```

[Senate Hearing 107-309]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 107-309

 WEAK LINKS: ASSESSING THE VULNERABILITY OF U.S. PORTS AND WHETHER THE 
         GOVERNMENT IS ADEQUATELY STRUCTURED TO SAFEGUARD THEM

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

                                HEARING

                               before the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 6, 2001

                               __________

      Printed for the use of the Committee on Governmental Affairs

78-045              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2002
____________________________________________________________________________
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Internet: bookstore.gpr.gov  Phone: toll free (866) 512-1800; (202) 512�091800  
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                   COMMITTEE ON GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 FRED THOMPSON, Tennessee
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
RICHARD J. DURBIN, Illinois          SUSAN M. COLLINS, Maine
ROBERT G. TORRICELLI, New Jersey     GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia                 PETE V. DOMENICI, New Mexico
THOMAS R. CARPER, Delaware           THAD COCHRAN, Mississippi
JEAN CARNAHAN, Missouri              ROBERT F. BENNETT, Utah
MARK DAYTON, Minnesota               JIM BUNNING, Kentucky
           Joyce A. Rechtschaffen, Staff Director and Counsel
              Dan Feldman, Counsel/Communications Adviser
              Jason M. Yanussi, Professional Staff Member
         Hannah S. Sistare, Minority Staff Director and Counsel
          Jayson P. Roehl, Minority Professional Staff Member
                     Darla D. Cassell, Chief Clerk

                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Levin................................................     3
    Senator Collins..............................................    15
    Senator Cleland..............................................    30
    Senator Bennett..............................................    33
    Senator Thompson.............................................    36

                               WITNESSES
                       Thursday, December 6, 2001

Hon. Ernest F. Hollings, a U.S. Senator from the State of South 
  Carolina.......................................................     6
Stephen E. Flynn, Ph.D., Senior Fellow, Council on Foreign 
  Relations and Commander, U.S. Coast Guard......................    10
F. Amanda DeBusk, Miller and Chevalier, former Assistant 
  Secretary of the Commerce Department and former Commissioner, 
  Interagency Commission on Crime and Security in U.S. Seaports..    16
Rob Quartel, Chairman and Chief Executive Officer, FreightDesk 
  Technologies and former Member, U.S. Federal Maritime 
  Commission.....................................................    19
Rear Admiral Richard M. Larrabee, Ret., Director, Port Commerce 
  Department, The Port Authority of New York and New Jersey......    23
Deputy Chief Charles C. Cook, Memphis Police Department..........    40
Argent Acosta, Senior Customs Inspector, Port of New Orleans and 
  President, National Treasury Employees Union (NTEU) Chapter 168    43
Michael D. Laden, President, Target Customs Brokers, Inc.........    47
W. Gordon Fink, President, Emerging Technology Markets...........    49

                     Alphabetical List of Witnesses

Acosta, Argent:
    Testimony....................................................    43
    Prepared statement...........................................   127
Cook, Deputy Chief Charles C.:
    Testimony....................................................    40
    Prepared statement...........................................   120
DeBusk, F. Amanda:
    Testimony....................................................    16
    Prepared statement...........................................    93
Fink, W. Gordon:
    Testimony....................................................    49
    Prepared statement...........................................   138
Flynn, Stephen E., Ph.D.:
    Testimony....................................................    10
    Prepared statement with an attachment and slide presentation.    57
Hollings, Hon. Ernest F.:
    Testimony....................................................     6
Laden, Michael D.:
    Testimony....................................................    47
    Prepared statement...........................................   133
Larrabee, Rear Admiral Richard M., Ret.:
    Testimony....................................................    23
    Prepared statement...........................................   114
Quartel, Rob:
    Testimony....................................................    19
    Prepared statement with slide presentation...................    98

                                Appendix

Slide presentation by Stephen E. Flynn entitled ``Bolstering the 
  Maritime Weak Link''...........................................    80
Slide presentation by Rob Quartel................................   107
Letter (with an attachment) to Senator Collins from Captain 
  Jeffrey W. Monroe, Director, City of Portland, Department of 
  Transportation, dated October 26, 2001.........................   142
U.S. Customs Service Optimal Staff Levels, Fiscal Years 2000-02, 
  February 25, 2000..............................................   148
Classification of U.S. Customs Districts and Ports for U.S. 
  Foreign Trade Statistics.......................................   285

Responses to questions for the record from:
    Mr. Flynn....................................................   248
    Ms. DeBusk...................................................   253
    Mr. Quartel..................................................   259
    Rear Admiral Larrabee, Ret...................................   270
    Mr. Acosta...................................................   275
    Mr. Laden....................................................   277
    Mr. Fink.....................................................   282

 
 WEAK LINKS: ASSESSING THE VULNERABILITY OF U.S. PORTS AND WHETHER THE 
         GOVERNMENT IS ADEQUATELY STRUCTURED TO SAFEGUARD THEM

                              ----------                              

                       THURSDAY, DECEMBER 6, 2001

                                       U.S. Senate,
                         Committee on Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:08 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Joseph I. 
Lieberman, Chairman of the Committee, presiding.
    Present: Senators Lieberman, Levin, Bennett, Cleland, 
Torricelli, Collins, and Thompson.

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. Good morning. Thanks to all of you for 
being here, particularly to Senator Hollings and our other 
witnesses. This is one of a continuing series of hearings that 
this Governmental Affairs Committee has held since the 
terrorist attacks of September 11 which have examined the 
Federal Government's ability to prevent, prepare for, and 
respond in the event of future terrorist attacks.
    In some ways, we ask questions that some have been hesitant 
to ask in the past, and I suppose some might wonder why we are 
asking them now--because they may reveal vulnerabilities. And 
yet, if we do not ask them, we will not close those 
vulnerabilities and we will be susceptible to further attack. I 
think all of us felt that, unfortunately, after September 11, 
we have to start thinking more like the terrorists do, and we 
are going to try to do it in a very thoughtful and 
comprehensive way today and we have the witnesses here to make 
that happen.
    Not since December 7, 1941, which is 60 years ago tomorrow, 
has the question of our domestic security so dominated national 
debate. The Committee has taken a hard look at whether the 
Federal Government is appropriately structured to meet those 
challenges. Specifically, we have held hearings on our aviation 
and postal systems, on cyberspace, and more broadly, on the 
safety of our critical infrastructure and how we should 
organize for homeland security.
    Today, we direct our attention to the security of the 
Nation's 400-plus ports through which 95 percent of all U.S. 
trade flows. The picture, unfortunately, is not a reassuring 
one. U.S. ports are our Nation's key transportation link for 
global trade and yet there are no Federal standards for port 
security and no single Federal agency overseeing the 11.6 
million shipping containers, the 11.5 million trucks, 2.2 
million rail cars, 211,000 vessels, and 489 million people that 
passed through U.S. border inspections last year.
    I just want to put an exclamation point there, that as I 
have studied this more, I must say it surprised me. There are 
no Federal standards for port security and no single Federal 
agency overseeing port security. Port security is largely a 
matter of State and local administration. The Coast Guard, the 
Customs Service, the Immigration and Naturalization Service, 
and other agencies all have a role to play, but the plain fact 
is that the movement of goods into the United States, five 
million tons a day, is now so efficient in the sense of goods 
coming into the country and moving rapidly as a matter of 
commerce to their destination that port security has been 
sacrificed.
    It is not possible to physically inspect more than a small 
sample of containers as they arrive in the United States. Less 
than 1 percent are actually examined, and that leaves our 
ports, unfortunately, vulnerable to attack. And not just our 
ports. Containers arriving from Europe, Asia, or Canada are 
more likely to be inspected at their final destination rather 
than at the arrival port.
    I am sure that would surprise most Americans, but that is 
the reality and it means that at any given time, authorities 
have virtually no idea about the contents of thousands of 
multi-ton containers traveling on trucks, trains, or barges on 
roads, rails, and waterways throughout the country. The ease 
with which a terrorist might smuggle chemical, biological, or 
even at some point nuclear weapons into one of those containers 
without being detected is terrifying.
    Even the physical security of ports is minimal. Last year, 
the Commission on Crime and Security in U.S. Seaports reported 
that of 12 of the Nation's largest ports, 6 had perimeter 
fencing that could be penetrated, 4 had no regular security 
patrols, and 10 never performed routine criminal background 
checks on employees. The Commission said the state of security, 
``at U.S. seaports generally ranges from poor to fair.''
    The FBI told the Commission that ports were highly 
vulnerable to terrorist attack, although at that time, they 
considered the threat to be marginal. The assessment, of 
course, has changed since September 11 and 2,000 military 
reservists have now been activated to shore up port security.
    Part of the overall problem, as is so frequently the case, 
is the lack of resources to properly enforce port security. 
But, of course, we are going to be dealing with that on the 
Senate Floor in the Department of Defense appropriations bill 
and the homeland security funding that is part of that bill.
    The Coast Guard, for example, has 95,000 miles of shoreline 
to patrol but is at its lowest level of manpower since 1964. 
International trade has doubled since the mid-1990's, but the 
number of Customs inspectors has remained the same, just 8,000. 
The Federal Government is also handicapped by a lack of 
coordination and communication between agencies.
    I have heard that a ship with a--this is a hypothetical, 
but not too improbable--a shadowy record of ports of call, for 
example, carrying a cargo that does not square with its home 
port and manned by crew members on a watch list of people with 
suspected terrorist ties might not necessarily raise any red 
flags, and that is because the Coast Guard could know about the 
ship, Customs could know about the cargo, and INS could know 
about the crew members, but no one would necessarily have all 
that information, so the pieces would not be pulled together to 
form a picture that would set off alarms.
    Even if resources and coordination were adequate, the 
front-line agencies would still be handicapped by a lack of 
access to national security intelligence from the FBI and the 
CIA. That is a complaint that I have heard over and over again 
from local officials following the September 11 attack.
    The Committee is particularly pleased to welcome Senator 
Fritz Hollings and to thank him for his leadership and 
dedication--lonely, most of the time--to pursuit of better port 
security in America and the critical role that he has played in 
keeping this problem on our collective radar screens over the 
years. I am very pleased that he is with us today to testify 
about legislation that he and Senator Bob Graham have written 
to respond to the vulnerability of our ports. Their 
legislation, which I strongly endorse, addresses some key 
findings and recommendations of the Commission on Seaport 
Security. Our ports, goods, and citizens will be safer when it 
passes.
    I must say that the more that I study this issue, the more 
I realize how pervasive the problem is and how much work we 
have to do on it to make sure that we get our entire system of 
importing and exporting to a point where it is not only 
efficient, but it is also safe. The entire commercial structure 
may need to be addressed systematically, and as some of the 
witnesses we are going to hear this morning will suggest, the 
best answer may lie in an entirely new approach that relies on 
innovative technologies combined with security inspections 
starting at ports of origin, rather than ports of destination. 
I am going to be very interested to hear testimony on that.
    We may need, as one of our witnesses would put it, to push 
our borders back and create sanitized shipping zones for goods 
bound for the U.S. from overseas ports. We certainly need to 
put technologies to work so that containers can be 
electronically sealed and alarmed after they are inspected, 
then X-rayed for a baseline record of their contents. Global 
positioning satellite systems could be attached to all 
containers to monitor shipments, and a secure Internet tracking 
system could help place a shipment anywhere along its path.
    Fortunately, our ports are busy and they do not need a bail 
out. They just need a sensible strategy to keep them safe and 
sound as vital economic hubs, and I am hopeful that the 
testimony we will hear today will help the Congress do just 
that.
    Senator Levin.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Mr. Chairman, thank you. Thank you for these 
series of hearings that you are holding that are really a 
comprehensive series, and I think perhaps the most 
comprehensive look that is being given to our security issues 
in a whole host of areas.
    I also want to join you in welcoming Senator Hollings, an 
old friend of both of ours, or a dear friend, I should say, of 
both of ours. He has been, indeed, a leader in the subject that 
you are looking at today.
    We, who are on the Northern Border, are particularly very 
keenly interested in this subject. We have twice the Border as 
exists on the South Borderand yet we have a small, tiny 
fraction of the security which exists there, and that is 
inadequate, and you will be hearing more about that. The 
Northern Border receives about two-thirds of the truck traffic, 
about 85 percent of the trains, a large number of ships.
    We have the longest coast, actually, of all the four 
coasts. People sometimes forget that the St. Lawrence Seaway 
and the Great Lakes is the longest coastline that we have in 
this country. We have many ports of entry, lots of ships coming 
in from overseas, and it is a major issue for us. The issues 
that the Chairman has identified, are both the security issue 
as well as trying to move trade, because when we have long 
lines of trucks, for instance, coming into my home State and 
leaving my home State, with trade, it means that our plants are 
not able to run as efficiently when we have to wait 2 or 3 
hours at a bridge or a tunnel. What you are looking at today is 
mainly seaports, but I gather you are including all ports of 
entry, and I think the third panel will be looking at those, as 
well.
    What you have identified, Mr. Chairman, one of the issues 
that we are pushing very hard on is the reverse inspection 
issue. It makes a lot more sense to be inspecting cargo before 
it lands at our ports, before it goes through our tunnels, 
before it goes across our bridges, because it could be too 
late. If someone wanted to attack a port or a tunnel or a 
bridge, they would do so before they entered our country, not 
afterwards, and they would do it in the process of entering, 
not after they have entered.
    So the reverse inspections that we are pushing so hard for, 
getting our Customs people to get involved in much more 
actively, could be an important part of added security for our 
ports of entry, including our bridges and tunnels. Some of the 
technologies which the Chairman has identified are also very 
important and we must put more resources into those 
technologies to identify threats to our ports of entry.
    And also, we need more resources. We have a huge shortage 
of resources, particularly on the Northern Border, but I think 
that is true on the South Border, and also on the East and West 
Coasts. We have a large number now of temporary employees 
following September 11. We have got to have permanent employees 
instead of temporary employees. But we have both resource 
problems, technology challenges, and just plain common sense 
that push for those reverse inspections that could provide so 
much greater security.
