak to be getting resolved. 

More of the vulnerable nuclear facilities in Russia are receiving 

security upgrades. The current Defense Authorization Act includes 

amendments by Senator Lugar that cut bureaucratic red tape and 

hopefully will speed up the work of Nunn-Lugar. These are good 

steps, but they are simply not enough. 

What is most striking is that the size of the problem still totally 

dwarfs the policy response of our government. The Nunn-Lugar 

program to secure nuclear materials in the former Soviet Union is 

now 14 years old, and about half of the nuclear materials in Russia 

still have no security upgrades whatsoever. At the current rate of 

effort, it’s going to take another 14 years to complete the job. And 

is there anybody anywhere who thinks in this country we have 14 

years? 

16

1The prepared statement of Commander Flynn appears in the Appendix on page 115. 

This is unacceptable. Bin Laden and the terrorists will not wait. 

And the challenge is bigger, as you know, than the ex-Soviet 

Union. Some 40 countries have the essential materials now for nuclear weapons. Well over 100 research reactors around the world 

have enough highly enriched uranium present to make a nuclear 

device. Too many of these facilities lack any kind of adequate protection. Now, the terrorists are smart, and they plan, and they’ll 

go where the security is weakest. 

Our own agencies need to make protecting the Nation from a 

possible WMD attack an absolute priority. And we are disappointed 

to hear, for instance, that the FBI is not further along on preventing weapons of mass destruction. In short, we do not yet have 

a maximum effort against what everybody agrees is the most serious threat to the American people. 

Now, when is an issue a priority? I think everybody knows when 

it’s a priority. It’s a priority when our leaders are talking about it. 

Now, why isn’t the President talking more often about securing nuclear materials? Why, apart from the superb efforts of this Subcommittee, why isn’t the Congress focused? Why aren’t there more 

hearings? Why isn’t there greater member interest? And what 

about the media? Why aren’t the airwaves filled with commentary 

if everyone agrees that the crossroads of terrorism and nuclear 

weapons is simply the most serious threat that we are facing in 

this country? 

What we recommend: The President should develop a comprehensive plan to dramatically accelerate the timetable for securing all nuclear weapons-usable material around the world and in 

securing our ports. He should request the necessary resources that 

he needs to complete this task. He should publicly make this goal 

his top national security priority, and ride herd on the bureaucracy 

so that we can maintain in this country the sense of urgency that 

we need on this issue. 

The Congress should provide the resources needed to secure vulnerable materials and our ports at the fastest possible rate. The 

Congress hopefully will work with the President to secure as much 

public support as possible for this effort. In this area, the President 

and the Congress simply need to work together, and to do so on 

a bipartisan basis because there is simply, in my view, no higher 

priority on the national security agenda. 

Thank you, Mr. Chairman. 

Senator COLEMAN. Thank you, Governor. Commander Flynn. 

TESTIMONY OF STEPHEN E. FLYNN, PH.D., COMMANDER 

(USCG, RETIRED),1 JEANE J. KIRKPATRICK SENIOR FELLOW 

FOR NATIONAL SECURITY STUDIES, COUNCIL ON FOREIGN 

RELATIONS, NEW YORK, NEW YORK 

Commander FLYNN. Thank you very much, Mr. Chairman. It’s 

an honor to be back here before you today. And I want to thank 

you, I want to echo what has been said here before, and commend 

you for your leadership, and that of Chairman Collins, on these 

critical issues. 

17

And I’m also very pleased that Senator Akaka and Senator Lautenberg are here. I know they’ve been such strong voices on the 

issues of port security and container security that have been an 

issue that’s consumed a lot of my attention, particularly since September 11, but before then when it was unfashionable. 

I am especially pleased to be alongside Governor Tom Kean, who 

of course has provided this Nation such an extraordinary service 

with the leadership you provided at the 9/11 Commission. I was 

sort of astonished to the extent at which many Americans didn’t 

want to look closely at that event of that day. I think that’s been 

part of the trauma of it. But I think so many Americans I certainly 

hear around the Nation are so grateful for the work that you’ve 

done, sir. And it’s an honor to be with you today. 

Particularly, Mr. Chairman, thank you for your outstanding leadership in raising the profile and advancing practical approaches to 

this complex challenge. You’ve been hard at work on this issue, I 

know, long before the Dubai Ports World controversy made this 

issue of port and container security the hot button issue here in 

Washington. 

I also want to commend the work of Ray Shepherd and Brian 

White of your staff for their tireless oversight of activities of the 

U.S. Government on these issues. I would count Mr. Shepherd and 

Mr. White, along with Kathleen Kraninger and Jason Yanussi, who 

are on the staff of the Senate Homeland Security and Governmental Affairs Committee, as four of the most knowledgeable individuals on supply chain container security in Washington. 

One of the extraordinary things about this issue is it’s very difficult to see the forest for the trees. And the tendency is for people 

to just take pieces of it, whether it’s under Committee jurisdictions 

or whether it’s in the bureaucracy. And there’s only a handful of 

folks, like this Subcommittee, who have been trying to rise above 

it and see its totality. 

As I will outline in my testimony today, the Government Accountability Office is largely on the mark in highlighting a number 

of serious shortcomings in the design and the execution of the radiation detection programs being pursued by both the Department of 

Energy and the Department of Homeland Security. But before getting into the particulars about what are the limits of these programs and outlining some recommendations for next steps, I think 

it important to review the nature of the terrorist threat as it relates to this issue. 

Let me share with you at the outset the terrorist scenario that 

most keeps me awake at night that I recently shared before the 

House Armed Services Committee. This scenario has been informed 

by the insights provided to me by Gary Gilbert, the Chairman of 

the Corporate Security Council and Senior Vice President, 

Hutchison Port Holdings, who will be testifying before your hearing 

on Thursday, March 30. 

The scenario goes this way. Imagine that a container of athletic 

footwear for a name brand company is loaded at a manufacturing 

plant in Surabaya, Indonesia. The container doors are shut with a 

mechanical seal that is put into the door’s pad-eyes. These designer 

sneakers are destined for retail stores in malls across America. 

18

The container and seal numbers are recorded at the factory. A 

local truck driver, though, turns out to be sympathetic to al-Qaida, 

and he’s the guy who’s going to pick up the container. On the way 

to the port, he gets lost, turns into an alleyway, and backs the 

truck up at a nondescript warehouse, where a small team of 

operatives pry loose one of the door hinges to open the container 

so they can gain access to the shipment. This is a common technique in cargo theft. 

Some of the sneakers are removed, and in their place the 

operatives load a dirty bomb wrapped in lead shielding, and then 

refasten the door. The driver then takes the container, now loaded 

with the dirty bomb, to the port of Surabaya, where it is loaded on 

a coastal feeder carrying about 300 containers for the voyage to Jakarta. 

In Jakarta, the container is then transferred to an inter-Asia 

ship, which typically carry 1,200 to 1,500 containers to the port of 

Singapore or the port of Hong Kong. In this case, the ship goes to 

Hong Kong, where it is loaded on a super-container ship that carries typically 5,000 to 8,000 containers for a trans-Pacific voyage. 

The container then is offloaded in Vancouver, British Columbia. 

Because it originates from a trusted name brand company that has 

joined the Customs-Trade Partnership Against Terror, the shipment is never identified for inspection by the Container Security 

Initiative team of U.S. Customs inspectors located in Vancouver. 

Consequently, the container is loaded directly from the ship to a 

Canadian Pacific rail car, where it is shipped to a rail yard in Chicago, crossing the border somewhere, I think, in your home State, 

Mr. Coleman. Because the dirty bomb is shielded in lead, the radiation portals currently deployed along the U.S.-Canadian border do 

not detect it. When the container reaches a distribution center in 

the Chicago area, a triggering device attached to the door sets the 

bomb off. 

There would be four immediate consequences associated with 

this attack. First, there would be the local deaths and injuries associated with the blast of the conventional explosives. Second, there 

would be the environmental damage done by the spread of industrial-grade radioactive materials. 

Third, there would be no way to determine where the compromise to security took place, so the entire supply chain and all 

the transportation nodes and providers must be presumed to 

present a risk of a potential follow-on attack. Fourth, and perhaps 

most importantly, all the current container and port security initiatives would be compromised by the incident. 

Now, in this scenario, the container originated from one of the 

5,800 companies that now belong to the Customs-Trade Partnership Against Terrorism. It would have transited through multiple 

ports—Surabaya, Jakarta, Hong Kong, and Vancouver—that have 

been certified by their host Nation as compliant with the post-9/11 

International Ship and Port Facility Security Code that came into 

effect on July 1, 2004. 

Because it came from a trusted shipper, it would not have been 

identified for special screening by the Container Security Initiative 

team of inspectors at Hong Kong or Vancouver. Nor would it have 

been identified by the radiation portal. 

19

As a consequence, governors, mayors, and the American people 

would have no faith in the entire risk management regime erected 

by the Bush Administration since September 11. There will be 

overwhelming political pressure to move from a 5 percent physical 

inspection rate to a 100 percent inspection rate, effectively shutting 

down the flow of commerce at and within our borders. 

Within 2 weeks, the reverberations would be global. As John 

Meredith, the group managing director of Hutchison Port Holdings, 

warned in a January 20, 2004 letter to Robert Bonner, then the 

Commission of Customs and Border Protection, ‘‘I think the economic consequences could well spawn a global recession—or 

worse.’’

In short, the stakes are enormous. But there are four factors associated with the scenario that I just laid out that usefully informs 

the focus of this hearing. First, the threat is not so much tied to 

seaports and U.S. borders as it is to global supply chains that now 

largely operate on an honor system because the standards are so 

nominal. 

Second, no transportation provider, port operator, or border inspector really knows what’s in the containers that pass through 

their facilities, and the radiation portal technology currently being 

deployed at U.S. borders as a part of the Second Line of Defense 

and Megaports programs can be evaded by placing light shielding 

around a weapon. 

Third, private companies must be part of the solution since they 

have huge investments at stake. And fourth, the scenario I just 

laid out involving Vancouver as the offload port in North America 

highlights that the challenge of securing global supply chains can 

involve both port security and border security measures simultaneously. 

Mr. Chairman, I believe that we are living on borrowed time 

when it comes to facing some variation of the scenario I just laid 

out. This is because both the opportunities for terrorists to target 

legitimate global supply chains remain plentiful, and the motivation for doing so is only growing as jihadists gravitate towards economic disruption as a major tactic in the war with the United 

States and the West. I’d like to elaborate on this latter point. 

The primary conclusion that I reached in researching my book, 

America the Vulnerable, is that Americans and the West must assume our most critical infrastructures that underpin our economy 

will become the target of choice for terrorist groups like al-Qaida. 

This perspective runs a bit contrary to the longstanding view of 

terrorism that has held that terrorists are mainly interested in 

symbolic and spectacular acts of violence that kill lots of people. 

But this trend towards economic targeting has been growing in 

Iraq, for instance. Beginning in June 2003, Iraq’s energy sector became a primary target for insurgents. By mid-July 2005, nearly 

250 attacks on oil and gas pipelines has cost Iraq more than $10 

billion in lost revenues. Successful attacks on the electric grid have 

kept average daily output at 5 to 10 percent below the pre-war 

level despite the $1.2 billion that United States has spent to improve Iraqi electrical production. 

Now, the key here is that we have insurgents who are increasingly learning how to target critical infrastructure, many of them 

20

foreign insurgents who are going to take their skill-set back home. 

And disruption is a big part of their efforts. 

Against this strategic backdrop, I believe there remains too little 

appreciation within the U.S. Government that global supply chains 

and the intermodal transportation systems that support them remain a vulnerable critical infrastructure to mass disruption. Instead, U.S. law enforcement agencies and the national security 

community have been looking at supply chains as one of but a 

menu of smuggling venues. 

Some agencies like my own former agency, the Coast Guard, and 

the Office of Naval Intelligence have argued that a weapon of mass 

destruction is more likely to be smuggled into the United States on 

a fishing vessel, an ocean-going yacht, or a bulk cargo vessel rather 

than in a container. 

Now, this is probably an accurate assumption in the case of a nuclear weapon. A nuclear weapon would be of such high value asset 

to a terrorist organization that they would be unlikely to surrender 

custody to unwitting third parties to transport it. 

But the opposite reason applies to a dirty bomb, which is more 

commonly referred to by national security experts as a weapon of 

mass disruption because its lethality is fairly limited, a factor primarily of the conventional explosives with which it’s made. 

The radioactive material contained in the bomb would create 

costly environmental damage and potentially some long-term 

health risk for those that were exposed, but not immediate deaths. 

The fact that a dirty bomb is suited for disruption makes it an 

ideal weapon to set off within the intermodal transportation system 

precisely because it would generate the kinds of consequences that 

my scenario portends. 

I’m afraid, for the foreseeable future, the material to make a 

dirty bomb will likely be available throughout the international 

community despite even stepped-up counter-proliferation. This is 

because radioactive materials that can be used in the construction 

of weapons are becoming more widely available as sophisticated 

medical and engineering equipment are purchased and used 

throughout the international community. 

It is against this threat backdrop that we should evaluate the effectiveness of the U.S. Government programs which aim to confront 

this threat. 

I review in my written testimony the various initiatives that 

have been undertaken since September 11 by the Coast Guard, 

CPB, DOE, DOS, and DOD. Overall, these programs have been 

largely well-conceived by the parent agency or the department that 

sponsors them. But I do not believe it’s appropriate to conclude 

that all this activity should be confused with real capability. 

For one thing, the approach has been a piecemeal one, with each 

agency pursuing its signature program or programs without much 

regard for the other initiatives. There are also vast disparities in 

the resources that the agencies have been allocated. 

But most problematic are some of the questionable assumptions 

about the nature of the terrorist threat that underpin these programs and the poor state of intelligence that underpins the risk 

management approach that CBP and the Coast Guard are relying 

upon to decipher high risk and the low risk. Using Secretary 

21

Chertoff’s language, they are relying almost entirely on what they 

know about known risk, with virtually no capability to deal with 

the unknown risk. 

Further, in an effort to secure funding and public support, agency heads and the White House have often over-sold the contributions that these new initiatives are making towards addressing a 

very complicated and high stake challenge. Against a backdrop of 

these inflated and unrealistic expectations, the public will be highly 

skeptical of official assurances in the aftermath of a terrorist attack 

involving the intermodal transportation system. 

Absent change, in the scramble for fresh alternatives to reassure 

an anxious and angry citizenry, the White House and Congress are 

likely to succumb to the political pressure to impose draconian inspection protocols that will dramatically raise costs and disrupt the 

cross-border trade flows. 

We can certainly do better than all of this. And I lay out in my 

testimony a framework that I have testified about before, which I’ll 

just briefly summarize here. It involves several layers. 

The first and most important is that at the factories, we move 

from a C–TPAT, which relies primarily on customs agents to do the 

job of trying to verify compliance, to one that would use independent third parties overseen by not just customs, our customs 

agents, but perhaps by an international team of oversight. 

Second, continue to explore the ability to track movements of 

containers and monitor their integrity as they move throughout the 

supply chain. 

Third, and most importantly, I recommended to you an initiative 

that I know you looked at and saw, Mr. Chairman, in Hong Kong 

as I think a true model of where we might be able to go, which is 

that within private facilities overseas, begin the effort of scanning 

every container for not just radiation, because of their ability to defeat it in the ways that I just laid out, but also for its contents to 

find big dense objects that don’t belong there, and to record what 

moves through the system so we can both better deter, ideally be 

able to identify and intercept without false alarms, and ultimately, 

in the worst case, be able to resolve issues of where something happened so the whole system won’t fail. 

And finally, we need to do a much better job in coordinating all 

this activity and giving it the scale of urgency that Governor Kean 

has laid out so eloquently here today. 

In conclusion, at the end of the day, confronting the nuclear 

smuggling threat requires that we take the post-September 11 security framework the U.S. Government has been developing, largely on the fly over the past 4 years, and quickly move it to the next 

generation that builds on the original framework. We have a 

version 1.0. We need a version 2.0. 

The three key ingredients in getting from where we are to where 

we must be is first to recognize that it’s a global network that we’re 

trying to secure. Second, that much of the network is owned and 

operated by private entities, many who have foreign ownership, so 

the U.S. Government must be willing and able to work with those 

companies as well as their host governments to advance appropriate safeguards. 

22

And finally, both Congress and the White House should embrace 

a framework of ‘‘trust but verify,’’ in President Ronald Reagan’s 

phrase, based on real global standards and meaningful international oversight. 

Thank you, Mr. Chairman, and I look forward to responding to 

your questions. 

Senator COLEMAN. Thank you very much, Commander, and my 

thanks to the Governor. 

But just quickly, your last four points, when you summarize C–

TPAT, you said trust but verify. It’s a voluntary system today, but 

you’re recommending including a verification piece in there, which 

we don’t presently have. Is that a fair statement? 

Commander FLYNN. That’s exactly right, sir. 

Senator COLEMAN. In terms of monitoring for integrity, in the 

scenario that you laid out, if in fact there was within that container 

from the time it’s sealed a device, an RFS device, or a monitor that 

would let us know if that container was opened, that might prevent 

the disruptive scenario that you laid out. Is that a fair statement? 

Commander FLYNN. That is correct. And I think, the dream is 

that we’d actually have something built into the container. Because 

the release of radioactive material would happen over time, and 

that would be ideal, a sensor for that. But certainly something that 

helps to detect an intrusion would be quite helpful. 

Senator COLEMAN. And that technology is readily available 

today? 

Commander FLYNN. It is. The challenge, of course, ultimately 

managing this technology in a system of millions of containers 

would require political leadership and a real commitment on the 

U.S. Government’s part. But it’s technically feasible and economically viable. 

Senator COLEMAN. One of the things that I have found fascinating, Commander, is in working with the private sector in my 

State in the past. Companies such as Target Corporation and Best 

Buy, I didn’t want to incur any extra cost in the cost of a container. 

But today, when I talk to the private sector, they’re looking for 

more uniform standards like this. They understand the risk of the 

system being shut down. And I think they’d be more inclined to 

incur costs for security. However, we need leadership in this country to ensure that you have these kind of systems across the board. 

Does that corresponded with your conversations——

Commander FLYNN. Absolutely. What I hear from a number of 

chief security officers of some of the biggest companies is they look 

around and they see because there is no verification process in C–

TPAT, they see a lot of free riders. So they’re making a case for 

standards and enforcement and making a real commitment of resources. But as Governor Kean was saying about the terrorists 

gravitating to the weakest point, they can’t secure the supply chain 

on their dime when others are basically allowed to essentially come 

in on the fly. 

So it’s an issue of raising the bar so there is a level playing field 

for all of them, and therefore we don’t put the whole system at 

risk. Because we don’t like to discriminate by companies and say, 

oh, Target, you’re great; everybody else is bad. When the attack 

happens, we’re going to bring it all down. 

23

The other issue is, frankly, C–TPAT, in a curious way, puts all 

the liability on the private sector. When basically customs inspectors are only focused on a narrow universe of unknown shippers, 

basically, to examine, if something goes wrong within their supply 

chain—and no chief security officer can protect against the scenario 

that I laid out here today as a one-time incident. They just can’t 

do it with existing technology. That whole company’s brand goes up 

in smoke because customs as well as the U.S. Government will be 

the first to say, you failed to live up to your security obligations. 

So I’m hearing increasingly a willingness to go further, to have 

a set of standards that we can have confidence, to reduce their own 

liability exposure, and to level the market playing field so we secure the system. 

Senator COLEMAN. And you’ve mentioned the ICIS system in 

Hong Kong, in which every container is scanned. A concern has 

been raised—and I want to discuss this more fully, and we will discuss it more fully Thursday. 

But one of the concerns being raised is that, well, you can get 

the scan, but you can’t really analyze. You’re not really doing an 

analysis of that. And somehow, that would be a reason for not 

scanning every container. How would you respond to that? 

Commander FLYNN. Well, one of the key things about the Hong 

Kong project, and I was involved a bit in sort of the thought leader 

side of putting it together, is that the basic notion is to defeat—

the way that I laid out in the scenario was you shield the weapon 

and we know the existing radiation portal can’t find it. 

But now you have a very dense object because you surround it 

in lead. The scan can alarm around a very dense object where it’s 

not supposed to be. Twenty-foot containers and 40-foot containers 

actually are set to carry the same amount of weight. Typically, you 

put more heavy things, therefore, in 20-foot so they take up less 

room on the ship. So you basically don’t expect to see very dense 

material inside 40-foot containers. 

The main application as a primary screen is to validate low risk 

is low risk. And it also solves your kitty litter problem that alarms 

off because you see the consistency across the load with the manifest. 

The problem is the current protocols of how we do this has not 

been developed yet on the U.S. Government side. When the pilot 

was undertaken as a private sector initiative, nobody knew whether it could work or not. And yet what it was about was to say, if 

it’s possible to do 100 percent screening, it works better for the terminal if that can be done as a part of its routine instead of disrupting its life. And it should provide a treasure trove of information for customs to work with. 

My own—as I see this evolve very quickly, it is as we merge commercial data about what’s supposed to be in the container, and the 

software builds the archival information, it sees in my sneaker scenario—it’s seen 40 shipments of sneakers before, and this is the 

first one that has this object in it. The software will support the 

analytical job. 

So at the end of the day, we’re operating a system where we have 

no data. In Hong Kong last year, the Customs and Border Protection Service inspected about 3,500 containers total in a port that 

24

moved 22 million containers. Now, all those weren’t coming to the 

United States. But in just two of the gates—because it’s not just 

in Hutchison Terminal; it’s also in another terminal called Modern 

Terminal—those two gates have collected to date almost 2 million 

images. 

I think—which is better, a system where we rely on intelligence 

that’s weak to basically look at 3,500 with foreign cooperation, or 

one that we’re gathering much more information and we can enhance our targeting for it? I think most Americans would rightfully 

choose the latter, particularly when the facilities are willing to put 

the equipment in and pay for it and maintain it for us. 

Senator COLEMAN. And on the back end in your very chilling scenario—I’m going to move from your chilling scenario to the one 

that the Governor has presented—you talk about shutting down 

the entire system until we put in place 100 percent monitoring. 

I think the reality is we’d be shutting down the system because 

we wouldn’t know where the problem came from; whereas with this 

system you could at least—you’d have a database and a multiple 

layer of database. You’d have an image. You’d have an RPM monitor. You’d have a manifest. I presume you have the computer capacity to go back and track it down. 

And then you’d have one part of the system you’d shut down, but 

there would still be integrity in the rest of the system. And I think 

folks have to understand: We shut down the global supply chain, 

we shut down the ability to bring cargo containers to this country, 

we greatly disrupt, absolutely destroy for a period of time, the 

economy of this country. 

Commander FLYNN. Yes. And the world. 

Senator COLEMAN. And the world. I’ll start with worrying about 

Minnesota—but that is the reality that we face. 

Commander FLYNN. And I think, Mr. Chairman, it’s important to 

realize that there is deterrent value by building this capability. The 

scenario laid out was the assumption by the terrorists that putting 

the dirty bomb in the system would disrupt this critical infrastructure, that it would get that response. 

As you build the capability to have the system potentially fare 

better, you basically take that off as an attractive target. And I 

think the key is to recognize that there is deterrent value in putting safeguards in place. You almost hear that it’s hopeless. They’re 

suicide bombers. 

They have limited capabilities, and acquiring a weapon of mass 

destruction could take years. They have a very limited threshold 

for failure. They’re not going to put it in a system where there’s 

a high risk of detection, or even where the consequences are going 

to be limited, given the alternatives, and we could therefore safeguard this critical network against the worst case scenario by 

building it. 

I think the bottom line is to recognize that it’s not about necessarily preventing a conduit for getting bad things to the United 

States. It’s the system itself that is critical and needs to be safeguarded. And that’s why it deserves greater priority than it’s been 

receiving. 

Senator COLEMAN. And Governor Kean, you’ve been part of this 

across the board. You present a very chilling scenario. The first 

25

scenario is of a nuclear weapon. And clearly, the case you’re making is we’ve got to get back to the sources, and still throughout the 

world there are a significant number of sources that are still not 

secured. And that presents a grave threat. 

In addition, though, if I can go back to your service as head of 

the 9/11 Commission. If a dirty bomb were to have exploded at the 

base of the World Trade Center, can you talk about the economic 

and the emotional impact? 

Clearly it would not be a Hiroshima-like effect of taking at one 

swipe perhaps hundreds of thousands of lives, if not more. But can 

you talk a little bit about the economic and psychological impact 

of a nuclear or radiological device being exploded in a high population area? 

Governor KEAN. Well, first of all, the psychological impact of just 

having that go off in a highly populated area. And for instance, in 

the financial district, that could make parts of that district 

unlivable for any number of years. Totally disrupt our economy in 

the process. Terrify residents of urban areas, or any area where a 

lot of people live together. 

I think the psychological, economic consequences of that would be 

almost impossible to imagine. It’s hard to think of something that 

would be any worse, which is the reason why that kind of scenario 

is the one that keeps me awake at night. 

Senator COLEMAN. We don’t have the capacity to lock down all 

nuclear material. We use a lot of it in construction. We use a lot 

of it in medical technology. Therefore, the threat of a dirty bomb 

becomes a great concern. I envision two scenerios: Building a dirty 

bomb elsewhere and bringing it into this country; or two, bringing 

in enough material into this country and then construct it here. 

In either scenerio, one of the things that we’re going to have to 

do is rely upon foreign companies like the Hutchison company and 

others. There’s been a lot of discussion about that, and I’m not 

going to get into the Dubai situation, but the reality today is that 

80 percent of our ports are foreign operated. The Megaport Initiation is a program in which we work with companies in other countries to do the screening for us. 

I’d be interested if you have any kind of reflections as you look 

at the overall security on this program. Since you’ve talked about 

taking a holistic approach to this issue. How should we be looking 

at this program? How should we be looking at these issues today? 

Governor KEAN. Well, I like the old Reagan phrase, trust and 

verify, because in any system that we come up with, you’ve got two 

problems. One is how you acquire the material, and my own view 

is it’s more likely to be acquired in another place and transported 

to this country. So if possible, you stop the acquisition, or make it 

very difficult. That may be number one. 

But second, of course, we don’t know how many nuclear materials have escaped now from various sources or in various parts of 

the world. And then comes the issue of our borders, of whether or 

not you can get the kind of system which Commander Flynn was 

talking about, whether or not again, in my view, you can raise it 

on the country’s radar screen. 

I mean, the problem politically I see is that when we studied 

September 11, there were very good people both in the Clinton and 

26

Bush Administrations who understood the problem, who understood the dangers, who understood what might happen—not necessarily a plane crashing into a building, but what might happen 

with al-Qaida and terrorism. 

But it was here on the priority list rather than up here. I think 

in this issue that we’re talking about, with the exception of yourself, Senator Lautenberg, and others who really recognize this 

problem, we’re in the same status today on this issue. People know 

it’s a problem. Good people are working on it. But they’re working 

on it slowly. They’re not saying it’s urgent. They’re not raising it 

to the top of their priority level. 

And if the worst occurs, I think the reactions, immediate reactions of the people, of the economy, and, frankly, of our—I think 

we’ll rush to judgment on legislation. I think it will be a bad scenario from every point of view. 

Senator COLEMAN. Commander Flynn. 

Commander FLYNN. If I could just comment, a big part of the formula that I’ve been involved with in terms of pushing borders out 

is that you have to work with both the companies as well as the 

countries which you’re in. Most of the efforts to date has been primarily in the traditional format, going country to country. That is, 

container security is from customs to customs. 

I spent a good bit of time at the end of my Coast Guard career 

in the Caribbean. We have huge problems with corruption, and this 

is one of the things you’re going to have here. That’s just a fact of 

life. In many cases, the industry players have more integrity in the 

process than you might find in the local countries. They’re very 

much invested in the enterprise they’re protecting. 

So take the port of Karachi, for instance, which is now going to 

be half run by Hutchison Port Holdings and the other half by 

Dubai Port Worlds. You can’t get a container out of there to the 

Middle East unless you run through those two facilities. I’d like to 

work with those facility operators for that problem. 

I worry, as one of the fallout of what we just recently went 

through Dubai Port World—I mean, this is now the third biggest 

terminal operator on the planet—that it’s going to—well, I think 

the company will figure out that it’s good to be forward-leaning in 

any event, but let’s just say we made the diplomatic element of 

that more challenging. We need both to work with foreign countries 

and with foreign companies. 

Senator COLEMAN. Senator Lautenberg. 

Senator LAUTENBERG. Thanks, very much, Mr. Chairman, for 

your patience. The question devolves here and I look at the Committee structure and get an example of how things operate. So the 

question is: What is the urgency of full participation by all of the 

Committee members? 

I want to start off by asking a very simple question of Governor 

Kean. Thanks so much for all the things that you have done and 

will continue to do for us. And Commander Flynn, your testimony 

was invaluable and your research thorough, and we really appreciate that. And I ask you to continue to sound the alarm, as you 

have. 

During the debate on next year’s budget, the Senate rejected an 

amendment that would have required 100 percent screening of 

27

cargo. Governor, is 100 percent screening an essential factor in protecting our country and protecting our people? 

Governor KEAN. It is certainly desirable at some level. I’m not a 

technical expert, as Commander Flynn is, as to know where that 

falls on the kind of continuum that he was talking about as to 

what you do internationally and where you screen things. But certainly if we could do it technologically, it would be certainly a step 

in the right direction. 