    But while I must leave you, Mr. Chairman, I am very keenly 
interested in this subject. I want to again thank you for these 
hearings. I congratulate Senator Hollings for his usual 
steadfastness in staying with an issue for so long, and I think 
that, finally, tragically, probably, because it took September 
11 to wake us up, but nonetheless, finally, I think we are 
going to get to the point where Senator Hollings has been for 
so long.

                  PREPARED STATEMENT OF SENATOR LEVIN

    It took the tragedy of September 11 and the subsequent need for 
heightened security along our borders to draw attention to what many of 
us have known for years; there is an alarming lack of resources along 
our Northern Border. While much has been done over the last decade to 
improve security on our border with Mexico, the Northern Border has 
largely been ignored. For example, only 1,773 Customs Service personnel 
are present at our border with Canada, while 8,300 protect our Southern 
Border. Similarly, while 8,000 Border Patrol agents monitor our 2,000 
mile Southern Border, only 300 are stationed at our 4,000 mile Northern 
Border. So, 96 percent of our Border Patrol agents are assigned to a 
border that is only half as long as the one to which 4 percent of 
agents are assigned.
    Although hugely understaffed, we process a large percentage of the 
country's commercial traffic. The Northern Border has six of the top 
eight truck border crossings in the country, including the number one 
truck border crossing, Detroit's Ambassador Bridge. Our Customs 
officers on the Northern Border process 62 percent of all trucks, 85 
percent of all trains, and 23 percent of all passengers and pedestrians 
entering the country each year. However, our Customs inspectors 
represent only a small fraction of the currently deployed inspectors in 
the country, and their numbers have remained essentially static since 
the 1980's.
    The Detroit Region has half of all Northern Border crossing traffic 
yet has only 10 percent of the INS inspectors assigned to the Northern 
Border and 24 percent of the Customs inspectors assigned to the 
Northern Border.
    With this startling lack of resources, it's no surprise that the 
new security measures at the border have a tremendous impact on our 
region's economic well being. Auto plants wait days for critical parts. 
Hospitals can't perform vital services when supplies and staff are 
trapped in long lines at the bridge and tunnel. We need to find a 
permanent solution to the staffing shortfall at our borders so that we 
are able to perform essential security inspections without causing 
unreasonable backups that hurt our economy. We are grateful for the 
recent Federal commitment to increase the number of National Guard at 
the Northern Border and are relying on them to help protect our border 
and keep traffic and commerce flowing smoothly. However, we need to 
move quickly to put permanent staff and technology in place.
    Congress has taken some important steps to achieve this goal, but 
we are not there yet. The FY 2002 Treasury Postal Appropriations bill 
provides an additional $28 million for Customs to institute a Northern 
Border initiative including hiring approximately 285 additional Customs 
officers. The Commerce Justice State FY 2002 Appropriations bill 
provides for $66.3 million for 570 new border patrol agents across the 
nation and $25.4 million for 348 new land border ports-of-entry INS 
inspectors across the nation. Particular attention will be paid to the 
needs of the Northern Border. Congress also tripled staffing levels for 
INS, Customs and Border Patrol staffing on the Northern Border in the 
anti-terrorism bill. A portion of the $40 billion emergency 
supplemental should also go to staffing up the security at our Northern 
Border.
    But improved border security involves more than just more money. It 
requires changing policies and practices that don't make sense. On 
November 13 I held a hearing of the Permanent Subcommittee on 
Investigations to highlight an obvious gap in our border security. The 
U.S. Border Patrol is the uniformed law enforcement arm of the 
Immigration and Naturalization Service (INS) with the responsibility of 
combating alien snuggling and illegal entries other than at ports of 
entry. The Subcommittee looked at how people who attempt to enter the 
country illegally at places other than the official ports of entry are 
arrested and processed by the Border Patrol. When persons are arrested 
by the Border Patrol, the large majority voluntarily returns to their 
country of origin, usually Mexico or Canada. The others, perhaps as 
many as one-third of those arrested on the Northern Border, are given a 
notice to appear at a removal hearing. The Border Patrol decides 
whether the person should be detained, released on bond or, as is often 
the case, released on his or her own recognizance while awaiting a 
hearing. This hearing can take several months to occur.
    In FY 2001 at the Detroit Border Patrol Sector--which encompasses 
all of Michigan--the Border Patrol arrested more than 2,100 people. A 
significant percentage of these people were arrested while actually 
attempting to enter the U.S. illegally. Most of these 2,100 were 
voluntarily returned to their country of origin. However, more than 
one-third were given a notice to appear at a removal hearing. Reports 
from Border Patrol agents indicate that the vast majority of the latter 
group were released on their own recognizance pending their hearing. 
The INS wasn't able to tell us how many of the persons arrested in this 
situation and released fail to show up for their scheduled hearing. 
However, by looking at related statistics and ballpark estimates, we 
estimated that the number is at least 40 percent and possibly as high 
as 90 percent.
    The conclusion is inescapable: The vast majority of people arrested 
by the Border Patrol while attempting to enter the U.S. illegally who 
don't voluntarily return to their own country are released on their own 
recognizance. Most of those released don't show up for their removal 
hearing and little or no effort is made to find them.
    As I said at my Subcommittee's hearing, this is a dysfunctional and 
absurd system that makes a mockery of our immigration laws. When we 
release persons into the county who are without an address, without 
ties, without any record of who they are, we're abdicating our 
responsibility to the larger community. This is a practice that has to 
stop. On November 13, I asked the INS and Border Patrol to report to me 
on the steps they plan to take to close these enforcement loopholes. If 
the response is unsatisfactory, I plan to introduce legislation to 
accomplish it.
    There is much that needs to be done. Customs and INS officials 
shouldn't have to rely on temporary fixes--we need permanent workers 
and we need them now. We also need to find a way to compensate our 
local law enforcement volunteers and secure funds for technology. We 
should also consider performing reverse Customs inspections of vehicles 
entering tunnels and crossing bridges on the Northern Border. With the 
increased security risks to our nation's infrastructure in the post-
September 11 climate, it seems obvious that inspecting vehicles for 
bombs or explosives AFTER they enter our tunnels or cross our bridges 
is illogical. To rectify this security vulnerability, we must work with 
our neighbors to establish a reverse inspection program to inspect 
vehicles before they have the chance to endanger or destroy important 
transportation infrastructure.
    And finally, we need to make common sense changes to our law 
enforcement and immigration policies to ensure the safety of our people 
and the integrity of our laws. We are an open and generous country and 
we welcome persons from around the world who want to contribute their 
hard work to help build a better America. But we also have a duty to 
protect ourselves and our country from people who would do us harm.

    Chairman Lieberman. Thanks, Senator Levin. Thanks for your 
involvement in this. Because I know of the great interest in 
Michigan about this, I look forward to the questions you have 
raised, and to working with you on some responses.
    Senator Hollings, thanks so much for being here.

 TESTIMONY OF HON. ERNEST F. HOLLINGS, A U.S. SENATOR FROM THE 
                    STATE OF SOUTH CAROLINA

    Senator Hollings. Thank you very, very much, Mr. Chairman 
and Senator Levin. I am grateful to the Committee for the 
chance to appear here.
    Let me ask consent that my prepared statement be included 
in the record.
    Chairman Lieberman. Without objection.
    Senator Hollings. I will get right into the advance check. 
I, frankly, had not heard of that, the concept of pre-clearance 
of cargo in foreign ports. Let me say, Senator Bob Graham of 
Florida and I, as you indicated, Senator Levin, we have been at 
it 3 years. We started off really in looking into drugs and the 
drugs coming in in containers. We were not thinking of 
explosives and terrorism particularly at the time. President 
Clinton, at our behest, put in a study commission. The study 
commission, comprised of 17 Federal agencies, made its report. 
We put in a bill in the last Congress with no further success. 
We have one in in this Congress that has been reported out of 
committee unanimously. And yes, we have been working to advance 
that bill forward as well.
    Along that line, the only reason for the hold-up on the 
floor is OMB. Our Republican colleagues embarrassedly have to 
stand up and object on account of costs. You can ship a 
container anywhere into the United States for $5,000, and bring 
in explosives or chemical weapons. We had one terrorist that 
was picked up in Italy in a marine container, he had a phone, a 
toilet, cooking and sleeping equipment, and plans and security 
passes for some of the airports, false documentation to get 
into any and every entry point into the United States and 
everything like that. He was living in the container.
    So either one can come in for $5,000, or you can get in the 
contraband needed to destroy our Nation. We have spent billions 
for the threats from outer space and a ballastic missile 
defense system but we do not want to spend port security. We 
know the cost of everything and the value of nothing.
    This is an emergency situation. Let me, if the Committee 
will please, read from an article in the London Times entitled, 
``Secret Fleet Supplied Bombers,'' published over a month ago. 
``Three years ago, nobody paid much attention to a crew 
unloading a cargo from a rusting freighter tied up on the K-
side at Mubasa, Kenya. The freighter was part of bin Laden's 
merchant fleet and the crew was delivering supplies by the team 
of suicide bombers who weeks later would blow up the U.S. 
embassies in Kenya and Tanzania. Bin Laden's covert shipping 
interests were revealed at the trial of the bombers, but until 
now, security services have been slow to track down how many 
vessels he operates.''
    Well, we have tracked it down now and he operates over 20 
vessels, but he could easily hijack an oil tanker he does not 
own. Some company like Chevron, Exxon, or responsible owner's 
tanker could be hijacked and used as a weapon. You can operate 
one with four suicidalists, or martyrs, and run it right into 
the Golden Gate Bridge or the Brooklyn Bridge or any place in 
the United States.
    So we are into an emergency situation and we have to go to 
the 50 largest ports, at least, and very quickly. There are 
some 361 ports, and let me join in, in support of the very 
comprehensive opening statement made by the distinguished 
Chairman. He has covered the subject. We have 361 ports, we 
have 50 major ports, and we have got to really move forward as 
fast as we can to have a plan of security there. Currently we 
don't have Federal security plans.
    I think the big problem is that the whole thrust in port 
operations, and I used to operate one when I was a Governor and 
have been a big supporter of port facilities and economic 
expansion and everything else of that kind, but they are many 
splendored things. Some are owned privately. We are getting one 
privately developed right now in the State of South Carolina. 
Some are owned by the State itself. We have a State Ports 
Authority, and some are owned by the State Ports Authority but 
are leased out. For instance, the largest carrier in New York, 
Maersk lines, leases major portions of the port. Also 
associated in the operations of ports are the Customs Service, 
the Immigration Service, the Drug Enforcement Administration, 
the local police, the Coast Guard, and everything else.
    To show you the lack of attention we did have, and it was 
not Admiral Loy, the Commandant, but another admiral was before 
our committee just 3 weeks ago and we asked who was in charge 
of security at the port. He said he did not know. Under law, 
the Captain of the Port, namely the Coast Guard official, is 
really, under present law today, responsible for the security 
of the port, but it is joined in by the local FBI, DEA, all 
these other agencies that I mentioned.
    And what we really need and the thrust of our bill is to 
get them all together and submit as judiciously and as 
expeditiously as possible a plan, to the Secretary of 
Transportation, a plan for security. They are all required to 
do that in the measure. There is some $1 billion overall 
provided with respect to quadrupling Customs agents and so 
forth at the port, buying the inspection equipment for the 
screeners. To my knowledge, the best screening equipment is 
down in Miami. That not only X-rays, but it scans the heat and 
can pick up drugs and articles in there. They tell me down in 
Georgia they are producing one that can even do better than 
that.
    It requires the ocean shipping manifests of cargo coming 
in, but as I indicated, you can have a good check-off on an oil 
tanker, but it can easily be hijacked and brought in, so there 
is still that threat that has got to be taken care of, and we 
need maritime protection and to establish greater controls of 
foreign vessels.
    I would be glad to try to respond to any questions. We have 
to get this bill out, and Senator Bennett, I was just saying 
our Republican colleagues embarrassingly have to object to it. 
I know they are for port security, but OMB has got them putting 
up a hold.
    Incidentally, Senator Levin, it also includes the truck 
traffic coming in and the rail security and other modes of 
transport. We are trying our best to prepare the New York and 
Baltimore tunnels and so forth. You are going to hear before we 
leave about Amtrak and the tunnels over here in Baltimore, 
particularly going into New York and Grand Central Station. 
Those kinds of things have got to be cared for, or we will have 
problems.
    So we are trying our best to clear it, and pass the bill 
through the Senate, and ours was passed out totally bipartisan, 
unanimously from the committee, and I again, will be glad to 
try to respond to any questions you have.
    Chairman Lieberman. Thanks very much, Senator Hollings. So 
the bill is on the calendar now?
    Senator Hollings. Oh, yes. It has been on the floor twice 
now and asked for its consideration, but there has been 
objection and my best look-see at it has been at the behest of 
the Office of Management and Budget on the matter of cost. Like 
I said, you can get a container brought in that has 60,000 
pounds and thousands and thousands of those containers come in 
each day, largely unchecked.
    Incidentally, you cannot find out the ownership of those 
containers or the ship. I have been working on that as well. 
Some are owned by the Chinese, and we have got one port out on 
the West Coast operated by the Cosco, a Chinese government 
controlled company. Others are operated out of Hong Kong. Some 
are holding companies and everything else like that.
    The biggest difficulty I am having at the moment on the 
safety side of the equation at seaports is where the poor 
truckers that come onto the port facilities there and they 
spend 2 hours trying to get a safe container chassis, because 
nobody maintains the chassis. If they get an unsafe one that 
blows a tire, or has defective lights, the patrolman pulls them 
over and they have lost their livelihood because they have 
gotten a fine and penalties to their driver's license, and the 
poor truck driver trying to work around the clock to feed his 
family has lost out. So he has to come there 2 hours early on 
the lot at the port itself trying to find something safe, and 
we have been trying to get some kind of requirements and 
everything at the port itself to check these things out. But, 
ultimately, the maritime business operates under a cloak of 
secrecy.
    There are all kinds of problems, but the biggest is 
security, and there is no idea of security. The whole idea is, 
move it. If we can move it faster than New York can or some 
other port can, brother, we are going to get the business.
    Chairman Lieberman. So we have a very efficient but 
insecure system now at ports?
    Senator Hollings. Yes, sir.
    Chairman Lieberman. Is there money for port security in the 
$7.5 billion homeland security component of the DOD 
appropriations?
    Senator Hollings. The amount that is in that homeland 
security is only $50 million, but that will give us a good 
start to do the planning.
    Chairman Lieberman. A beginning.
    Senator Hollings. Yes, sir.
    Chairman Lieberman. I wonder, before Senator Hollings 
leaves, do any of my colleagues have a question?
    Senator Levin. Thank you.
    Chairman Lieberman. Senator Hollings, thanks very much. We 
look forward to working with you.
    Senator Hollings. I thank the Committee very, very much.
    Chairman Lieberman. We will share the results of our 
hearing today with you, and once again, we thank you for your 
leadership.
    Senator Hollings. Yes, sir.
    Chairman Lieberman. Do either of my colleagues have an 
opening statement, Senator Bennett or Senator Torricelli?
    Senator Bennett. No thank you.
    Chairman Lieberman. Let us go to the first panel, then, and 
I am going to call Commander Stephen Flynn of the U.S. Coast 
Guard, who is now a Senior Fellow of National Security Studies 
at the Council on Foreign Relations, to go first.
    In a very real sense, although I suppose we would have 
eventually found our way to port security as a result of this 
series of hearings, Steve Flynn's testimony before this 
Committee on the subject of homeland security really educated 
and alarmed us, and I think he has become something, at least 
in my mind, of the Paul Revere of 21st Century port security. 
So I do not want to work out whether the terrorists are coming, 
but they will come unless we raise our guard at the ports.
    So I am going to give you a little more time than the 5 
minutes because I know you have a presentation. I think it may 
frame a lot of the rest of the hearing. Go right ahead.

TESTIMONY OF STEPHEN E. FLYNN,\1\ PH.D., SENIOR FELLOW, COUNCIL 
      ON FOREIGN RELATIONS AND COMMANDER, U.S. COAST GUARD

    Mr. Flynn. Thank you very much, Mr. Chairman. It is a real 
honor to be back in front of you again today to talk about this 
very, very serious issue, and I certainly commend you, sir, for 
hosting these hearings, because at the end of the day, I think 
we are talking about not just trying to protect the American 
people from potentially another catastrophic terrorism event, 
but we are also talking here, as well, about the sustainability 
of global commerce, because how the terrorists do their work 
may force us to respond in a way that could sacrifice the 
movements of peoples and goods that are so essential for us to 
continue to prosper.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Flynn with an attachment appears 
in the Appendix on page 57.
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    We saw that in the week immediately following September 11, 
when the United States had to do what no Nation could do to it, 
which was essentially to impose a blockade on its own economy. 
What we did was not just ground our aircraft, but we closed 
most of our major seaports and effectively sealed our borders 
with Canada and Mexico, and we did that because we did not have 
much confidence that we had the capacity to filter bad from 
good in all those flows coming our way.
    We started the engine back up again and we have done a good 
scrubbing on the aviation side, but in my view, the aviation 
sector is the virtual Fort Knox of security by comparison to 
the other two sectors. The maritime and surface sector continue 
to be extraordinarily vulnerable, and we really have not come 
to grips with those issues.
    I would like to talk a little bit about that, because I 
think what we have to take is another lesson from the September 
11 time frame, is what we saw here is not a singular event by a 
single crazed individual or a network of individuals. I 
believe, as I think some others in the national security field, 
which I am a part, believe that what we witnessed on September 
11 was really how warfare will be conducted in the 21st 
Century. What this means is that at the end of the day, 
regardless of what goes on in Afghanistan now, and it looks to 
be a very successful campaign, is that, essentially, we are 
only defeating the terrorists of the moment.
    The United States may be an unrivaled power in terms of 
global military and economic and cultural reach, but the fact 
of the matter is, there are limits to that power. There will 
always be corners of the world for terrorists to hide in or 
failed states or failing states that have corners in their 
rural countrysides or mega-cities.
    So we have to begin with the assumption here that there 
will be for the foreseeable future anti-American terrorists 
with global reach; that, second, they will continue, because of 
the age we are in, to have access to weapons, including 
chemical and biological, that could lead to a catastrophic 
terrorist attack here on U.S. soil; and we also have to 
conclude that terrorists and our adversaries who cannot take us 
on frontally in a conventional way because they will lose in 
that enterprise, that are thinking about attacking America 
asymmetrically, whatever their mode may be, will be inspired by 
what happened by September 11, inspired because these folks 
made it look easy, and equally inspired and more soberly, 
perhaps, by the amount of particular economic disruption they 
have caused as a result of that single attack.
    We have to realize at the end of the day that terrorism is 
not about just killing people or toppling buildings. There is 
military utility to engaging in a terrorist act if you can 
generate societal and economic disruption that weakens the 
power of your adversary and forces it to change its behavior. 
That is why, militarily, you would decide to engage in an 
attack in the way that we saw on September 11, or what I worry 
about, alternatively, potentially exploit or target our other 
very open and vulnerable systems.
    What we saw on September 11, I believe, is the exposure of 
the soft underbelly of globalization. That is the very thing 
that has made America so successful and prosperous, our global 
reach and the networks that feed energy and labor and transport 
goods and people. It is also a system that remains extremely 
vulnerable.
    The best way, I think, to illustrate that problem, and not 
just in our ports but in the broader issue, and I think this is 
the important point, I guess, I hope to leave, is that we 
cannot think about our transportation sector in isolated nodes. 
Unfortunately, our government is constructed that way. We look 
at surface, aviation, rail, and we divide it up and we often 
make these modes compete with one another for resources. The 
fact is, it is a network that allows for global commerce to 
move and global travel to move and it is almost interoperable 
in today's world. We call that intermodal.
    The best way to illustrate, though, our current security 
measures, I would argue, is by taking a look at the container 
problem that you have mentioned this morning, Mr. Chairman. Let 
me try to illustrate it a little bit more.
    Of course, we are talking about these 20-foot, 40-foot 
boxes that are so ubiquitous I think so few of us pay any 
attention to them. They are hurtling down the highways. They 
are on rails. They are on ships. We drive by them. But we think 
things so often that show up in Wal-Mart just magically appear 
there from a back room. They, of course, come from all corners 
of the world and they come to us via those containers. We are 
talking about, in 1999, they represented about 80 percent of 
all general cargo, but today, the numbers look to be well over 
90 percent of general cargo that comes into the United States 
transoceanic comes in a container.
    [A slide presentation was shown.] \1\
---------------------------------------------------------------------------
    \1\ Copies of the slide presentation by Mr. Flynn entitled 
``Bolstering the Maritime Weak Link,'' appears in the Appendix on page 
80.
---------------------------------------------------------------------------
    Mr. Flynn. Now, a little over a year ago, I had written in 
foreign affairs and I brought this up here as a way to 
illustrate this, a scenario where I put this man's face up and 
I said, if I had been a consultant to bin Laden, he had done 
this little job on one of our embassies, but instead, what he 
might alternatively want to do, as I suggested, is to buy a 
company that had been moving ceramics in the New York area for 
the last 30 years and then load that out of the port of Karachi 
and the container would perhaps move on, like you see these 
throughout the Asia area here, one of these container movement 
operations, just from a barge that gets on one of these rusty 
freighters.
    And we bring it to a place like Hong Kong. This is just one 
of five major terminals in the Port of Hong Kong. It is getting 
almost cartoon-like as you see the numbers. We are talking 
about 1.1 million container movements a month in the Port of 
Hong Kong. They are going to be loaded on something like 
perhaps the Virginia Maersk. This is a 6,600 TEU. If you can 
imagine, that is right there 3,300 railroad cars, 3,300 18-
wheelers that are sitting not just on top there, but in the 
hull of that ship. That could be loaded in under 30 hours in 
Hong Kong.
    And it would steam for Long Beach, perhaps, and then, 
because it is going to Newark, it would probably travel in 
bond. That means we would unload it right from the pier and it 
would go onto a rail car, like this, and it would head into the 
inland of the United States. Our Customs inspection system is 
built to inspect--it is confusingly called the port of entry, 
but it is basically the point where it enters the economy, 
which in this case would be Newark. So it would be the Customs 
inspector in Newark who would actually have responsibility to 
examine the manifest and to ultimately look at the container 
when it got to Newark.
    Chairman Lieberman. And that would be the first American to 
do so?
    Mr. Flynn. That is right. It would go directly from the 
ship. Customs could, if alerted, stop it, of course, in the 
port of arrival, but the routine is to allow it to move 
directly in and move it. And so it may travel through a place 
like Chicago. I have--you do actually see passenger freight, on 
that bridge there coming through is one. If I had a chemical 
weapon with a GPS transponder on it, I could set off that 
device. And what I would have done is, before anybody knows 
what is in the container and where it is from, I would have 
caused, obviously, a real catastrophic event near a major 
population center where--and this is a major rail hub, of 
course, near the airport, and that would be very disruptive.
    Now, let us imagine we just had some of that, even on a 
smaller scale, and it led America to ask the question, how do 
we know what is in these boxes? And I think most people would 
be rather mortified to realize that we do not really have real 
command on that. There are upwards of 500,000 entities out 
there that can load boxes around the world. There are 40,000 
freight forwarders that load the box, seal it with a plastic 
seal, typically with a number on it, and then it is off to the 
races. It goes from any where in the way I just illustrated 
onto a ship and is coming here. And then the verification is a 
Customs function done again at the port of entry.
    Now, we would then say, well, gee, if we do the inspection 
at the port of entry, what happens if there was a bomb in there 
that was triggered when you opened it up? If we take--and this, 
by the way, is sort of a rail yard. It gives you just a sense 
of what we are talking about trying to manage and sift through.
    But let us take the Port of Newark, for instance, and 
Admiral Larrabee will talk a little bit more directly about 
this here. This is the biggest container port, of course, on 
the East Coast, but this, I think, is a very important picture 
for us to realize what we are talking about.
    Let me step up perhaps and point out, these are the 
container terminals here. This is an aerial view of Newark 
International Airport. I call this an intermodal moment. In a 
mile, you have container ships coming in off-loading. This is 
actually one of the major rail hubs that spiders off to the 
Northeast and the rest of the continent, along with the New 
Jersey Turnpike, along with the Newark International Airport. 
So we inspect the container in Newark and it turns out to be a 
bomb. Where is the plume going to go? I think we could imagine 
where it could go.
    Out of that would be, I think most folks would suggest, let 
us not open the box and inspect it in Newark anymore. We do not 
want any uninspected boxes coming in. So, therefore, I guess we 
do not have any boxes coming into Newark. Forty-million people 
within 200 miles would have a very disrupted market as a 
result.
    So I lay that out as a sense of what we are talking about 
is not just simply that we have a vulnerability and that 
somebody could bring something in and cause disruption, but 
really, this is again about the sustainability of global 
commerce. How we respond and are set up to respond to this 
threat could, in fact, itself have real ripple effects.
    Out of those scenarios, I think there are three key things 
that we have to have in regard to the hearing today. First is 
that seaports cannot be separated from the international 
transport system to which they belong. Ports are really just, 
in essence, nodes in a network where cargo is loaded or 
unloaded from one mode, a ship, into other modes--trucks, 
trains, and on occasion, planes. Therefore, seaport security 
must always be pursued against the context of transportation 
security, and this has been very difficult because we have been 
taking this rather balloon effect approach to it.
    Second, the port security initiatives must be harmonized 
within a regional and international context. One of the major 
ports for the Northeast is Montreal and Halifax. They bring in 
about a million containers between the two of them, half of 
which come into the United States. If you only regulated ports 
inside the United States, you may push some of these problems 
offshore into Canada, Bahamas, Vancouver, or even into Mexican 
ports that could come online here. So we have to be talking 
about this network not just within the U.S. domestic context, 
but also overseas.
    Finally, since U.S. ports themselves are perhaps America's 
most critical infrastructure, they should not be viewed as the 
primary line of defense in an effort to protect the U.S. 
homeland. They are essentially the last line of defense.
    Now, the fact that seaport security must be considered 
within the broader transportation logistic context that 
includes ports outside U.S. jurisdictions has obvious 
implications for how the U.S. Government is organized to 
safeguard them. First, I would argue we have three major 
structural impediments.
    One is that the agencies with responsibilities for a 
specific transportation mode rarely communicate with their 
counterparts in the other modes. In fact, there is a pervasive 
culture of competition among the modes, often reinforced by the 
Congressional advocates, I think most rather dramatically 
illustrated just this last couple of weeks, when the House has 
decided to bankroll additional airport security by taking $60 
million out of the supplemental monies promised the U.S. Coast 
Guard to pay for port security. It's a little bit, from my 
view, here of the classic horse leaving the barn and closing 
the gate afterwards on that one.
    The security challenge associated with seaports is not just 
one posed by conveyances, ships, but the operators, passengers, 
and cargoes on those ships. So we have a complicated problem of 
we have to get a handle on people, we have got to get a handle 
on conveyances, and we have got to get a handle on goods. But 
people is an issue of consular affairs. That is State and INS. 
Goods are U.S. Customs, USDA, and FDA. Ships and the non-land 
side of the ports are Coast Guard, but the land side is a 
smorgasbord, depending on what port you are here, of local, 
State, and private entities. And then there are the trucks. 
About 10,000 trucks come into the Port of Newark each day, 
entirely unregulated activity.
    And then, finally, since the jurisdiction of most of these 
agencies runs out at the water's edge, they tend to approach 
the regulatory enforcement issue with some strictly domestic 
contest or framework, rather, than an international one, and 
the international security community pays no attention to this 
problem.
    So that is the state of affairs we are in, in a very quick 
framework, as I think many of the witnesses can fill in the 
blanks. But I think the key here, I hope that this illustration 
provided highlights the importance of not thinking that we can 
achieve homeland security in this regard at home. We have to be 
looking at this as a network and for what it is, which is one 
that moves overseas.