Senator LAUTENBERG. Well, as we hear Mr. Flynn’s testimony, do 

we shortchange other areas of concern by focusing so much on port 

security, on containers? I think we have to kind of take a look at 

the world out there in which we exist and ask the questions whether or not we must go—let me call it modularly and say, OK, this 

is the most likely case of vulnerability, and start there, put the resources there and put the focus there. 

Governor KEAN. Well, I think you’re right. And we certainly have 

to take the technology we have and install it. I mean, when you 

hear we have technology that can detect a nuclear device, and yet 

it’s not installed in our various ports and at our borders because 

we can envision—as Commander Flynn said, we did a movie with 

Sam Nunn to try to alert the country a bit, and the idea we had 

was that somebody, again coming across in a station wagon from 

Canada with a small lead shield, and the radiation wand waves 

over it and doesn’t pick up a thing because that technology—we 

have the technology that could have gotten through that lead 

shield, but it’s just not installed as yet. 

So I don’t think we have much excuse for being able to do it and 

having the technology there at our ports and at our borders and 

not using it. 

Senator LAUTENBERG. So we should get on with it. I was down 

at the port a couple weeks ago, and every time I go there—and I 

know that you’ve been there—and you see the activity and the volume of material that is shipped in. And everything, whether it’s 

from sneakers to Ferraris, it’s there. And it is a likely place for 

something terrible to be delivered to our shores. 

And particularly when the FBI says that the most dangerous two 

miles of targets exist between Newark Airport and Port Newark, 

exist in the country as a target for terrorism. And here these containers are just overwhelming the whole area. You see them wherever you look. To me, there is no excuse for not getting on with this 

inspection and these structures for process to make sure that we’re 

doing it. 

And why hasn’t the Administration, in the view of either one of 

you, worked to develop such a 100 percent screening regime? What 

could cause this—I’ll call it benign neglect? 

Governor KEAN. Well, again, I can’t—Commander Flynn is the 

expert on these areas. But it just seems to me that, as I said before, that we get very distracted in this country. Things come at 

us unexpectedly in the legislative and political arena, and we sort 

of respond to what hits us. And it’s sort of like a boxer described 

the Olympic Games: When he gets hit in the face, his hands go to 

his face, and if he gets hit in the stomach, his hands go to his stomach. And they wonder why he never wanted to fight. 

28

We tend to do that, I think, in the political system in the United 

States. We don’t say this is a No. 1 priority, and we’re going to 

stick to it and we’re not going to be distracted. There are good people in the Administration working on this, as there are good people 

in the Congress working on this. But it’s not at the top of the priority list. 

People aren’t saying, as I think the Committee is saying, and I 

believe and Commander Flynn believes, this is a No. 1 priority. I 

mean, the common defense of the United States is the reason government was formed. It’s the reason we have a government. And 

if we’re not doing this, then we’re not doing anything. 

And somehow, with the good leadership, I think if you and the 

Chairman and this Subcommittee and others who understand this 

and believe it, we’ve got to somehow demand that the Administration, the leaders of the Congress, the news media, and other people 

focus on this, if it is the greatest danger, as I believe it is. 

Senator LAUTENBERG. Governor Kean, your voice carries a lot of 

weight, and I urge you to continue to raise it on behalf of the wellbeing of our country and this world in which we live. 

Commander FLYNN. I think there are two pieces to that, that is 

why we’re not—as you well know, our ports have basically been 

managed as a local/State matter. And so to some extent, it was a 

federalism argument made initially here that these are in fact assets that belong to the localities, and they should therefore respond—they should be responsible primarily for the security of 

them. 

Although clearly we have a Coast Guard and customs role, the 

bulk of the resources—that’s basically a fly-by visit kind of presence that we’ve maintained in there because we’ve had them being 

State and local matters. And we don’t have a national ports kind 

of a focus. So that’s made it very problematic. You ended up with 

each agency sort of saying, well, what have I got on my shelf to 

help with this? And there wasn’t much. 

States and locals weren’t in a position to do this because if Baltimore raises its security cost and bar it makes business more attractive down in Norfolk. I mean, this thing screams for Federal standards. And things like dealing with Halifax and Vancouver as potential competitors, that’s a Federal role to negotiate this within a 

hemispheric context because the transportation system will move 

around to where the costs are least. So that’s one real issue. 

The other was, which is why I was so thrilled with what has 

happened in the Hong Kong model, going to the world’s busiest 

port, two of the world’s busiest terminals on the planet, and with 

the support of the CEOs of those two companies, none of whom 

have ports in the United States but we’re vested in trying to explore this, and customs initially believe it would just be impossible 

to do this without slowing things down. And they got a lot of importers who said, you can’t do this. 

So the challenge there was to prove it could be done. Now it’s 

how do we adapt our government protocols to deal with the reality 

that you could have this amount of screening data available? They 

can’t do it without more resources. They need analysts. They need 

technology, and they—on our end. 

29

So if the private sector ends up, as in this case they’re offering 

to do, to build this infrastructure and to pay for it through a surcharge, maintain it globally, if they produce that capability and our 

own government isn’t capable of processing it, then it’s just another 

embarrassment that the customs has got to face, or Coast Guard 

or others, because we’re going to have the data we can save up and 

say, you should have seen it. But because we starved them of analysts and starved them of capabilities, we’re not going to get there. 

Customs and Border Protection has a total of 80 inspectors to 

manage the C–TPAT program. There are 11,000 companies in application for that, and some of those companies have literally thousands of providers. Now, how can you provide oversight? There are 

more—I came down on the shuttle this morning. There are more 

TSA screeners at the Delta shuttle terminal than we are providing 

for the entire Customs and Border Protection to do this critical job. 

And that’s where things start to break down, and I really think 

that at the end of the day, this is going to expose our government 

to the biggest cost of terrorism, which is the loss of public credibility and confidence when we have the next attack. 

Americans gave their government a pass on September 11, I believe. But they expect that everything that can be done is being 

done to deal with this threat. And they’re going to be appalled at 

what they see, the lack of effort that’s still being made on these 

issues. While good intentions are there, as the Governor has said, 

we’re just not treating with the level of urgency that certainly this 

Subcommittee is trying to treat it with. Thank you. 

Senator LAUTENBERG. Well, to make your point even clearer, in 

comparison, TSA screeners: We have 130,000 to 150,000 people in 

uniform trying to protect our security, we’re told, the fight against 

terrorism. We have an additional billion dollars put into the budget 

for next year for port security. 

Isn’t that kind of a hard comparison to understand? I mean, if 

we want to protect people on our shore—we lost 3,000 people on 

September 11, and it left a mark on this country that we will probably never recover from. To the Chairman’s question earlier about 

what the effects could be if a dirty bomb was placed in the same 

area, the fact is that people today are still paying a direct health 

price for that terrible attack. There are people who have respiratory diseases as a result of being exposed there. 

And so when we look at a billion dollars for increased funding 

to examine these containers, does that strike you as being a major 

step toward solving the problem? 

Commander FLYNN. Well, I think the disconnect here is we’re an 

extraordinarily wealthy Nation who’s at war. And I think it would 

strike most Americans, when it comes to what we’re doing on the 

homeland, we’re not acting like a Nation at war. 

Senator LAUTENBERG. Governor Kean, do you——

Governor KEAN. Yes. I can’t say it any better than that. I mean, 

this is something—everybody’s said it from the President on down. 

This is a longtime struggle. We’re fighting a new enemy that is 

training people in the ungoverned areas of this world as we speak, 

and plotting in areas where we can’t get at them. You can’t attack 

them like we used to attack a nation state. These are, in a sense, 

entrepreneurs, these people who we’re fighting. 

30

And if we don’t recognize that and recognize that nevertheless 

this is a war we’re in and we’ve got to make long-term plans because they’ve got long-term consequences, then this Nation and our 

children are going to suffer. 

Senator LAUTENBERG. We have to step up to it. 

Governor KEAN. Have to step up to it, I believe. 

Senator LAUTENBERG. Thank you very much. Thanks for these—

our thanks, Mr. Chairman, go to these two people who have devoted so much of their energy and skill to helping protect this country. I for one am grateful, and I’m sure that all of those who are 

aware of the mission you’re on are grateful. 

Senator COLEMAN. I want to echo the words of Senator Lautenberg, Governor Kean, and Commander Flynn, because it speaks 

volumes. We hope that this clear message you’re raising will go beyond the confines of this Subcommittee. 

We appreciate your questions, Senator Lautenberg, and we appreciate the testimony of the witnesses. Thank you. 

I would now like to welcome our second panel to this hearing. 

Eugene Aloise, Director of the Natural Resources Environment 

Team, and Gregory D. Kutz, the Managing Director of Forensic Audits and Special Investigations, both at the Government Accountability Office. 

Mr. Aloise, I welcome you to the Subcommittee. Mr. Kutz, I welcome you back to the Subcommittee. By my count, you’ve testified 

before this Subcommittee, I think, at least six times and assisted 

us in identifying over $8 billion in waste, fraud, and abuse. So I 

want to thank that. I note that Mr. Rhodes is also here from the 

Government Accountability Office. 

GAO is here to testify on three reports you have developed pursuant to our request. These reports are an impressive body of work. 

Two of these reports, on the domestic and international deployment 

of radiation detection equipment, were led by Mr. Aloise and his 

team. Mr. Kutz and his team made an invaluable contribution with 

their undercover operation at our Nation’s borders. I am confident 

that these three reports will lead to reforms at the Department of 

Homeland Security, the Nuclear Regulatory Commission, and the 

National Nuclear Security Administration. 

I’d also like to thank Stockton Butler, James Shafer, Eugene 

Wisnoski, Rich Egan, and Andy O’Connell for their contributions to 

these reports. 

Gentlemen, I look forward to your testimony today. As you’re 

aware, pursuant to Rule 6, all witnesses before this Subcommittee 

are required to be sworn in. I’d ask you to please stand and raise 

your right hand. 

Do you swear the testimony you’re about to give before this Subcommittee is the truth, the whole truth, and nothing but the truth, 

so help you, God? 

Mr. ALOISE. I do. 

Mr. KUTZ. I do. 

Mr. RHODES. I do. 

Senator COLEMAN. Mr. Aloise, we’ll have you go first, followed by 

Mr. Kutz. After we’ve heard testimony, we’ll turn to questions. 

31

1The prepared statement of Mr. Aloise appears in the Appendix on page 128. 

I would like to know, Mr. Kutz, in my notes here, it says Mr. 

Ryan. That’s a typo, but it demonstrates just how often you and 

Mr. Ryan are here. But it’s great to have you back. 

Mr. Aloise, you may proceed. 

TESTIMONY OF EUGENE E. ALOISE,1 DIRECTOR, NUCLEAR 

AND NONPROLIFERATION ISSUES, NATURAL RESOURCES 

AND ENVIRONMENT, GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. ALOISE. Thank you. Mr. Chairman and Members of the Subcommittee, I am pleased to be here today to discuss our two reports 

on U.S. efforts to combat nuclear smuggling in foreign countries 

and in the United States. Together with our March 2005 report on 

DOE’s Megaports Initiative, these reports represent GAO’s analysis 

of the entire U.S. effort to deploy radiation detection equipment 

worldwide. 

The threat of nuclear smuggling is real. According to IAEA, between 1993 and 2004 there were 662 confirmed cases of smuggling 

of nuclear and radiological materials. Twenty-one of these cases involved material that could be used to produce a nuclear weapon. 

Over 400 cases involve materials that could be used to make a 

dirty bomb. 

While these cases occurred in other countries, there is concern 

that terrorists may try to smuggle nuclear materials or a nuclear 

weapon into the United States. In response to these threats, four 

U.S. agencies—DOE, DOD, the State Department, and DHS—are 

installing radiation detection equipment in foreign countries and in 

the United States. 

My remarks will focus on our two reports being released today. 

Specifically, I will discuss the progress made by and the challenges 

facing U.S. agencies in installing this equipment in foreign countries and DHS’s effort at U.S. ports of entry, and the challenges 

DHS faces in completing its program. 

The first major initiative to deploy radiation detection equipment 

was on the borders of the former Soviet Union and Eastern Europe. 

In the mid-1990s, DOD and the State Department provided portal 

monitors and other equipment to a number of countries, and in 

1998 DOE created the Second Line of Defense program. 

Today, in addition to the Second Line of Defense program, six 

other programs—one at DOE, two at DOD, and three at the State 

Department—have provided equipment and related training to 36 

countries. Combined, these programs have spent about $178 million since 1994. 

While much progress have been made, these programs face a 

number of challenges, including possible corruption of border security officials, technical limitations of equipment installed by the 

State Department and now maintained by DOE, and inadequate 

maintenance of some handheld equipment. 

Regarding possible corruption, officials from several countries 

we’ve visited told us that corruption is a big problem within the 

ranks of border security organizations. Corrupt officials could defeat these systems by turning off the equipment or ignoring the 

32

alarms. We face the danger that a $20 bribe could compromise a 

$200 million system. 

To lessen this threat, DOE and DOD plan to deploy communication links between border sites and command centers so that alarm 

data is simultaneously evaluated by multiple officials. In addition, 

screening and training of border guards is also planned. 

Another problem relates to limitations of the portal monitors previously provided to some countries by the State Department, which 

makes them less effective in detecting weapons-usable nuclear material because the portals can only detect gamma radiation. 

Since 2002, DOE has maintained this equipment, but except for 

one site has not upgraded it. We have urged DOE to upgrade this 

equipment because until these sites receive equipment with both 

gamma and neutron detection capability, they will be vulnerable to 

nuclear smuggling. 

In addition, much of the handheld equipment provided by the 

State Department and other agencies may not function properly because it is not being maintained. While DOE is maintaining the 

handheld equipment it has given to other countries, no U.S. agency 

has maintained about 1,000 handheld detectors that are vital to 

border officials conducting inspections on vehicles and pedestrians. 

For example, we observed border guards using handheld equipment 

that has not been calibrated properly since 1997. This equipment 

needs to be recalibrated every year. 

In addition, no U.S. agency keeps accurate data on the status 

and location of all the equipment provided by U.S. programs. Without such a list, we cannot assess if equipment is operational and 

being used as intended. 

Turning to the deployment of radiation detection equipment in 

the United States, DHS has made progress in deploying and using 

portal monitors and other equipment. But it is significantly behind 

in its total deployment schedule. As of the end of last year, about 

$286 million had been spent on this effort. 

DHS is deploying radiation detection equipment in the following 

five phases: International mail and express courier facilities; major 

northern border crossings; major seaports; southwest border crossings; and all other categories, including international airports, remaining northern border crossings and seaports, and all rail crossings. 

These categories were prioritized according to their perceived 

vulnerability to the threat of nuclear smuggling. For example, 

major seaports are vulnerable because sea cargo containers are 

suitable for smuggling. Also, over 95 percent of the cargo entering 

the United States does so through seaports. 

As of December 2005, about 670 portal monitors have been deployed in the United States, about 22 percent of the planned total 

portal deployment at U.S. border crossings, seaports, and mail facilities. In fact, deployments in mail facilities and the first phase 

of northern border sites are complete. However, deployments at 

seaports and southwest border crossings are about 2 years behind 

schedule. Importantly, deployments at airports and land rail systems have not yet started. 

DHS estimates that with the work it has completed, it is screening about 62 percent of container shipments but only 32 percent of 

33

seaborne shipments and about 77 percent of private vehicles. DHS 

plans to deploy over 3,000 portal monitors by 2009 at a cost of $1.3 

billion. This is a massive undertaking. 

However, in our view this estimate and time frame are highly 

uncertain. In fact, our analysis shows that if DHS continues to deploy portals at its current rate, the program is facing a likely cost 

overrun of about $340 million and will not be completed before 

2014. 

We found a number of factors that account for this slow deployment. Specifically, delays by DHS in releasing funds to contractors 

has in some cases disrupted and delayed deployments. In addition, 

difficult negotiations with seaport operators about where to place 

portals, especially for rail cars, has delayed work at seaports. 

Many seaport operators are concerned that the construction 

needed to install the equipment, as well as the screening process 

itself, will slow down the movement of commerce. Mr. Chairman, 

it is important that DHS resolve this problem at seaports because 

until it does, our seaports are vulnerable to nuclear smuggling. 

In addition, uncertainties exist in the type and cost of radiation 

detection equipment DHS plans to employ. DHS’s $1.3 billion estimate to complete the program is based on widespread deployment 

of advanced technology portals. However, the prototypes of these 

portals have not been shown to be more effective than the portals 

now in use. 

Furthermore, when this technology is available, experts estimate 

it will cost about $330,000 to $460,000 per portal. Currently, portal 

monitors cost about $50,000 to $60,000 each. Even if future tests 

indicate that this equipment works better, it is not clear that the 

dramatically high cost for this new equipment will be worth the investment. 

During our review, we found that CBP officers had made 

progress in using radiation detection equipment correctly and are 

following inspection procedures. However, we found gaps in the 

procedures that need to be addressed. 

For example, CBP officers lack access to NRC’s license database 

that could be used to verify that shippers of radiological material 

actually obtained required documentation. As a result, unless nuclear smugglers in possession of faked NRC licenses raise suspicion 

in other ways, CBP officers could follow agency procedures yet unwittingly allow them to enter the country with illegal nuclear 

cargo. In our view, this is a significant gap in the procedures that 

must be closed. My colleague, Mr. Kutz, will discuss in his testimony just how serious a loophole this is. 

Mr. Chairman and Members of the Subcommittee, that concludes 

my statement. I will be happy to respond to any questions you may 

have. 

Senator COLEMAN. Thank you, Mr. Aloise. Very appreciative. 

Mr. Kutz. 

34

1The prepared statement of Mr. Kutz appears in the Appendix on page 143. 

1See Exhibit 10 which appears in the Appendix on page 405. 

TESTIMONY OF GREGORY D. KUTZ,1 MANAGING DIRECTOR, 

FORENSIC AUDITS AND SPECIAL INVESTIGATIONS, GOVERNMENT ACCOUNTABILITY OFFICE, ACCOMPANIED BY KEITH 

A. RHODES, CHIEF TECHNOLOGIST, CENTER FOR TECHNOLOGY AND ENGINEERING, GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. KUTZ. Mr. Chairman, thank you for the opportunity to discuss our undercover operation to test border security. Our operation had three objectives: First, to determine whether the radiation portal monitors worked; second, to observe the reaction of 

CBP inspectors to our test; and third, to see whether we could beat 

the system using a ruse. As I discuss our operation, I will address 

all three objectives, along with several other key facts and findings. 

We tested two land ports of entry that had radiation portal monitors installed, one at the U.S.-Canadian border and the other at 

the U.S.-Mexican border. For each border crossing, we used radioactive sources commonly used in industry and sufficient to manufacture a dirty bomb. 

It is important to note, and as Commander Flynn noted, that a 

dirty bomb would contaminate an area and could result in significant loss of business and cleanup costs. Although the blasts from 

the explosives could result in some deaths, the dirty bomb generally would not contain enough radiation to kill people or to cause 

serious illness. Thus, a dirty bomb is generally considered to a 

weapon of mass disruption rather than a weapon of mass destruction. 

We purchased a small amount of our radioactive sources from a 

commercial supplier over the telephone. To do so, we used a fictitious company and a fabricated story as to why we needed the radioactive sources. Suppliers are not required to exercise any due 

diligence when selling small quantities of radioactive sources. 

Note that we could have purchased all of the radioactive sources 

that we needed for both of our border crossings with the same fictitious company and fabricated stories. It is also important to note 

that our fictitious company was located in the Washington, DC 

area, and that the items that we purchased were shipped directly 

to our Nation’s capital. 

In preparing for our operation, we also produced counterfeit documents. First, we searched the internet and found several examples of official NRC documents. We then used commercial off-theshelf software to counterfeit these documents, which authorized us 

to acquire, possess, and transfer radioactive sources. We also produced a logo for our fictitious company and a counterfeit bill of lading.1

On December 14, 2005, two teams of investigators made a simultaneous crossing of the north and south border. The radioactive 

sources in the trunks of both vehicles were sufficient to make a 

dirty bomb. The radiation portal monitors properly signaled the 

presence of the radioactive sources when we entered the United 

States from both Canada and Mexico. 

35

We observed CBP inspectors at the northern border follow their 

required procedures after the portal alarm sounded. For example, 

the inspector directed our investigators to a secondary area for a 

more thorough inspection. The inspector then located the source of 

the radiation, identified the source, reviewed our documents, and 

notified his supervisor of the incident. Although most of the required procedures were followed, the secondary inspection conducted at the southern border was less rigorous. 

Although both of our vehicles were inspected in accordance with 

CBP policy, we were able to enter the United States with enough 

radioactive sources to make two dirty bombs. The CBP inspectors 

never validated the existence of our fictitious company or the authenticity of the counterfeit bill of lading and NRC documents. We 

look forward to working with this Subcommittee, CBP, and NRC to 

improve the security of our Nation’s borders. Mr. Chairman, that 

ends my statement. I look forward to your questions. 

Senator COLEMAN. Thank you very much, Mr. Kutz. I understand, Mr. Rhodes, you’re here to provide additional information 

should the questions warrant that. 

Mr. RHODES. That’s true, Mr. Chairman. 

Senator COLEMAN. Let me start with you. Why don’t we start 

with the investigation, and then I want to move to some broader 

issues with you, Mr. Aloise. 

First, I noted in some of the news stories about this that folks 

in the Department of Homeland Security’s Domestic Nuclear Detection Office said that the substance could have been used with limited effects in terms of a dirty bomb. Could you talk about the effects of a dirty bomb? I will follow up with Director Oxford on the 

next panel, but I’m interested in your perception. 

There seems to be a disagreement between the NRC and perhaps 

the GAO on the impact of dirty bombs and what their effects could 

be. Had this material been used to create a dirty bomb, and had 

that dirty bomb been set off at the New York Stock Exchange or 

set off at the Nation’s Capitol, what would be the effect? 

Mr. KUTZ. Yes. Let me make a couple comments. Then Mr. 

Rhodes is our expert; that’s why he’s here today. But the items 

that we were able to get, we could have actually gotten much more. 

We used what we thought was a minimal amount that we could 

use to make a dirty bomb that would cause disruption and loss of 

business and chaos, as I think the prior panel discussed. 

And so I would defer to Mr. Rhodes on the more technical aspects 

of that. But again, there were two parts: We took it across the border, and we also had it shipped here to Washington, DC without 

anyone asking any questions. 

Senator COLEMAN. And the issue wasn’t really the quality. I 

mean, the monitors went off with that quality. You could have had 

a larger quality. 

Mr. KUTZ. Correct. 

Senator COLEMAN. But in the end, it was the documents that allowed you to get through and past the secondary check. Is that correct? 

Mr. KUTZ. Yes. That’s correct. 

Senator COLEMAN. Mr. Rhodes, could you talk a little about dirty 

bombs? 

36

Mr. RHODES. The point I’d like to make is last evening when I 

was driving home, I heard on the radio the term, ‘‘It was an insignificant amount.’’ Just to clarify why we used the amount of material we did, ultimately it was 1,250 times the allowable amount, according to the EPA standards. So according to the Environmental 

Protection Agency, it was not insignificant. 

I’ve also heard statements made about it being comparable to a 

smoke detector. First of all, the material we brought across is different than what’s in a smoke detector, and the kind of radiation 

that it emits is different. Also, if we were to destroy it, either via 

dirty bomb or even if we just ground it up and just blew it out the 

back of a truck with a fan, in Wall Street, for example, it would 

register. And then the standard operating procedures would go into 

play. 

Concentric circles would start to be sealed up around the city. 

And if you apply the standard operating procedures for some period 

of time until it could be cleared up and until it was considered safe 

to go into the zone of contamination, nobody would be doing any 

dealing on Wall Street. 

They’d have to go to secondary locations or something like that 

because no one in their right mind is going to say, well, all of our 

radiation detectors are going off, but we don’t think it’s very high, 

or we think it’s insignificant, or it seems to us it’s only the amount 

that’s in a smoke detector. 

Because you have to have the standard operating procedures and 

you have to make certain that the area is safe and is uncontaminated. At a minimum, you’re going to have to wash Wall 

Street. You’re going to have to hose it down to try to clean the material up. 

If this is an insignificant amount of material, then I guess those 

radiation monitors at the borders are set too low because the whole 

operation was set to trip those monitors, to make certain that they 

would go off, to make certain that we had to check the secondary 

procedures. That’s why it’s a disruption. 

Certainly if I took all of this material and I put it in your coffee, 

Mr. Chairman, you wouldn’t like that. If I were to have you hold 

it in your hand for more than an hour, you would certainly get a 

radiation burn from it. So this discussion of insignificance in 

amount is really a function of how do we respond to it. And if we 

spread it, and the alarms went off and the radiation detectors 

showed positive, and it was verified, and the isotope came back as 

being what it was that we used, there would be tremendous impact. 

Senator COLEMAN. Let me talk about the amount that you could 

have purchased. Is there anything that would preclude somebody 

from buying a thousand smoke detectors? Would that trigger any 

kind of review regarding concerns about the radiological nuclear 

material in those? Is there anything that triggers a review by the 

Federal Government when one purchases even commercial products that have quantities of radioactive material? 

Mr. RHODES. The threshold—with respect to what we purchased, 

we already had some materials from a prior operation that we did. 

So we purchased a certain amount, below any threshold that anyone would validate the existence of our company or ask any quesVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00044 Fmt 6633 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
37

tions immediately when we got it, to prove a point. We could have 

actually done that time and time again and accumulated larger 

amounts, much larger than we actually used when you combine 

both of our operations together. 

Senator COLEMAN. All right. You mentioned that there is no due 

diligence. Are there any requirement for anyone to check the bona 

fides of folks who have multiple purchases of material that would 

have radioactive material? 

Mr. ALOISE. NRC allows the applicant who applies for a license 

and buys a license up to 12 months before they check if that’s a 

valid applicant or not. 

Senator COLEMAN. My questions are: What’s the minimum 

threshold for requiring a license? In other words, is it any amount 

of material? Is there a threshold for certain quantities of material? 

When does the NRC actually require somebody to get a license? 

If you were buying multiple quantities of medical devices that 

had this material in it, would you have to have a license from the 

NRC, or even to purchase smoke detectors in massive quantities? 

Mr. ALOISE. Well, in terms of other material other than smoke 

detectors it varies by device, by material. There are varying 

amounts and varying limits which would require a license, yes. 

Senator COLEMAN. In 2003, the GAO recommended that the NRC 

spent an accounting for generally licensed material. There was also 

a recommendation for a database for its licenses. Do you know if 

those things have been implemented? 

Mr. ALOISE. The NRC tell us they’re working on developing 

them. 

Senator COLEMAN. Still? 

Mr. ALOISE. Still. 

Senator COLEMAN. There was also a finding that the precise 

number of sealed sources is unknown. What does sealed sources 

mean? 

Mr. ALOISE. A sealed source is a radiological device that could be 

used in medical equipment or industry, that could be used in well 

logging equipment. And it’s about that big, size of a cigar, and it’s 

inserted in a piece of equipment. 

Senator COLEMAN. And as for the number of sealed sources, do 

we know those? Is there any information on that? 

Mr. ALOISE. There’s no tracking of them. There’s no precise—I 

mean, there’s hundreds of thousands of them all over the United 

States in use. 

Senator COLEMAN. Was this the subject of a recommendation in 

the 2003 report to the NRC? 

Mr. ALOISE. Yes. We recommended that—regarding licenses, that 

NRC modify and change its regulations to validate that an applicant applying for nuclear material was a valid applicant before 

issuing the regulation. This is something some States already do. 

Some States hand-deliver a license to an applicant to ensure 

they’re a valid applicant. 

Senator COLEMAN. The sense I get from my investigators in talking to the NRC, was that there was clearly a concern about nuclear 

bombs. Now, that should be a focus, especially because of the potential loss of life. 

38

But the sense we got from the NRC was perhaps almost a—I’ll 

use the word cavalier approach to the idea of dirty bombs, that 

they just didn’t kill enough people and they are insignificant—in 

terms of the scale of things. 

In a post-September 11 world, my concern is that the economic 

and emotional impact of a dirty bomb goes far beyond a simple calculation of loss of life and property. Can anyone respond to that? 

Mr. Rhodes. 

Mr. RHODES. Let me make one point based on the earlier panel’s 

discussion of patience. Yes, there are thresholds even at the NRC 

where they’ll begin to pay attention. They’re equivalent to the 

IAEA thresholds. If we had been patient enough, we could have 

used this process to get as much material that would have eventually gotten their attention. 

The reason—if we are just talking about loss of life, if we are 

talking about what are called stochastic and non-stochastic health 

effects, the stochastic are who dies right away—the non-stochastic 

are the ones who die right away, and the stochastic ones are how 

many cancers do you have later on. 

If they look at that situation and they say, well, we won’t have 

that much leukemia or we won’t have that many people dead, it’ll 

just be like a car bomb or something, I think they are indeed missing your point. Your point is that if I do this on the corner of Wall 

Street at midday, the havoc that it will wreak is unavoidable because emergency procedures will have to go into effect. 

No one is going to say, yes, something went off, but it’s not that 

big a deal. They’re going to respond as though all events are exactly the same. And I think that’s difficult for people who are viewing it purely in long-term health effects to understand. 

Senator COLEMAN. And, the same would hold true if you’re looking at the Nation’s Capitol, or the White House. Just the psychological impact of saying that we’ve struck a symbol of American authority would have tremendous impact. 

Mr. KUTZ. Yes. I would just say this. The Customs and Border 

Protection’s reaction to our test was very positive, and I think 

they’re proactively looking at solutions to the counterfeiting issue. 