    Our ultimate objective should be, go to the point of 
origin, and how we get to this is, I think, first, with some 
standards about how one gets to load a container, who gets to 
load it, and the process that is done. It has to be done in a 
sanitized way. Standards have to be identified in that and 
pushed through, whether it is the International Maritime 
Organization or the World Customs Organization, to say, if you 
stuff a box and you want to be off to the races to come to a 
port in the United States or in any of the other large ports in 
the world, you have to meet some basic requirements, and if you 
cannot do it there and we cannot feel comfortable with that, 
you have to restuff the box at a place that we feel comfortable 
that we know what is there and that there is a trusted partner 
who is doing that loading.
    Second, when it is loaded, we want you to track it. We want 
you to know where it is. This is sort of what I call in-transit 
visibility and accountability, using technologies like GPS and 
electronic transponders and so forth. As soon as it leaves the 
factory, it goes from there to the terminal and we can account 
for it every step of the way.
    There are two purposes for in-transit accountability and 
visibility. One is ideally to deter it. There is not much time 
for a bad person to bring something in. But most importantly, 
as well, is that when you have intelligence that there may be a 
compromise, which is perhaps the only way we are going to find, 
in many instances, a problem, it becomes actionable 
intelligence, that you can pinpoint immediately where the 
problem is and go in and, working with the carrier, you will be 
able to identify and figure out where the best way to manage 
that compromise might be.
    Then the terminal operator itself would have to have 
accountability of the box. That happens as a matter of routine 
in most places. And then the ship mills where it is, and then 
the same on the receiving end when it is loaded off, and in the 
case of in bond shipment, again at trails along the way.
    Then we have this complete control, sanitized control, and 
if that is done with the technologies and the cooperation--and 
the final piece is sharing data about who and what you are up 
front to allow agencies to assess that against any watch list 
they may have--if you do those three things, security up front, 
in-transit visibility and accountability, and the sharing of 
data, you get the easy trade lane. We are going to move you 
quickly, which makes sense from a security standpoint, because 
goods that rest often are most vulnerable to crime. So you 
actually have a security incentive, not only a market one, to 
accelerate if you can be confident up front.
    That is why I am confident this is going to be workable if 
we think in these terms, because we can really--it has always 
been a false proposition in my view, openness versus control. 
Without control, the whole system is in jeopardy. That is what 
we saw on September 11. With smart controls, there actually is 
a national security rationale to fix things that have been 
broken for a long time, agencies that have paperwork 
requirements that make no sense or that are duplicative and 
redundant, bottlenecks in infrastructure that should not be 
there. We need to fix that from a security standpoint, and 
that, I think, parades an opening for this to be dealt with, 
not just here at home, but also overseas.
    Thank you very much, Mr. Chairman.
    Chairman Lieberman. Dr. Flynn, thank you for an excellent 
opening statement. The country is fortunate that you have had 
the practical and academic experience you have had and you have 
brought them together at a time when, post-September 11, we 
need that very much, so I look forward to questioning you.
    I am pleased to say Senator Collins is sitting today as the 
Ranking Republican Member of the Committee, and I think it is 
appropriate that I ask her now if she would like to make an 
opening statement before we go on to the other witnesses.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you very much, Mr. Chairman. I 
apologize for being a few minutes late for the hearing.
    I want to thank you for convening this important hearing. 
Coming from the State of Maine, as I do, the vulnerability of 
our ports is of particular interest and importance. Our 
seaports are as important in the war against terrorism as the 
safety of the food we eat and the security of the planes we fly 
in. With more than 95 percent of our imports flowing through 
our ports and with millions of passengers and maritime 
containers passing through them with only limited inspections, 
we must have a far better security system in place than we do 
now.
    Correspondence that I recently received from Captain 
Jeffrey Monroe, the Director of Ports and Transportation for 
Portland, Maine, makes the need for better port security very 
clear. Captain Monroe, in commenting on the security of our 
ports, put it bluntly. ``Our local, State, and Federal agencies 
were, in many cases, ill prepared for September 11 and the 
coordination of information and effort was almost 
nonexistent,'' he wrote. Captain Monroe's letter includes a 
series of specific recommendations and I would ask that this 
correspondence be made part of the record.\1\
---------------------------------------------------------------------------
    \1\ The letter from Captain Monroe with an attachment submitted by 
Senator Collins appears in the Appendix on page 142.
---------------------------------------------------------------------------
    Chairman Lieberman. Without objection.
    Senator Collins. Since September 11, the Coast Guard has 
expanded its patrols in Portland's harbor and has increased its 
surveillance of ships entering the port. But given the volume 
and the lack of personnel, this is a daunting and exhausting 
task. We must improve coordination between Federal, State, and 
local agencies, as well as the private sector. We must have 
highly trained and a sufficient number of employees. We must 
have a clear chain of accountability to achieve port security.
    It is evident that we have a great deal to do and I am very 
pleased that the Chairman has assembled such a distinguished 
list of witnesses to assist us in this goal today. Thank you, 
Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Collins. I really look 
forward to working with you on this. I think this is an area 
where the Committee together can make an important contribution 
and I thank you for that excellent opening statement.
    The next witness is Amanda DeBusk, now with Miller and 
Chevalier, former Assistant Secretary of Commerce, former 
Commissioner, Interagency Commission on Crime and Security in 
U.S. Seaports. Thanks so much for being here.

TESTIMONY OF F. AMANDA DeBUSK,\1\ MILLER AND CHEVALIER, FORMER 
   ASSISTANT SECRETARY OF THE COMMERCE DEPARTMENT AND FORMER 
 COMMISSIONER, INTERAGENCY COMMISSION ON CRIME AND SECURITY IN 
                         U.S. SEAPORTS

    Ms. DeBusk. Thank you very much. I am honored to be here 
today. I am speaking to you as a former Commissioner on the 
Interagency Commission on Crime and Security in U.S. Seaports. 
President Clinton established the Commission by executive order 
on April 27, 1999. Senator Bob Graham was particularly 
instrumental in the Commission's establishment. I served on the 
Commission as the Commerce Department representative in my 
capacity as Assistant Secretary for Export Enforcement. The 
Commission issued a report in August 2000 with 20 findings and 
recommendations. I would like to highlight those that are most 
important for this Committee post-September 11.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. DeBusk appears in the Appendix on 
page 93.
---------------------------------------------------------------------------
    Let me provide some background. One of the underlying 
concerns was how wide open our seaports are compared to our 
airports. In most cases, there is free access to the seaports. 
The Commission found that significant criminal activity was 
taking place at most of the 12 seaports that we surveyed. At 
many seaports, it is legal to carry firearms, so criminals with 
arms may have access to terminals where passengers embark for 
cruises.
    Concerning cargo, because of misreporting and lack of 
reporting, no one knows in a timely fashion, if ever, what is 
in those containers at our seaports. One of the cases my former 
office investigated involved a riot control vehicle that was 
exported to China as a fire truck. The vehicle, it was a huge 
thing. It resembled a tank. It had a turret on top for spraying 
pepper gas all around. It was all boxed up in a container and 
at the time of export, no one knew what was inside the 
container and so it was exported as a fire truck.
    The Commission approached the crime and security problem 
with the possibility of terrorist activity associated with the 
new millennium. Thankfully, nothing happened.
    At that time, the FBI considered the threat of terrorism 
directed at any U.S. seaport to be low. However, even though 
the threat was low, the FBI considered that our vulnerability 
to attack was high. The Commission found that the state of 
security at seaports generally ranged from poor to fair, with a 
few exceptions where security was good.
    We looked at fundamental activities for combatting 
terrorism, protective measures, crisis management, and 
consequence management. These activities require comprehensive 
interagency coordination. They involve law enforcement, 
intelligence agencies, emergency response agencies, and if 
needed, the military. Outside the Federal context, coordination 
is needed with the State and local authorities and the private 
sector.
    Today, I would like to highlight recommendations in four 
areas relevant to this Committee: Enhanced interagency 
coordination, physical security at the ports, better and more 
timely information about cargo transiting the ports, and 
increased use of technology.
    First, we need better interagency coordination. There are 
361 seaports. Most ports are chartered by States or local 
government. Some terminals are operated by public port 
authorities. Others are private. There is no central Federal 
authority. There are at least 15 Federal agencies with 
jurisdiction at the seaports. In addition, there are State and 
local agencies and the private sector. Every single group is 
important for combatting terrorism and has something to 
contribute, but coordinating these groups is a monumental 
undertaking. Perhaps a Department of National Homeland Security 
could play a leadership role in this coordination.
    The Commission found that there needed to be a 
comprehensive and definitive statement of Federal 
responsibility. The Federal Government needs to conduct threat 
assessments to determine where the threat is greatest and where 
we urgently need preventive measures. The Federal Government 
should strengthen coordination to more effectively address 
terrorism. It should work with all stakeholders. Key 
information available to the Federal Government should be 
disseminated to others, as needed.
    Let me provide an example of where better coordination 
would be useful. The FBI has excellent regional 
counterterrorism task forces that consist of Federal, State, 
and local agencies. However, at the time of our study, these 
groups did not focus on the seaports. They should do so.
    S. 1214, an amendment to the Merchant Marine Act, has some 
good proposals on establishing local port security committees.
    Second, the Commission found that we need better physical 
security at the seaports for both vehicles and people. At many 
ports, access is virtually uncontrolled. At one of the ports I 
visited, we saw a line of vehicles that was parked right beside 
the vessel. We were told that these were the dock workers' 
vehicles that were parked there for convenience. At the time, 
and as Senator Hollings alluded to, we were trying to figure 
out if this is someplace where drugs could be hidden for things 
coming off of vehicles, or coming out of containers and being 
stashed into the vehicles. But now what we have to do is think 
about the possibility that these vehicles lined up right beside 
the vessels might contain a car bomb or even a ``dirty nuclear 
weapon'' that could be hidden inside them.
    Many ports do not have ID cards for personnel. I observed 
all sorts of people that were milling around at dockside. There 
was no way we could tell who should be there and who should 
not. The Commission found that at one point, pedestrians could 
freely walk through the purported access control points without 
even being questioned. We did not even want to contemplate a 
group of terrorists taking over a cruise ship, but it is a 
possibility.
    Training of security personnel is also a problem. Many 
seaports use private security personnel who lack crime 
prevention and enforcement training.
    The Commission recommended developing regulations to create 
a secure area where passengers board and disembark vessels. We 
also recommended proceeding with an INS project to manage risk 
with respect to both passengers and crew. We recommended 
creating shared dockside inspection facilities so that all 
relevant agencies have ready access to conduct inspections. The 
Commission called for the establishment of minimum guidelines 
for physical security, such as fences, lights, gates, 
restrictions on vehicle access, restrictions on carrying 
firearms, the establishment of a credentialing process so you 
would know who is supposed to be there, considering criminal 
background checks for those with access to sensitive areas of 
the port, and development of a private security officer 
certification program. S. 1214 moves in the direction of these 
recommendations, but it does so through voluntary security 
guidance. The Committee should consider making some of those 
requirements mandatory.
    Third, we need better information about cargo transiting 
the ports. On the import side, information is often vague and 
import entries may be filed 5 days after arrival. On the export 
side, information tends to be very general, with descriptions 
like ``general merchandise'' that really do not tell you 
anything, and is required 10 days after export. One of the 
concerns with providing earlier and more detailed information 
is that it would allow specific cargo to be targeted for theft 
by those with access to the information, and this concern needs 
to be addressed.
    Fourth, we need better technology at the seaports. Better 
technology is needed for a whole variety of applications, which 
include X-raying containers, using computer systems to target 
cargo associated with high-terrorist risk, collecting data on 
crimes at seaports, and providing real-time information for 
tracking high-risk cargo and personnel.
    In sum, the Commission said, ``A terrorist act involving 
chemical, biological, radiological, or nuclear weapons at one 
of these seaports could result in extensive loss of lives, 
property, and business, affect the operations of harbors and 
the transportation infrastructure, including bridges, 
railroads, and highways, and cause extensive environmental 
damage.'' We need to take action now to reduce the risk of 
future catastrophes.
    Thank you for inviting me here today to testify on this 
important subject.
    Chairman Lieberman. Thank you, Ms. DeBusk, for excellent 
testimony, which, unfortunately, continues to paint a harrowing 
picture as I listen to it.
    Rob Quartel is our next witness. He is the CEO and Chairman 
of FreightDesk Technologies and a former member of the U.S. 
Federal Maritime Commission. Thanks for being here.

   TESTIMONY OF ROB QUARTEL,\1\ CHAIRMAN AND CHIEF EXECUTIVE 
   OFFICER, FREIGHTDESK TECHNOLOGIES AND FORMER MEMBER, U.S. 
                  FEDERAL MARITIME COMMISSION

    Mr. Quartel. Thank you, Senator. The last time I think I 
saw you up close was about 6 or 8 months ago at Sutton Place 
Gourmet, and I cannot remember what you were buying---- 
[Laughter.]
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    \1\ The prepared statement of Mr. Quartel with attachments appears 
in the Appendix on page 98.
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    But I would observe that probably half of what you and I 
bought came in on a container. The meat probably came from 
Australia. The flowers and other vegetables probably came from 
Latin America, and so on and so forth, so this is a problem 
that is right here, wherever you are, every day. You are 
standing there in the middle of the system. It is probably a 
good thing you cannot remember what I was buying.
    Chairman Lieberman. I certainly cannot remember what I was 
buying.
    Mr. Quartel. I know that what I was buying was something 
fattening.
    Chairman Lieberman. Senator Collins and I were saying, I 
wish I could say it was all American, but I am sure it was not. 
[Laughter.]
    Mr. Quartel. But that is the beauty of the system----
    Chairman Lieberman. Yes.
    Mr. Quartel [continuing]. The fact that we are able to 
access all these markets worldwide, whether they are food, 
whether they are the subcomponents of manufacturing. That is 
really what makes us efficient as a country and contributes to 
the national economy.
    I would like to thank you for the invitation. I have got a 
quick slide show, and because of the time, what I am going to 
do is kind of truncate some of this and really kind of talk to 
the slides.
    But I think based on Commander Flynn's and Ms. DeBusk's 
statements, this is really a scary issue and I would like to 
make one point of policy that I think the Committee ought to 
adopt, which is very straightforward. Every container destined 
to either land in or go through the United States, and the last 
point is really important, in my mind should be treated as a 
potential weapon of mass destruction, every ship that carries 
it as a delivery device, and every port as a potential target, 
and that suggests several things.
    First, it suggests you cannot let a terrorist container get 
into the port. The port is the target. You saw the map where 
you had everything within a mile there in the Port of Newark, 
which, by the way, is what makes that a very efficient port, 
because you can switch from mode to mode to mode, whatever 
happens to be the most efficient way to do it.
    It also suggests you cannot let it on a ship, and so one of 
the concepts I would like to talk to today is the notion of 
pushing the border back electronically. Ms. DeBusk talked about 
the fact that we collect a lot of data. Every part of the 
process is documented. This slide I am going to talk to in a 
minute shows the complexity of it, but you need to bear in mind 
that everything in the process is documented.
    From the time it is purchased, a buyer or seller 
transaction creates a purchase order that says what it is, how 
many you want, the weights, eventually all the rest of that, to 
the trucker who picks it up, to the train who moves it, to the 
ship that carries it, to the train that delivers it, or truck 
in the United States, all of that is documented in a series of 
documents. What does not happen, as Ms. DeBusk said, is that it 
does not all get there to Customs or anyone else early. It gets 
there strung out across the process.
    [A slide presentation was shown.] \1\
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    \1\ Copies of the slide presentation appears in the Appendix on 
page 107.
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    Mr. Quartel. This first slide really is intended to talk to 
the issue of complexity. The international trade process is 
hugely complex. It is not like domestic trade, which goes from 
point to point. You have in every single trade 20 to 25 
involved parties, whether they are the buyer, the seller, the 
transportation modes, all the rest of those. You have as many 
as 30 to 40 documents. You have a couple of hundred data 
elements. The messages all arrive in a variety of different 
kinds of platforms, some electronic, some fax, some by E-mail. 
But it is a tremendously complex process.
    Admiral Loy has pioneered a concept called Maritime Domain 
Awareness, and I think that is very relevant to this port issue 
here.
    By the way, I also would ascribe to what Commander Flynn 
said earlier. I view the port as really too late. In my mind, 
the port is the least of the problems. Yes, you have to protect 
the port. Yes, you have to protect the physical integrity of 
it. Yes, you have to have all the security measures. The real 
problem is at the beginning of the cargo. That is where you 
have to interdict it.
    I would take Admiral Loy's thought and actually press it a 
little further. I really suggest that there are five domains in 
international trade. The first is the origin of the cargo. In 
manufacturing today, you might have a company that does virtual 
manufacturing in Asia, where they will have 20 different 
factories that are all subcomponents of the process. It starts 
in one. It moves by truck to another. It moves by truck to 
another, by train to another, and another to another to 
another, literally that many, and then is assembled in one 
place and forwarded to the United States. So that is part of 
the process that includes inland transportation, all of the 
parties engaged in manufacturing.
    The second, at the port of loading. And on this chart, by 
the way, one of the things I have done is just very quickly, 
and it is not necessarily 100 percent accurate, I did it on a 
plane in the middle of the night the other night, is to talk to 
some of the agencies on the issue of where some of their 
authorities might lie in the process, U.S. Government agencies, 
and also, as has been said earlier, these authorities tend to 
be sort of stovepiped. They are aimed at a specific part of the 
process. That is really all they can do under the law.
    The second part of it is in transit. There are a number of 
protective things you need to do there.
    One of the things from end to end, of course, is 
visibility. Companies are going to that, to tracking the cargo, 
though tracking is not nearly so pervasive as we seem to think 
it is, based on when we go to the web, we seem to know where 
everything is. One of the reasons is that much of what we think 
of as being tracked is in FedEx packages, typically air 
freight, which is different than ocean and land, which are in 
containers.
    The fourth is the port of discharge, which is really, I 
think, the point of the hearing today.
    And then finally, multiple destinations.
    If you want to figure out what is happening to a cargo, you 
really need to know what it is, where it came from, where it is 
going to, who has touched it, what did they do with it, what 
did it cost, who paid for it, and that is all the kind of data 
that is collected in a system.
    The information process itself provides an attraction 
because, if you work at it, you can hide the transaction. This 
really kind of talks to the issue of how cargo moves. Forty or 
more days before it gets here and just in time, you may have a 
buyer-seller transaction. They generate a letter of instruction 
and a commercial invoice.
    On this slide, the red documents are reported to Customs. 
It goes to a warehouse. It finally gets to a ship and the ship 
creates a master bill of lading. A single container might 
contain as many as 10 or 20 different cargoes. It may be 10 
containers which are the same shipments, they are all the same 
thing to the same manufacturer. Containers are not just packed 
by one person. They may be packed by multiple people. You have 
people at each end who consolidate what is in a container. You 
have people at the other end who deconsolidate it and send it 
off in a bunch of different directions.
    Carriers generate documents. Throughout the process today, 
you typically have an intermediary, a freight forwarder or a 
customs broker or a third-party logistics provider. That, by 
the way, is one place that I think in the future we need to 
focus some of our thinking about how you manage the process for 
the government, because they are the ones who typically handle 
the paperwork as well as the financial documentation. You have 
additional carrier reporting at the end. And then, finally, you 
have another set of documents generated.
    What I would like to suggest to you is today, we tend to 
think of the border at the bottom there as being the physical 
border where the ship comes in. The concept I would ask the 
Committee to consider is to push that border to the top of the 
page between the warehouse and the port of embarkation and to 
do that electronically.
    The next two slides--this is a sample of the kinds of data 
that comes out of the documents that are generated in a typical 
commercial transaction. By the way, when a ship lands in the 
United States, it drops off 40,000 documents.
    Chairman Lieberman. Forty thousand?
    Mr. Quartel. Documents for 6,000 containers. So that is my 
10 to 20 to 30 documents per container.
    Chairman Lieberman. And who gets those documents?
    Mr. Quartel. Customs gets some of them. The shippers get 
some of them. Letters of instruction and financial letters go 
off to the people who handle that. So there is a lot of data. 
That is one of my key points to you. This is not a new process. 
Part of what we have to do and the opportunity here is to 
manage the data process, and we can talk to that.
    If you go across this, you can get everything I am talking 
about. You can find out--and this is the other part of it, is 
another 60 different elements. You could find out who paid for 
it, what it is, what it weighed, where it was coming from, how 
it went, by truck on the way, on the way back, the ship. If you 
go to the ship, you can actually tell what was going with it 
side by side.
    Now, the process I would like to suggest to you--I am going 
to go actually one slide further and then come back. The 
process I would like to throw at you for your consideration is 
a kind of profiling process. You create a commercial database 
from the kind of data which is currently provided by the 
commercial sector, some of which goes to the government and 
some of which does not, and some of which should not go to the 
government because it is essentially competitive data. But you 
can create a commercial database.
    We already have a database and bases of government data. 
The Coast Guard, for example, has what is called a fusion 
center, where they fuse conceptually data from a variety of 
different kinds of law enforcement sources. Right now, that 
data is not always compared against each other and it is 
certainly not compared when a cargo originates.
    What I would suggest to you is that you create a new 
process, perhaps driven by Customs, in which you collect the 
commercial data, you collect the law enforcement data, and you 
run it through a decision algorithm which basically says, well, 
what is wrong with this? Is it--and I can show you back here 
two slides--is the cargo something that is said to be coming 
from a place where it is not manufactured? Is it steel coming 
from Romania, where they do not have a steel factory? Is it 
coming from Afghanistan but going to the heart of New York? Is 
it something going by a nuclear power plant?
    If you go through the documents, and this is just kind of 
an example of it, you can actually see where you can find these 
anomalies, and while I am not an expert in the mathematical 
profiling aspect, I do know a lot about the data management 
process. But there are people who are expert in profiling and 
we are dealing with some of those and I have been working with 
the National Defense University, which looked through some of 
this, who create the kinds of algorithms which can help you 
decide, and we use some of this today with drug enforcement, 
but not to this extent.
    Chairman Lieberman. Mr. Quartel, excuse me, but you have 
gone beyond the 5 minutes now----
    Mr. Quartel. I am sorry. I am going to finish right now.
    Chairman Lieberman [continuing]. So if you can begin to 
think about wrapping up.
    Mr. Quartel. I am done, virtually.
    Chairman Lieberman. That was good timing.
    Mr. Quartel. Thank you.
    Chairman Lieberman. Thanks very much for very thoughtful 
and helpful testimony, which we will look forward to 
questioning you on.
    Our final witness on this panel is Richard Larrabee, who is 
a retired Rear Admiral of the U.S. Coast Guard and now Director 
of the Port Commerce Department of the Port Authority of New 
York and New Jersey, so a person with great experience and 
right in the middle of the topic that we are discussing today. 
Thanks so much for being here.

    TESTIMONY OF REAR ADMIRAL RICHARD M. LARRABEE,\1\ RET., 
 DIRECTOR, PORT COMMERCE DEPARTMENT, THE PORT AUTHORITY OF NEW 
                      YORK AND NEW JERSEY

    Rear Admiral Larrabee. Mr. Chairman, thank you. Members of 
the Committee, good morning. Thank you for the opportunity to 
testify this morning.
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    \1\ The prepared statement of Rear Admiral Larrabee appears in the 
Appendix on page 114.
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    I have provided written testimony and would ask that that 
would be placed in the record.
    Chairman Lieberman. It will.
    Rear Admiral Larrabee. What I would like to do is just take 
a couple of minutes in the interest of time to touch on some of 
the things that the prior testimony has talked about, but do it 
from a ports perspective.
    Mr. Chairman, as you said before, the ports of this country 
are a vital intermodal link in our transportation system and a 
large part of our economy. The Port of New York handled about 
three million containers last year, about 560,000 automobiles, 
and over 30 billion gallons of petroleum products, the largest 
petroleum port in the United States. That system, as the 
Chairman suggested, is based on speed, reliability, and cost, 
and we are living in a ``just in time'' society where the 
movement of those goods are critical.
    On the morning of September 11, the Port of New York and 
New Jersey was closed. It was closed by the Coast Guard captain 
of the port. Other law enforcement agencies were involved in 
that decision, but it was done in a very orderly way. There was 
a tendency in the port from one perspective to keep the port 
closed because of the fear of the threat of terrorism. On the 
other hand, the pressures that Commander Flynn talked about of 
keeping commerce moving were obviously part of that discussion.
    Because petroleum resources were going low, because of a 
shortage of other supplies that would normally come through the 
port, we felt a great deal of pressure to open the port up as 
quickly as possible, and on the morning of Thursday the 13th, 
we reopened the port with a large number of security measures 
in place--all ships boarded by the Coast Guard at sea, all 
manifests, both cargo and crew manifests, checked, tug escorts 
into the port, and an extensive cargo inspection program by 
both Customs and Coast Guard and other law enforcement 
agencies, a heightened level of activity in terms of spot 
checks and patrols in the port.
    That level of activity, along with an extensive effort by 
the Coast Guard to protect vital assets of the Port of New York 
and New Jersey, certainly was an extraordinary effort on the 
part of all of those Federal agencies, but it simply was not 
sustainable, and today in the Port of New York, we are seeing 
far fewer resources doing those kinds of things when today the 
level of our security might have to be higher than it was 
perhaps the day after September 11.
    I want to talk just briefly about this notion of who is in 
charge, because we certainly heard Senator Hollings talk about 
that. I think we have other models that we can look at. In my 
own experience, I can tell you that in the wake of Exxon 
Valdez, the U.S. Senate and the administration at the time 
certainly supported efforts to improve that system. The end 
result was OPA 1990, and since that time 10 years ago, we have 
seen a dramatic decrease in not only the number of spills and 
the size of spills, but an increase in our ability to respond. 
One of the key issues in that legislation was answering the 
question: Who is in charge?
    As it was suggested this morning, I believe the Coast Guard 
Captain of the Port currently has the jurisdiction to do a 
number of things that we have heard about. Perhaps his position 
needs to be strengthened, but I believe the Coast Guard is in 
the right position to manage both the prevention and the 
response to an incident like the one we are talking about this 
morning.
    We have heard an awful lot about this notion that perhaps 
the greatest threat in one of our ports is not a large tanker 
hitting one of our bridges but the entry of a weapon of mass 
destruction using our very efficient container movement system, 
and there is no question about that.
    I believe that last week, Admiral Loy, the Commandant of 
the Coast Guard, addressed the Assembly of the International 
Maritime Organization and proposed that a working group be 
established to look at port security and terrorism, 
specifically at the issues of cargo visibility and 
accountability. We certainly support the Coast Guard's proposal 
and believe that the IMO is one of those appropriate forums to 
address the issues of international concern, and I think there 
certainly are parallels in this area, too.
    The shipment of hazardous materials these days is a process 
that has seen dramatic improvements over the last 20 to 30 
years. Today, the kinds of accountability and responsibility of 
moving those kinds of materials certainly gives us 
opportunities to look at parallels when it comes to moving 
other cargoes.
    We have heard a little bit this morning about this notion 
that communications is the foundation of coordination, and 
certainly there is a real need to share intelligence and threat 
assessments among the Federal, State, and local agencies, and I 
would have to say to you this morning that as Director of the 
Port of New York and New Jersey, I am not in a very good 
position today to tell you whether our measures that are 
underway right now are adequate for the threat that is out 
there. We simply are still not sharing the kind of threat 
assessments that I think need to be in place.
    Chairman Lieberman. That is a very important statement. 
Forgive me for interrupting, but I hope we all listened to it. 
That is an unacceptable situation. You just feel you are not 
getting the intelligence information you need?