I think ultimately NRC came around to the fact that the counterfeiting issue was something they need to deal with. But the level 

of concern and threshold, I just don’t think that they were thinking——

Senator COLEMAN. And I was going to follow up on the documents, Mr. Kutz, and I think I mentioned in my opening statement 

that the technology that you used to create those documents was 

not some super-secret, high tech, government-only technology. Is it 

fair to say that a somewhat adept 20-year-old who’s pretty good 

with computers could have created the same documents you created? 

Mr. KUTZ. Yes. We used off-the-shelf software, and we used the 

internet. So it’s basically technology anyone could achieve. And actually, I was able to go out—you talk about low technology, I was 

even able to go on the internet and find the document that we 

counterfeited. And there are no special security features in these 

documents that make it difficult to counterfeit them. 

39

Senator COLEMAN. And basically, you could go onto the NRC site, 

you could see what the documents look like, and then simply recreate those? 

Mr. KUTZ. No. They weren’t on the NRC site. You had to actually 

search for other sites. They were on other different sites. NRC does 

not put them on their site, which we certainly agree with them on 

that. 

Senator COLEMAN. The good news is that Homeland Security is 

saying that within 45 days they will close this loophole. Are they 

working with you on that? 

Mr. KUTZ. Yes. They’ve reacted positively. I mean, they’re either 

going to have to have an online capability to validate whether a license is genuine or authentic, or some sort of a telephone system 

to call in and validate whether the license is legitimate. 

Senator COLEMAN. Mr. Aloise, I want to go back to our second 

line of defense programs, but it’s really our first line of defense, 

which is outside our borders. 

Mr. ALOISE. Right. 

Senator COLEMAN. That’s really where this begins. It begins if 

you listen to Governor Kean locking down nuclear material abroad. 

There is still a lot out there, and where there is a lot of this material, making sure that it’s not smuggled from there to somewhere 

else. 

And one of the concerns is corruption. And that’s noted in your 

report. Is that correct? 

Mr. ALOISE. Yes. 

Senator COLEMAN. So how do you deal with that? What can the 

State Department do? How do you deal with the reality that you 

can bribe somebody and somebody could turn a blind eye and allow 

this material through a transit point. 

Mr. ALOISE. Well, first of all, everywhere we went on our travels, 

both U.S. officials and country officials raised corruption as a big 

problem. And what DOE and DOD are doing are trying to devise 

systems where the alarm would ring—when it rings at the portal, 

it will also ring at various levels within the agencies and within 

the countries themselves that are monitoring the portals. 

It will be multiple levels of officials, multiple levels of authorities. So there will be multiple checks, and there won’t be just one 

check with the border official at the portal monitor. 

Senator COLEMAN. Just so I understand the technology, if you 

could have one border, say, on the Russian side, and another border in another country on the other side, if all of a sudden the monitor goes off on one side, a central place can actually see that a 

monitor has been shut down? 

Mr. ALOISE. Yes. They’ll be able——

Senator COLEMAN. And could react to that? 

Mr. ALOISE. They’re building those kinds of systems. Also, they’re 

doing redundant systems. Where they suspect corruption is really 

bad, they’ll put systems on one country and on the other country 

so they’ll get them at both places. 

Senator COLEMAN. One of the debates that we’re generally having is working with foreign companies. For example, our Megaports 

program works with foreign companies and in Freeport, works with 

40

Hutchison Port Holdings. Rather than work with the government, 

you’re working with foreign companies operating the terminal. 

Have you looked at that? The sense I got from Commander Flynn 

was that there may be more reliability and an ease of operation in 

working with these foreign companies than there is working with 

foreign countries. Can you respond to that? 

Mr. ALOISE. Let me say this first. With all of these nonproliferation programs, there is a risk. And the Congress has decided to accept that risk because to do nothing is not acceptable. 

And in most of these programs, we’re relying on the people in 

these other countries to operate and maintain and sustain this 

equipment. And so we’ve supported these programs in the past, 

we’re on record supporting them, and we still support them. And 

I think what you have to do is get the buy-in, as Commander Flynn 

said, of these other countries and companies because they all have 

a vested interest in this. 

Senator COLEMAN. You’ve raised some concern about the ability 

of Homeland Security to put in place the radiation portal monitors 

by 2009. I think there’s been a differing of figures. I have some figures that talked about 740 to date, and a plan for about 2,400 by 

2009. 

Your concern is you would call their ability to do that highly uncertain. Is that correct? 

Mr. ALOISE. Right. Right now their deployment rate for portal 

monitors is about 22 per month, and they would have to go up to 

about 52 per month to meet their date based on our analysis. And 

we used their very latest figures from their December 2005 

progress report. 

Senator COLEMAN. Is there anything that you can see in terms 

of funding commitment, manpower commitment, or anything else 

that would give you confidence that they could in fact double the 

rate at which they’re installing these radiation portal monitors? 

Mr. ALOISE. Well, our analysis shows that right now one of the 

biggest problems is the delay in getting the funds to the contractor. 

There are 13 seaports where they actually had to delay site work 

to install the equipment because they had not gotten their funding 

yet. They had to lay people off in some instances. So the first thing 

we’d like them to see is get the funding out that they already have 

quicker to the contractor. 

Senator COLEMAN. Is there anything that needs to be done legislatively, or is this simply the bureaucracy picking up the pace at 

which it operates? 

Mr. ALOISE. I think it could be done within the bureaucracy. 

Senator COLEMAN. One of the other concerns raised in the report 

was the difficulty in negotiating with port operators. A reality here 

is that folks are hesitant to change a system and impact the flow 

of commerce, because time equals money in these operations. 

Again, it was Commander Flynn who talked about if it’s quicker to 

operate in another port or another country, you’re going to do that. 

You could go somewhere in the United States. You could go to Canada; you could go to Mexico. 

But with this issue of negotiating with port operators, did you 

look at whether in fact there was a legitimate concern that construction, screening, putting and installing radiation portel monVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00048 Fmt 6633 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
41

itors, would actually slow down the process and cause some negative economic impact? 

Mr. ALOISE. In every place we went across various countries 

around the world and all the ports that we went to in the United 

States where this equipment is installed, we talked to truck drivers. We talked to seaport operators. No one said to us that this 

equipment, our screening process, has slowed down commerce. No 

one has ever raised that to us. It is a big concern, but where this 

equipment exists, we haven’t seen it happening. 

Senator COLEMAN. The concern is oftentimes on the part of the 

private side, the port operators themselves. And as I understand 

the strategy of DHS—and what they’re trying to accomplish—

they’re trying to work in a cooperative way. They’re not putting 

heavy pressure because they could, in effect, put some very heavy 

pressure and say, hey, unless you do this now, you’re going to suffer these negative consequences. 

Is that fair? Do they have the authority to do that? 

Mr. ALOISE. Right. 

Senator COLEMAN. But they’ve chosen not to. Do you think we’ve 

reached a point where in fact they have to be a little tougher and 

a little more aggressive, understanding that the concerns about 

economic impact seem to be somewhat questionable? Have we 

reached the point where we need the agency to be tougher and 

more aggressive and simply say to these port operators that this 

is something we need to do because this is a national security 

issue? 

Mr. ALOISE. Mr. Chairman, I think we’re at the point where 

we’re thinking, we need to think outside the box here. We understand why they’re negotiating. That makes sense. But they’re 2 

years behind in their seaport deployments, and they have to take 

a different approach. 

Senator COLEMAN. And 95 percent of the cargo coming into this 

country comes in through the seaports. Is that correct? 

Mr. ALOISE. Right. That’s correct. 

Senator COLEMAN. So the good news is certainly at our northern 

and southern borders, we’ve got good screening, good RPMs in 

place? 

Mr. ALOISE. Yes. At the first phase at the northern border. 

Senator COLEMAN. And in fact, Mr. Kutz, when your team went 

in through the northern border, the alarm was sounded and, in 

fact, folks were stopped. 

Mr. KUTZ. Yes. And they followed the procedures that they were 

supposed to. 

Senator COLEMAN. And yet the material still got through. 

Mr. KUTZ. Yes. 

Senator COLEMAN. And then at the southern border are those the 

boxes containing material? 

Mr. KUTZ. Yes. 

Senator COLEMAN. The southern border also, I think it’s fair to 

say that we’ve made progress at the southern border? 

Mr. KUTZ. Made progress. 

Senator COLEMAN. But again, 95 percent of the cargo comes 

through seaports, and that’s where we’re significantly behind? 

Mr. ALOISE. That’s correct. 

42

1The prepared statement of Mr. Huizenga appears in the Appendix on page 152. 

Senator COLEMAN. I hope the message is that we have to pick up 

the pace when it comes to seaports. 

Gentlemen, thank you. It’s been very helpful. I appreciate it. 

The final witnesses to our hearing today are David G. Huizenga, 

the Deputy Assistant Secretary at the National Nuclear Security 

Administration; Vayl Oxford, the Director of the Domestic Nuclear 

Detection Office of the Department of Homeland Security; and 

Jayson P. Ahern, Assistant Commissioner at U.S. Customs and 

Border Protection. 

As I previously mentioned, the purpose of this hearing is to assess U.S. efforts to secure, detect, and interdict radiological and nuclear material domestically and abroad. The GAO has laid the 

groundwork for this panel, and identified several issues of concern. 

Mr. Huizenga, I’d like to thank you for your stewardship of our 

programs to detect and interdict radiological and nuclear material 

abroad. In particular, and I’m going to talk about this in my questioning, the Megaports Initiative is a forward-looking program that 

enhances our collective security by pushing our borders out. 

Mr. Oxford, even given your short tenure at DNDO, we’re impressed with your leadership and expertise you have brought to the 

issue of nuclear detection, and appreciate the fact that there is an 

office, a domestic nuclear detection office. I think that’s one of the 

advancements, one of the improvements that we made that we 

really haven’t talked about but I think puts us in a position to be 

much better at what we need to do here. 

And Mr. Ahern, while unacceptable gaps remain at our seaports, 

we do acknowledge your yeoman’s work at CBP, and specifically 

your leadership in transitioning CBP from its focus on interdicting 

guns and drugs to interdicting weapons of mass destruction. I appreciate your attendance at today’s important hearing, and I’m 

anxious to get your response to the issues raised by GAO. 

Before we begin, pursuant to Rule 6, all witnesses before this 

Subcommittee must be sworn in. Please raise your right hand. 

Do you swear the testimony you are about to give before this 

Subcommittee is the truth, the whole truth, and nothing but the 

truth, so help you, God? 

Mr. HUIZENGA. I do. 

Mr. OXFORD. I do. 

Mr. AHERN. I do. 

Senator COLEMAN. Mr. Huizenga, we’ll have you go first, followed 

by Mr. Oxford, and finish up with Mr. Ahern. After we’ve heard 

testimony, we’ll turn to questions. There’s a timing system; when 

the yellow light goes on, finish your statement. We’ll enter your full 

statements into the record in their entirety. 

Mr. Huizenga, you may proceed. 

TESTIMONY OF DAVID G. HUIZENGA,1 DEPUTY ASSISTANT 

SECRETARY, NATIONAL NUCLEAR SECURITY ADMINISTRATION 

Mr. HUIZENGA. Thank you, Mr. Chairman. And thank you specifically for your continued support of these important national security matters. I’m pleased to appear before you today to share the 

43

progress that we made under the National Nuclear Security Administration’s Second Line of Defense program, which deploys radiation detection equipment at strategic international locations. 

I’d like to note first Senator Domenici’s and Governor Kean’s 

pointed remarks about the fact that we have a first line of defense 

as well, to secure the nuclear material where it is. For more than 

a decade, NNSA has secured nuclear materials and weapons at 

over 100 research, storage, and manufacturing facilities in Russia 

and other countries of the former Soviet Union. 

These security upgrades are the first line of defense in our government’s strategy to deny terrorists access to a nuclear weapon or 

the essential material to make a weapon, the fissile material. 

Backed by strong congressional support and commitments made at 

the 2005 Bratislava summit, we are on track to complete these security upgrades by the end of 2008. 

But the focus of today’s hearing is on the Second Line of Defense 

program, which forms a key element in the multi-layered strategy 

and system to protect the homeland from an attack using a nuclear 

or radiological dispersal device. Our international efforts are centered on the premise that confronting the threat of nuclear terrorism as close to the source of the material as possible is the most 

effective means to reduce the risk of attack. 

The Second Line of Defense program pursues its goal to detect 

nuclear trafficking by partnering with foreign customs and border 

patrol officials. We provide the host country with a comprehensive 

system, including detection equipment, training, and support for 

maintenance and repair of this equipment. We coordinate our efforts closely with other U.S. Government agencies, such as the Departments of State and Defense, our partners at Homeland Security, as well as international partners like the International Atomic 

Energy Agency. 

The Second Line of Defense program has two main components, 

and I’ll address both. First, the Core program. Under the Core program, we have worked cooperatively with Russia and their Federal 

customs service since 1998 to secure their approximately 350 points 

of entry and exit against nuclear smuggling. We have provided radiation detection systems at two-thirds of the 120 border crossings, 

airports, and seaports that we’ve agreed with them to equip. Our 

Russian partners have already completed 120 sites on their own, 

and will fund installations at the remaining border crossings. 

While work in Russia remains one of our top priorities, we realize the deployment of radiation detection systems is also needed 

along other potential smuggling pathways in other countries. 

Working with the State Department and other agencies to 

prioritize our efforts, we have expanded the SLD program and are 

now installing or have installed equipment throughout the FSU 

and Eastern Europe. We have identified approximately 230 sites in 

29 countries outside of Russia, and over the next 3 years plan to 

complete installation of detection equipment in all high priority 

countries. 

In parallel with providing systematic country-wide detection capability, we’re also providing maintenance and repair for the radiation portal monitors provided by the other U.S. Government agenVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00051 Fmt 6633 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
44

cies to 23 former Soviet republics and central European countries 

from the period of 1992 through 2002. 

As Mr. Aloise pointed out in the recent report, the GAO is recommending that these older detectors which can only detect gamma 

radiation be upgraded with up-to-date gamma neutron detection 

capability. We have accepted this recommendation and will replace 

the equipment by the end of 2007. 

I’d like to address one other issue that has come up relative to 

the GAO report, and that is the issue of corruption in these foreign 

countries. The SLD program is specifically structured to address 

this concern and this challenge by ensuring, as Mr. Aloise pointed 

out, that radiation portal monitors will be networked, and more 

than one official will be involved in closing out an alarm. We will 

construct central alarm stations, and indeed are working to also 

connect some of these central alarm situations to regional or national centers. 

I’d like to turn now to the other area of Second Line of Defense, 

the Megaports Initiative. In 2003, we established this program to 

provide early detection of illicit trafficking of nuclear materials before they enter our territory. We install comprehensive radiation 

detection and communication systems at foreign ports to enhance 

interdiction capabilities of the foreign customs authorities. 

The program is designed to scan imports/exports and as much 

transshipment cargo, containerized cargo, as possible while posing 

minimal impact on terminal operations. Agreements with host governments require all information associated with illicit trafficking 

of nuclear or radiological materials be provided to the U.S. Government. 

We’ve made steady progress over the last 3 years, identifying approximately 70 ports of interest in 35 countries. We’re operational 

in the Netherlands, Greece, and Sri Lanka, and are conducting a 

pilot activity in the Bahamas. We will be fully operational in Spain 

in the spring of 2006 and are at various stages of design and construction in nine additional countries. And we are aggressively pursuing agreements with many of the other remaining 21 countries 

of interest. 

An integral element of the U.S. maritime security strategy, the 

Megaports Initiative complements the efforts of CBP’s Container 

Security Initiative. Under an April 2005 memorandum of understanding with CBP, we’re working closely with our CSI partners 

and have committed to install radiation detection equipment at all 

CSI ports. 

The radiation detection equipment provided under Megaports reinforces CBP’s targeting, screening, and non-intrusive scanning activities. It’s not a replacement of it. This is an additional added 

layer of support. 

Earlier, we heard from Commander Flynn that there is a need 

for greater coordination. And I would just like to point out that we 

have, I think, coordination at the highest levels of our agencies. I 

know recently Secretary Bodman had a phone call with Secretary 

Chertoff in advance of the Secretary’s trip abroad, his Asian trip. 

And as a matter of fact, Secretary Chertoff in his press conference 

today was talking about the partnership between Megaports and 

his efforts at Homeland Security. 

45

For the record, I believe it’s important to make clear that we 

have been working very closely with our partners at Homeland Security for some time over the last few years, and will continue to 

do so. 

I’d like to turn briefly to the type of equipment being deployed 

for primary inspections under the SLD program. The portal monitors were initially developed to ensure nuclear material security at 

DOE weapons sites. The detectors employ plastic scintillators and 

helium-3 gas, and have been evaluated at DNDO’s test facility in 

Nevada, and have proven to be operationally effective in harsh and 

often remote international environments. 

That being said, we recognize that the use of this technology 

places additional burdens on secondary inspectors, and there’s a 

need to develop equipment that will identify radioactive isotopes 

associated with innocent alarms. We are particularly interested in 

the Advanced Spectroscopic Portals being developed and tested by 

DNDO, and I hope that these monitors will be used in secondary 

inspections at Megaports as soon as they’re available. 

We have also been working closely over the last 2 years with 

CBP to evaluate the effectiveness of the Integrated Container Inspection System, or ICIS, mentioned earlier in the hearing. It’s 

being piloted by private industry in the port of Hong Kong. This 

system combines radiation detection with container identification 

and non-intrusive imaging, and we support the private sector’s efforts to enhance the security of maritime trade lanes. We believe 

that the private sector container scanning effort is compatible with 

the Megaports mission. 

To contribute to this partnership, we are prepared to provide radiation portal monitors, which we have already purchased and are 

ready to ship, and a communications package to transmit alarm 

data to the host government as well as to the CSI officials. 

As the primary agency responsible for international deployment 

of radiation detection equipment, we are working very closely with 

our DNDO partners to shape the global nuclear detection architecture. Our work with DNDO falls into the following major areas: 

We’re baselining and identifying gaps in the global architecture; 

identifying operational needs that drive research and development 

efforts; we’re identifying the possible DNDO procurement vehicles, 

which we may piggyback on their efforts so that we don’t have to 

duplicate procurement efforts at DOE; and we’re also looking at 

sharing overseas data and information with DNDO. 

In closing, I would like to restate that the SLD program, or Second Line of Defense program, is dedicated to preventing international smuggling of nuclear and radiological material. We accomplish this goal by working closely with foreign governments and 

maintaining strong relationships with other U.S. Government 

agencies. We firmly believe that the unique capabilities of each department and agency are being leveraged to accomplish our common objective of preventing nuclear material from reaching the 

shores of the United States. 

Thank you for your continued support, Mr. Chairman. At this 

point, I’d be happy to answer any questions. 

Senator COLEMAN. Thank you, Mr. Huizenga. Mr. Oxford. 

46

1The prepared statement of Mr. Oxford appears in the Appendix on page 163. 

TESTIMONY OF VAYL OXFORD,1 DIRECTOR, DOMESTIC NUCLEAR DETECTION OFFICE, DEPARTMENT OF HOMELAND 

SECURITY 

Mr. OXFORD. Good morning, Mr. Chairman. It is my pleasure to 

come before you today to address how DNDO is responding to the 

threat of nuclear and radiological terrorism. I would like to thank 

this Subcommittee for its attention to this issue. I’d also like to 

take the opportunity to thank the 180,000 people of DHS who are 

responding daily to the challenges of the post-September 11 world. 

Today I will discuss topics related to the use of technology to detect nuclear and radiological materials that could be used in a terrorist attack. I’ll review DNDO’s accomplishments and some of our 

program priorities. I will touch upon the progress we have made 

with Customs and Border Protection regarding the domestic deployment of radiation portal monitors, and how DNDO and DHS as 

a whole is considering innovative ideas like the Integrated Container Inspection System, or ICIS, that is being piloted in Hong 

Kong. 

First let me address some of DNDO’s accomplishments since its 

founding. As you know, DNDO was established as a joint office in 

April 2005 to integrate the Department’s efforts against the nuclear and radiological threat under a singular authority, and to coordinate those efforts with relevant partners across the government. 

DNDO was assigned the responsibilities to develop a global nuclear detection and reporting architecture; to develop, acquire, and 

support the deployment of the domestic nuclear component of that 

architecture; and to fully characterize systems’ performance before 

they are deployed. We were also asked to establish protocols and 

ensure that detection leads to effective response. Finally, we were 

asked to conduct an aggressive transformational research program 

to address additional architectural gaps. 

In the last year, the DNDO has taken major steps towards 

achieving its mission. We completed the first ever global detection 

architecture that allowed us to identify international and domestic 

vulnerabilities and priorities. We have completed additional development efforts on the next generation passive detection system 

that would not only detect presence of radiation but will also discriminate between threat and non-threat materials. 

We have now completed two high fidelity test and evaluation 

campaigns at our Nevada test site to characterize systems performance in next generation passive portals as well as handheld mobile 

and backpack detection systems. Finally, we have begun the development of the next generation radiography system to deliver imaging systems that will automatically detect high density material in 

cargo. 

The DNDO is also taking steps to improve nuclear detection capabilities within our Nation’s borders. We have launched the 

Southeast Transportation Corridor pilot program to deploy radiation detectors to weigh stations and other sites, and to provide 

training, technical reachback, and operational protocols needed at 

the State and local level to ensure that detection technology is 

47

being operated properly and that alarms are escalated as appropriate. 

We are also launching a Securing the Cities Initiative aimed at 

enhancing protection and response capabilities in and around the 

Nation’s highest risk urban areas. We will work with State and 

local officials to develop urban and regional deployment and operations strategies, identify appropriate detection equipment, establish the necessary support infrastructure, and develop incident 

management protocols to respond to a dirty bomb attack. These 

two initiatives, when integrated, form the basis for the DNDO vision for an interior layered domestic detection framework. 

Regarding RPM deployment strategy, this Subcommittee has expressed particular interest in the progress of RPM deployment at 

U.S. POEs. Additionally, the GAO reports we heard about earlier 

contained recommendations pertinent to DNDO that I would like 

to take the opportunity to address. 

In its report, the GAO made two specific recommendations regarding the DNDO. It called for the Secretary of Homeland Security, working with the Director of DNDO, in concert with CBP and 

PNNL, to devise a plan to close the gap between the current deployment rate and the rate to complete deployments by September 

2009. 

Second, it cited that once the costing capabilities of advanced 

technology portal monitors are well understood, and before any 

new equipment is purchased, the Secretary of Homeland Security 

will work with the Director of DNDO to analyze the benefits and 

costs of deploying advanced portal monitors. 

The DNDO concurs with both of these, and let me address them 

individually. In the first recommendation, we are working with 

CBP to propose a deployment strategy that now results in screening of 98 percent of all containerized cargo crossing the southern 

border by the end of this fiscal year; 93 percent of all cargo crossing 

the northern border will be complete by 2007; and 98 percent of 

containerized cargo coming into U.S. seaports will be complete and 

scanned by the end of 2007. This strategy will result in full coverage of all incoming containerized cargo at every port of entry in 

the United States by 2011. 

We also fully concur with the second recommendation, that calls 

for a deliberate process to ensure that funds are used in a responsible manner, and that advanced systems with higher procurement 

costs are deployed in cost-effective situations. The DNDO testing of 

these systems at the Nevada test site has since validated that systems performance when compared with current systems, and demonstrated in some cases a four times improvement in performance 

against threat objects, and a 60-percent reduction in false alarms 

created by naturally occurring radioactive materials. 

This information is now guiding a joint DNDO–CBP analysis in 

support of a revised RPM deployment strategy that is an optimized 

mix of current and next generation technologies balancing our need 

for better capability and coverage across the country as well as 

their associated costs. Initial results of this analysis support the 

decision to acquire over 600 detection units in fiscal years 2006 and 

2007, including 184 current generation RPMs and 106 next generaVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00055 Fmt 6633 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
48

1The prepared statement of Mr. Ahern appears in the Appendix on page 173. 

tion portal systems this year, and 131 current generation and 142 

next generation systems in the year—fiscal year 2007. 

Regarding the integrated cargo inspection system this Subcommittee has witnessed in Hong Kong, first of all I would like to 

applaud the private sector for creating such a concept for screening 

international containers. The screening can be compatible with the 

U.S. Government’s layered security strategy, and is another tool to 

further our ability to identify and address risks. An integrated 

cargo inspection system, one that combines targeting, passive, and 

active detection and information analysis, would be a robust contribution to the nuclear detection challenge we face. 

The ICIS pilot serves as a model comprehensive passive and active inspection, as well as a model for public/private partnership. 

However, ICIS, as deployed, is not an operational system. DHS has 

sent teams to observe the ICIS pilot, and has determined that the 

technology has potential but still faces significant limitations. 

DNDO certainly favors an integrated systems approach where at 

international seaports every cargo container could be both passively and actively scanned. This would enable us to detect 

unshielded or lightly-shielded materials with the current and next 

generation RPMs, as well as automatically detect highly-shielded 

threat materials using radiography. 

Detector data would then be analyzed by DHS prior to cargo 

transit, and along with ATS, manifest, and detector data, would be 

integrated for enhanced targeting capability. Additional targeted 

inspection could be performed upon arrival at U.S. POEs utilizing 

mobile advanced RPMs and radiography systems. 

Mr. Chairman, this concludes my prepared remarks, and I look 

forward to your questions. 

Senator COLEMAN. Thank you very much, Mr. Oxford. Mr. Ahern. 

TESTIMONY OF JAYSON P. AHERN,1 ASSISTANT 

COMMISSIONER, U.S. CUSTOMS AND BORDER PROTECTION 

Mr. AHERN. Good morning, Mr. Chairman, and thank you for the 

opportunity to be here today. I’m pleased to join my colleagues 

from DNDO as well as NNSA to discuss an issue of prime importance to Customs and Border Protection and to the security of our 

Nation, and that is preventing the smuggling of nuclear and radiological weapons into the United States. 

Mr. Chairman, CBP’s priority mission is homeland security, 

keeping terrorists and their weapons, including weapons of mass 

destruction, from getting into our country. That means improving 

security at our physical borders and ports of entry. And it means 

extending our zone of security beyond our physical borders so that 

America’s ports of entry are not the first line of defense against the 

international threat of terror. 

After September 11, CBP developed and implemented unprecedented initiatives, all driven by the understanding that the threat 

still exists and is still very real, and that CBP must and will do 

everything humanly possible to prevent a second attack. 

In assessing how far we’ve come in setting in place the mechanisms that protect our country from terrorist attack, I believe it’s 

49

worth noting that before September 11, there was not a 24-hour 

Rule or Trade Act requiring advanced information to be transmitted prior to shipment to the United States. Before September 

11, there were no National Targeting Center, where multiple Federal agencies worked together to identify both trade and people of 

risk. 

Before September 11, there were no CBP officers working together with our counterparts in foreign countries to identify and 

screen high risk shipments before they’re bound for the United 

States. And before September 11, there were no concerted public 

and private sector partnership against terrorism, working to improve the security and the efficiency of trade. And before September 11, there was no radiation portal monitors at our ports to 

screen cargo containers. And there were only 16 large-scale x-ray 

devices in use at our U.S. seaports. 

There is no question that our Nation’s 322 ports of entry today 

are far safer than they were before September 11. But at the same 

time, we’re all aware that securing our ports and the global supply 

chain is work in progress, and we must do more. 

I’d like to spend the remainder of my time responding to your 

letter of March 8, specifically and very candidly to the concerns you 

outlined in your letter of invitation. 

To begin with, first, the subject of this hearing, and that’s detection technology. I’m able to report that CBP does currently operate 

740 radiation portal monitors at our Nation’s ports of entry, including 190 at our seaports. And RPMs today are our most robust radiation detection equipment, allowing us to quickly and thoroughly 

screen for radiation. 

In addition to the large-scale technology, CBP has deployed 491 

radiation isotope identifier devices and 12,500 personal radiation 

detectors. And overall, the RPMs that we currently have deployed 

on the northern and southern border and to date at our seaports, 

67 percent of all arriving land and sea containerized cargo coming 

into the United States is run through the radiation portal monitors. By the end of next year, 2007, we’ll have 621 RPMs deployed 

at our Nation’s top sea ports, giving us the ability to screen 98 percent of inbound sea containers. 

Beginning next month, CBP will also begin to deploy 60 mobile 

RPM systems at our seaports, and these mobile rpms will give us 

the flexibility to screen low volume locations as well as real-time 

screening of high risk containers shipside. We expect these RPMs, 

these mobile RPMs, to be in place by the end of this year. 

To date, we have also screened over 80 million containers with 

RPMs, and we’ve resolved over 318,000 radiation alarms. We have 

resolved all the alarms, and the majority of the alarms have been 

attributed to naturally occurring radioactive materials, known as 

NORMs, and no alarms have been attributed to illegal nuclear material coming into this country. 

I would like to briefly comment about the GAO red team testing, 

and that is the attempt of GAO to introduce, smuggle into the 

United States, radioactive materials through two ports of entry on 

the northern and the southern border. 

I believe this was a very good opportunity for us to test our systems and our protocols in a real life situation. Although our sysVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00057 Fmt 6633 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
50

tems worked, and our officers appeared to have followed our protocols for radiological alarms, the bottom line is the material was allowed in with questionable documentation. 

We have learned, and we’re working to strengthen our protocols 

immediately so this does not happen again. We agree with GAO’s 

assessment, and we assure that we are working with all their recommendations, but particularly on establishing a process for validating NRC licenses, and we expect to have a process in place 

within 30 days. 

For the container security initiative, it’s important also to mention that we’ve made enormous progress, pushing our borders out. 