    Rear Admiral Larrabee. As Senator Hollings said, this is a 
system that really is being managed day to day by the private 
industry, and it is not only the Port Authority, but more 
importantly, terminal operators and shipping lines which need 
to be brought into this circle and be made more aware of what 
the threats are and what they can be doing in a practical way.
    I think there is a need for standards, and Senator Hollings 
talked about that this morning. My Port Authority Board is 
asking me what I should be doing and my answer to them is--I am 
waiting for Federal legislation. We desperately need to pass 
the Hollings bill in the very near future and I would ask you 
to support Senator Hollings' efforts.
    Just to conclude my statement, this is a system that, as 
you have heard this morning, is the responsibility of an awful 
lot of people, whether it is the paperwork or the number of 
agencies involved or the number of hands that move this 
particular cargo. It simply is a system that requires the 
diligence and responsibility of an awful lot of people. We 
believe that there are ways to make the system more secure. We 
believe that we have to do that.
    We are very appreciative of the kind of support that we 
have gotten from agencies like the Coast Guard, the FBI, and 
Customs, and we are very hopeful that you are going to be able 
to give them the kind of resources that they are going to need 
to do their job.
    Finally, I want to thank Senator Torricelli and others for 
supporting us in the local New York area. Supplemental 
legislation has been passed, and I know, for one, we are going 
to be getting some extra resources in the port in order to 
improve our security level. Thank you.
    Chairman Lieberman. Thanks, Rear Admiral, for very helpful 
testimony from a particularly important perspective.
    Let me focus in on this question of coordination. It is a 
fascinating and, in many ways, troubling picture, even from an 
organizational point of view. And again, as I said in my 
opening statement, when I got more into this, I was surprised 
to be reminded that there is no Federal coordinating role here, 
that the ports are State and locally overseen, that there is a 
lot of private interests involved. Ports in Connecticut, for 
instance, most of them are owned privately, the harbor 
facilities.
    Give me a sense of what happens at a typical port, either 
privately owned, and/or locally regulated. Are there Federal 
agencies present at the major ports? Are they coordinating now? 
Maybe, Rear Admiral Larrabee, you could give me a picture of 
what is happening at a typical port of entry.
    Rear Admiral Larrabee. Well, I do not think there is any 
question that there is a great deal more coordination today 
than there was on September 10.
    Chairman Lieberman. Yes.
    Rear Admiral Larrabee. The boardings that I talked about 
that the Coast Guard is conducting, vessels are being boarded 
on a priority basis based on an analysis of that vessel and 
what sort of threat it might pose to the port 96 hours before 
the vessel arrives, and my understanding is that both Customs 
and the Coast Guard and INS are looking at cargo manifests and 
crew manifests, ports of destination, and making decisions 
about whether or not to board and what to look for. So that is 
there.
    Chairman Lieberman. Is that the universe we are talking 
about, Customs, Coast Guard, and INS, of Federal presence at 
the ports?
    Rear Admiral Larrabee. I think, for the most part, that 
covers all of the issues that we have talked about this 
morning.
    Chairman Lieberman. Let me then ask what can be done to 
either facilitate better communications between the front-line 
agencies in securing our ports, and more broadly, whether you 
think there is a need for active Congressional involvement here 
through legislation to create some kind of new overarching 
Federal organization to be concerned about the ports and to 
guarantee coordination. Ms. DeBusk.
    Ms. DeBusk. Yes. First to answer your question, I do think 
there is a very strong need to have an umbrella to coordinate 
all this, perhaps through homeland defense.
    Let me just sort of give you a little vignette of what 
happens there. You have 15 Federal agencies with some sort of 
authority at the port, and----
    Chairman Lieberman. Fifteen, well beyond the three I 
mentioned.
    Ms. DeBusk. Absolutely.
    Chairman Lieberman. Just name a few more.
    Ms. DeBusk. You have the Commerce Department and you have 
the Agriculture Department, you have the Food and Drug 
Administration, you have all these, and let me just take a few 
of the older ones that you do not necessarily think about, like 
EPA, for instance.
    Let us just take the Agriculture Department. They would 
perhaps know how to be on the lookout for contaminated food 
coming in. Let us just think about a terrorist who decides to 
sprinkle a little cyanide in all the Cheerios, right. They 
would know how to be on the lookout for that, but that is not 
the expertise of the Coast Guard.
    In my former office, Export Enforcement, we knew how to 
target, to look for things that might be used for weapons of 
mass destruction or chemical or biological agents. But again, 
that is not the job of the Coast Guard. The Customs folks, they 
know how to look very well for the drugs that are coming in or 
going out. That is one of their specialties, and obviously the 
drug trade supports terrorism.
    But again, no one is bringing all these pieces of the 
puzzle together and I think there is a strong need for perhaps 
the Office of Homeland Defense or some other body to be able to 
do that.
    Chairman Lieberman. Dr. Flynn, I know that you and Mr. 
Quartel are asking us to consider pushing the border back, a 
very interesting idea which I know the Committee will want to 
get to in a few moments. But what about the border where it is, 
even if you push it back? What do you suggest from your 
experience and work as to what we should do, if anything, to 
facilitate better communications and coordination among the 15 
Federal agencies and the State and locals and privates involved 
to guarantee a more secure and efficient situation?
    Mr. Flynn. Let me say, Senator, that while I am talking 
about pushing the border back, that we think about this problem 
as one that starts much farther away than our border. I am not 
calling for the end of the border.
    Chairman Lieberman. Right.
    Mr. Flynn. That is, it is really a series of concentric 
circles that to the best of our ability, we put the most 
intensity at the origin point and then the number of 
inspections narrows down as we have to get to our own entry 
because of the volume and velocity issue that we face here.
    What is clear is that we need a general pool of data, and 
there was an effort that Customs was involved with in the 
former administration to create what was called the 
International Trade Data System that would bring all the kinds 
of things that Mr. Quartel outlined there all in one pool and 
allow the agencies to shop within that data.
    Most of what we find is things also, as Mr. Quartel talked 
about here, is this anomaly detection, the things that do not 
make sense, a high-value good going on a slow boat to China 
originating from a place, as he said, that does not make steel. 
And so what you need there is this data up front and you need 
it in a pool, and ideally you also would be housing people 
together.
    We have models for this in the drug world. We have the 
EPICs, the El Paso Intelligence Center. We have similar efforts 
in Jonestown and so forth here. But what we have learned here 
is that just to try to take that small segment of high-risk 
drugs, we really have to now think about all general cargo as 
at risk, as it always has been, and it is not just for 
narcotics, of course. Now it is human trafficking, but 
especially this concern with weapons of mass destruction. So 
there are various useful models of how we bring data and infuse 
it that is brought out of the drug world. We just need to 
expand, in part, upon that.
    But we rushed with some legislation here right after 
September 11 to put more primary inspectors. You look at 
everything, you see nothing in this business, and we all know 
this from those people with the glazed eyes who look at the X-
ray machines as the luggage goes by. That is not the way to do 
it. You have to be smarter.
    And so the challenge here is analysts, well-trained people 
who know their segments and markets--and this issue of 
information sharing is huge. I am almost confident, for 
instance, that Rear Admiral Larrabee has not been given a 
clearance and it would probably take him about a year or two, 
perhaps, to get a security clearance. He was a former flag 
officer in the U.S. Coast Guard that has been doing this for 
years and we cannot find a way to clear him into a system to 
share intelligence that would be useful for him as a decision 
maker and a manager at work here. These stovepipes are huge and 
have to be addressed.
    Chairman Lieberman. Well said. My time is up. Do you have a 
clearance?
    Rear Admiral Larrabee. No, sir. I had a clearance, but I 
have not gotten it back yet.
    Chairman Lieberman. Yes. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Commander Flynn, I understand from my staff that through 
discussions that they have had with Rear Admiral Naccara that 
you have been involved in developing a Northern New England 
Border security project. Could you tell me about that project 
and whether you think it would help solve some of the 
coordination and communication problems that we have heard 
about today?
    Mr. Flynn. Sure. This is actually spawned out of the State 
of New Hampshire, and Governor Jeanne Shaheen actually took a 
real leadership role and interest on this.
    This is obviously a real concern by most of the Northern 
States, and Senator Levin was here as well, about the hardened 
border and what that would mean. In the New England context and 
Northern New England context, this is about the Port of 
Montreal and Halifax, as well. About half the containers coming 
to Halifax and Montreal come into the United States. So getting 
a handle on the cross-border trade is central without a kind of 
hardened, sealed border approach.
    The notion here is that I was very excited to hear in terms 
of this interest in New England, and I think it is something 
that we need as a model overall. We have to do some 
experimentation, and I think the way this is done is some 
delegation by the headquarters here to regional commanders, 
such as Rear Admiral Naccara and the Regional Director of 
Customs and let them work with the governors and private 
sector, trusted partners, and with their counterparts across 
the border in the provinces and the ports in Halifax and begin 
to do this process of vetting legitimate players and finding 
ways to expedite their movements, applying some of these 
technologies.
    Ideally, we will find some companies up there who will want 
to play. There will be some resources found to test some 
technologies and you bring together INS, Coast Guard, and the 
other players, FDA and so forth, to try to get a handle on 
this.
    So what there seems to be, I know she has contacted 
Governor King in Maine and Governor Dean in Vermont and there 
is interest, I think, in Massachusetts, and I have been up in 
Ottawa last week, in fact, testified before their House of 
Commons on this issue. There is real interest on the other side 
of the border to try to come to arrangements where--this, I 
think, is so important. What we are trying to do here is not 
just find the needle in the haystack bad thing. What we are 
trying to do, as well, is to take the legitimate trade and 
travel and validate it as such we can set that haystack aside. 
That way, even if we had something as horrific as happened on 
September 11, we do not have to stop that flow. We know what it 
is. We do not have to stop those people, stop that train.
    And so part of our efforts should be not entirely driven 
towards finding that one needle, but it should be focused on 
how to take the vast majority of legitimate goods, validate as 
such, so even if a terrorist attacked, we do not have to 
disrupt that. Thank you very much.
    Senator Collins. I think it is interesting that at every 
single hearing we have had, no matter what the areas we are 
looking at, we find that agencies are not talking to one 
another or not sharing information or there is a lack of 
coordination. That is the common theme, whether we are talking 
about immigration policies or airports or our seaports. It does 
seem to be something that ought to be able to be solved.
    Ms. DeBusk, I want to ask you about a comment you made 
about having voluntary standards for port security. You 
expressed some concern that voluntary standards might not be 
enough. What particular standards do you think need to be made 
mandatory rather than leaving it up to the individual ports?
    Ms. DeBusk. Firearms would be an excellent example. I do 
not know why you would want anyone with firearms to just be 
strolling around at the port, so I do not know why you could 
not just say, no, you cannot have firearms at the port, as 
opposed to see if ports want to have--you put out a guideline 
that says it is better if you do not have firearms at the port. 
That would, to me, be a perfect example.
    Senator Collins. Mr. Quartel, I am very intrigued by the 
notion that both you and Mr. Flynn brought up of pushing the 
borders back. If we can inspect at the point of origin, it 
seems to me that really is the way we have to go, because if we 
do not inspect until the container gets to the United States, 
and we know we do not inspect most of them in any event, it is 
too late in many cases.
    Assuming we could get agreements from countries and 
companies to have a system that pushes the borders back, do we 
have the technology that would allow us, once a container is 
inspected, to electronically seal it and alarm it and have a 
monitoring system? I am just unfamiliar with the technology in 
this area. Does that exist now?
    Mr. Quartel. Some of that technology exists, and I think 
one of the later panels is going to be talking to the specific 
physical aspect of technology. If I might, I think what I would 
like to conceptualize for you, though, is a non-physical means 
of inspecting, which is really, I think, what we are suggesting 
to you here.
    In the hierarchy of things you want to do, you want to 
first screen a cargo electronically. You know the data. You can 
funnel out 80 percent of it just by knowing with some 
certainity that they are good people, they are good companies, 
they have security in place, you know they maintain it. Then 
you go to a scan. There are passive scans. There is an issue 
there of the cost, which you will probably hear about later, 
and we cannot mandate that a foreign port use it. Then you go 
to search, and then you go to actually seizing it. So it is 
screen, scan, search, stop, basically.
    There are technologies for the physical control of the 
process. They are a lot more expensive than most people can 
actually afford to introduce across a system of 40-some million 
containers worldwide.
    Senator Collins. Thank you, Mr. Chairman.
    Chairman Lieberman. Thank you, Senator Collins.
    Senator Cleland, good morning.

              OPENING STATEMENT OF SENATOR CLELAND

    Senator Cleland. Thank you very much, Mr. Chairman, and 
thank you for having the hearing today. Thank you, panelists, 
for coming.
    I would just like to follow up on Senator Collins' 
observation. I am on the Commerce Committee as well as this 
Committee. Whether we are talking about aviation security, bus 
security, port security, rail security, homeland security, it 
does seem to us that, and to me as I connect the dots, that we 
are talking about three basic bugaboos: Coordination, 
cooperation, and communication between and with Federal 
agencies. Now, that is no rocket science there, but it is 
coordination, cooperation, and communication.
    I have been briefed on the Dark Winter exercise, the attack 
or presumed attack by smallpox on the country, and Senator Nunn 
played the role of the President with the Johns Hopkins mock 
attack on smallpox back in June. That exercise was called Dark 
Winter, and Senator Nunn, who was in this body for 24 years, 
former chairman of the Armed Services Committee, said, as 
President, as he got into the mock exercise, he found himself 
becoming more and more impatient with bureaucracy. What he was 
running across was the lack of coordination, cooperation, and 
communication.
    [The prepared statement of Senator Cleland follows:]

                 PREPARED STATEMENT OF SENATOR CLELAND

    Mr. Chairman, as a Senator from a State with several ports, I 
appreciate your holding this hearing today.
    I am also a member of the Senate Commerce Committee, which has 
oversight of our Nation's seaports. I welcome our chairman, Senator 
Hollings, here today to tell us what the Commerce Committee has done to 
help secure the Nation's ports. I supported these efforts, and voted 
for S. 1214, the Port and Maritime Security Act of 2001. Given the 2000 
Report of the Interagency Commission on Crime and Security in U.S. 
Seaports which found that security at U.S. seaports ``generally ranges 
from poor to fair, and, in a few cases, good,'' there was not time to 
waste after this country realized its vulnerabilities on September 11.
    S. 1214 contains several provisions that I believe would help 
strengthen port security. The bill calls for a vulnerability assessment 
at our ports, and the review of this assessment should involve all 
relevant authorities for each port, which usually includes local, 
State, and Federal officials. At the Nation's 50 most economically and 
strategically important ports, the vulnerability assessment would be 
updated on a regular basis. The Department of Transportation would 
develop procedures for screening passengers, cargo and crew members at 
maritime facilities, and those employed at security sensitive jobs at 
ports would have to undergo criminal background checks. Attempts would 
also be made to work with foreign ports to assess security 
vulnerabilities abroad, which is an important part of this equation. 
Also, S. 1214 authorizes loan guarantees and grants to help fund 
security improvements and upgrades. This bill provides for funding of 
research initiatives to develop technology for detection of chemical 
and biological agents, which is vitally important as we continue to 
hear of the potential that terrorists may have access to ``dirty'' bomb 
materials. Unfortunately, there have been some Senate colleagues who 
have blocked consideration of this legislation despite the efforts of 
Senator Hollings and others to bring this bill to the floor. I am 
hopeful that we will be able to address this bill soon.
    Since September 11 was not an attack on our ports, it is difficult 
to raise this issue with the public in order to have the public demand 
action. But, the facts point to the need for better port security: 95 
percent of foreign goods enters or leaves by ship, only 1-2 percent of 
cargo containers are inspected, and the U.S. has 95,000 miles of 
shoreline. In Georgia, over 12 and a half tons of cargo on over 2,500 
vessels entered our State ports during fiscal year 2001. I must be able 
to reassure my constituents and all Americans that the vast amount of 
material entering the U.S. via ship is safe. How do I do this under the 
current regime? I hope to get some answers today from our panelists.

    Senator Cleland. Now, how do we improve that? I just want 
to ask some basic questions based on the fact that I have a 
State which has two major ports, Brunswick, Georgia, and 
Savannah, Georgia. As a matter of fact, Brunswick is very close 
to the Trident nuclear submarine base at King's Bay, which 
stores nuclear weapons. That has been a real eye-opener to see 
how the lack of security at Brunswick, the Port of Brunswick, 
impacts, say, a nuclear sub base just to the South and how the 
nuclear sub base has had to take extraordinary measures just to 
protect its nuclear weapons.
    I will say first, Mr. Commander, since the President says 
we are at war and the Coast Guard is supposed to be under the 
Navy, coordinated by the Navy in wartime, are we remiss by not 
having the Coast Guard under the Navy so at least at a nuclear 
submarine base like King's Bay, you have the coordination built 
in because the Navy is in command of the Coast Guard and the 
Coast Guard could help out with the protection of nuclear 
weapons? I just throw that out to you.
    Mr. Flynn. Sure, Senator. The cooperation between the Coast 
Guard and Navy has always been ongoing. Of course, even the 
Vietnam War, the Coast Guard was actively involved in the 
Vietnam War. We did a lot of river patrols and so forth, but we 
never felt officially under the Department of Navy in that 
instance.
    Today, in fact, you have the CND offered to Admiral Loy 
naval assets to assist the Coast Guard in this new war, that 
is, helping in the patrolling, giving some Naval patrol craft 
to help the Coast Guard do its mission. You already have a 
Maritime Defense Zone Commander who is a Coast Guard Commander 
who is dual-hat and works with the Atlantic Fleet Commander.
    So I am not worried about the ability for the Coast Guard 
to work with the Navy in an integrated way. I am more worried 
and concerned about the rest of that tapestry.
    What we know about these terrorists is that they are 
blending into the real estate. They are blending into the day-
to-day movements and trying to look as legitimate as possible, 
whether it is as a fisherman or a charter boat or whatever 
might be on the water, or that their commerce blends into 
legitimate commerce, and we are trying to get a handle on the 
people, the conveyances, and the cargo and have a sense of 
being able to fuse the details of that in advance.
    The Coast Guard will have some knowledge about the 
conveyance, in this case a ship. That actually works. Our 
intelligence people sit with the Office of Naval Intelligence 
and the Navy works closely with that, as well, in tracking 
those.
    Customs will know about the cargo and INS will know about 
the people, and obviously Consular Affairs, who give the visas, 
will know about the people. The FBI and CIA will have the 
backlist.
    The challenge here, just to illustrate quickly, though, 
is--I heard this from a Customs agent who was involved with 
designing a scenario, he said, last April that followed this 
weapon of mass destruction, the container, and it was built out 
of--the FBI had given Customs some information about a 
household goods from Asia which actually had a dirty bomb in it 
and it was going to be arriving in New York on the Fourth of 
July. This had to go up to headquarters to get scrubbed before 
they used it. It got kicked back initially. They said it was 
unrealistic because the FBI would never give the information 
about the household goods being contaminated to the Customs 
organization.
    Senator Cleland. May I just interrupt? Mr. Chairman, we 
have run across this with the CDC----
    Chairman Lieberman. That is right.
    Senator Cleland [continuing]. A couple of times--and we 
just had the Postmaster General here--we have demonstrated in 
hearings that the FBI, once it gets hold of the anthrax 
letters, whether it is Senator Daschle's letter or Senator 
Leahy, does not send it to the CDC. It sends it to Fort 
Detrick, Maryland, who does it, and Fort Detrick, Maryland, 
looks upon that as the FBI as a customer, so they are not going 
to tell anybody, and the FBI does not tell anybody. Therefore, 
the CDC winds up in the dark and ultimately gives bad advice to 
the Postmaster General about a Postal Service entity one step 
removed from Daschle's office while two people are dying at 
Brentwood.
    The point is that it is not healthy for the right hand to 
not know what the left hand is doing. Again, coordination, 
cooperation, communication. So I just want to get your take on 
whether the Coast Guard, since the President said we are at war 
and the Coast Guard in wartime is under the Navy, ought to be 
under the Navy, but that is not your concern. Your concern is 
working with the other entities, right?
    So let me move on to Ms. DeBusk. You mentioned the 
possibility of the fact that there is no central authority, 
controlling authority, in terms of port security in America. 
You mentioned the creation maybe of a Department of Homeland 
Security. As a matter of fact, that is exactly what the Hart-
Rudman Commission recommended over a year ago, that an entity, 
an agency with budgetary authority and troops, people, infantry 
to command, be instilled in our Federal Government to 
coordinate this kind of thing.
    Instead, we have an Office of Homeland Security with 18 
people. Tom Ridge is a good guy, a fellow Vietnam veteran, but 
I doubt that 18 people are going to go up against 60 different 
agencies. So we still are left with the challenge of 
coordination, cooperation, and communication.
    Any thoughts about what this Committee ought to do in 
furthering our strong interest in strengthening an Office of 
Homeland Security or creating a Department of Homeland 
Security?
    Ms. DeBusk. Yes, and I think you have already answered the 
question and that is resources. The only way you really get 
good coordination is through resources to back it up in 
addition to jawboning and saying, let us all talk together.
    The resources would come in for basic things like computer 
systems that talk to each other. There is a lot of good will in 
the agencies. They like to cooperate. For instance, my former 
office got along excellently with the Customs Service, but we 
did not have the same database for going back and forth on the 
computer system with the information.
    And so I think in terms of getting coordination and the 
concept of pushing back the border, it only works if there are 
resources that would be committed to doing things like letting 
the agencies talk to each other over the computer system.
    Senator Cleland. Thank you very much. My time is up.
    Just to highlight, I mentioned this in the Commerce 
Committee, I will mention it here, that Georgia Tech in Atlanta 
has developed a little chip, a little glass sensor to pick up 
biological and chemical agents, which might be helpful in this 
war against terrorism and detecting early on what is in some of 
these containers.
    Thank you very much, Mr. Chairman.
    Chairman Lieberman. Thank you, Senator Cleland. That is 
very interesting. You know, you are right. Something is going 
on here, and probably my colleagues on the Committee have had 
the same experience I have, which is that a lot of complaints 
from local officials about difficulty in working with the 
Federal intelligence agencies and the FBI. I wonder if the 
Committee might not have a role to play in calling in the 
agencies, either in a public or private session, and talk about 
this problem. The examples that you just gave, Dr. Flynn, and I 
think it was Rear Admiral Larrabee gave another example earlier 
on, they are just not acceptable, because you are now--ports 
are now the front lines, so we have got to arm you with the 
information to protect us.
    Senator Bennett.

              OPENING STATEMENT OF SENATOR BENNETT

    Senator Bennett. Thank you very much, Mr. Chairman, and for 
your pursuing this continued issue. In the spirit of full 
disclosure, I am going to be very shameless in pushing my bill.
    Chairman Lieberman. It would not be the first time that has 
happened around Congress. [Laughter.]
    I was not speaking of you, but it has been done in Congress 
before.
    Senator Bennett. Right. In July, the Defense Threat 
Reduction Agency, DTRA, gave me a top secret briefing on air 
vulnerability analysis of the Port of Baltimore, and, of 
course, the members of the panel might not know, but my hobby 
horse, my focus here is on critical infrastructure protection 
generally, but the computer portion of it more specifically.
    Some people say to me, well, why are you focused on 
computers because homeland defense, homeland security involves 
so much more than computers. I will give you an example that I 
use in speeches. With the ability that currently exists for 
hackers and others who want to get into computers, this is not 
a theoretical. This has happened. Someone got into the computer 
system at a dam and was in a position to control whether or not 
the floodgates would be opened or closed. Downstream from the 
dam was a military installation which would have been flooded 
and destroyed had the hacker or activist or whoever it was 
decided to open the floodgates.
    So when you think of homeland security and you want to 
protect the military installation, or fill in the blank, put in 
whatever you want, downstream, you want to protect the facility 
downstream, it was the vulnerability of the computer that made 
that possible.
    And as I sit here and listen to all of you describe your 
frustrations and your problems, I realize that we cannot 
stovepipe port security away from the issue of computer 
security. You talk about anomalies, Commander Flynn and Mr. 
Quartel, you wanted to look for an anomaly in the situation, 
suppose I was the individual loading that dirty bomb in a place 
where it would not show up, should not show up, and that would 
be an anomaly that would immediately appear on a computer 
screen somewhere. And prior to learning that, I break into the 
computer system and change the data so that the data that comes 
says this is not an anomaly. This really is woolen goods or 
cotton goods or something coming from an agricultural country, 
and yes, it has an unstable political background, but these are 
T-shirts that we do not need to worry about because I have 
changed the computers to have the information that comes to you 
say it is T-shirts.
    And when we talk about the theme that Senator Cleland 
talked about and Senator Collins talked about of not talking to 
each other and not getting the proper analysis, we come back to 
the fact that I have heard several of you say a very large 
portion of the ports are under private control, and unless we 
pass a law that requires private people to give us all of the 
information as to what is happening in terms of the threat on 
their computers, which law does not exist now, again, 
shamelessly, we need to pass my bill which says they can 
voluntarily share that information with a common analysis 
center in the government without worrying about a FOIA request 
being filed by Osama bin Laden saying, I want to know what the 
private sector is telling the government about my attempt to 
break into their computers.
    So, as I say, shamelessly, I am laying this out. Now, I 
would like your responses to that and your comments about that 
and see if I have misread some of your testimony about 
vulnerabilities here.
    Mr. Quartel. I actually have not read your bill, but I like 
what you are saying. In the specific example--by the way, I 
have also a port story. I was at the Port of Los Angeles 
Tuesday afternoon and they had a similar story to this one 
about information sharing. There are reasons for not 
information sharing, which we know, firewalling various kinds 
of data. But there are also ways to share data by tapping 
databases electronically without violating all of these other 
provisions, which I think is what you are talking about.
    No terrorist is going to tell you he has got 20 tons of 
nitrate kinds of fertilizers and a $80 GPS and a $3 blasting 
cap that he is going to load through there. There is a 
hierarchy of responses. Data by itself will not tell you 
anything.
    Customs today has a program they call BASC, for example, 
which they use in the drug process, where they work with 
trusted parties, people who have procedures in place where they 
seal and load and they know the people there, they have 
security as to who the people are, so they can actually 
certificate across the process and that helps them speed it.
    So while you use data to look for anomalies and suspect 
situations, you also do what Steve Flynn was saying, which is 
you also can channel big chunks of that out. If it is a Cisco, 
for example, they may have a procedure in place that you cannot 
load a nuclear weapon or a dirty bomb in any of their systems. 
So maybe those cargoes go through faster.
    There may be small players in the business who can also get 
through that process. In fact, most of our cargoes that come 
from Asia have a lot of small players, so we actually have to 
deal with the real world as it really is.
    If I have one message to the Committee beyond that I have 
already said, it is that what we should do is tap into the way 
business works, and one of the things as government we do not 
do very well, particularly in transportation, is ever ask the 
shipper, meaning the guy who owns the cargo, what they think. 
We go to the carriers, we go to the labor unions, we go to 
this, we go to that, but we do not go to the shipper, and these 
are the guys who have the holistic view of the process.
    We have talked about tracking. Most shippers do not care 
where a cargo is every minute. It is not useful data. What is 
useful is to know it arrived at the port or it is going to be 3 
days late at the port or it missed the train, because then they 
use it for planning.
    So if we talk about tracking, for example, it should align 
with what a customer wants to do with it. It should align with 
his commercial interests. And if we do not align the interests, 
you are going to find things like port shopping.
    Senator Hollings said, well, let us concentrate on the top 
25 ports. You should, but on September 11, the guys came 
through a minor airport, an out-of-the-way crossing at the 
border, and then fed into a major funnel and you will have 
exactly the same kind of thing in shipping unless you align 
your interests with the way the commercial sector operates and 
data is a key part of it.
    Ms. DeBusk. Let me just add something on that from one of 
the concerns of the private sector, because the security of the 
data is incredibly important for getting the cooperation of the 
private sector.