As of this morning, just this past Saturday in Honduras, the Container Security Initiative is now operational in 44 ports, the most 

recent in Puerto Cortes, and recently before that, on March 8, in 

Port Salalah, Oman. 

Since 2002, CSI, we’ve added at least one port a month to the 

program. And these 44 ports currently amount for—75 percent of 

the maritime cargo containers coming into the United States to 

have an opportunity to be screened for risk. By the end of 2007, 

we’ll have officers stationed at 58 ports, totaling 85 percent of the 

container traffic coming to this country. 

I’m also proud of our partnership that we have with the private 

sector under the Customs-Trade Partnership Against Terrorism. 

And today C–TPAT has nearly 6,000 certified partners from the 

private sector, including some of the largest U.S. importers, working to increase supply chain security from foreign loading docks to 

the U.S. port of arrival. Through C–TPAT, CBP reviews the security practices of companies shipping goods to the United States. 

A year ago we had only 8 percent of the certified members validated. Today we have 27 percent done, and we have another 39 

percent underway, so that we’ll be at 66 percent by the end of this 

fiscal year. 

I know there’s also been concerns about the number of validators 

we have on board, supply chain security specialists. Today we have 

88 on board; within the last 2 weeks we have selected 41 additional 

validators, and they’ll be on within the next 30 to 45 days so that 

they’re on board for a May 15 training class. And by the end of the 

summer, we’ll be at our 156 target. 

I also would like to talk to you about an additional protocol that 

we’ve put in place. We have recently entered into an agreement 

with 19 recently retired Customs and Border Protection officers 

and special agents from Immigration and Customs Enforcement to 

have them involved and trained, given the exact same training as 

our supply chain security officers, so that they can use their experience in offsetting our teams to increase the pace of validation overseas. 

With regard to our targeting systems, CBP, our partners within 

the government, we’re also looking to increase the targeting capabilities at the National Targeting Center. Certainly we look to continue to improve the integration of our intelligence through our targeting efforts and the data elements we need to make our system 

more comprehensive and accurate. 

Recently MitreTech Systems, an independent consulting firm, 

performed an independent evaluation of CBP’s Automated TarVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00058 Fmt 6633 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
51

geting System and targeting methodology. CBP uses ATS to identify ocean containers that are high risk for terrorism. The assessment identified a number of strengths, including recognizing our 

assets of how highly trained our officers are. 

They also recognized our ability to adjust rules and weights to 

account for priorities, risk, and changes. But they also made a 

number of recommendations, such as the ability to have an infrastructure in place to test the simulation of proposed rules or mock 

shipments, and we continue to improve under their direction. 

Last, under the Hong Kong ICIS program, I believe it’s important just to offer my comments in addition to Mr. Oxford’s. I’ve had 

the opportunity to see this concept, and certainly it employs technology that integrates into a single computer screen the radiation 

profile and VACIS image, much of the same technology we use at 

our ports today. 

But I believe today the Hong Kong concept is just that, a concept, 

and the effectiveness of this concept has been overstated. But nevertheless, it is consistent with our strategy to push the borders out, 

and I believe it does have the ability to complement our CSI program. And we’re committed to partner with the private sector to 

develop a viable concept of operations. And this will take also a 

considerable amount of support from the host country counterparts 

as well in each country we would go to. 

In conclusion, we know that securing America’s borders is an ongoing and long-term effort, but we can be proud of what we’ve been 

able to accomplish thus far, and to make America safer and our 

seaports more secure. 

Mr. Chairman, we welcome the oversight of this Subcommittee 

and you personally, and suggestions our colleagues at GAO as well 

as independent reviewers like MitreTech have made to improve our 

programs. We take these recommendations very seriously, and 

work every day to improve the ways we carry out our homeland security mission and to keep terrorists and terrorist weapons, including weapons of mass destruction, nuclear, and radiological weapons, out of our country. 

Thank you for the invitation today, and I’ll look forward to taking any questions later. 

Senator COLEMAN. Thank you very much, Mr. Ahern. 

I want to start by acknowledging the clearly substantial improvements from where we were on September 11. Today, we have the 

National Targeting Center, C–TPAT, CSI, and we are utilizing radiation portal monitors. So there is no question that we’re safer 

today than on September 11. 

However, are we safe enough? Have we elevated this issue to the 

highest priority and are we responding accordingly? As I said to 

Secretary Chertoff when he was being confirmed, unlike perhaps 

any other department head, if the head of transportation—if there 

are highway deaths on the highway, it’s part of the reality of the 

world we live in, and you don’t get a lot of feedback. And if there 

are environmental spills, we deal with that; a great concern, but 

it’s the world we live in. But in this area, failure’s not an option. 

And so the standard is higher, and in part, that’s why we’ve been 

so vigorous in this oversight. 

52

I just want to, if I can, talk about ICIS for a second. And I appreciate the fact that we’re hearing that it may serve as a model. I 

was in Hong Kong and I saw the ICIS system. I also appreciate the 

recognition of working with the private sector and with foreign entities. I think as a result of some of the concerns about the DP 

World process, about whether it should have had a 45-day review, 

I believe; the law required that, it didn’t—but I don’t know if we 

ever got to the substance. 

And part of the reality is that if our defense requires us to work 

vigorous, requires us to work with foreign entities in some capacity, 

we do that. We have to take a close look at it. But I appreciate the 

recognition that this is part of the reality. 

My concern about ICIS is I hope we push the envelope. Clearly, 

and I think, Mr. Oxford, your comment, it’s a model. It’s not an 

operational system. The fact that you can do a couple lines—and 

I was there. Every truck rolls through. It doesn’t stop. It doesn’t 

interrupt the flow of commerce. You’ve got the image. You can 

check that, then, with a manifest. You tie that in with the radiation portal monitor. 

We then have a couple-week period while containers are coming 

over here and perhaps subject to further analysis, which I think 

has been the issue. I’ve got to believe that with computer technology, we’ll be able to do some analysis which will give us more 

information. 

But I’m hopeful that we’re taking a close look, and that there 

isn’t any kind of bureaucratic resistance. 

Let me, if I can, talk about Megaports, and then I want to talk 

a little with you, Mr. Ahern, about ATS and about our targeting 

system. There’s been a lot of discussion publicly about Megaports 

deployment in the Bahamas, and with Hutchison Port Holdings 

awarded a sole source contract. They operate the port in the Bahamas, don’t they? 

Mr. HUIZENGA. That’s correct. 

Senator COLEMAN. So if you want to operate in the Bahamas, 

you’re going to give a sole contract. 

Mr. HUIZENGA. They’re the only people driving those vehicles 

around on their port. 

Senator COLEMAN. And I would take it that it’s your judgment 

that it is in the best interests of this country to have a Megaports 

program, to be working with folks like Hutchison and others to 

make sure that we’re putting in that extra line of defense. 

Mr. HUIZENGA. Absolutely. I mean, pushing the boundaries out 

is what this is all about. And it’s important to note that we reviewed our relationship with Hutchison before we started to pursue 

the contract, and we’re convinced that they’re a company worth 

working with. 

Senator COLEMAN. I worry there’s a little bit of xenophobia here. 

However, I believe that if foreign countries are operating ports, 

then they should establish an American subsidiary. 

Foreign companies operate 80 percent of our ports. It is a reality 

at today’s world for the U.S. Government to work with foreign companies. Yet I hope we will take a close look, and understand what 

the gaps or concerns may be. I am certainly one who believes that 

53

1See Exhibit 15 which appears in the Appendix on page 440. 

1See Exhibit 7 which appears in the Appendix on page 371. 

Megaports is part of this integrated infrastructure and I hope we 

continue moving forward. 

Can I just clear something up about numbers? We have good coverage of our southern and northern borders, somewhere in the 90 

percent. I thought it was stated that we’d have 98 percent of our 

containers coming in from ports. 

Screened for radiation by 2007? Is that correct? The question I 

have is, however, when do you have ‘‘full coverage’’? GAO says not 

by 2016. I thought the Secretary said by 2009. Can you help me 

understand the difference? Are we committed to this accelerated 

process that would make the GAO number somehow not relevant 

based on what we intend to do over the next couple of years? 

Mr. AHERN. Yes. I would tell you that our projection right now 

for the RPMs for seaports would get us to 621 RPMs by 2007, and 

that would get us to 98 percent of the sea containers coming in 

through the top 22 ports. 

Senator COLEMAN. Senator Levin is not here, but there was a 

comment about imaging technology. It may have been you, Mr. Oxford, who discussed some of the capabilities of the new technology. 

That chart is a scan of a truck carrying garbage from Canada into 

the United States.1

And perhaps any of you gentlemen can help me. Even with all 

the technology that we have today—you talked about imaging systems, high density cargo. I presume that’s high density cargo right 

there. How do you know whether there is a dirty bomb buried in 

there? How do you know whether they’ve got any kind of weapon 

of mass destruction? How do we somehow stop that from being a 

carrier for some weapon of mass destruction? 

Mr. OXFORD. Mr. Chairman, that’s why when we looked at the 

ICIS system, we look at some of the operational and technical limitations. The VACIS system originally was designed to look at contraband and other anomalies for customs’ other missions. What 

we’re looking for in next generation radiography systems is to actually have better information content, where we can now discriminate between the material that’s in that cargo. 

So it’s not just the ability to find high density material. It’s to 

identify the differences in density so we can look at those anomalies and red flag for the operator the material in that cargo that 

you care about. So what you’re seeing on this image is a current 

generation capability that has very little information content and 

requires a lot of operational judgment. 

Senator COLEMAN. Mr. Ahern, the basis for our system today is 

really—the Automated Targeting System. And in terms of what we 

inspect, do we have the chart that shows the various ports, the foreign ports? I think it says Le Havre and some others.1 Is there a 

chart there that says these are the number of high risk cargos? 

These are the numbers of requests that have been made to actually 

do a screening. I think that’s the one. 

A couple of questions. We’ve got CSI ports, Container Security 

Initiative. And by the way, where they work well, at least in Hong 

54

Kong, our folks are operating side by side. Is that the model 

throughout all the CSI ports? 

Mr. AHERN. We do find that Hong Kong is one of our better footprints for our officers working alongside. We do have that in many 

other locations as well. 

Senator COLEMAN. But we don’t have it in all the locations? 

Mr. AHERN. The side by side officers? 

Senator COLEMAN. Yes. 

Mr. AHERN. Not in every location. 

Senator COLEMAN. I mean, to me it is important to work side by 

side. In Hong Kong, I saw how well that operated. There must be 

things we can do to somehow facilitate getting folks to work side 

by side. 

But one of the questions I have is if you look at the green, the 

green are the high risk shipments. Now, I presume high risk, is 

that through an ATS targeting system? 

Mr. AHERN. Yes. That would be. 

Senator COLEMAN. And then we go to the country and we go to 

Hong Kong, and you can kind of see. And even with my Lasik vision here, I can’t look at it exactly. But what you have is 37.2 percent of high risk shipments are examined at Hong Kong. And we 

actually have a higher number that are requested. And that decision to actually examine is done then by the host country. Is that 

correct? 

Mr. AHERN. That is correct. 

Senator COLEMAN. Even with this system, we don’t control 

whether it’s examined there. Now, those that we’ve asked—the yellow that we’ve asked to be examined—forget the green in which 

there are lots of high risk. But those between—those we’ve asked 

to examine in the yellow, do we examine those containers then before they’re actually unloaded on our shores? 

Mr. AHERN. If they’re determined for high risk, they would be examined upon arrival in the United States if they’re not done overseas. 

Senator COLEMAN. What about all the high risk that are not inspected? In regard to Hong Kong, 15,636 are identified high risk; 

only 5,580 are actually examined. What about those 10,000? Are 

they also examined here? 

Mr. AHERN. Those would be examined in the United States. 

Senator COLEMAN. In what way are they examined? 

Mr. AHERN. They would be given as far as the radiation screening as well as the NII, physical examination, if necessary. 

Senator COLEMAN. Physical—when you say if necessary, out of 

those other 10,000, how many are actually physically examined? 

Mr. AHERN. I would have to give you the precise breakout. 

Senator COLEMAN. Can you give me a ballpark figure? 

Mr. AHERN. I wouldn’t want to provide a speculative answer. 

Senator COLEMAN. If you look at Le Havre, France, what you 

have here is 1,649 identified as high risk. You only have 244 actually examined there, 553 not. So the French authorities simply 

made a decision that over half those that we request to be examined aren’t examined. Is that correct? 

Mr. AHERN. What I’d like to do, if I might, is I know that taking 

a look at the snapshots in time that were used from this, February 

55

2005 to February 2006, I know in the early part of 2005 that we 

were not getting the responsiveness that we had hoped for in 

Japan and in France. So if I might, if I could actually provide some 

more detail after this hearing to show the progress that has been 

made in recent months to bring those numbers to adjust those bars 

a little bit more positively. 

Senator COLEMAN. I’d appreciate it. Because clearly what we 

would like to see is, we’d like to understand, if there’s resistance 

from the host country, what are we doing to change that? What 

kind of tools can we use to say, we have a concern, and if this is 

really a partnership, we need you to act a little more aggressively. 

Because it seems to be somewhat varied in terms of the nature of 

the response. And actually if something is high risk and we want 

it to be checked, you would expect we wouldn’t want to have any 

variance. 

Mr. AHERN. Absolutely. And I think we can provide some information as a follow-up to this hearing to show what it’s been in recent months, moving towards the goals that we would like. 

Senator COLEMAN. Let me focus on ATS for a second because it 

really is kind of at the root of our system, what we identify, and 

we’ll get into all the details here. But we essentially, through a 

range of factors, give cargo a rating, and based on that rating we 

make a determination as to whether it’s high risk and then once 

that determination is made, we will then determine whether in fact 

there’s some extra review accessory. 

The system itself, have we ever conducted any kind of peer review? Have we ever done any kind of analysis that substantiates 

the veracity, the accuracy, of this system? 

Mr. AHERN. Yes. That was the MitreTech review that I spoke of 

in my short statement. That outside review actually pointed to a 

lot of things that we had that were strengths of the program as 

well as additional areas we needed to improve upon. 

Senator COLEMAN. Do you ever do any red team testing where 

the system is actually checked it out. Do you do simulated testing? 

Have you ever gone down there and seen whether you could escape 

and get through this system that we place such reliance on? 

Mr. AHERN. With, again, the MitreTech study that was done, we 

have now some protocols that we’re going to begin to operate within the next month to 2 months to start—do some what they call 

in the sandbox testing for us. 

Senator COLEMAN. So we’re going to do that now? 

Mr. AHERN. Yes. 

Senator COLEMAN. OK. And I hope we do that now. I mean, 

again, this is the kind of underlying basis or—we’re banking everything on a system that we’ve done some studies. We have not done 

the kind of testing that says, OK, is it vulnerable? Does it work? 

And if it does—and I applaud, by the way, Customs and Border 

Protection and DHS, in regard to what we saw with the radiological material—which is interesting, by the way. I did read in the 

paper they said we’d have that document problem fixed in 45 days. 

I do know your testimony today says 30 days. So I’m going to hold 

you to the 30 days. 

Mr. AHERN. Fair enough. 

56

1See Exhibit 7 which appears in the Appendix on page 371. 

Senator COLEMAN. But I do appreciate it. But I think we—again, 

we need to take a look at this. 

My other concern is simply the reality that this is a sampling. 

It’s not random. It’s targeted. 

Mr. AHERN. Right. 

Senator COLEMAN. It’s a targeting system, but that depends on 

C–TPAT and other programs. You’ve got relationship with shippers 

and companies like Best Buy, etc., that we put a lot of stock in 

what they’re doing without the kind of thorough review investigation. 

And so in effect, you’ve got a lot of folks who are going to have 

a pass. And I think that was in Commander Flynn’s scenario. 

They’re going to get a pass on any kind of high risk based on getting points for relationships that I worry where someone could understand that and use that as a way to break through that system. 

That’s one of the vulnerabilities we have. Is that correct? 

Mr. AHERN. Well, what I would just add to that is that without 

getting into too much of our scoring in an open hearing like this, 

I would remind all of us of the change in protocols that we had 

going back several months ago where we actually did cease providing any kind of an advantage at the time of manifest filing 

when we do the initial scoring. And there’s not any at that point 

in time for the security screening that goes that 24 hour prior to 

lading. 

Senator COLEMAN. But the problem even with that is that we 

look at a company and we give it certain credit. But we’re really 

not looking at all their operations. We’re not out there checking to 

see whether in fact what we believe to be their system—we may 

have looked at one place, but there’s not a uniform review, certification process that gives us—certainly not 100 percent certainty. In 

fact, I think it’s a lot less than that. But, I mean, that is the system we have. 

Mr. AHERN. Well, if you’re talking about the validations, we have 

a very uniform way of going out and doing the validations now. It’s 

much more consistent than it was, again, even just several months 

ago. That’s, again, lessons learned from a previous GAO report. 

Senator COLEMAN. Mr. Oxford—let me just finish, if I can, with 

ICIS because one of the benefits of ICIS is at least we could have 

the images of the containers in this chart. Today, we don’t have images for those containers in Hong Kong.1 Again, this chart is dated, 

a moment in time. 

But right now we have a system that says of the 15,636 high risk 

shipments examined at Hong Kong, we know that 5,823 are actually checked there. We’ve identified 7,918 that we’d like to be 

checked. We do believe that before they get in, those are covered. 

I still have a question as to the 8,000 to 10,000 spread which we’ve 

identified high risk, whether in fact those are checked before they 

get here and what that means. 

But at least with ICIS, just using that as part of a system, we’d 

at least have a screen. We’d have an image. We’d have a manifest. 

We’d have a radiation portal monitoring of all these high risk, 

which we don’t have today. Is that correct? 

57

Mr. AHERN. That would. And just to put ICIS in its proper context as we go forward into the future, I think it is appropriate to 

take a look at. It’s very consistent with our pushing the border 

strategy out, and it would be very complimentary to the 44 ports 

where we currently have CSI. 

And when our targeters overseas would get a score for risk, one 

of the first things they should then ask for is, let me have the electronic file that is there for this container coming in so they can 

again make an informed decision of what’s going on. 

But it won’t all just be through that protocol. There will certainly 

be a lot of alarms that will be occurring. As I stated, with the 80 

million containers that we’ve now put through the RPMs, 318,000 

have resulted in alarms that needed to be resolved. And I would 

submit to you, and I know there’s been a lot of discussion by many 

who’ve looked at this issue, and I would think that the carriers 

would support the same position that I’m going to proffer at this 

point, any alarm needs to be resolved before it’s put on a vessel for 

the United States. 

Anything using it for forensic capabilities en route or after route 

within the United States may be interesting to have, but you would 

want to make sure that the alarm is resolved before it’s put on a 

vessel for the United States so that there’s not any concern about 

something happening en route or upon arrival. So that would be a 

very critical component that needs to be added into this process. 

Senator COLEMAN. Mr. Oxford, last line of questioning. I believe 

you were quoted in one of the articles today talking about the red 

team testing that GAO did and the material that at least set off 

a radiation portal monitor. So the monitors were set off. Clearly, 

from a monitoring perspective, there was enough material in there 

to raise the level of concern. Is that correct? 

Mr. OXFORD. Yes. 

Senator COLEMAN. And GAO says that based on their analysis 

and working with a couple of other government agencies, they 

thought this was enough to make dirty bombs. Is that correct? 

Mr. OXFORD. That’s what they said, yes. 

Senator COLEMAN. And your comment was it was somewhat 

minimal material. 

My question is this, though—two questions, actually. One, you’re 

not discounting the impact of dirty bombs, are you? 

Mr. OXFORD. Absolutely not. 

Senator COLEMAN. And so the testimony of Governor Kean in 

terms of the emotional impact, or Commander Flynn in terms of 

the economic impact, you wouldn’t disagree with that, would you? 

Mr. OXFORD. Not at all. In fact, when you look at our Securing 

the Cities Initiative, we were going to focus a lot in the urban 

areas on a dirty bomb-like attack, and what we can do to prevent 

and immediately mitigate those effects. 

Senator COLEMAN. And the other concern that I had in this regard is, again, without debating how much material was in those 

two boxes, it was the sense from GAO that they could have gotten 

a lot more material without raising any red flags. What do we have 

to put in place to make sure that there are red flags so that people 

can’t get radiological material in a level enough to build a dirty 

bomb without anybody being concerned about it? 

58

Mr. OXFORD. Well, even though that falls mainly in the domain 

of the Nuclear Regulatory Commission, I think the exercises and 

the ability for CBP to do what they’re proposing to do, especially 

for the cross-border activities, certainly allows an extra layer of security to be able to look at that material. 

It was mentioned in the opening statements that the Energy Policy Act that dictated NRC lead a task force, with a report due to 

Congress this August, I think we, as a government, need to look 

hard at the recommendations that come through that process to 

make sure we’re all doing more for source security within the country as well. 

Senator COLEMAN. Let me ask the last question then about a 

general concern. We’ve got a lot of agencies involved in this effect. 

What we had, if you look to that Second Line of Defense program, 

we have a question about whether the State Department—the 

records they had in terms of the devices and everything else. We 

have DOE now. We have Homeland Security. I think there may be 

some other entities. 

Is there a concern that there are too many cooks cooking this 

broth, and that perhaps we need to somehow better centralize this? 

Is there going to be a concern, if something goes wrong, that a lot 

of people are going to be pointing fingers and say, there wasn’t a 

single person in charge? Because we’ve been through that dance before. Anybody want to respond to that? 

Mr. OXFORD. Mr. Chairman, if I could try to take that on because 

I may be one of those people they point at when that time comes. 

We have seen within the 11-plus months that we’ve been in existence that we have a daily dialogue now across the inter-agency 

that didn’t exist on a routine basis in the past. We think that was 

one of the preeminent reasons for why DNDO was created, was to 

create that daily dialogue. 

It does not mean we have to run every program. And we’re seeing the benefits from having the NNSA people on our staff. Mr. 

Ahern has 11 people from CBP within the DNDO office. It’s creating this dialogue on a daily basis. And that extends to the Department of Defense, the Department of State, the Federal Bureau 

of Investigation, and now we have two NRC people on the staff to 

start working these issues. 

So I think we’re making a great step forward in creating that 

cross-talk that was necessary in the past. 

Senator COLEMAN. I appreciate that. And I would just urge that 

if there’s even any inkling among you or folks who work with you, 

any of the other agencies, that somehow we’re seeing the beginning 

of some silo effect where people are questioning the level of communication and cooperation, I would hope that is attended to very 

quickly because were that to happen, I think it would be very problematic. 

Mr. HUIZENGA. Mr. Chairman, I’d like to echo Vayl’s point. I 

really believe we have a significant amount of communication right 

now, and it benefits us because we’re able to bring the expertise 

from the different agencies to bear on this common problem. 

And, we can share the expertise that we’ve developed over the 

last decade working in foreign countries, and we can help on the 

CBP’s efforts with CSI in order to provide that additional layer of 

59

radiation detection screening before the containers leave the foreign ports. 

Senator COLEMAN. I thank you. We will have a hearing on 

Thursday. We’ll focus more on ICIS, focus more on C–TPAT and 

CSI. But this has been very helpful, and I do thank you for your 

testimony. 

With that, this hearing is now adjourned. 

[Whereupon, at 12:25 p.m., the Subcommittee was adjourned.] 

(61)

NEUTRALIZING THE NUCLEAR AND RADIOLOGICAL THREAT: SECURING THE GLOBAL 

SUPPLY CHAIN 

THURSDAY, MARCH 30, 2006

U.S. SENATE,

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS,

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 10:03 a.m., in 

room SD–342, Dirksen Senate Office Building, Hon. Norm Coleman, Chairman of the Subcommittee, presiding. 

Present: Senators Coleman and Levin. 

Staff present: Raymond V. Shepherd, III, Staff Director and 

Chief Counsel; Brian M. White, Professional Staff Member; Joanna 

Ip Durie, Detailee, ICE; Mary D. Robertson, Chief Clerk, PSI; Leland B. Erickson, Counsel; Mark L. Greenblatt, Counsel; Steven A. 

Groves, Counsel; Cindy Barnes, Detailee, GAO; Elise J. Bean, Staff 

Director/Chief Counsel to the Minority; Laura Stuber, Counsel to 

the Minority; Hanni Itah, Intern; Kathy Kraninger (HSGAC, Collins); and Henry Abeyta (Energy, Domenici). 

Senator COLEMAN. This hearing of the Permanent Subcommittee 

on Investigations is called to order. 

I know that Senator Schumer is on his way. I am very pleased 

to see my good friend and close colleague, Senator Graham, here 

today. Both Senator Graham and Senator Schumer have really 

taken a lead on this issue of container security, and have recently 

visited Hong Kong. As part of our discussion today, we will be talking about the ability to screen 100 percent of containers and an operation in Hong Kong. Both Senator Graham and Senator Schumer, have just returned from Hong Kong and I thought it would 

be very worthwhile for this Subcommittee to hear from them abut 

their trip. 

Senator Graham, I am going to turn it over to you before my 

opening statement. I anticipate Senator Schumer should arrive 

shortly. If he is not here, I will give my statement, but I would like 

to give you the opportunity to begin first. I know both of you are 

busy. 

I welcome the Ranking Member. Senator Levin, I indicated that 

I was going to give both Senator Graham and Senator Schumer the 

opportunity to talk a little bit about their experience before our 

opening statements. 

Senator LEVIN. That is fine. 

62

Senator COLEMAN. I know they have to go on their way. 

Senator Schumer is finally here, and I am very pleased to see 

him. I also indicated that both of our colleagues have taken a very 

strong interest in the whole issue of port security, container security, and personally visited Hong Kong recently to look at one of 

the systems there. 

Senator Schumer, what I am going to do is I am going to have 

you and Senator Graham speak before we do our opening statements. As soon as you are done—I know that you are in the middle 

of markups and other things, we will certainly excuse you at that 

time, but I do want to thank you for being here today. 

With that, Senator Graham. 

TESTIMONY OF HON. LINDSEY GRAHAM, A U.S. SENATOR 

FROM THE STATE OF SOUTH CAROLINA 

Senator GRAHAM. Thank you, Mr. Chairman. You are right, we 

just returned from Hong Kong and China, the Mainland, and my 

body is somewhere between there and here, so I will try to make 

this brief and to the point. 

In terms of leadership, I know Senator Schumer has been talking 

about port security for a long time, and Senator Levin has been 

talking about national security matters every time we meet, in 

Armed Services he is talking about these things. Mr. Chairman, 

your bill is sort of a model, and that is how I got involved, by talking with you and the gentleman from Hutchison behind us. You 

kind of set us up. 

I have Charleston port in South Carolina, and we are looking at 

locating a new port. I guess the Dubai Port World experience has 

sort of woken up the country a bit, and let us take advantage of 

what was an unfortunate event, but it did tap into some concern 

out there about how our ports are operated, who should own the 

terminals and are we where we need to be as a Nation? In that 

regard, the whole experience could be positive. Senator Coleman, I 

want to be a partner with you and Senator Schumer, and Senator 

Levin, and others to try to get this right. 

The Hong Kong experience was very exciting. We met with the 

Hutchison people, and we viewed a system called ICIS. I think you 

have already been there. One of the things we have learned from 

this whole Dubai experience, that most Americans did not realize 

that most of the cargo coming into our country is coming in basically uninspected. We have a screening program of sorts, but the 

technology to look into each cargo container and find out if it is 

something we want or something dangerous to us as a Nation 

seems to be developing rapidly. The only thing not developing rapidly is our government’s ability to deal with port security. Maybe 

from this whole episode and your bill, and other pieces of legislation, the government can catch up to the private sector. 

Here is what was so exciting, is that the technology that Senator 

Schumer and I had the pleasure of viewing, seems not only to be 

technically good, but commercially sound, that you can screen cargo 

at the biggest port in the world without bringing our commerce to 

a halt. What we are lacking is infrastructure within out government to take those images and analyze them to make sure that the 

63

container does not carry contraband or weapons of mass destruction or other things that would hurt Americans. 

As a Nation, I believe it will be political malpractice for us not 

to come together as Republicans and Democrats and put the infrastructure in place to take this promising technology and spread it 

worldwide. We can do it in partnership with the private sector. 

That was what was so exciting. This is not another government 

program of many layers. This is allowing us to tap into private sector innovation where we could partner with the private sector, let 

them lead the way in screening and inspection, and we will have 

some infrastructure in place at the Federal level to make sure we 

know the results of these screens, to make sure the cargo is safe 

to come into our country. 

One final thought. This has to be done worldwide, and it has to 

be done with the private sector taking the lead, and we are trying 

to do it with other nations. The Bahamas event is sort of the wrong 

model. No one in the United States wants to take over the sovereignty of the Bahamian Government or any other government. 

We want a partnership, sort of like we have with airlines, where 

governments can work in collaboration with our government and 

the private sector, to make sure that commerce is secure for us all, 

because if there is a terrorist attack on our shipping lanes or at 

any port in the United States, or any major port, the ripple effect 

would be devastating to the world at large. So we have a chance 

to collaborate with nations that have ports with their borders, and 

make this a win-win. 

That is what I am looking for, a marriage between the private 

sector, our government and the world at large, to make sure that 

we know what is coming to our shores, because the one thing I 

have learned from this whole episode, after talking with you and 

others, Mr. Chairman, is this is probably the weak link in the national security chain. The good news: We can solve the problem if 

we work together and we get ahead of it. 

With that, I appreciate the opportunity to be before your Subcommittee, and look forward to working with you and others to 

solve the problem. 

Senator COLEMAN. Thank you, Senator Graham. In your time in 

Congress, both in the House and here, you have been a champion 

on national security issues. I greatly appreciate you bringing your 

passion, your intellect, and certainly one thing the good Lord gave 

you in much bounty, and that is good common sense, bringing it 

to this discussion. It is much appreciated, and I look forward to 

partnering with you. 

Senator Schumer. 

TESTIMONY OF HON. CHARLES E. SCHUMER, A U.S. SENATOR 

FROM THE STATE OF NEW YORK 

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

you for your leadership on this issue. Just the report that was 

issued the other day should be a wake-up call to everybody through 

your Committee, your Subcommittee. I want to thank, of course, 

my good friend, Carl Levin, for his leadership as well. 

This is an issue whose time is due, and the whole whirlwind 

about the Dubai Ports can have some good, and the good is that 

64

we really do tighten up port security, and the good news, I think 

all of us are aware, and particularly Lindsey and I on our visit to 

Hong Kong, is that it can be done. It can be done without impeding 

commerce, and it can be done without much government expense, 

and this is all very good news. 

First let me say our trip to the Hutchison Whampoa Terminal in 

Hong Kong just knocked my socks off. First, it is as large as could 

be. I thought we had big ports in New York, but they are dwarfed 

compared to the Hong Kong port in size, but also in terms of efficiency and modernity and so many different ways. 

But second, their system of security, of checking each container, 

not 5 percent, not 10 percent, not 50 percent, but 100 percent of 

all the containers, for nuclear and other detrimental materials is 

just incredible, and they do it without slowing down commerce at 

all. In fact, our Customs people told us their biggest problem is 

that the containers are checked so quickly, that sometimes they 

have a rough time catching up with them because they are already 

at sea by the time they get information on the check. That is something that has to change, but it is an easily solvable problem. 

I have not seen anything in the United States—and I have studied port security that compares to what we saw in Hong Kong, and 

that is a shame. It is a shame that China and Hong Kong could 

have better port security than we here in the United States, and 

the system that we have seen—and I know you have been enthusiastic about and champion, Mr. Chairman—should be our standard. 

As you know, they first create an image of every container’s content that can be sent and reviewed by Customs officials in real and 

near-real time to ensure not only what is in there, but that if there 

is, say, a lead box that might contain something that is bad, they 

will come up with that, too. That has always been my great worry 

since I introduced legislation years ago to require scanning of containers for nuclear materials. The way they figured this out is they 

have three different check levels, and when the three match up, 

you know something is wrong and you pull the container. And 

maybe in that lead container or that imperceivable container will 

be nothing bad. Well, so be it. Better to be safe than sorry. 

The other bit of good news is the cost is amazingly low. It costs, 

I learned on our trip, about $2,000 to send a container from Hong 

Kong to the United States. That, by the way, is very cheap as well. 

It is one of the reasons we have so much more commerce, because 

this man, whose name I forget—sounds like—McLean. Mr. 

McLean, who developed these containers really did the world a 

service. So it costs only $2,000 to send a container across the ocean, 

Pacific Ocean. It is probably a little less for the Atlantic. Guess 

how much it costs to do this? About $6.50. Now maybe it will be 

a little more in ports that are less efficient. Hong Kong is the 

world’s largest port. Let’s say it is $20. One percent, adding $20 to 

the cost of a $2,000 container to make sure that it does not contain 

material that might be terribly dangerous to us, makes eminent 

sense. 

So what I think—and I know I have talked to you, Mr. Chairman, Senator Graham, some of the others—we could mandate this 

on every container that comes into the United States, mandate a 

system like this be used. Could not do it immediately, but over a 

65

reasonable period of time. The technology could be adapted to each 

port. We saw how they are adopting it in Bermuda, where they 

would not have a long line like this, but they actually have a truck 

where the detectors go by the containers instead of the containers 

go through a sort of toll booth. It would not cost the government 

a nickel. 

Now, there would be some government costs, because the scanning is done here in the United States. You just send it by 

broadband, somebody sitting in a Customs office, maybe in New 

York City—that might be a good location for such an office——

Senator GRAHAM. Or in Charleston. [Laughter.] 

Senator SCHUMER. But somewhere in the United States could 

just scan this with the expertise, send the OK right back. 

Broadband allows us to do things that were unimaginable 10 years 

ago. So we would have to hire some more Customs inspectors, but 

when you think of all the people we see at the airports who are 

government employees, this is a small cost for port security, which 

is much wider open than air security. 

So the work of this company, Hutchison Whampoa, which is the 

largest port operator in the world, has proved DHS wrong. This can 

be done. It is an example of what should be done in the private sector, and we should be as aggressive as they are in making sure 

that everything is screened, and require it to do it. 

My nightmare, Mr. Chairman, has been, ever since September 

11, that somebody somehow smuggles a nuclear weapon into one 

of our cities, not just a dirty bomb, but a real nuclear weapon. If, 

God forbid, that were to happen, there would be enormous loss of 

life, the economy would be disrupted, and our whole way of life 

would probably change, the wonderful way of life we have here in 

America. It is worth a little extra effort and a few extra dollars to 

make sure that does not happen. 

I look forward to working with you, Senator Levin, Senator 

Graham, to make that a reality as soon as possible. 

Senator COLEMAN. I do not know if there has been a more zealous and passionate advocate for this kind of security than you, and 

for obvious reasons, representing New York State, representing the 

World Trade Center area, and I know a very personal loss to you. 

I appreciate your continued passion and focus, and look forward to 

working with you. 

Senator I am going to excuse our colleagues. Senator Levin, anything you want to add? 

Senator LEVIN. I just want to thank both Senator Graham and 

Senator Schumer for all they have done in the Senate, most recently for their trip to China. It was very important to all of us 

that you raised the issues that you did with the Chinese about currency manipulation—that was the one we followed the most closely—but also for your taking the time then to go to Hong Kong and 

to inspect that technology. 

I know our Chairman has done the same thing, so we have a 

Chairman who is on the job on this issue, and I am going to be 

working with him, and look forward to working with both of you. 

I would just make one point, which is not directly, perhaps, related to the technology issue, but as the Chairman and I both 

know, 11 million containers come in by sea, but 11 million conVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00073 Fmt 6601 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
66

tainers come in by truck, and so this technology is critically important to all border States, not just to States that have ports, and in 

addition, we have a couple of million containers by train which 

come in. So this involves the safety of all Americans, but directly 

involves many more States than just the States that have seaports. 

Senator COLEMAN. Colleagues, thank you. 

Senator SCHUMER. I would just say, just from my look there, it 

seems to me that the technology could easily be adopted for land 

and train as well as port, and we would have to do that, because 

terrorists look for our weakest pressure point. 

Senator GRAHAM. Mr. Chairman, if I may add, this trip was everything you said it would be. That is what got me to go to the 

port, is through our conversation you suggested while we are over 

there. It was, as Senator Schumer said, astounding what the private sector is doing. 

And one brief commercial for South Carolina. There is a program 

called Project Seahawk that has been in the budget now for 3 years 

that Senator Hollings started. We have 40 different law enforcement agencies at the Federal, State and local level, working out of 

one building in Charleston, South Carolina, sharing information 

about port security by turning to their left or to their right, to talk 

to people. My goal is to make sure that program thrives and survives, and everybody in the country can duplicate this model of 

talking to each other at every level of government. It would add a 

lot of security to our ports and other places. 

Thank you for what you are doing, it is very important. 

Senator COLEMAN. I thank you for your leadership, and I look 

forward to working with you. Thank you very much. 

OPENING STATEMENT BY SENATOR COLEMAN 

Senator COLEMAN. Today we will conclude our two-part hearing 

on neutralizing the nuclear and radiological threat and securing 

the global supply chain. On Tuesday, we extensively discussed the 

threat of nuclear or radiological terrorism. The consensus was 

clear: The threat is real and we are not doing enough to prevent 

it. 

Commander Flynn, who testified before us on Tuesday specifically outlined a stark scenario of a dirty bomb transported to the 

United States via a maritime container. However, this is not simply a worse-case scenario. One of our witnesses today will testify 

how 2 years ago, Palestinian suicide terrorists evaded port security 

in Ashdod after being smuggled in a secret compartment within a 

container from Gaza. Ten Israelis were killed and 16 others wounded after they intercepted the terrorist before they reached their target. It is suspected that the suicide bombers were intending to blow 

themselves up near the tanks of hazardous material after inspectors found unexploded grenades within the secret compartment. 

Experts in the industry believe it is just a matter of time before 

terrorists break security measures at a port of entry, most likely 

with a dirty bomb. These hearings are designed to prevent that 

from happening. 

Global trade is one of the pillars of our Nation’s economy. American national security is inexorably linked to economic security. 

Governments across the world must ensure that the supply chain 

67

1See Exhibit 9 which appears in the Appendix on page 373. 

is secure, but must also do so without impeding the flow of commerce. More than 90 percent of global trade moves in ocean-going 

containers, and over 10 million containers enter the United States 

annually. 

The Congressional Budget Office, at my request, studied the economic consequences of an attack on the Ports of Los Angeles and 

Long Beach.1 CBO found our Nation’s gross domestic product would decline by about $150 million per day for each day these two 

ports are closed, and that the annual cost of closing these ports 

would escalate to nearly $70 billion. While CBO did not analyze 

the cost to human life and property of such a terrorist attack, the 

economic impact of closing the ports could be comparable to both 

the attacks of September 11 and Hurricane Katrina. We cannot afford the devastation these findings imply. We must secure our supply chain before we pay the high price of an attack, and seek the 

appropriate balance between two often-competing priorities: Security and speed. 

Former Customs and Border Protection Commissioner Bonner 

had the vision to address this grave threat and balance these two 

priorities—security and speed—after the September 11 attacks. 

This balancing act resulted in the creation of two of the most 

prominent Homeland Security programs—the Container Security 

Initiative (CSI), and the Customs-Trade Partnership Against Terrorism, or C–TPAT. CSI effectively pushed our borders out by placing CBP officers in foreign ports to inspect containers before they 

reach our shores. C–TPAT exemplified a true public/private partnership. 

These ideas alone are laudable—but due to the sheer magnitude 

of the challenge of securing the global supply chain, we must continue to improve upon these promising initiatives. 

As Chairman of the Permanent Subcommittee on Investigations, 

I have pursued a bicameral and bipartisan investigation into supply chain security for almost 3 years. I have worked extensively 

with our Chairman, Chairman Collins, and am proud to have several of my findings and recommendations included in the GreenLane Maritime Cargo Security Act, which I know will be the subject of a hearing next week, and I certainly applaud Chairman Collins’ leadership on this issue. 

Following our hearing last May and the two excellent GAO reports, I was pleased to see CBP and Commissioner Bonner acknowledge these findings and work to improve these programs. I 

am pleased to report today that CSI and C–TPAT have made substantive progress in the past 10 months, and are well on their way 

to becoming sustainable security programs. 

With that said, considerable work lies ahead. These initial programs were only the first step in a constantly evolving process. We 

must urgently move to the next level of security—especially since 

trade is only forecast to continue its rapid expansion. 

In preparation for this hearing, the Subcommittee wrote an extensive report that analyses the global supply chain. The Subcommittee staff’s findings are troubling. In short, America’s supply 

chain security remains vulnerable to the proverbial Trojan Horse—

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America’s enemies could compromise the global supply chain by 

smuggling a weapon of mass destruction (WMD) or even terrorists, 

into this country. 

Again, these frightening scenarios are not the work of Hollywood 

writers. Last year, on two separate occasions, dozens of Chinese 

immigrants were smuggled through the Port of Hong Kong into Los 

Angeles using maritime shipping containers. These incidents, coupled with similar episodes abroad, demonstrate the vulnerability of 

the global supply chain. 

The 9/11 Commission confirmed these vulnerabilities, stating, 

‘‘Opportunities to do harm are as great, or greater, in maritime or 

surface transportation.’’

Over the course of its three-year investigation, Subcommittee 

staff has identified numerous weaknesses in America’s programs 

that secure the global supply chain. A brief overview of these problems illustrates the challenges confronting these efforts.

• In CSI, the Subcommittee found that only a de minimis

number of such high-risk containers are actually inspected. 

In fact, the vast majority of high-risk containers are simply 

not inspected overseas. To make matters worse, the U.S. 

Government has not established minimum standards for 

these inspections.

• The Subcommittee found that an overwhelming proportion of 

participating companies in C–TPAT receive benefits prior to 

having their security profile validated. Only 27 percent of 

the participating companies have been subject to a validation. Therefore, 73 percent of companies have not been subjected to any legitimate, on-site review to ensure that their 

security practices pass muster.

• The targeting system employed by the U.S. Government to 

identify high-risk shipping containers entering U.S. ports is 

largely dependent on what some have phrased ‘‘the least reliable’’ form of data for targeting purposes, which includes 

cargo manifests and bills of lading. Moreover, the Subcommittee has found that this targeting system has never 

been tested or validated, and may not discern actual, realistic risks.

I will certainly speak to Deputy Secretary Jackson about that 

this morning. 

The staff report makes several recommendations to enhance CSI, 

improve C–TPAT, and reform the automated targeting system. 

But I would like to briefly focus on the initiative that I personally observed in Hong Kong, and that my two colleagues just talked 

about. 

In December, I traveled to Hong Kong to examine the world’s 

largest port. In addition to the impressive CSI team, and observing 

the close relationship between Hong Kong Customs and our CBP, 

I examined a promising screening concept piloted by the Hong 

Kong Container Terminal Operators Association. In Hong Kong, 

containers are screened with both x-ray and radiation detection 

equipment. 

69

Effectively screening containers with both an x-ray and a radiation scan is the only definitive answer to the perplexing, and perhaps most important question that we are going to be examining 

today, ‘‘what is in the box?’’

However, in fiscal year 2005, only 0.38 percent of containers 

were screened with a non-intrusive imaging device, and only 2.8 

percent of containers were screened for radiation prior to entering 

the United States. Overall, CBP screens or examines only 5.4 percent of containers with what they call a non intrusive imaging 

(NII) machine, and less than 40 percent with radiation portal monitors (RPM). By any standard, any test, I believe that this is a failing percentage. We cannot afford to fail when it comes to public 

safety. 

These numbers are low because to date, the Federal Government 

adopted a risk-based approach with the explicit goal of screening 

only high-risk containers. 

Now, while this approach is fundamentally sound, the system 

used to target high-risk containers has yet to be validated or proven to accurately identify high-risk containers. Moreover, the validity of the intelligence used to enhance this system’s targeting ability is increasingly in question. 

So I think we need to both enhance our targeting capability and 

use technology to enhance our ability to increase inspections, again, 

without impeding the flow of commerce. I believe the Hong Kong 

concept holds great promise. 

In Hong Kong, this system allows all incoming containers to be 

screened upon entry to the port without impeding the flow of commerce. In essence, the terminal operators, a private sector entity, 

have demonstrated that 100 percent screening can be a reality. The 

processes and policies to implement such a system are obviously 

quite significant. However, I believe the challenges that remain can 

be overcome, and I plan to work collaboratively with the Department of Homeland Security to solve these challenges. 

It is also important to note that screening 100 percent of containers does not mean that 100 percent of images will be reviewed, 

or that our current risk-based approach is not the right one. This 

image is merely another piece of information, and more importantly, the system ensures that each container is screened for radiation, and that is important. In addition, if an event does occur, we 

would have the capability to go back and identify the container involved in the incident, and thus preserve our trade lines. We cannot afford to shut down all our ports and stop global trade, nor can 

we afford the likely outcome of a catastrophic event would have on 

our supply chain—U.S. Government mandated 100 percent screening. 

Implementing this system will add another layer of security to 

the supply chain and demonstrate a true public-private partnership. We, the U.S. Government, should embrace this private sector 

initiative that increases our screening ability without impeding the 

flow of commerce. The task is too great for government alone. Industry and government need to work collaboratively, and move forward on programs and technologies to secure trade. Instead of security being a cost of doing business, it must become a way of doing 

business. 

70

The bottom line is this: We are safer now, we are safer today 

than we were yesterday, but we have to ask the question continuously, are we safe enough? The question then becomes: How do we 

get there? In the words of the hockey legend, Wayne Gretzky, ‘‘A 

good hockey player plays where the puck is; a great hockey player 

plays where the puck is going to be.’’ In other words, we cannot 

safeguard a post-September 11 America by simply using pre-September 11 methods. If we think that terrorists are not plotting 

their next move, then we are mistaken. We must find where the 

gaps are in our Nation’s homeland security, and close them before 

an attack happens. This is the only way to guarantee our security. 

To move in this direction, we need to implement 100 percent 

screening measures and we need DHS to validate that our automated targeting system effectively identifies high-risk containers. 

Currently, about 5 percent of all containers coming into the United 

States are actually inspected. By any test, this is a failing percentage, and we cannot afford to fail the public when it comes to security. We must secure our supply chain before we pay the high price 

of an attack. And this is what we hope to address today. 

Senator Levin. 

OPENING STATEMENT OF SENATOR LEVIN 

Senator LEVIN. Mr. Chairman, thank you for all you are doing 

in an area of critical importance to the United States. You have focused this Subcommittee’s attention on a critical national security 

problem, and the Nation will be more secure as a result of your initiative, and we are grateful for it. 

Each year, as I mentioned a moment ago, about 11 million shipping containers enter U.S. seaports. Another 11 million containers 

enter the United States by truck, and 2 million by rail. Translating 

that to my home State, each week over 50,000 commercial trucks 

carrying containers cross from Canada into Michigan. Detroit is the 

number one entry point in the whole country for containers carried 

on trucks. Port Huron, Michigan is the number four entry point in 

the whole country. The vast majority of these containers are never 

inspected, and the challenge facing our country, as the Chairman 

has outlined, is what to do to address the national security threats 

that are posed by these containers. 

The Subcommittee staff has conducted a bipartisan and bicameral investigation into U.S. Government programs designed to 

secure the global supply chain. The Subcommittee staff report 

makes recommendations with regard to key security risks facing 

our Nation, including the trash which is coming into the United 

States in containers that cannot be effectively examined. 

The Subcommittee staff report confirms that a minimal number 

of containers are currently inspected, either domestically or overseas. The Subcommittee report found that Customs teams at three 

ports in France, Japan, and the U.K., refer a very low percentage 

of high-risk shipments for exams. 

Another disturbing finding of the staff report is that the automated targeting system, ATS, the backbone of Customs security assessments, does not work with any assurance. Customs uses ATS 

to assign a risk score to each shipping container bound for the 

United States. The staff found that the ATS scoring system has 

71

never been audited or validated to establish its effectiveness. Moreover, the data shows that ATS scores result in such a large number 

of containers being designated as high risk, that U.S. Customs officials stationed at the CSI ports often fail to request that each of 

the high-risk shipments be examined. 

The C-TPAT program presents a different set of problems. C–

TPAT confers a range of benefits on participants, many of which 

result in faster shipments for them. When C–TPAT first started, it 

conferred these benefits on all participating importers immediately 

upon receiving their application to join the program and prior to 

ensuring that the participant was meeting the program security 

standards. After the Subcommittee hearing in May 2005 questioned that approach, Customs changed its practice. Customs now 

reviews the security information of a C–TPAT applicant before allowing the applicant into the first tier of the program, which is an 

important change in the program. 

The Subcommittee staff also notes, however, that the validation 

process being used by Customs examines only one supply chain for 

each program participant, even for companies that use multiple 

supply chains. To get a more realistic analysis of each participant’s 

security practices, the Subcommittee report recommends that Customs examine more than one supply chain at more than one supply 

point. 

As I mentioned, the Subcommittee report also addresses a key 

security issue which affects my home State of Michigan and a number of other States, which is the importation of containers carrying 

trash. Since 1998 Canada has shipped hundreds of thousands of 

trash containers across U.S. borders. According to the Department 

of Homeland Security’s Inspector General’s Office, in 2004 alone, 

Canada shipped approximately 100,000 containers of trash into 

Michigan. In addition, another 10,000 containers of trash crossed 

through nine other ports of entry on both the northern and the 

southern borders. During that period, Customs officials uncovered 

a number of instances in which Canadian trash containers carried 

more than just trash into the United States. The Inspector General 

has determined that from 2003 to 2004, Canadian trash containers 

brought into the United States illegal drugs, medical waste, and illegal currency. 

Trash containers pose inherent difficulties in terms of supply 

chain security because it is difficult to trace the source and content 

of trash cargoes with any confidence. Even a trash importer with 

the best intentions is unable to monitor what is being transported 

in particular trash containers. The result is an unreadable x-ray 

scan, and I put a copy of that x-ray scan up on that chart over 

there, and you can see that it is unreadable because of the density 

of the cargo and its lack of uniform content. With other cargoes it 

is possible to know the content and to trace the origin, midpoint 

and ending point of the journey of the cargo, and then to take steps 

to monitor and ensure the security of the supply chain. Until a 

similar system is established for the supply chain of trash importers, the Department of Homeland Security must take additional 

precautions before allowing trash containers to enter the United 

States, and until those precautions are taken and shown to be efVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00079 Fmt 6601 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
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1See Exhibit 16 which appears in the Appendix on page 491. 

fective, we ought to end the importation of Canadian trash. They’ve 

got plenty of room to bury their own trash. 

We should not be accepting any security risk to import Canadian 

trash. Current technology, as I indicated, cannot produce a usable 

x-ray image of a trash cargo because of the density and anomalous 

nature of that cargo. While other material such as concrete or 

bricks are equally as dense, they are uniform, and therefore, readily inspectable, and also, those products contribute positively to our 

economy. Their introduction into the flow of commerce provides 

building materials, helps create new jobs. Concrete and bricks pose 

lower security risks, since unlike trash, their supply chains can be 

monitored and made secure. In contrast, Customs would likely 

show that the security risk of trash and the cost associated with 

reducing that risk far outweigh any conceivable economic benefit. 

A few years ago, Mr. Chairman, as you know—and you have 

been extremely helpful on this issue and we appreciate it—the security problems associated with trash containers crossing U.S. borders without effective screening technology, led me, along with Senator Stabenow and Congressman John Dingell, to ask the Department of Homeland Security’s Inspector General’s Office to review 

the effectiveness of the screening methods. The Inspector General’s 

disturbing report, released in January of this year in an officialuse-only version, identifies flaws and vulnerabilities with current 

methods to screen containers entering the United States. 

The Subcommittee, in its report, has decided to release other official-use-only material today, and the report that I just referred to 

by the Inspector General should now also be made available, and 

I intend to do so.1

The Department of Homeland Security’s Inspector General noted 

that improvements need to be made in the inspection process, and 

that the Commissioner should conduct a risk analysis and develop 

minimum requirements for selecting and inspecting trucks carrying 

trash. 

Based on its investigation, the Subcommittee staff report makes 

the following recommendations, which I strongly endorse. Ban 

trash imports. Until it can be ensured that the supply chain of a 

trash importer is secure, we should not allow trash containers to 

enter the United States. The DHS should immediately adopt the 

Inspector General’s recommendations to conduct a risk analysis, 

develop minimum requirements for selecting and inspecting trucks 

carrying Canadian trash if they are going to ever be allowed. Until 

these steps are taken and we have total confidence in the security 

of these containers, they should not be allowed. In the meantime, 

we ought to have an immediate moratorium on allowing trash containers into the United States. 

I thank the Chairman for all he has done to direct the staff of 

the Subcommittee to look at all of the problems in this report, particularly for the one which I have just spent a few moments on, 

which represents an unusual and particular security risk to the 

United States, which is the import of Canadian trash. Again, thank 

you for your leadership, Mr. Chairman, and I have reduced, believe 

73

it or not, the length of this statement, and I would ask that the 

full statement be incorporated in the record. 

Senator COLEMAN. Without objection. 

[The prepared statement of Senator Levin follows:]

PREPARED STATEMENT OF SENATOR LEVIN 

Each year, about 11 million shipping containers enter U.S. sea ports, another 11 

million containers enter the United States by truck, and another 2 million by rail. 

Each week, 52,000 commercial trucks carrying containers cross from Canada into 

Michigan. Detroit is the number one entry point in the whole country for containers 

carried on trucks; Port Huron is the number four entry point. The vast majority of 

these containers are never physically inspected. The challenge facing our country is 

what to do to address the national security threats posed by these containers. 

The Chairman is to be commended for focusing this Subcommittee’s attention on 

this critical national security problem. The hearing held earlier this week concentrated on the specific problem of stopping the illegal transport of nuclear and radiological materials across U.S. borders. Today’s hearing focuses on the two key programs which, in the words of the Customs and Border Protection of the Department 

of Homeland Security, are designed to ‘‘push out our borders’’ and inspect containers 

before they reach our shores. These programs are the Container Security Initiative 

(CSI) and the Customs Trade Partnership Against Terrorism (C-TPAT). Both programs were the subject of a Subcommittee hearing last year. Today’s hearing and 

Subcommittee staff report continue that oversight effort. 

The Subcommittee staff has conducted a bipartisan and bicameral investigation 

into U.S. government programs designed to secure the global supply chain. The Subcommittee’s three year investigation has included document requests and letters 

from the Subcommittee, staff assessments of ten ports, and numerous meetings with 

both foreign and agency officials. The report released today identifies improvements 

needed in the key Customs programs, to address such problems as low inspection 

rates of high risk containers, the security of shippers’ supply chains, and the effectiveness of the Automated Targeting System (ATS) used to identify high-risk containers. The Subcommittee staff report also makes recommendations with regard to 

a key security risk facing our nation: trash coming into the U.S. in containers that 

are not effectively examined. 

The Subcommittee staff report confirms that a minimal number of containers are 

currently inpsected either domestically or overseas. At foreign CSI ports, 0.38% of 

containers were screened with either x-ray equipment or a physical exam, and only 

2.8% of containers were screened with a radiation portal monitor. When U.S. and 

overseas data are combined, the data shows that Customs examines just 5.4% of 

containers either physically or with an x-ray, and uses a radiation portal monitor 

to screen less than 40% of incoming cargos. The Subcommittee report found that 

Customs teams at 3 ports (France, Japan, and the U.K) referred a disturbingly low 

percentage of high risk shipments for examinations. 

Another disturbing finding of the staff report is that the Automated Targeting 

System (ATS), the backbone of Customs’ security assessments, does not work as it 

should. Customs uses ATS to assign a risk score to each shipping container bound 

for the United States. The Subcommittee staff found that the ATS scoring system 

has never been audited or validated to establish its effectiveness. Moreover, the data 

shows that ATS scores result in such a large number of containers being designated 

as high risk, that U.S. Customs officials stationed at CSI ports often fail to request 

that each of the high-risk shipments be examined. If ATS designations are identifying too many containers for examination and U.S. Customs officials using the system are forced to apply their own criteria to select which cargos should actually be 

inspected at foreign ports, the current ATS is not functioning as intended. It needs 

to be either immediately refined or replaced since it is the backbone of the system. 

The C-TPAT program presents a different set of problems. C-TPAT confers a 

range of benefits on participants, many of which result in faster shipments. When 

C-TPAT first started, it conferred these benefits on all participating importers immediately upon receiving their application to join the program, and prior to ensuring the participant was meeting the program’s security standards. After the Subcommittee hearing in May questioned this approach, Customs changed its practice. 

Customs now reviews the security information of a C-TPAT applicant before allowing the applicant into the first ‘‘tier’’ of the program, which is an important improvement. The Subcommittee staff report also notes, however, that the validation process being used by Customs examines only one supply chain for each program participant, even for companies that use multiple supply chains. To get a more realistic 

74

analysis of each participant’s security practices, the Subcommittee report recommends that Customs examine more than one supply chain at more than one supply point. 

The Subcommittee staff report also addresses a key security issue affecting my 

home state of Michigan, the importation of containers carrying trash. Since 1998, 

Canada has shipped hundreds of thousands of trash containers across U.S. borders. 

According to the Department of Homeland Security Inspector General’s office, in 

2004 alone, Canada shipped approximately 100,000 containers of trash into Michigan, an 8 percent increase over 2003. In addition, another 10,000 containers of trash 

crossed through 9 other ports of entry on both the Northern and Southern borders. 

During that period, U.S. Customs officials have uncovered a number of instances in 

which Canadian trash containers carried more than just trash into the United 

States. In fact, the DHS Inspector General has determined that, from 2003 to 2004, 

Canadian trash containers have brought into the United States illegal drugs, medical waste, and illegal currency. 

Trash containers pose inherent difficulties in terms of supply chain security, because it is difficult to trace the source and content of trash cargos with any confidence. Even a trash importer with the best intentions is unable to monitor what 

is being transported in particular trash containers each day. With other cargoes, it 

is possible to know the content and to trace the origin, mid-course and ending point 

of the journey of the cargo, and then to take steps to monitor and ensure the security of the supply chain. Until a similar system is established for the supply chain 

of trash importers, DHS must take additional security precautions before allowing 

trash containers to enter the United States. 

In addition, current technology cannot produce useable x-ray images of a trash 

cargo, due to its density and lack of uniform content. This chart shows the x-ray 

image produced by a trash container at a Michigan border crossing. While other materials, such as concrete or bricks, are equally as dense, they are uniform and easily 

inspected. These products also contribute positively to the U.S. economy. Their introduction into the flow of commerce, for example, provides building materials and 

helps create new jobs. Concrete and bricks also pose lower security risks, since, unlike trash, their supply chains can be more easily monitored and made secure. In 

contrast, the security risk of trash cargos and the costs associated with reducing 

that risk far outweigh any conceivable economic benefit. 

Two years ago, the security problems associated with trash containers crossing 

U.S. borders without effective screening technology led me, along with Senator 

Debbie Stabenow, and Congressman John Dingell, to ask the DHS Inspector General’s office to review the effectiveness of Customs’ screening methods. The Inspector 

General’s disturbing report, released in January of this year in an ‘‘official use only’’ 

version, identifies flaws and vulnerabilities associated with current methods to 

screen containers entering the United States. The Subcommittee has decided to release other official use material today; this report should also be made available. 

Based upon its investigation, the Subcommittee staff report makes the following 

recommendations, all of which I strongly endorse:

• Ban Trash Imports. Until U.S. Customs can ensure that the supply chain of 

a trash importer is secure and develops protocols ensuring adequate inspection of trash containers, Customs should not allow trash containers to enter 

the United States.

• Adopt Moratorium. Banning trash imports is the right answer to protect U.S. 

security. If a ban is not imposed, at a minimum, DHS should immediately 

adopt the DHS Inspector General’s recommendation to conduct a risk analysis 

and develop minimum requirements for selecting and inspecting Canadian 

trash containers. Until those steps are taken, Customs should place a moratorium on allowing trash containers into the United States.

• Impose inspection Fees. If a trash import ban is not imposed, Congress should 

enact into law the provisions recently adopted by the U.S. Senate to impose 

a fee on international shipments of trash to pay for a more rigorous inspection regime to protect U.S. citizens from security risks currently associated 

with trash containers. 

I thank the Chairman for taking a close look at the problem of Canadian trash 

being imported into this country. As the DHS Inspector General has pointed out, 

it is a serious security risk for the country. I also commend the Chairman for his 

leadership in tackling the complex national security threats associated with container security in general.

75

1The prepared statement of Mr. Jackson appears in the Appendix on page 181. 

Senator COLEMAN. Senator Levin, I want to thank you for your 

focus on this overall issue, but in particular, the laser-like focus 

you have put on this trash issue. I think that is what is needed 

if we are going to affect change. If we are going to make something 

happen, you need that. I want to pledge my continued cooperation 

and assistance because you are trying to do the right thing. So I 

want to thank you. 

Senator LEVIN. Thank you, Mr. Chairman. 

Senator COLEMAN. I would like to welcome the Hon. Michael P. 

Jackson, Deputy Secretary at the Department of Homeland Security. Mr. Jackson, I sincerely appreciate your being with the Subcommittee this morning, and look forward to hearing your testimony on DHS’s efforts to bolster our supply chain security. As you 

are aware, pursuant to Rule 6, all witnesses before this Subcommittee are required to be sworn. I ask you to please stand now 

and raise your right hand. 

Do you swear the testimony you are about to give before this 

Subcommittee is the truth, the whole truth, and nothing but the 

truth, to help you, God? 

Mr. JACKSON. I do. 

Senator COLEMAN. Thank you. I just want to say one thing, Mr. 

Jackson. I really do appreciate you being here. I know the full 

Committee will be having a hearing on the GreenLane bill that 

Chairman Collins has authored and you will be participating in 

that hearing. Our job is to do oversight, and I indicated early on—

and I have been involved in this for a while now—we are safer 

today than we were on September 11, we are safer today than we 

were yesterday. But the reality is, the nature of this issue is such 

that we cannot rest on our laurels, and so our job is to keep looking 

at the soft underbelly. If you just look by way of example at what 

is happening in Iraq with IEDs, it is almost a cat and mouse game. 

We get a little better and they get a little better. I think it would 

be a great mistake for us to assume that somehow they are not getting better, that they are not seeing what we are doing, and so that 

is the challenge and the purpose of what we are doing here today. 

I do want to thank you because you have been very helpful, and 

it is much appreciated by this Subcommittee. 

TESTIMONY OF MICHAEL P. JACKSON,1 DEPUTY SECRETARY, 

DEPARTMENT OF HOMELAND SECURITY 

Mr. JACKSON. Mr. Chairman, thank you for having me, and, Senator Levin, thank you for being here and for having me as well. I 

am very grateful for the work of this Subcommittee and very respectful of the work of this Subcommittee, and I am delighted to 

be here to help you understand that DHS is very much focused on 

the issues that you have been focused on. 

Secretary Chertoff has repeatedly spoken about the importance 

of risk-based analysis. In our world we have to find the highest 

risks and apply prudential balance. As you said in your opening remarks, Mr. Chairman, that we have a balance between security 

and mobility. We can make a better balance. We can have better 

76

security. We can make that equation iteratively stronger, and that 

is exactly what our commitment to do is. 

I want to assure you that just as this Subcommittee has been focused on that matter, so to is the Department. I am going to tell 

you that I personally am committed to imposing a sense of urgency 

and supporting a sense of urgency about these matters, just as 

your Subcommittee work has done for us as well. 

I will not try to go over a lot of facts and figures to reiterate 

what you have said, which is an important point. We have made 

transformational change in the security of the global supply chain 

in our Maritime World Security Program since September 11. We 

will spend this year at the Department of Homeland Security approximately $2.6 billion on maritime security efforts across the Department. If the President’s fiscal year 2007 budget is enacted, we 

will have spent some $9.6 billion in this area in 4 years, fiscal year 

2004 to 2007. 

Earlier this week colleagues of mine from the Department, and 

from the Department of Energy, talked in more detail about some 

of the programs that you have already raised, and I shall not repeat the testimony there. I will try to supplement that. 

What I will say is this really is an alignment. We need you and 

your strong report, Republicans and Democrats together with the 

Administration, to strengthen security on a continuous improvement basis. We also need our partners in the private sector to do 

just that too, and I am very grateful—you will hear from several 

of them today, and I am very grateful for the role that they have 

played, especially since September 11, in helping us do this transformational work in the marine world. So there is lots to do still, 

lots to do that we can do. In fact, we must be institutionally disciplined, just as you said, to keep this focus one step ahead of the 

bad guys. The area that we are focused in the maritime domain on 

most particularly, most urgently, is, of course, the weapons of mass 

destruction and preventing weapons of mass destruction from being 

intruded into the country from the maritime domain. 

Our approach to security is a layered and evolving and continuously strengthening system. It is layered in ways that help us collectively through multiple mutually reinforcing tools diminish the 

risk that we associate with any specific failure at a specific point. 

So if you look at one layer, that is not the measure of how we can 

collectively bring security to the system. We got to take each of the 

weakest links in our layers and strengthen each of them 

iteratively, but we have to step back a little bit, and that is where 

I am going to try to talk today mostly, and say, where are the layers that need the most focus? What is it that we have that we can 

improve slightly to good advantage, and where do we have to dig 

deeper and really make more fundamental change? 

It begs the obvious, but it is worth stating that this system we 

are talking about is a global system, and it is one that is driving 

our interdependent global economy. So what we have to do here requires the cooperation of multilateral government-to-government 

conversations. It requires the cooperation of domestic and foreign 

corporations. It requires the cooperation of technology partners to 

make the systems and tools that we will be talking about. 

77

With whom should we partner and how? A fair question. But 

there is no question that we do have to make these partnerships 

with the private sector particularly in this global maritime domain. 

Some of the first generation of layered security will give way to 

second generation tools. We will be able, in effect, to stand down 

certain type of tools and replace them with wholly new tools, and 

some of these tools will be iteratively strengthened in essentially 

the same groove, in essentially the same pattern, in essentially the 

same mode. 

Let me just try to put into context where I would like to drive 

by trying to outline eight buckets of activity that we need to think 

about. Essentially, to outline our security there are four major 

moving parts or four components to our layered security: Vessel security, personal security, cargo security, and port facility security. 

So those four layer areas, we have programs in each. Then you 

have to divide it foreign and domestic. I think Rob Bonner was 

masterful at pushing the borders out early after September 11. I 

was at the time Deputy Secretary of the Transportation Department, and admired Rob’s work, and having come to the Department of Homeland Security, I have enjoyed the benefit of the work 

that CBP has done in this area, and the Coast Guard has done in 

this area. 

Most of the Federal programs in these eight buckets then can be 

clumped in some way or another. I would like to focus today on two 

particular areas that present significant opportunities for improving security. First, improvement regarding DHS’s targeting of containers of highest risk, and second, related to this in this first 

bucket, tools to inspect containers, so improvement of the targeting, 

and improvement of the tools used to inspect. 

And then a second area, I would like to talk for a bit just about 

deployment of the Transportation Worker Identification Card, the 

TWIC card. Both of these tools are areas I think of high opportunity for us. 

Securing our borders requires us to dig deeper into what the Secretary is calling Secure Freight Initiative, which is an opportunity 

to look not only at better targeting, but enhanced inspection tools. 

CBP’s automated targeting system is probably more effective than 

it gets credit for, and I am not so disappointed in that because all 

of the nuances of the system are not public matter. The components of it are a complex series of algorithms designed to help us 

select containers of high risk, and it includes data that is fed to us, 

essentially scraped electronically from the waybill, and also a large 

history file that allows us to pull up our inspections, our history 

of movements of individuals who are moving containers into the 

country. So these two parts of the ATS system are what makes it 

work. 

Now, I want to say this is a first generation tool. Here is an area 

where we need a second generation tool, and if I could, I would just 

like to outline an idea that we are aggressively pursuing at DHS 

on what a Secure Freight Initiative might look like to help us dig 

deeper and plumb more sophisticated ways to get better targeting 

information, to enhance the ATS capabilities. 

The supply chain is riddled with data about the pre-history of 

any inbound container movement that we do not collect. We have 

78

no visibility into them we can’t manage. It is resident not only in 

the ocean carriers, but in everyone who has touched a particular 

movement, the pre-history of that movement. In a short nutshell 

summary, what I think we need to do is mine that pre-history of 

every container movement to the maximum extent that is prudent 

and possible and that can be harmonized with the art of what 

works without imposing excessive burden, but we can do better. 

From the time an order is placed, the fulfillment of the order takes 

place and a container is sealed. It moves through the supply chain 

with intermodal movement, truckers, customs brokers, others having information about this. We can find a model I think to gather 

this, plus the waybill information that we currently have, and get 

a much richer pattern analysis for our targeting, our profiling of 

this container. 

How would we do this in a global environment? I think what we 

have to do is look for a fundamentally different layer or business 

model on top of what we have. Let me try to describe it this way. 

If I can take on my left hand, and say, here are the governments, 

not just our government that needs this data, but I would argue 

that all governments that are involved in the international supply 

chain, moving containers across the globe. They need information 

about the security and a better knowledge of what is in them. On 

my right hand we have all the actors who touch this, essentially 

all private sector entities, some of whom are directly regulated by 

us, and others with whom I believe could be indirectly brought into 

an appropriate mix. 

What I think we need is some intermediary institution, which I 

would like to see the industry work with the government to help 

create. I would be happy for DHS, and we will step forward and 

fund methods that would create such intermediary institutions, the 

hardware, the software, the institutional tools necessary to do this. 

But this data repository or data fusion center could gather information about movements in the global supply chain, and then could 

direct them to the government that needs that information. In effect, the data warehouse becomes a repository for information, and 

the government has a call upon that repository and drives that 

data in a real-time way into its own risk profiling analysis. 

I have talked to multiple governments in the last 9 months about 

their interest in helping us try to find a more globally based and 

industry-centric partnered way to manage this data aggregation infusion. I believe there is strong interest in several of our strong 

partners involved in supply chain security to experiment in this 

area. I believe that industry can be helped to build this type of 

functionality. It cannot be done overnight. We cannot be too excessive or draconian in what we ask for. We have to work through 

issues about preservation of the privacy of confidential business information. We have to ask for what is reasonable. We have to look 

for what is possible, but what is reasonable and what is possible 

in the richness and density of this information will change and 

grow over time, and we need a new system, a more global system 

and a somewhat more powerful business model, I believe, to do 

that, just to do that. 

So when your Subcommittee staff appropriately looked at ATS, 

the punch line was, we need better, stronger. I am in agreement 

79

with that. CBP is in agreement with that. Secretary Chertoff is in 

agreement with that. 

What we would like to suggest that this concept of secure freight 

can help create a much more powerful multiplier that takes the information, flows it into our ATS systems ultimately for the pattern 

analysis work that we would do, but can more powerfully and more 

quickly, honestly fuse this data. 

Let me just say one thing about technology. There is nothing in 

what I have just described that is technologically impossible. The 

U.S. Government, however, is not the world’s best technology integrator. What we need to do is find ways to work with the private 

sector to create a more nimble, more market-driven capability to do 

the initial aggregation. We would have to sit there with them sideby-side with government people, ideally with a multilateral team of 

auditors, inspectors and helpers. But we can, I think, with the 

proper incentives and support, financial and otherwise, create this 

capacity that just does not exist, and it will not take our lifetime 

to make this happen. 

Let me switch to a second part of the secure freight idea, and it 

is this powerful idea that, Mr. Chairman, you have seen, and that 

your two colleagues spoke about eloquently this morning, of the 

pilot in Hong Kong. This week, Secretary Chertoff is in Hong Kong 

to look at this pilot himself, to kick the tires on it. But I would tell 

you, after extensive discussions with industry about the ICIS pilot 

and its underlying technology, and its underlying business concepts, that I find myself highly optimistic that this pilot can point 

the way to a collaborative network that can significantly enhance 

CBP’s capability physically to inspect a large number of containers 

from points worldwide. 

Again, I think this needs a little unpacking, so if I could take 

this one just one more layer. We should not either overly praise 

what is there, not ignore the fantastic opportunity that is in front 

of us. On the one hand this is a pilot. The data is not being used, 

as I understand it, operationally to manage security in the work 

stream that is existing right now. It offers tremendous promise to 

do exactly that, and after consultations on this topic, CBP has 

begun the comprehensive review of a large brace of this data to try 

to integrate this to our own targeting information, our own 

profiling information through the ATS system. So we will be able 

to say, here is a container of high risk. Let’s look at these images. 

Let’s see if this helps reconcile it or if it gives greater concern, and 

then we have to drive protocols that would allow us to inspect the 

things that need inspecting in a more physical and labor-intensive 

inspection. 

But right now let’s make no mistake, this is not an operational 

security tool. It is, however, I think, a transformation demonstration of the industry’s commitment to put their own dollars to bear 

on improving security. They have agreed in Hong Kong to tax 

themselves for the purpose of improving security, and we should 

praise this and partner with these types of opportunities to take 

this type of system and make it an operationally more aggressive 

and solid tool. 

I agree with what has been said. There are some export control 

issues why we might not want to put all of our technology abroad 

80

in the world, but most sensitive parts of that have to do with the 

screening algorithms, the software. If we, in effect, globally network the images, as Senator Schumer was discussing earlier, we 

could keep the software, the analytical tools, protected appropriately, and do a much more substantial look at all of the highprofile containers with this type of additional tool. We could also 

randomly inspect more containers, and we could, obviously, and 

would want to, reconcile any alarm from a radiation monitor. 

Right now the alarm is, in effect, turned off. It gathers data, but 

it shows no real-time alarm for us to reconcile. So we want to take 

what is very strong here, which I think is the industry’s commitment to spend, their willingness to improve, their desire to partner 

with us, in fact, their—I am going to say—their aggressive creativity in putting together an opportunity like this. We have had 

some very substantial conversations with industry. I just report to 

you that after the Secretary gets back, we intend to try to bring 

this to a focus and see a path ahead. It is an area where we would 

want to come back to this Subcommittee over time, and work with 

you on exactly how we see that path unfolding. 

I would just conclude with saying one quick thing about TWIC. 

If we talk about containers, and we talk about the port physical security, we talk about the vessels, we talk about the people, in the 

area of the personnel, we have to implement the Transportation 

Worker Identification Card program. It is too late, we have 

dithered too long. And I am here today to tell you that on Friday 

of this week, the Transportation Security Administration will publish a request for qualifications, seeking firms who are appropriately experienced and interested, to help us deploy certain components of the TWIC Program. This step tomorrow will be the first 

step towards operational deployment of the TWIC program as contemplated by Congress and contemplated by our Department. This 

deployment will include accelerated and parallel rulemaking work 

both by TSA and the Coast Guard, and it will include a procurement needed to help launch the operational program. 

Secretary Chertoff has instructed his team to get this done as 

quickly as possible, and I can tell you personally that the pedal is 

pressing the metal. 

Further details will be forthcoming as part of the rulemaking 

and procurement action, but this tool will add a valuable layer to 

our security needs. 

I think I will stop there. I apologize for the length of my opening 

remarks, but I am grateful for the opportunity to have this dialogue with you. 

Senator COLEMAN. Thanks, Secretary Jackson. I am actually uplifted to hear of the forward movement on the Transportation 

Worker ID Program. One of the great concerns I have is the current situation today where we do not know who is handling the 

product, and I think we are perhaps uneven in that situation, perhaps on the East Coast a little better than the West Coast, whatever it is, but this is an area in which we have to move forward. 

It is critically important. We can have the tightest global supply 

chain, and yet when the cargo is in our ports and we do not have 

clear control of who is there and who is picking it up and what 

they are doing with it, that entire system, it is only as strong as 

81

the weakest link. And what you have identified is a weak link, and 

so I find it gratifying to hear that the pedal is to the metal on that 

one, and moving forward. 

Let me just briefly talk, if I can, about the ICIS Hong Kong system. I want to make it clear, I do not think this is the cure-all, the 

silver bullet. I have no interest in ICIS. I am not sure if any parts 

are made in my State. I do not think so. It just seems to me that 

the challenge I have is when my constituents ask, is it technologically feasible, to have all cargo containers run through a radiation portal monitor. When my constituents ask that and I say, 

yes, and in fact, we do it in one place in the world, but we do not 

do it here, that is not a good answer. 

So I look at this as being partners. You have done a very good 

job of really talking about the layers and this is not being used 

operationally. In fact, Senator Schumer said the system runs so 

quick as those containers go through as they are entering the Hong 

Kong Port, we are not checking each and every one of them. We 

have the image. We are seeing it going through a radiation portal 

monitor, which by the way, we do radiation portal monitoring of 

every car going through the San Ysidro land border crossing, about 

50,000 cars a day in our land border crossings. 

Mr. JACKSON. Yes. 

Senator COLEMAN. So it appears to me that we know we can do 

it, so let’s figure out how to do it quickly. That is my—you can see 

my colleagues, their reaction. So when you say highly optimistic, 

the way I understand it, I do not think any of us are saying this 

is the system and we need to implement this and it is going to 

solve all our problems. There are still a number of issues in the 

supply chain. But again, we have checked, in effect, 100 percent 

screening, and perhaps more important is that it is happening over 

there. That is another concern. If we screen it here and, God forbid, 

we even get it here and a device goes off here, it is still going to 

shut down our ports. 

Mr. JACKSON. Yes. 

Senator COLEMAN. On the other hand, we need to—and I think 

the genius of what CSI is about and C–TPAT is about is we have 

pushed our borders out. So I hope then, and what I am hearing, 

is certainly a willingness and a commitment to look at all of these 

options. 

The fundamental underpinning of this is ATS, the system that 

we use to identify high risk shipments. Our report raises a number 

of issues, and you just touched upon some today. Clearly, we have 

to strengthen this system. A concern that what we have right now 

is we have bills of lading and manifest data—and I think it would 

be fair to say, even you said, that is not the best data. There is 

a lot of stuff that goes on before that we just do not know about. 

I take it that it is technologically feasible today, from the time 

something is manufactured, let’s say Target or Best Buy has a facility somewhere in China. They can put it in a container there, 

and I take it we have the technology today to determine whether 

that container is ever opened. Is that fair? 

Mr. JACKSON. I don’t think there is a production technology that 

has reliably demonstrated that container has not been penetrated. 

There are technologies that have been focused on the doors. There 

82

have been technologies focused on the seals alone, but, frankly, you 

can pop the doors by the hinges, or you can drill a hole into a container. So what we are driving towards, where we have to be, is 

all six sides penetration monitoring and exception reporting, which 

could be real time. That is not Buck Rogers really, but it is not on 

the shelf today in a way that the industry would find, I think, 

something they would think is commercially viable. 

Senator COLEMAN. I need to understand this because I do not 

want the good to be the enemy of the perfect right here. 

Mr. JACKSON. Right. 

Senator COLEMAN. The whole range of technology that allow us 

to say whether something has been entered. There is GPS to tell 

us where something is, whether it has moved outside. In fact, I just 

have to say that one of my frustrations on this Subcommittee when 

we were looking at Katrina is the government folks are saying 

things were lost in the supply chain. FedEx does not tell us that. 

So are we hesitant to move forward because we do not have a perfect system at this point in time? 

Mr. JACKSON. No, I don’t think it’s that. I think our S&T Division is, at DHS, doing some extensive scientific and operational 

testing of these types of technology. The industry itself is doing 

that work as well. I think the component parts of the technology 

solution can be assembled, and then what you are talking about is 

a networked solution. It’s a very intensive capital investment to 

create the networked solution. Without the network, you don’t have 

the useful data in a time sensitive fashion, it is not as strong. So 

how you aggregate the technology, how you network the data feed, 

how you build it into an operational paradigm that makes a difference, these are all the component parts that have to be stitched 

together. 

But I don’t think it is unreasonable for you to press on this area, 

and we’re pressing ourselves in this area. 

Senator COLEMAN. One of the concerns we have about the targeting system is some would say that it hasn’t been fully tested. 

We haven’t done a red team test and tried to find a hole in the system, which is what we did with the GAO report, and smuggled two 

dirty bombs into the country. Can you give me a sense of your confidence in ATS today, and whether in fact we are in the process of 

doing the kind of testing that would at least raise the confidence 

level of some of us on this side of the bench? 

Mr. JACKSON. It’s our job to help you raise your confidence level, 

and we want to give you the information to do so, and we want to 

make a system that will make you feel like it is something that is 

as good as it can be. 

I believe it is a strong and powerful tool. I do not believe it is 

a perfect tool. It is transformationally better than what we had on 

September 11, and I believe to take it to the next step, you can 

work in two grooves. You can work to do the type of peer review, 

peer analysis that you have called for, and which our Inspector 

General has suggested. We are doing that. We have a firm—I think 

your staff has been briefed—that is under way with just such an 

effort today. 

The idea of red teaming, that is an inherently solid thing that 

ought to be part of our ConOPS for all of our modes in transporVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00090 Fmt 6601 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
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1See Exhibit 7 which appears in the Appendix on page 371. 

tation security. So we are doing more there. We can take that tool 

and make it stronger. 

What I was saying earlier about secure freight is that there are 

inherent limitations if we limit ourselves to the data that comes in 

by virtue of just a waybill. When you make that move from gathering just this data, which is readily available and electronically 

submitted, to fusing data from multiple other vendors, you have to 

take a different step, and I think, take on a different business 

model. Again, I do not think that this is something that is out of 

the realm of possibility in the near term to make real. I want to 

be able to say when I have left my job in 3 years, that we left this 

system behind, it is working, it is humming, it has made a big difference. 

So that’s the sort of timeframe, in my mind, that I think we 

should be thinking. It’s not decades to do this. It won’t be months, 

but it’s not forever. 

Senator COLEMAN. Let me just follow up with this question about 

my firm belief that we have to do the inspection before it reaches 

our shore. I have a chart here that we used the other day. This 

chart shows out of all the targeted containers 1—we identify 

through ATS-containers that are high risk, we then make requests 

to have them examined, and then we get a percentage of those requests complied with, higher in some areas such as Hong Kong, 

less as in other areas like LeHavre, France. What can we be doing 

to make sure that when we request a container be inspected, that 

the host government, the host country, do the inspection? 

Mr. JACKSON. I think we just have to be very firm. What I was 

told about this particular set of data is that we have made progress 

on the two bars that are lower on that chart since that data point 

was taken. But, again, this is something we just have to work on 

a case-by-case basis with each government. We have to show them 

that this is a compelling priority for us, and it’s not going to be 

easy in every circumstance, but I think we have to be determined, 

and we can. 

We will use multiple ways to help make that work. The 

Megaports Initiative puts technology overseas to help in some of 

these cases. Our own people there, deployed in the right way, can 

make a big difference. It is a partnership, and like all young partnerships, this one is still evolving, but I think growing stronger, 

and to me, is an impressive foundation. 

Senator COLEMAN. Thank you, Mr. Secretary. Senator Levin. 

Senator LEVIN. Thank you, Mr. Chairman. Thank you, Secretary. 

Mr. JACKSON. Yes, sir. 

Senator LEVIN. I want to just pick up where the Chairman left 

off in terms of the requests that are made to foreign governments. 

You say we have to show them a compelling reason for them to 

carry out the kind of inspections or the need for that. Why is that 

not automatic? Why do we have to ask them anything? We just tell 

them we are not going to accept the container. 

Mr. JACKSON. We can do that, and that is the ultimate lever, and 

I believe we should be absolutely willing to drop that lever. 

84

Senator LEVIN. Is there a reluctance to just say, ‘‘Unless you 

folks carry out these kinds of inspections, that we are just not 

going to allow it in?’’

Mr. JACKSON. No, I don’t think there is a reluctance. There is not 

an institutional instruction order or demand that that not happen. 

In fact, I would say there is some strong leadership incentive to 

say, ‘‘We’ve got a 24-hour rule. It’s working. Don’t load.’’ So I believe we can do more of that. 

Senator LEVIN. I am not satisfied with that answer. It seems to 

me it ought to be an automatic, just simply say—let me go to 

Tokyo, let me just give you the numbers in Tokyo. I do not know 

if that is on the Chairman’s chart or not, but in any event, let me 

use these numbers. It is kind of hard to follow them without them 

being on a chart, but here goes. Our automatic targeting system 

identified 5,600 high-risk containers at the Port of Tokyo. This is 

from February 2005 to February 2006, 477 exams were requested 

by the CSI personnel, and then 430 exams were conducted by 

Tokyo officials, so about 10 percent of them, roughly, were not examined. 

Now, first of all, I am not sure I followed your answer as to why 

it is after we identify 5,600 high-risk containers, there is only 

about 9 percent that lead to a request for an exam. I did not quite 

follow your answer on that one. Maybe I ought to ask you that one 

first and then lead up to the fact that the Tokyo officials did not 

carry out the exams on 10 percent after we requested them to do 

so. 

Mr. JACKSON. Let me start with one point that I think is most 

important, which is all of the containers that are identified as highpriority containers will be——

Senator LEVIN. Is that the same as high risk? 

Mr. JACKSON. High risk, yes, sir, sorry. High risk—you actually 

have the nomenclature right, I didn’t—will be inspected either 

abroad or in the home port at home when it arrives. 

I agree, and we all agree, that it is better to push as much of 

that out as far as possible. I’m going to have to just tell you that 

we actually do that screening inspection for all of the ones that are 

the high-priority containers. 

Your question, it is a good question, is a fair question, it is an 

operationally important question, is how do we get it pushed out 

farther? 

Senator LEVIN. No, that is not my question, but let’s go back to 

what you said. How do you know that all of those containers are 

in fact inspected when they get here? 

Mr. JACKSON. They track each of these, and they reconcile them 

through CBP, and they keep records of—there’s a score on the algorithm, and when that score is triggered, those containers are targeted for inspection and must be inspected. We inspect 100 percent 

of all those high-risk containers. 

Senator LEVIN. So those 5,600 high-risk containers identified at 

the Port of Tokyo, are all inspected, either there or here? 

Mr. JACKSON. Yes, sir. 

Senator LEVIN. And you’ve got data which you could show us to 

confirm? 

85

Mr. JACKSON. I’m assuming we could show you the CBP audit 

trail on these issues. 

Senator LEVIN. Would you do that, so we can follow how——

Mr. JACKSON. I would be happy to walk through that. 

Senator LEVIN. OK. I do not know why they are not all examined 

overseas. What is the reason for that? 

Mr. JACKSON. Senator, I am going to have to plead that I would 

like to get back with you with a more complete answer. Let me give 

you a very partial answer. Part of this is a limit on the resources 

that we are asking another government to bring to bear to do our 

work. If we know we have this safety net, which is we are going 

to inspect 100 percent of all these containers, we do engage in, I 

believe, operationally a triage process, which is, in effect, to say if 

we are absolutely, positively worried about one that we think must 

be inspected, we ground it. If we can get them to inspect it and 

clear it, we clear it and allow it to come forward. 

I am confident that on a port-by-port basis there are circumstances about the scheduling of staff, the equipment that’s 

available for screening, radiological screening and VACAS type of 

screening, that impose limits on this. I would hypothesize that 

there are, I’m going to say, institutional barriers in some cases that 

we need to work. So all of those levers, this is why your support 

for ICIS is important too. If we have the technology there, and we 

can run things through and look, then we are in much better 

shape. 

Senator LEVIN. All right. Who do you think should bear the burden, the cost of that inspection? Should it be the buyer or the seller 

basically? 

Mr. JACKSON. Yes. 

Senator LEVIN. What is the deal, 50–50? Just real quickly. I am 

going to run out of time. 

Mr. JACKSON. The shipper ends up paying the cost of moving 

goods throughout the system, and how we allocate it, we are going 

to end up having to talk through that equation. 

Senator LEVIN. That the shipper should, the shipper being the 

seller—the seller and his shipper should pay that cost? 

Mr. JACKSON. Whoever is receiving these goods, who is paying for 

the container to be moved is going to pay the ocean carrier, the 

dredge move, the manufacturer that closed the box and ships it 

over to you. 

Senator LEVIN. We will have to leave that one, because I think 

it is an important question, but we are not going to resolve that 

here. Now, 10 percent of the 477 exams that were requested by our 

people were not conducted by Tokyo officials. My question is, why 

should it not be automatic? We make that request. It has got to be 

done or else it cannot be shipped. Why not just tell them that? 

Mr. JACKSON. Can I unpack that example, and get you back a detailed answer about what happened there? 

Senator LEVIN. Well, you can, but let me just say, well, that is 

true with almost all the ports, so it is not just what happened 

there. I am not picking on Tokyo. This is true with all the ports. 

And I think our Chairman pointed out, and this chart points this 

out, that I think our Subcommittee staff found that 18 percent 

overall of the requested exams are not carried out. That is highVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00093 Fmt 6601 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
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1See Exhibit 14 which appears in the Appendix on page 436. 

2See Exhibit 19 which appears in the Appendix on page 465. 

3See Exhibit 15 which appears in the Appendix on page 440. 

risk containers where it is a very small percentage that we are asking——

Mr. JACKSON. They are not carried out overseas, but they are 

conducted when the container arrives. 

Senator LEVIN. I know, but these are ones where we specifically 

ask the officials in that overseas port to do it, and in 18 percent 

of the cases they do not. This is a part of a part of a part. These 

are the highest risk of the highest risk. 

Mr. JACKSON. I would like to get some better data for you, sir. 

Senator LEVIN. OK. My question is, why don’t we just make that 

automatically a precondition of shipment. Folks, if you do not do 

it there, we are not going to accept it in our ports. That is the question, OK? 

Mr. JACKSON. We would probably have to then manage the protocols that would define what we would ask for with a greater degree 

of granularity than we do today if we are going to make exit/entry 

around the ask. 

Senator LEVIN. We have a declaration of principles with every 

single country where a CSI port is established. Why not make that 

one of the declarations of principles? 

Mr. JACKSON. I would have to look at the declaration. I haven’t 

read that, sir. 

Senator LEVIN. OK. Just yesterday the GAO provided the Subcommittee with preliminary results of a report that they are working on with regard to ATS, where the GAO also confirms what the 

Subcommittee staff report says, that ATS is ineffective. Are you familiar with the GAO report to this Subcommittee? 

Mr. JACKSON. I have not read it, sir. 

Senator LEVIN. I want to save a minute for the trash issue, but 

I want to just give you an article from the Detroit Free Press of 

March 29, which shows that the inspectors are waving through 

long lines of trucks without inspection in order to speed up the 

process, and that they are doing this on the instigation of their supervisors.1 I will not ask you to comment today unless you are familiar with it. If you are——

Mr. JACKSON. I’m not, but I would be happy to look into it. 

Senator LEVIN. If you would do that for the record.2

Now, I will take my last minute on the trash issue. Current technology, and maybe no technology, can produce useful and usable 

images of trash cargo. It is too dense, it is too anomalous. You have 

seen the x-ray image, which I put up there before, which was taken 

at a Michigan border crossing.3 You just cannot see the contents 

of the container because x-rays cannot penetrate the contents because of its density. 

At Tuesday’s hearing, our Chairman, Senator Coleman, showed 

the same picture to Mr. Oxford, who is head of the DHS’s domestic 

nuclear detection office, and asked him whether he could tell 

whether there was a dirty bomb in the trash truck. Mr. Oxford 

stated the current picture showed very little content and that they 

are working on the next generation of x-ray machines. 

87

If your head of the DNDO says that x-rays cannot adequately 

show what is in a container—which is obvious to us, just look at 

the picture—why not just simply tell the Canadians, ‘‘Folks, there 

is a security issue here for us. We cannot determine with any credibility or confidence what is in these trash trucks without unloading 

every trash truck and inspecting it. You are going to have to end 

these shipments until there is such technology, and by the way, 

you guys have more land in Ontario than we do in Michigan.’’ This 

is not the only State affected. There are, I think, three other 

States, including New York, where trash is shipped from Canada 

or Mexico into our country. 

That is my question of DHS, why not just simply say, ‘‘We cannot 

effectively inspect. Until that is doable, you are going to have to 

bury your own trash.’’

Mr. JACKSON. Sir, we have not reached the conclusion that that 

measure is a requirement. We have, however, taken this issue, 

which you’ve been a very eloquent advocate for, for which I am personally grateful, and we have launched a process that will be very 

shortly completed, the first step of which is due by May 1, which 

is an analysis of the technical and operational means that we have. 

You are right about this image. We can do radiation detection 

work. We can do physical inspections. We do that. We follow these 

trucks to the dump on a random basis, and literally crawl through 

the slime with them to do this work. We have multiple different 

layers of operational controls here. We have no perfect technology——

Senator LEVIN. It is not a perfect one. There is not one which is 

anywhere near perfect. I mean the pictures are useless. You are 

not going to inspect every truck at the dump. If you follow one out 

of 500 you are doing well probably. The radiation cover is just one 

of the many problems. So the bottom line is what I said, there is 

no effective way of inspecting. There is a security issue in this. 

Would you agree with that? 

Mr. JACKSON. There is a security vulnerability. 

Senator LEVIN. In May you are going to let us know whether or 

not we should tell the folks——

Mr. JACKSON. In May we are going to come back and we are 

going to unpack that security vulnerability with more detail, and 

tell you the types of options that we think can be put in place 

against the problem, and I am happy to make sure that we come 

up and brief you as soon as the first work is done. That will be followed by a requirements document and production of exactly how 

you would manage this process, pay for it, and operationally deploy 

the tools needed to do that, and we will keep you in that process 

all the way. 

Senator LEVIN. Two questions. Make sure it happens promptly, 

and, number two, make sure one of the options there is just stop 

it until we have an effective technology. I want you to include that 

option. Will that be included? 

Mr. JACKSON. I’ll promise to make sure that the option is added 

to the list of options. 

Senator LEVIN. Mr. Chairman, thank you for your support and 

your patience. 

Senator COLEMAN. Thank you, Senator Levin. 

88

I am actually going to do a quick 5-minute follow up because I 

want to pursue what I ended with and you focused on, and that 

is the discrepancy between those containers that are identified as 

high risk, those where requests were made and those actually examined. You have a significant number that are identified as high 

risk for a range of reasons, could be drug smuggling or whatever. 

Then we make the request, which is a lesser number, and then 

after we make the request, ultimately, some are examined. I concur 

with Senator Levin, if we make a request, if we believe something 

is problematic, we should just say it is not coming here unless we 

take a look at it. 

I appreciate your telling the Ranking Member that you would 

show us the audit trail. I have to say, Mr. Secretary, that neither 

this Subcommittee staff nor the GAO has to date seen any audit 

trail. In my Chairman’s letter, I specifically requested that, and we 

have yet to see anything that demonstrates there is an audit trail. 

So we have heard the testimony from you and others saying, yes, 

we identify things as high risk and we inspect them here. 

I appreciate your recognition that it really should be inspected 

somewhere else before it comes into our ports, because, God forbid, 

we miss something and something happens at the time we open the 

box, our commerce will be shut down. But beyond that, we really 

do request to see that audit trail. If there is not one, then we have 

to recognize that and deal with it. But I can tell you that as we 

sit here today, neither this staff nor the GAO has seen any evidence of an audit trail, and we find that particularly disturbing. 

One other question with C–TPAT, because one of the things we 

do—and we touched on it briefly—is this public-private partnership. We agree that we need to work with foreign companies that 

run ports around the world and in this country if we are going to 

be secure. That is the reality; is that correct? 

Mr. JACKSON. Correct. 

Senator COLEMAN. We need to work with private companies. And 

in fact, Senator Levin, in the whole ICIS, the program in Hong 

Kong, includes no Homeland Security grants. In fact, the private 

sector said, we are going to do this because we are concerned about 

what happens if something goes wrong. But one of the concerns 

even with the C–TPAT program, which is this partnership with the 

private sector where folks get points, is that C–TPAT members receive free passes from some screenings if we think it is secure 

enough. On the other hand, we have a significant number of companies that we have not been validated to determine their system 

is secure. Can you tell me how many companies involved in the C–

TPAT that we have actually verified? 

Mr. JACKSON. We have 5,800 companies enrolled in C–TPAT 

right now, and 27 percent of those companies have had a completed 

validation. 

Senator COLEMAN. Have you thought about using a third party, 

bringing someone else in just to pick up the numbers? 

Mr. JACKSON. Yes, sir, I have. It is an option that I have asked 

CBP to come back and give us details on. I am personally quite 

open to the third-party intermediaries. The government has to own 

the security function. The government has to be able to manage 

that, but I am not closed at all to the idea that there might be mulVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00096 Fmt 6601 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
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tiple ways to accelerate our validation process here, and strengthen 

it. 

Senator COLEMAN. And, again, we are talking about a partnership. We do not have to do it all by ourselves, and if we simply cannot do it, then I would hope we would reach out and work with 

some others so we can bring that number up. 

Can you tell us today the percentage of cargo containers that are 

at least screened for radiological material, those that go through a 

radiation portal monitor? Do you have numbers on that? 

Mr. JACKSON. I do. This is in the U.S. ports, we screen with 

RPMs, radiation portal monitors, before they leave the port. Right 

now it’s 67 percent of the exiting containers being screened, and we 

have a deployment plan that will bring that to 98 percent by December 2007. 

Senator COLEMAN. The follow-up question, again, with the belief 

that it is best to screen before they get here, what is your vision—

do you have a vision that says 100 percent screening at some point 

in time before they get to U.S. ports? 

Mr. JACKSON. I think it is difficult always to throw the 100 percent screening, because just as this 98 percent screening, the marginal investment to get that last 100 percent guarantee is probably 

not worth that same lay-down. We could use, for example, on that 

last 2 percent, a very high proportion of random inspections using 

hand-helds, and I think, therefore, crunch that 98 number up higher, but maybe not to 100. 

Similarly, on the problem abroad, first, why I am so committed 

to explore the ICIS business model is, from the major load-out 

ports that are moving cargo our way, this is an opportunity to accelerate and strengthen in a meaningful way our capacity to screen 

abroad. But there are many smaller ports where this degree of 

scrutiny may not be cost effective, or where we may simply not be 

able to get the government or the terminal operators to play along 

with that. So can we get a lot done? I believe that there is a real 

prospect of doing just that. I am hesitant to make a firm commitment, say, yes, let’s drop the hammer and say 100 percent everywhere by this date. 

Senator COLEMAN. In the end I understand that. 

Mr. JACKSON. The overseas part. 

Senator COLEMAN. I think the best vision, that is, push out the 

borders and then do things like Megaports, and work with companies like Hutchison in the Bahamas. I know some of my colleagues, 

and I had concerns about the CFIUS process. I believe we need to 

do 45-day reviews, and I thought the law was broken when we did 

not do a 45-day review for the DP World situation. On the other 

hand, I am seeing reaction here that you see the word ‘‘foreign’’ 

and all of a sudden that is bad. What would be bad is if we do not 

work with other entities, we do not work with corporations, we do 

not work with other countries, and we try to do it all ourselves. 

Mr. JACKSON. Right. 

Senator COLEMAN. Then we will fail. 

Mr. JACKSON. That is exactly right, sir. 

Senator COLEMAN. What I would hope though is that we would 

have this focus on pushing it out and see, if not 100 percent, let 

us significantly improve the numbers that we have now that SenVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00097 Fmt 6601 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
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ator Levin and I am concerned about. The ICIS prototype shows us 

it can be done. 

Mr. JACKSON. I want to just leave one other thing on the table 

with you that I think is a cause for considerable enthusiasm and 

optimism on the radiation screening. You heard from Vayl Oxford 

earlier this week to talk about our next generation of advance 

spectroscopic portals, so called ASP systems. This is an area we are 

spending half a billion dollars this year at DNDO. I am very 

pleased at the quick start-up, and, frankly, grateful for the comments from your Subcommittee on some of their initial work. 

I think we can move to a much more effective tool in this area, 

and we can layer on top of that some pattern recognition software 

that would allow us to be more effective in looking at the image 

before us. We can look at tools like throwing up false images for 

our inspectors so that they can be tested, probed and pushed, and 

we can grade them and watch them and monitor their capabilities 

for doing this. Technology here offers some very near-term windows 

for major improvements. So as we think about how to take an ICIS 

type business model, we have this overlay of an intense investment 

that the Congress and the Administration have committed to this 

area, where we will get a much more meaningful tool. Sometimes 

we will be able, just on the basis of knowing the source, to be able 

to shoot that one through and say, yes, that is what should be coming from the background radiation associated with what we have 

in the waybill and other information about that load. 

Senator COLEMAN. I appreciate that. My concern is that I hope 

we take advantage of that. 

Mr. JACKSON. Yes, sir. 

Senator COLEMAN. I mentioned the Katrina hearing. It was extraordinarily frustrating for me to sit up here and listen to government officials talk about things being somewhere in the pipeline, 

when the 21st Century technology of not just FedEx, but small 

companies, can tell you exactly in the pipeline where that carburetor is, where that pair of shoes that you bought, and this is one 

area which government cannot afford to be operating in the 20th 

Century when industry is operating in the 21st Century. So I applaud the vision, and I just hope that you can push the bureaucracy really hard, so that we are not stuck with 20th Century technology when we have 21st Century security needs. 

Mr. JACKSON. Yes. It’s an urgent priority and it is a constant 

push to try to prioritize men and women who are doing 1,000 important things, to do 1,001, but this one is something that is very 

much on the Secretary’s radar screen, it’s very much on the Coast 

Guard’s, the CBP’s, the DNDO’s. Our team is focused on this. 

Senator COLEMAN. And we appreciate that and appreciate your 

appearance here. 

Mr. JACKSON. Thank you. 

Senator COLEMAN. Thank you, Mr. Secretary. 

I would now like to welcome our final panel of witnesses to the 

hearing: Christopher Koch, President and CEO of the World Shipping Council here in Washington, DC; Gary D. Gilbert, the Senior 

Vice President of Hutchison Port Holdings of Oakton, Virginia; 

and, finally, John P. Clancey, the Chairman of Maersk Incorporated of Charlotte, North Carolina. 

91

1The prepared statement of Mr. Koch appears in the Appendix on page 187. 

Clearly, the purpose of this hearing is to examine the current 

status of global supply chain security and analyze ways we can improve that security. An integral partner in securing the supply 

chain security is the private sector, and I was pleased that the Secretary made specific mention of that today. You are the companies 

that manufacture the goods, import the products, ship the containers, and operate the ports. And without your invaluable assistance, our government efforts would be far less successful. So I appreciate your attendance at today’s hearing, and I look forward to 

your perspective on supply chain security. 

Before we begin, pursuant to Rule VI, all witnesses before this 

Subcommittee are required to be sworn. I would ask you to please 

stand and raise your right hand. Do you swear the testimony you 

are about to give before this Subcommittee is the truth, the whole 

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

Mr. KOCH. I do. 

Mr. GILBERT. I do. 

Mr. CLANCEY. I do. 

Senator COLEMAN. Thank you, gentlemen. 

We have a timing system here. When the light turns from green 

to yellow, if you can sum up. Your written statements will be entered into the record in their entirety. We are just going to go from 

my left to right, and we will start with you, Mr. Koch, first, followed by Mr. Gilbert, finish up with Mr. Clancey, and then we will 

have some questions. 

Mr. Koch, you may proceed. 

TESTIMONY OF CHRISTOPHER L. KOCH,1 PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, WORLD SHIPPING COUNCIL 

Mr. KOCH. Thank you, Mr. Chairman. Thanks for the opportunity to be here today. My testimony is somewhat lengthy, and I 

will just summarize it in the following manner. 

The overall strategy and objectives that the Department of 

Homeland Security is using to try to address this challenge is 

something that we believe is fundamentally sound. It is the implementation that can be consistently enhanced and refined, and we 

appreciate the Subcommittee’s review of how that can be done most 

effectively. 

For maritime security strategy to be looked at, there is a vessel 

piece, there is a people piece, there is a port piece, and there is a 

cargo piece. And, obviously, today’s hearing is focusing really on 

the cargo piece. 

Your questions to the witnesses, or at least to me today, also 

asked for comment on our views on foreign investment, and I 

would like to start with that. Ninety-seven percent of the containerized cargo coming in and out of the United States is carried by 

companies that are foreign owned or controlled. The vast majority 

of the cargo handled through U.S. ports is handled by marine terminal operators that are, in fact, foreign owned. This is an industry, even though it is a critical national infrastructure, that is 

clearly basically run by foreign-owned companies. 

92

These companies, represented by people like Mr. Clancey and 

Mr. Gilbert, are working very hard to be partners with the U.S. 

Government, to come up with good solutions in this regard. And so 

to answer the Subcommittee’s question, my view on foreign investment is that it is an essential part of the smooth functioning of the 

American economy. We would hope that the American Government 

would reach out and work to develop partnerships with these actors, particularly as you look to things like ICIS, as I will get to 

later. If we are really going to embrace that concept, we have to 

understand that the people operating those post terminals where 

that equipment is going to be are going to be foreign terminal-operating companies, including companies like Dubai Ports. So we really have a strategic question to ask ourselves: Are we comfortable 

with this or not? 

My hope is that this Subcommittee and the Congress would say 

that they are comfortable under the right terms, making sure that 

can be done. 

Let me turn now to the cargo issue. The strategy of the government is something we fully support and think is very important, 

and that is to do the cargo risk assessment before vessel loading, 

and if there’s any cargo that is deemed high risk, it should be addressed before it is put on the ship and brought to the United 

States. That is the proper security strategy for the government to 

embrace. The strategy has various pieces in it that buttress this. 

As you have pointed out, Mr. Chairman, there is the screening for 

risk, there is CSI, and there is C–TPAT. But the overall objective 

is to inspect any container we have a question about. We use container inspection technology that includes both the NII type equipment, which produces the kind of image that Senator Levin was 

pointing to earlier, and also radiation scanning equipment. The 

present objective is to use NII or full devanning inspection of any 

container there is a security question about, and radiation scanning of all containers. 

Now, ICIS is a very attractive concept, but it is not yet an operating system. It presently doesn’t analyze or check the data generated about the boxes itself. What is encouraging about it is that 

the pilot appears to be demonstrating that the quality of the information that is generated by this technology is something that can 

have great use. But there needs to be an understanding about the 

assumptions of how this would actually work. 

If the assumption is that this technology is going to, in fact, be 

used to actually inspect every single container, you have to put it 

in context to understand the difficulty with that. Presently, we understand it takes 4 to 6 minutes for a trained CBP expert to look 

at one of these images and come up with an analysis of it. If you 

apply that to a container ship holding 4,000 containers, that is 

about 14 days’ worth of work for a single individual. 

We understand the concept as being one that can expand the 

tools available to the government to inspect any container before 

vessel loading at a foreign port where you have a question about 

a box—not that every box is going to have to go through the inspection process. But it’s these kinds of questions that need to be 

thought through as this concept is considered and it is rolled out. 

As I said, it is a tool, but to make it part of an operating system, 

93

Customs and DHS have to sit down and figure out how they’re 

going to use this tool, how the data’s going to be transmitted, how 

the protocols are going to be established, and how to develop the 

cooperation and receive the permission of foreign governments. 

There will be nuisance alarms that get set off repeatedly with 

this techology. How are those going to be resolved? By whom? All 

are very important questions, and we would urge that the concept 

not be rolled out with the assumption that we will consider those 

things after the containers have been loaded on the ship and it’s 

sailing for the United States, because that’s the wrong time to figure those things out. 

You’ve also asked the question about what we think the priorities are going forward to enhance maritime security. I would start 

with basically four. 

The first is, which has already been touched on today, the World 

Shipping Counsel believes that we should improve the data used 

for risk assessment by CBP’s Automated Targeting Center. The 

carrier’s bill of lading and the current 24-hour rule were a very 

good start. They do clearly have good value, but they are not adequate by themselves, and we should improve that. 

Second, the TWIC card should be rolled out. It was very good 

news to hear Mr. Jackson today stating that there will be a Federal 

Register notice tomorrow that’s going to start that process. It’s 

probably the most important thing that can be done to improve 

U.S. port security in the immediate future. 

Third, we fully support a priority examination and analysis of 

the ICIS project and the technology and how it can be integrated 

into the basket of tools that the government has to improve maritime security. 

And, fourth, to continue to do what Customs is doing to enhance 

C–TPAT, enhance CSI, and build closer, more cooperative relationships with foreign governments and the rest of the trading partners working in these supply chains. 

The U.S. Government cannot do this by itself. It needs the assistance of foreign governments, and it needs the assistance of the rest 

of the people working in the supply chain, and those relationships 

are understood by the Coast Guard, who’s working with the foreign 

governments, and carriers and terminal operators. And it’s understood by Customs, and that needs to be nourished, as they are 

doing. 

And, finally, we would simply again repeat our hope that, in 

looking at these issues and in passing legislation, that the Congress resists the temptation to in any way restrict foreign investment or to otherwise impair the growing, constructive relationship 

that is in place right now between members of the industry and the 

U.S. Government to solve what is clearly a very difficult challenge 

for all of us. 

We are transporting this year probably between 11 and 12 million containers into the United States. That’s an enormous challenge just from a commerce perspective to handle this volume efficiently. You have been to L.A.-Long Beach. You’ve seen the volume 

going through there. Without the continued investment and commitment of these present companies in this business, the U.S. economy will have a very serious difficulty just handling cargo. 

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1The prepared statement of Mr. Gilbert appears in the Appendix on page 205. 

So what has happened over the last several weeks has been perhaps turned into a good wake-up call. How can we do something 

constructive to improve maritime security? And we are certainly 

prepared to work with this Subcommittee and you, Mr. Chairman, 

in any way possible to see that is what results from all of this. 

Senator COLEMAN. Thank you, Mr. Koch. Mr. Gilbert. 

TESTIMONY OF GARY D. GILBERT,1 SENIOR VICE PRESIDENT, 

HUTCHISON PORT HOLDINGS, OAKTON, VIRGINIA 

Mr. GILBERT. Chairman Coleman, Senator Levin, we are very 

honored to be here to give our perspectives on the vital issue confronting the risk of nuclear smuggling and supply chain security. 

Chairman Coleman and Senator Levin, we are very pleased to be 

here to talk about nuclear smuggling and supply chain security. I 

want to thank you personally for coming out, for your leadership, 

as well as your staff. Three of them are here—Ms. Kathy 

Kraninger, Brian White, and Ray Shepherd—on the many trips 

they’ve made to see firsthand what is happening in supply chain 

security. 

HPH has been in the maritime business for 139 years originating 

the first registered company in Hong Kong in 1866, the Whampoa 

Dock Company. HPH is the global leader in the container terminal 

operations handling 51.8 million containers in 2005. We are located 

in 42 locations in 20 countries, and approximately 40 percent of the 

containers coming into the United States were either loaded or 

transshipped through an HPH facility. 

To date, HPH operates no ports within the United States. Given 

that fact, you might wonder why our company would be interested 

in partnering with the U.S. Government on a maritime security 

agenda. 

First, we share the shock and outrage that all Americans felt on 

September 11 and realized the world had changed on that fateful 

day. 

Second, as the world’s largest marine terminal operator, we know 

that we may be just a single terrorist incident away from having 

our whole global system fail. 

To a large extent, the modern global logistics system is a result 

of the revolution in transportation that has gone unobserved by 

most Americans. I have witnessed firsthand the fruits of hundreds 

of billions of dollars of investment to construct an intermodal transportation system that is efficient, reliable, and low cost for its 

users. As chairman of the Corporate Security Committee of HPH, 

I also know that the system is vulnerable to being exploited or targeted by terrorists. Should an attack lead the United States to 

close the ports even for a short period of time, the consequences to 

my industry and those who rely upon it would be devastating. 

The potential for the cargo container to be exploited for an act 

of terror has been borne out 2 years ago in Israel in a sparsely reported event that took place 3 days after the train bombings in Madrid. On March 14, 2004, two Palestinian suicide bombers were 

intercepted before they reached their intended targets of several 

fuel and chemical storage tanks in the port of Ashdod. The PalesVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00102 Fmt 6601 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
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tinian militants killed themselves along with 10 Israelis, and 

wounding 18 others. They reportedly evaded the security at the 

port facility’s gate by being smuggled from Gaza in a container outfitted with a secret compartment and an arms cache—the first majority where terrorists both exploited a container to get to their target and that their target of choice was a port facility. 

Our industry is so vulnerable to disruption. The terminal you 

visited, Hong Kong International Terminal, has a combined input 

of about 7.5 million containers. To support that kind of throughput, 

the facility operates 24 hours a day, 7 days a week, 365 days a 

year. Each day, upwards of 10,000 trucks drive through the gates 

of that terminal. A 96-hour closure—and we have them from time 

to time for typhoons—strands tens of thousands of containers, 

backing them up for upwards of 100 miles back into China. 

But our Hong Kong terminal as well as our other 41 terminals 

around the world can be seriously affected by closures elsewhere in 

the system. Our system got a flavor of that in October 2002 when 

a labor dispute on the West Coast of the United States led to a 10-

day closure of the ports. According to Robert Parry, president of the 

Federal Reserve Bank of San Francisco, the estimated cost to the 

U.S. economy was $1 billion a day for the first 5 days and rising 

to $2 billion each day after. Major retailers like Target Stores from 

your State became deeply concerned that their merchandise might 

not reach their shelves for the holiday season. Over 100 major container ships were stranded at the port outside of Los Angeles, causing major disrupts and delays. I suspect this should be a real wakeup for us in looking back at history. 

We expect that a breach may be involved in a dirty bomb, which 

will lead the United States and other States to raise their port security alert to its highest level while investigators work to sort out 

what happened. Such an incident would pose an unprecedented 

challenge for our operations that we have invested and to prevent 

an incident to work closely with government authorities to restore 

smooth operations should the system of prevention fail. 

Earlier this week, you received testimony from Commander Stephen Flynn. HPH has known Commander Flynn since the year 

2000. While he was serving in the U.S. Coast Guard, he spent time 

studying container operations in our facilities in Hong Kong. Commandeer Flynn at the time was deeply concerned about the rising 

threat of terrorism and the danger it posed to our industry. Sadly, 

like so many of the rest of our industry, we did not pay him much 

heed. After September 11, we listened to Commander Flynn with 

new respect, realizing along with the vast majority of Americans 

that the world changed forever that day and we could no longer 

treat security as an afterthought. We became one of his students 

versus his teacher, and we looked very closely at the layered approach to security, that being the ISPS Code, inspecting high-risk 

containers at ports of embarkation, location and tamper evidence 

monitoring, imaging, and radiation detection. 

We believe a layered strategy recognizes that there is no silver 

bullet to this security and statistically five 60-percent measures 

when placed in combination will raise the overall probability of success to 99 percent. 

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HPH has put in place the first layer, the ISPS Code. In the very 

beginning, we knew that the two initiatives, that with CBP as well 

as the ISPS Code, did not solve our problem of the Trojan Horse. 

As a result, we worry that CBP may be overestimating their ability 

to accurately assess true risk in the industry, because we believe 

CBP relies on the primary screen of commercially supplied ocean 

bill of lading/manifest data. And as Secretary Jackson said, it is an 

excellent first step, and we should be looking forward to the second 

step. 

As a result, only 1 percent of all U.S.-bound containers are actually looked at at the port. The United States, I believe, and the 

international community should strive to construct a ‘‘trust but 

verify’’ versus relying just on manifest information. 

We have been the lead also in the deployment of radiation detection equipment in the U.K. in Felixstowe as well as deployment of 

the NNSA program in Rotterdam, and most recently in Freeport, 

Bahamas. 

At HPH we believe it is possible to configure our facilities to support as much high percentage of verifications, and this would come 

from deploying non-intrusive inspection equipment to examine containers arriving in overseas loading ports to the United States. 

When we started the ICIS program, we looked at operating within two of the busiest container ports in the world. Beginning in 

2005, every truck entering two of the main gains at Hong Kong 

International Terminal and Modern Terminal has passed through 

portal screening technology, and a database of over 1.5 million images has been stored. Key to this pilot is truly the industrial engineering aspect. Many people have discussed here that we are not 

using them as a radiation alarm or as a scanning tool. We believe 

that if we could keep the boxes moving versus leaving them to rest, 

then we could evaluate significantly the NII images with speeds up 

to 15 kilometers 24 hours a day. The pilot is now being evaluated, 

I am pleased to say, by DHS/CBP, and they have under review 

20,000 containers at this present time. 

It was brought up about the illegal aliens that came out of 

Shenzhen, China, into the port of Los Angeles. If this infrastructure had been deployed 50 miles north, those illegal aliens would 

have been found. I am pleased to say, though, they were found by 

the ISPS Code because of the CCTVs and the training of the longshoremen in the facility. 

The present focus on ports is long overdue, and we believe that 

the Congress and the American people need to focus on achievable 

goals and not become overwrought by their worst fears. But we do 

believe a ‘‘trust but verify’’ policy, partnering with foreign overseas 

terminal operators, like my company, that are prepared to come together with an industry Coalition of the Willing. We had that coalition of the willing before some attacks that were in the press, but 

we feel we can pull that back together again. In fact, the four 

major container terminal operators loading 80 percent of the containers moving around the globe are headquartered in Hong Kong, 

Denmark, Dubai, and Singapore. 

Since September 11, our company has invested over $200 million 

to elevate the security in worldwide facilities. John Meredith is exercising, I believe—our CEO—private sector leadership on someVerDate 0ct 09 2002 14:40 Sep 05, 2006 Jkt 027754 PO 00000 Frm 00104 Fmt 6601 Sfmt 6601 C:\DOCS\27754.TXT SAFFAIRS PsN: PAT
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1The prepared statement of Mr. Clancey appears in the Appendix on page 212. 

thing that he believes to be one of our times most urgent global priorities. 

Mr. Chairman, I was profoundly moved by the discourse between 

Governor Kean and Senator Lautenberg on Tuesday when they discussed just when is an issue a priority. We believe this is a global 

priority and a true issue of priority. Thank you very much. 

Senator COLEMAN. Thank you very much, Mr. Gilbert. Mr. 

Clancey. 

TESTIMONY OF JOHN P. CLANCEY,1 CHAIRMAN, MAERSK, INC., 

CHARLOTTE, NORTH CAROLINA 

Mr. CLANCEY. Thank you, Mr. Chairman. As you may know, 

Maersk is one of the largest liner shipping companies in the world, 

serving customers all over the globe. With a fleet numbering more 

than 500 container and 1.4 million operated containers, the A.P. 

Moller Group employs 70,000 people in over 125 countries ships. 

In the United States and in North America, Maersk Inc. represents A.P. Moller’s activities with approximately 12,000 Americans working in our terminals and our offices throughout the country. The businesses we operate today include liner shipping, terminal operations, logistics, warehousing and supply chain operations, and other activities related to the movement of freight. 

Maersk has been actively involved in maritime security issues for 

many years. Our commitment to security is captured by the watch 

words for the company: ‘‘Constant Care.’’ The security of our containers and the integrity of our transportation network are essential to our operations at Maersk. As a worldwide company involved 

in many places here and abroad, we are constantly aware of the 

problems of security and safety. 

For many years, cargo moved fluidly through our ports and facilities, but certainly that changed with the advent of September 11. 

Mr. Chairman, in your letter of invitation, you requested that I 

address certain specific matters. 

Let me begin by commenting on Maersk’s perspective on U.S. 

Government programs related to maritime and port security. Many 

Federal Government programs are successful. but neither the government nor private industry can achieve maritime security unilaterally. It requires joint efforts. Maersk participates in the Maritime 

Security Program, which we believe provides a cost-efficient way 

for U.S. interests to be guaranteed, while at the same time providing benefits to liner companies. In addition, we have entered 

into a variety of U.S. Government programs and pilot projects. For 

example, we were the first enterprise-wide transportation company 

to be validated by C–TPAT. 

Maersk also participates in the Super Carrier Initiative, one of 

approximately 25 ocean carriers working with U.S. Customs and 

CBP in this area. 

Another area of our work with the government involves the issue 

of employee identification cards, and I was pleased to hear from 

Secretary Jackson that we’re finally moving forward on that. 

But we realize that is not enough to make the maritime operations within this country secure, so Maersk has intensified our 

98

own efforts through the establishment of a comprehensive security 

policy and a strategy in this regard. 

In short, we agree that maritime security here and abroad can 

be improved, and we are working cooperatively to achieve this objective, both in partnership with the government and through our 

own efforts. We have some concerns that government programs not 

be commercially punitive, duplicative, or inconsistent, or add unnecessary levels of bureaucracy, and that’s why the partnership is 

so important. 

You inquired about the use of radiation detection equipment, 

which has been well spoken and addressed this morning, at seaports and the possible impact to our operations. We have had success in working on this matter with CBP, and we strongly support 

it. 

A third area of inquiry relates to foreign ownership of U.S. terminals. Congressional concern obviously was highlighted with the activities and the possibility of Dubai Ports acquisition in the United 

States, and also the role of investment in marine terminals in the 

United States. 

A marine terminal operating company typically holds a long-term 

lease from a public—local or State—port authority to manage the 

unloading and loading of containers in a marine facility. It is a specialized, highly competitive, low-margin business whose tools—a 

dock, a crane, and a parking lot—are in the hands of American 

union labor and American management. 

The shipping industry has always been highly globalized and 

highly competitive. Billions of dollars in foreign investment from 

the Japanese, South Koreans, Danish, British, Chinese, and others 

in this country have led to the success of our ability to grow and 

expand international trade. For example, Maersk alone in the last 

3 years has invested $3 billion in U.S. port projects, and we continue to look at other opportunities. Today, foreign-owned companies are running the majority of U.S. marine terminals, as Mr. 

Koch addressed. 

Port authorities prefer large, profitable, predictable volumes that 

can only be guaranteed by liner companies, so liner-affiliated, foreign terminal operators are the top priority. 

Second, liner companies prefer handling their own landside operations because it is the most expensive component of our entire activity chain. 

Terminal operators today operate with lease agreements typically 

awarded and administered by the local governments. There has 

been no evidence that foreign-controlled companies are less secure, 

or in any way less compliant with security regulations, or in any 

way less cooperative with the U.S. Government, particularly on security issues. 

Mr. Chairman, your letter also raised the potential impact from 

a terrorist element smuggling a weapon of mass destruction. I 

think enough has been said about that this morning, but certainly 

we are concerned and we believe that more can be done. 

Mr. Chairman, finally you asked about specific maritime security 

recommendations. In general, I would encourage policymakers to 

evaluate potential programs with an eye toward trade reciprocity. 

As a carrier that operates in 125 countries around the world, I’ve 

99

had the experience to see and experience instances in certain ports 

where it is sometimes a little bit difficult and sometimes very difficult to get them to comply with suggestions. So bilateral agreements, we believe, are mandatory if we are going to be successful, 

particularly as you want to move towards 100 percent inspections. 

Thank you very much. 

Senator COLEMAN. Thank you very much, Mr. Clancey. I would 

mention this Transportation Worker Identification Card is a big 

deal. And maybe it was you, Mr. Koch, who said that it is probably 

the most significant thing that can be done right now to enhance 

the security of the global supply chain. So I was also pleased that 

we heard the Secretary mention that. 

Let me talk a little bit about foreign ownership first. I have some 

other specific questions, but I wanted to touch upon that first. Mr. 

Clancey, Maersk, you have an American operation of an international company. Mr. Gilbert, you have an international company 

that I do not think runs terminals in the United States, but you 

are centered right here. Maybe Mr. Koch should answer this or 

maybe you all can. 

Would there have been anything—just going back to DP World, 

Dubai—would there have been anything that would have precluded 

either economically or operationally from the DP World having an 

American company, an American operation that would have been 

subject to vetting by Homeland Security? It probably would have 

raised, I think, a level of confidence. Is there anything that would 

have precluded that or made that difficult to happen? We never got 

to that point. 

Mr. KOCH. Other than Congress? And that was the issue. Really, 

I think Dubai Ports would have been happy to structure that arrangement to put everything that was in the United States in a 

U.S. corporate structure, as long as, obviously, its ownership interest could be protected. I think they would have been happy to do 

that. It just got—those kinds of suggestions came up too late to be 

factored into what became a very active, political issue. 

Senator COLEMAN. Anybody else want to respond to that? 

Mr. CLANCEY. We have operations very similar to that. One is 

Maersk Line Limited that operates ships for the U.S. Government. 

It is a stand-alone company with clearances, and the chairman of 

that company is the past commander of NATO. They have corporate governance. They have rules and procedures to manage that 

business as a stand-alone American controlled business, and each 

year it has examined and validated, and it has always been successful. 

Senator COLEMAN. Mr. Gilbert. 

Mr. GILBERT. In our case, sir, all of the ports that we have in 

those countries are incorporated in those countries, so in Panama, 

let’s say we have 1,608 employees. It’s a registered company in 

Panama, but the majority of the shares that are held of that company, in the parent company of HPH. That is repeated in either the 

Bahamas or Poland or Netherlands of the U.K. It is a question of 

they are almost exclusively with the country nationals of that country. 

Senator COLEMAN. I will ask Mr. Koch and Mr. Clancey this, because it has to do with the Freeport, Bahamas operation. Part of 

100

the Megaports strategy is to work with foreign companies. In fact, 

it is actually easier to work with foreign companies rather than the 

foreign country. It is easier to get the level of cooperation, less diplomatic hoops to jump through. Mr. Koch and Mr. Clancey, is there 

anything that you are aware of in the proposed Megaports situation? We would be working within the Bahamas, in Freeport, with 

a Hutchison operation, where they would be involved in the 

Megaports Initiation defense. Is there anything from a security perspective you think would be problematic about that? 

Mr. KOCH. Mr. Chairman, I am not aware of anything that’s 

problematic, and one of the things that’s encouraging about that 

particular project is that it examines how you can do the radiation 

scanning on what remains in the United States an open, unsolved 

problem, which is, how do you do radiation scanning on boxes that 

are going onto trains? 

The present radiation scanning system in the United States is 

most easily implemented for boxes going out a gate, and that is 

fairly easy to set up the screening. There’s a lot of cargo that leaves 

U.S. ports via on-dock rail. The Port of Tacoma, for example, has 

been struggling with this. The project in the Bahamas is testing 

and using a technology that can be put on container handling 

equipment that maybe can answer the question of how to efficiently screen containers being moved onto on-dock rail and could 

also help maybe be applied in the United States as well. 

Senator COLEMAN. Mr. Clancey. 

Mr. CLANCEY. I don’t see any problems whatsoever. Our only concern is the real-time use of that information, that the instant that 

it’s scanned, within a very short period of time before that container is fluid in our yards, that we’re told it’s a ‘‘no go.’’ We can’t 

make those decisions. We simply can’t call the shipper and say, 

‘‘We’re not going to move your container because we have a concern.’’ But if the government and Homeland Security can develop 

a message, working with Customs, to give us immediate alerts, we 

don’t see any issues at all. 

Senator COLEMAN. I am not going to ask you, Mr. Gilbert, since 

you got a dog in that house. 

Mr. GILBERT. Could I make a comment on the technology though, 

sir? 

Senator COLEMAN. Please. 

Mr. GILBERT. NNSA brought in a technology that does a primary 

scan and a secondary scan with an isotope. We have taken and put 

this operation where we have dropped the alarm down to the bottom. We have approximately, at this present time, about 25 percent 

rate of alarms. And then we do a secondary scan. The first scan 

goes at seven kilometers, the second scan at three kilometers. And 

we have, because with the containers at risk, we have a very good 

scan. Whereas, in Hong Kong, we’ve turned the alarm bells off because this is a proof of concept, but we have stored the images as 

well as the radiation signatures, and they are available on our 

disk. 

Senator COLEMAN. One of the questions I have, maybe it is a 

question about technology, one of the concerns—and I think the figure was 4 to 6 minutes. I forgot who raised that. I think Mr. Koch. 

You talked about how it takes 4 to 6 minutes for a trained expert 

101

to actually analyze the image, and say what is in there. Looking 

to the future, my sense would be that computer programming using 

different algorithms would be able to cut that substantially. Is 

there anything on the horizon with this technology? 

Mr. KOCH. We understand that a number of people are working 

exactly on that, but it does require matching an understanding of 

the contents of the container with the image though, which is going 

to require systems integration. Hopefully, that could be done. On 

some commodities, let’s say it’s a light commodity like apparel or 

footwear, anomalous images are probably very easy to identify if 

there is something here that causes a question. On high-density 

cargoes, auto parts, machine parts, things like that, it’s going to be 

a difficult and more serious challenge. But we know, in talking 

with SAIC and other vendors, that they are working assiduously on 

trying to develop software that could be used by the government 

in a reliable way. 

Senator COLEMAN. Because the issue here really is security. That 

is our concern. Yours is security but also speed. You have to make 

a profit, and those things that slow it down become problematic. 

Through some technology, such as ICIS, speed has not been compromised. I just do not want the bureaucrats to come back and say 

it takes 4 to 6 minutes when I have to believe that you have some 

computer technology that will allow you to do analysis very quickly. The key here again is to highlight those things that are high 

risk should be scanned at a minimum. 

Mr. Clancey, you talked about the bilateral agreements that 

work in other countries. Senator Levin’s question, and then my follow-up question, what if the United States simply said to folks in 

Japan, or in Hong Long, or LeHavre, or somewhere else, ‘‘We are 

not allowing stuff to go out if it has been identified high risk without there being some further level of review.’’ Would that present 

any economic problems, any issues with that? 

Mr. CLANCEY. I think that if you had the scanners, if we had a 

system that we were comfortable with, and if we had the ability 

to interpret the data in real time and Customs reaches a conclusion 

that there’s an issue here. I’ve worked and lived in a lot of countries around the world. I think that if the shipment was held for 

1 hour, 2 hours, or 6 hours, it wouldn’t be an issue. 

Senator COLEMAN. Mr. Koch. 

Mr. KOCH. In listening to the conversation between yourselves 

and Mr. Jackson, I was struck by the question of whether or not 

there is some ambiguity on the term ‘‘high risk.’’ There are certainly some things that Customs is going to really want to take a 

close look at and inspect the container, where it’s probably perfectly OK to do that in the U.S. port, if it’s contraband, for example, if it’s drugs, if it’s those kinds of things. 

If, on the other hand, the government actually believes that 

there’s a high risk that this box contains a terrorist potential, that 

should never be allowed to be loaded onto a ship and be brought 

to the United States. 

So I think the term ‘‘high risk’’ is used to describe a whole list 

of things that get triggered in their automated targeting system, 

some of which clearly require inspection in the foreign port, and 

some of which are probably perfectly OK to let in, and then you 

102

refuse to release the box at the U.S. port until it’s gone through 

the inspection process. I think maybe some analysis in coming up 

with a clear definition of ‘‘high risk’’ might handle——

Senator COLEMAN. My problem is I am a former prosecutor, Mr. 

Koch, and I have a kind of philosophy that bad guys tend to hang 

out with bad guys, and if somebody is in the drug and human trafficking business, and I offered him another $50,000 or $100,000 to 

transport this other piece of cargo, I do not think there would be 

any moral fiber that would say, I should worry about that. And 

that is why if it is high risk, I think we got to take a look at it. 

Mr. KOCH. I don’t think there’s an ocean carrier out there that 

would object to the U.S. Government saying, ‘‘Do not load any box 

the U.S. Government thought was a high-risk box.’’

Mr. CLANCEY. If I could add to that, Mr. Chairman, just so that 

you have a frame of reference to discuss this with your colleagues. 

In the peak, that’s the busiest time of our year, each day thousands 

of boxes are rolled, and the roll means they’re left behind. They’re 

left behind because there’s no space on the ship. So physically it’s 

very easy to do, and sometimes it’s a matter of policy. 

Senator COLEMAN. Mr. Clancey, you said at one point you believe 

we are doing good things but believe more can be done. And my 

last question before I turn to the Ranking Member is, what more 

can be done? What are we not doing we should be doing? And I 

would like each of you gentleman to address that. 

Mr. CLANCEY. I think that speed and velocity is terribly important. I mean I was not only pleased with Secretary Jackson’s comments, I was surprised. But I think it is that type of speed execution that is terribly important. There’s a lot of things being looked 

at, maybe there’s 100, but there’s probably 5 or 10 you could 

prioritize, implement, and even if they’re not 100 percent perfect at 

this time, put them in place. 

Senator COLEMAN. And I would like to work with you further for 

you to identify those 5 or 10. We would like to know what the private side is saying and then see if government can move forward. 

Mr. Gilbert. 

Mr. GILBERT. Sir, I think one of the things that came out of DP 

World was the education of the American people, but some way, I 

think that went astray a little bit to fear-mongering as well. I 

think that this dialogue that you are having right now about where 

we are with foreign ownership, I think that needs to be explored 

more. And the public-private partnership is what’s going to come 

from that, but if there’s a fear side to having a public-private partnership with those that have headquarters in Denmark or Singapore, then that’s going to be a very difficult thing. 

We are going to continue to put money into security because it 

is good for our industry, and the leader of our company believes 

that as an industry leader, that we must do that. But we need that 

to be embraced and worked with as we go forward in these pilots. 

Thank you, sir. 

Senator COLEMAN. Mr. Koch. 

Mr. KOCH. I would agree with Mr. Gilbert and Mr. Clancey’s 

comments. The only things I would add is in terms of priorities, 

first, the focus again on ICIS. How can it be integrated as another 

tool in the toolbox? That obviously means working with Customs 

103

very closely on developing acceptable operating protocols and agreements with foreign governments, because this is international 

trade and we can expect foreign governments to expect reciprocity. 

We can’t just expect everybody in the world to do what we want 

in their ports without us being willing to do the same thing in our 

ports for our export cargo. 

Second, the TWIC, we are looking forward to seeing this move 

forward. 

But third, again, to emphasize that it is important in our view 

to improve the data used for cargo risk assessment. Our strategy 

today is based on risk assessment, and the data being used is good 

but it is limited. The Secure Freight Initiative that DHS has spoken about as a next-generation strategy, is exceptionally ambitious 

as described, involving great quantities of data from great quantities of people, potentially going to third party commercial sources 

before being used by the government. That’s a wonderful vision, 

and it’s a great vision, but it’s a very ambitious agenda. We would 

hope that the government would not wait until that is ready to be 

rolled out before we take the next generation of improvement. 

Frankly, today, our customers give the government no data that 

can be used in the before-vessel-loading screening process, and we 

think that ought to be addressed because there are too many holes 

that could be easily closed by either the customer’s entry data 

being provided, just as the carrier’s entry data is provided, or other 

data elements that perhaps the government would want. That data 

should be given to CBP 24 hours prior to vessel loading, so that 

the strategy we have embarked upon of doing the risk assessment 

before vessel loading can be matured into something that we could 

all have more confidence in. 

Senator COLEMAN. Very helpful, Mr. Koch. Thank you. 

Senator Levin. 

Senator LEVIN. Thank you, Mr. Chairman. 

I think one of you made reference to the percentage of American 

ports that are operated by foreign companies. Was that you, Mr. 

Koch? 

Mr. KOCH. It’s a substantial majority of the terminal operations 

being run by companies that are foreign-owned companies, yes. 

Senator LEVIN. What percentage of the terminal operations are 

owned by foreign companies in Japanese ports? 

Mr. KOCH. I don’t know the answer to that. 

Senator LEVIN. What would your guess be? 

Mr. KOCH. The majority will be Japanese. I remember when——

Mr. CLANCEY. 100 percent are Japanese. 

Senator LEVIN. I think that is——

Mr. CLANCEY. But that’s something the U.S. Government has 

been involved in for a long time. 

Senator LEVIN. Been involved in allowing that? 

Mr. CLANCEY. Trying to break that monopoly. 

Senator LEVIN. Yes, but we have not, have we? 

Mr. CLANCEY. We have not. That’s the only country in the world 

probably where the monopoly hasn’t been broken. 

Senator LEVIN. What are you guys going to do about that? Do 

you believe in foreign trade, foreign ownership—Mr. Koch, you are 

104

the head of the World Shipping Council. Are the Japanese part of 

that? 

Mr. KOCH. Yes, they are. 

Senator LEVIN. What do they say when they are told, hey, you 

guys do not allow foreign ownership at your ports? 

Mr. KOCH. They went through an experience several years ago 

with the Federal Maritime Commission pursuing that quite aggressively, and several years ago, when I worked for Mr. Clancey and 

we were all at Sealand together, we worked very hard to try to get 

into the Japanese ports, and it’s a difficult problem. 

Senator LEVIN. Why do we tolerate it? Why do you tolerate it? 

Why don’t you kick them out of your council? 

Mr. KOCH. I think the shipping lines that are members of the 

council are responsible operators. 

Senator LEVIN. We talk about aggressive, but it is hitting your 

head against the wall if it does not succeed, and I find this such 

a one-way street. It is so typical of trade, as far as I am concerned. 

We look at our trade imbalance. Part of it is obviously caused by 

reasons of cheaper labor and a lot of other things, but part of it 

is just caused by closed markets to us, and if you want to hold up 

foreign ownership of ports as being part of a global economy, or 

port facilities here as being part of a global economy, it seems to 

me unless the private sector joins our government in trying to open 

up the Japanese or any other country that closes their market to 

us, it is going to continue to be a far different situation than a twoway street in trade. 

I do not know what more I can add on that subject, other than 

to tell you I am not particularly sympathetic in terms of the foreign 

ownership issues until all the countries who do trade with us, particularly these countries that have huge balances with us, positive 

trade balances with us, live by the same rules we do. 

So you can pass that angst along, and add it to a long list. 

Mr. CLANCEY. Yes, Senator, but it’s also true that almost every 

other country in the world allow foreign companies to operate their 

ports and——

Senator LEVIN. How about the Chinese? 

Mr. CLANCEY. Yes. 

Senator LEVIN. So what percentage of Chinese port facilities are 

owned by foreign interests? Do you know offhand? 

Mr. CLANCEY. Foreign investments, I’d say 30. 

Mr. GILBERT. Well, if you consider Hong Kong——

Senator LEVIN. No, skip Hong Kong. Are you including Hong 

Kong, Mr. Clancey? 

Mr. CLANCEY. No, I’m not including Hong Kong. 

Senator LEVIN. You think it is 30 percent outside——

Mr. CLANCEY. I would say that of the container activities between the Singaporeans, ourselves, Europeans, a lot of private capital venture funds, maybe 25 to 30. 

Senator LEVIN. And how about South Korea, are they open? 

Mr. CLANCEY. Yes. 

Senator LEVIN. So a significant percentage of their facilities 

would be owned by foreign interests? 

Mr. CLANCEY. Not a significant amount, but there’s no limitations. 

105

Senator LEVIN. And no practical limitations either, OK. There is 

not barriers which are——

Mr. CLANCEY. No. 

Mr. GILBERT. What has happened, Senator, is a number of countries have gone and privatized their ports because they’re looking 

for private capital to come in. If you look at all of the investment 

that’s gone into Korea in the past, it had been U.S. investment that 

turned into DPW investment when that was sold, significant investment from Hong Kong and significant investment from Singapore. 

If you look at the U.K., all of their ports are privatized. We operate about 60 percent of it in the north, and P&O Ports, now DPW, 

operates in the south. And that goes around the globe. Actually, 

capital goes where it’s treated well, and in privatizations it is treated well. 

Senator LEVIN. How about Dubai in the Emirates, are their ports 

privately—their operations are owned by foreigners too? 

Mr. CLANCEY. Correct. 

Mr. GILBERT. I would point out though, Senator, an interesting 

fact, that when Jebel Ali, the biggest port in the Middle East, 

was——

Senator LEVIN. Where is that? 

Mr. GILBERT. In Dubai. Was constructed, for the first 10 years 

an American company ran that facility. And I know that because 

I was the first port director of that facility. And then they learned 

how to run their own facilities, and then they took them over, and 

in the past 2 years, have been expanding greatly into terminal operations. 

Senator LEVIN. Are they currently owned by a foreign interest in 

Dubai or the Emirates? 

Mr. GILBERT. I believe they are all owned by Dubai Port World 

now. If we go to other places such as Salalah, Denmark, A.P. 

Moller has a big facility there, and we have just bought one in 

Oman as well, SLR. 

Senator LEVIN. Twenty-four million containers come into the 

United States each year, 11 million by sea, 11 million by truck, 2 

million by train, according to the figures I have used. I assume 

those are all filled containers? 

Mr. KOCH. For ocean, the inbound trade is generally filled, yes. 

Senator LEVIN. And how about going out? 

Mr. KOCH. A lot of air. 

Senator LEVIN. A lot of empty containers? 

Mr. KOCH. A lot of empties. 

Senator LEVIN. What percentage of the containers that leave the 

United States leave empty, by sea? 

Mr. KOCH. I believe there’s about 7 million export containers, 

and I believe between 61⁄2 and 7 million. I can check that figure 

for you. 

Senator LEVIN. That go back loaded? 

Mr. KOCH. Loaded. 

Senator LEVIN. So half are loaded, half of them empty. 

Mr. KOCH. The carrier will have to reposition the empty from 

here back to Asia to pick up a load, so that you always have to 

maintain equipment balance. 

106

Senator LEVIN. But would you say that of the 11 million coming 

by ocean into the United States, perhaps half go back somewhere 

empty? 

Mr. KOCH. Probably not quite that high, but it’s certainly a large 

percentage. 

Senator LEVIN. Forty to 50 percent? 

Mr. KOCH. Forty percent is probably getting close. 

Senator LEVIN. Would you know the figure by truck? Would any 

of you have an idea by truck? 

[No response.] 

Senator LEVIN. OK. I think, Mr. Koch, you said it would be 

wrong for Congress to restrict foreign investment in any way in our 

port facilities. Do you consider that the law that we have on the 

books currently, which requires a 45-day formal investigation 

where there is an allegation that a transfer could affect the national security of the United States, do you consider that to be an 

inappropriate restriction? 

Mr. KOCH. No, sir. 

Senator LEVIN. Mr. Gilbert, you talked about ICIS, and I am interested as to whether or not there is any other similar technologies being developed, or is ICIS kind of by itself there? 

Mr. GILBERT. It was an engineering and proof-of-concept study, 

and we have told all the vendors that just as we build cranes and 

buy cranes, that we don’t have a specific vendor. So we think that 

if this is accepted, that images as well as radiation screening, then 

we will have the start of a market that many vendors will come 

into, both lowering the cost and increasing the capabilities and 

ability to do better scans and better radiation detection. 

Senator LEVIN. So those others at that point will be able to utilize those technologies? They are not patented or not——

Mr. GILBERT. The key is that the radiation portal can be pretty 

much interchanged. The one on the scan, the uniqueness of the 

vendor that has provided to us, is able to open a shutter and close 

a shutter as a truck moves through. So they have that pretty much 

now as a prototype that others have not done. Once that somebody 

knows there’s a market for it, they will be building it quickly. 

Senator LEVIN. You think then there will be competitors? 

Mr. GILBERT. We absolutely will request competitors for sure. 

Senator LEVIN. Mr. Gilbert, there have been allegations about 

the relationship between your company and the Chinese Government. Is there any relationship, and if so, what is it? 

Mr. GILBERT. We are a publicly traded company, and we have 

been since we started as the No. 1 company in 1866, with a handover and reversion in 1997. We became part of a SAR, and the 

whole Hong Kong——

Senator LEVIN. What is an SAR? 

Mr. GILBERT. The Special Administrative Region of China. 

Senator LEVIN. OK. 

Mr. GILBERT. And the Hong Kong Exchange fell within that. An 

interesting side, we have HPH is talked about, but actually, HSBC, 

the first director of HPH went to HSBC, the bank, and they’re 

there. We’ve got a particular note because of the fact that we have 

a lot of investment in China, but we have no government shares 

in our company whatsoever. 

107

Senator LEVIN. So the government has no connection to your 

company? 

Mr. GILBERT. Well, we certainly are good citizens in every country——

Senator LEVIN. I know that, but in terms of ownership or control. 

Mr. GILBERT. There is no ownership or control, sir. 

Senator LEVIN. Thank you. My time is up. Thank you very much. 

Thank you all. 

Senator COLEMAN. Thank you, gentlemen. It has been a very informative, very helpful panel, and we are very appreciative, so 

thank you much. 

With that, this hearing is adjourned. 

[Whereupon, at 12:25 p.m., the Subcommittee was adjourned.] 

(109)

A P P E N D I X

PREPARED STATEMENT OF SENATOR AKAKA 

MARCH 30, 2006 

Thank you, Mr. Chairman. I commend you for holding this series of hearings on 

the critically important issue of securing our global supply chain. 

As you know, cargo security is especially important to my state of Hawaii because 

we receive 98 percent of imported goods via the sea. Any interruption in sea commerce would have a staggering impact on the daily lives of the people in Hawaii. 

We must do everything possible to ensure supply chain security while enabling 

and not impeding trade. This balancing act is critical—with no room for error. Programs such as the Container Security Initiative (CSI) and the Customs-Trade Partnership Against Terrorism (C-TPAT) are part of that balancing act. 

CSI and C-TPAT have improved global supply chain security, but have not yet 

perfected supply chain security. Our vulnerabilities remain high, and there are considerable areas for improvement. These programs use voluntarily submitted information to focus scarce screening resources and target high-risk shippers and cargo. 

While all cargo is reportedly screened, only five percent is targeted for inspection. 

Both the Government Accountability Office (GAO) and the Department of Homeland Security’s Inspector General have reported glaring weaknesses with Customs 

and Border Protection’s (CBP) targeting methodology and execution. This targeting 

methodology, which forms the backbone of our present inspection process and plays 

a critical role in combating nuclear and radiological smuggling efforts, must be improved. 

To strengthen our targeting efforts, CBP must also ensure the nation’s intelligence community is sharing counter-terrorism information to strengthen targeting 

methodologies. Although the number of ports participating in CSI and C-TPAT continues to grow, the number of CBP inspectors has not risen correspondingly. Because of CBP’s inability to fully staff some ports, 35 percent of shipments are not 

targeted and, therefore, not subject to inspection overseas. GAO pointed out nearly 

a year ago these staffing imbalances and shortfalls. 

But, Mr. Chairman, it is not only GAO who has expressed concern over staffing. 

I’ve been contacted by the National Treasury Employees Union (NTEU) because of 

their concern over a decrease in staffing levels. Without a sufficient number of 

trained inspectors, how can we expect our borders to be protected? More troubling, 

the President’s Budget for fiscal year 2007 requests an increase of only $32 million 

and 21 full-time employees for all CBP operations at ports of entry. This stands in 

contrast with other human capital initiatives within the Department, including a 

$41.7 million or 133 percent increase for funding MaxHR, the new personnel system 

at DHS. I question the Administration’s commitment to address these critical staffing problems within CBP. 

As I’ve discussed before, I am also concerned about the potentially duplicative programs in the newly established Domestic Nuclear Detection Office (DNDO) and the 

National Nuclear Security Administration in the area of radiation detection technologies. These technologies must used effectively within the framework CSI and CTPAT. Detection technologies must also be effective at detecting and deterring nuclear or radiological materials while also expediting the flow of commerce. The new 

DNDO runs the risk of becoming another layer of bureaucracy on a crowded organizational chart, duplicating technologies being developed elsewhere in the federal 

government, and siphoning off scarce science and technology funds from other programs. Thank you, Mr. Chairman.

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Æ


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