    Senator Bennett. That is right.
    Ms. DeBusk. One of the big concerns is the very mundane 
concern of theft. If you know exactly what is coming in, 
exactly where it is, you can find it exactly with this high-
tech device. It turns out that it is great new color TVs, 
which, unfortunately, can disappear before reaching its final 
destination. So a major private sector concern in trying to do 
the public-private sector cooperation on data would have to be 
addressed through the security of the data.
    Senator Bennett. That is exactly the point of my bill. It 
says you can share this information and it will stay secure 
within the government.
    Ms. DeBusk. And also secure within the government, and then 
you have to think about a limited number of people within the 
government that would have access encrypted passwords, the 
whole thing.
    Senator Bennett. Sure.
    Mr. Flynn. And absolutely, Senator, I would support this, 
as well. You find most sophisticated ports are actually run 
virtually by computer, the gantry cranes and everything else. 
You take down the computer system, you shut down that port, as 
well. So the cyber attack could do it as much as a physical 
bomb kind of thing with huge disruption effects, so there is 
that area.
    The other is, ultimately, of course, we must be talking 
about sharing data overseas. We are dealing with 
multinationals, not just private sector domestic, but 
multinationals, and we are also, as with Canada, in an effort 
to enhance our data shopping there, if there is not comfort 
about the security of the data, that is going to make that much 
more problematic.
    I think taking that wartime analogy, though, that we are 
in, as the President said, about trying to apply it in this 
area, I think it would behoove us to think about--I get from a 
number of private sector people up in New York who have really 
been, obviously, mobilized by the tragic events of September 11 
and are waiting for the call, basically. These are the people 
who understand how to do data management, understand how to do 
data mining. We have huge companies out there who solved how to 
bring legacy systems together and make mainframes go and they 
are just sitting idle.
    I think some calling in of a red team, almost, to solve 
this information issue from private sector folks, anoint them, 
give them 9 months' charter, give them all the resources they 
need to fix this problem. Everything we are talking about in 
the government is 5- or 7-year, multi-year programs in one 
sector that we are not going to finance anyways until whenever. 
That is unacceptable. I do not think we are going to fix it 
through our traditional public sector needs. If it is a 
wartime, let us treat it as such and fix this by getting the 
smart people into this.
    Senator Bennett. That is a good summary, because in World 
War II, a lot of information from the private sector was 
considered secret, classified, shared with the government with 
the understanding that it would not be available, and in the 
war we are talking about here, with 90 percent of the critical 
infrastructure in private hands, that means an intelligence 
officer trying to see what is happening on the battlefield has 
90 percent of the battlefield blacked out to him if the private 
sector does not share the data. But as you indicate, Ms. 
DeBusk, the private sector will not share the data if they 
think it is going to be made public.
    Thank you, Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Bennett. Your 
questioning may have been shameless, but it was quite 
productive, I thought, and very interesting.
    Senator Thompson.

             OPENING STATEMENT OF SENATOR THOMPSON

    Senator Thompson. Thank you, Mr. Chairman. Sorry for being 
late. I was a witness this morning, an uncustomary role though 
it may be, at a U.S.-China Commission hearing. I wanted to get 
over here as quickly as I could.
    Chairman Lieberman. We are glad you are here.
    Senator Thompson. It occurs to me in listening to this that 
one of the things that is happening here is going to cause us 
to really look at the issue of federalism in a different way. 
One of the things this Committee deals with, of course, the 
relationship between the various levels of government.
    I listened to you and once again we see various Federal 
agencies are involved to one extent or another, but so is 
State, so is local. And, law enforcement is on one side, while 
prevention is on the other. The real question, I think, that we 
are grappling with is who ought to be doing what? What should 
we be doing and who should be doing it? If you think about it, 
that is really the main question of the government and it is 
not an easy one.
    I think that what we are seeing now after September 11 is 
that we are going to be doing some reassessing and we are 
probably going to be bringing the Federal Government into some 
areas, at least on the prevention side, that maybe they have 
not been before. We need your help on that.
    Hopefully, we will learn to stop doing some things at the 
Federal level that we should not be doing and let those 
responsibilities go to the State and local governments. We 
should consider a realignment, a reprioritization, as it were, 
to look at federalism anew and start concentrating and spending 
more of our resources on the things that the Federal Government 
can do and must do best. We should look for standardization. I 
think in areas of national security, we have to really look at 
that.
    The other thing that is kind of related that concerns me is 
what is the economic impact of all of this going to be and what 
are we going to be willing to tolerate. We can devise all these 
systems, but as we have seen at the bridge in Detroit, a little 
bit of slowdown, a little bit of disruption and things start 
backing up. What is that going to do, what is our toleration 
level going to be, and to what extent are we going to have to 
start looking at things differently?
    We have been called upon to sacrifice in this country, but 
so far, about the only sacrifice we have been called upon to do 
is shop at the mall, and buy more. What if we have to get used 
to doing more, not just at our airports, but here?
    My testimony today before the China Commission had to do 
with the extent to which we should be allowing foreign 
companies that are engaged in proliferation activities, that 
our government determines that are engaged in proliferation 
activities, to raise billions of dollars in our capital 
markets, no questions asked, without disclosing to the 
investors that they are engaged in proliferation activities.
    It seems like a no-brainer to me, but that is what is 
happening, billions and billions of dollars by companies, 
including Chinese companies that our country knows are engaged 
in proliferation activities, making the world more dangerous, 
which we say we need a national missile defense system to 
protect us against. But they can come and raise billions of 
dollars and hand it over to the military, as far as we know.
    As I am speaking, half of Wall Street is downstairs 
explaining why I am wrong because the measures I recommended 
will not do any good, because they will have an economic 
impact, it is going to cost us business. How much are we going 
to be willing to do? Has anybody made an assessment of the 
economic impact of the preventive measures that are being put 
on the table?
    Rear Admiral Larrabee. In the Port of New York and New 
Jersey, we have estimated that it will cost us about $150 
million in the next couple of years to implement just some of 
the things that the Hollings bill has suggested. As we begin to 
talk about other ways to prevent terrorism, I think that the 
cost goes up.
    You are absolutely right. My job every day is to find a way 
to balance a system that works very well because of its speed 
and its economy with the need to slow it down and be more 
deliberate in terms of making sure that we know what comes 
across the border, and that is a very, very difficult 
challenge, because the system that we operate today is what 
drives the engine of our economy, and the minute that that 
system slows down and we cannot bring oil in on the basis that 
we bring it in now, the system comes to a grinding halt.
    Mr. Quartel. If I can add to that, too----
    Senator Thompson. Liquid nitro gas, which is very much a 
concern.
    Mr. Quartel. Maybe I can take it from the micro to the 
macro. Every trip I now take on an airplane, and I used to 
travel a lot, adds 4 hours. That is half a day. So I travel 80 
percent less. So I am certainly not helping the aviation 
system, nor, frankly, are a lot of the rules, the way they are 
being implemented across the system.
    In logistics, the cost of transporting and moving goods and 
logistics and storing and maintaining them as inventories in 
the United States 20 years ago was 25 percent of GDP. Today, it 
is 15 percent. We have saved $1 trillion annually in terms of 
the kinds of things we have built into the system by moving 
cargo swiftly, reducing inventories, reducing the cost----
    Senator Thompson. Just in time?
    Mr. Quartel. Just in time. Although even ``just in time'' 
is only in a small percentage of the economy, these things 
affect everybody, from the biggest to the smallest.
    Senator Thompson. Some people are saying we are going from 
``just in time'' to ``just in case'' now.
    Mr. Quartel. Well, there is some issue there, but let me 
give you a number there. If you only increase inventories by 5 
percent, you add $75 billion in costs to the American economy. 
That is 75,000 jobs you have just lost.
    Mr. Flynn. I might add here, though, I think the key, 
again, about this prescription, if we are willing to take this 
in a comprehensive networked approach, Rear Admiral Naccara, 
the First District Commander up in Boston, has a very creative 
and ultimately successful model for how to deal with the 
liquified natural gas. What he is doing is he is sending 
inspectors to Trinidad where it is loaded. They are inspecting 
the facility, which actually is a pretty good, secure facility, 
to board the vessel when it leaves the harbor, inspect it 
before it goes to make sure there are no bad people on it, sail 
the harbor and get off at the pilot buoy. If it was hijacked in 
between, there would obviously be some communication of that.
    The advantage is when it gets to Boston, we are actually 
able to speed it in. I mean, you are going to still do some 
controls, but you do not want it harboring out there for a few 
days having a big advertisement, LNG is waiting here as a 
target. You actually want to get it in relatively quickly. So 
they will be met with an escort, but it will be moving very 
quickly. The company loves it because it now has expedited 
treatment in. We are more secure.
    The same modeling applies, I think, even as we think about 
cargo. If we are talking about building this in as a standard 
up front, the market will adapt, I think, to it.
    I would propose that, for instance, that perhaps Governor 
Ridge--well, the President would issue a homeland security 
Presidential directive to the Secretary of Transportation to 
meet with his counterparts in the six or seven major megaports 
to essentially say, we are not going to allow mystery boxes 
anymore into our ports because they are a critical 
infrastructure and here are the standards. And as soon as that 
is harmonized, the cost issue starts to get adjusted, just as 
it has with oil tankers.
    When we had this real problem many years ago, there were a 
lot of unsafe tankers, people were saying we could not impose 
standards. The oil would not come in anymore. Well, we have 
rationalized and adjusted.
    The real cost, though, for me, the one that most keeps me 
awake almost every night, knowing what I know about the system, 
is the cost of turning the spigot off. Ninety-five percent of 
general cargo coming into the United States comes in a 
container. This makes the anthrax in the mail service pale by 
comparison. We went to E-mail and faxes and UPS and FedEx. When 
you compromise this system and you turn off the switch, there 
is no alternative. Cargo stops coming in. That is the cost 
matrix I think we need to balance against, the dollars that we 
are talking about here and putting in a smart approach.
    Senator Thompson. Ms. DeBusk.
    Ms. DeBusk. Yes. One of the important things that is in the 
Hollings legislation, and that was recommended by the Seaports 
Commission, has to do with threat assessment. Because it is 
simply not possible to do everything that we can or should do 
at every single one of the 361 ports. So an important way to 
weed out spending priorities would be to conduct threat 
assessments and figure out where the greatest vulnerabilities 
are and tackle those first.
    Rear Admiral Larrabee. And then with better information, 
you can adjust your reaction with the idea that you cannot do 
everything, and----
    Senator Thompson. It seems to me like a threat assessment, 
certainly, everything has got to be prioritized and all that, 
but it looks to me like once we do that, it has got to be the 
most closely held information in all of our government.
    Ms. DeBusk. I agree.
    Senator Thompson. If the bad guys have that information, 
then it is all for naught.
    Ms. DeBusk. I agree completely, and even some of the 
information that was put out by the Seaports Commission is no 
longer available.
    Mr. Flynn. On the reverse, I just might say, Senator, is 
the schemes that we talked about, the criminals are there. They 
know--we are not talking about a hypothetical--about containers 
being used. They have been used for the last 15 years to 
smuggle narcotics into this country, as a matter of routine, 
almost. So bad guys know the vulnerabilities of this system.
    Mr. Quartel. And I would suggest to that, every one of us 
can tell you how to get it in, and if we can, someone else can, 
as well.
    Senator Thompson. Knowing what we are watching and what we 
are not watching is what I am talking about.
    Mr. Flynn. Oh, yes, sir.
    Senator Thompson. Thank you, Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Thompson.
    Thanks to the four of you. We have got to move on to the 
next panel, and we really did not go into some of the very big 
ideas that you gave us for reform, such as pushing the border 
back and how that would work, how we station our personnel 
there or do we, and does that require international treaties 
and agreements. And then, although we will get into both of 
these matters in the next panel, too, I hope, the use of 
technologies that are available now to create new ways to track 
containers without slowing them up so that there is no adverse 
economic effect.
    Perhaps either with the Committee or our staffs, we could 
ask you to give us some more time to better develop those 
ideas, because it may be that this Committee can take a 
leadership role, hopefully after Senator Hollings' bill is 
passed, which I hope will happen soon, to implement some of 
those ideas.
    But in the meantime, I thank you very much. It has been 
excellent testimony.
    Chairman Lieberman. We will call our third panel, Argent 
Acosta, Customs Inspector, Port of New Orleans, and President 
of the NTEU Chapter 168; Deputy Chief Charles Cook of the 
Memphis Police Department; W. Gordon Fink, President of 
Emerging Technology Markets; and Michael Laden, President of 
Target Customs Brokers, Inc.
    Thank you all for being here. Chief Cook, we are going to 
call on you first. You come from a great city.
    Mr. Cook. Thank you, sir.
    Chairman Lieberman. You even have some great Senators 
representing your State here in Washington.

 TESTIMONY OF DEPUTY CHIEF CHARLES C. COOK,\1\ MEMPHIS POLICE 
                           DEPARTMENT

    Mr. Cook. Thank you very much, Mr. Lieberman. I would like 
to say good morning to the Members of the U.S. Senate, 
witnesses, and others present. I want to give special thanks to 
Senator Fred Thompson and, in particular, his staff, Hannah 
Sistare, Jason Roehl, and Morgan Munchik, for inviting me to 
speak here today on behalf of the people of Memphis.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Cook appears in the Appendix on 
page 120.
---------------------------------------------------------------------------
    I am here today to talk about the City of Memphis, how we 
have responded to the events of September 11, and the needs of 
Memphis in the area of homeland security. I am sure our 
situation is much like those of other cities our size.
    Prior to September 11, the Memphis Police Department, the 
local FBI, the Memphis and Shelby County Emergency Management 
Agency, the Memphis and Shelby County Fire Departments, the 
City of Bartlett, the City of Germantown Police and Fire 
Departments began training with incident command tabletop 
exercises. Our focus was on natural disasters, the threat of 
terrorist attacks, school shootings, and plane crashes.
    This multi-agency training developed a team concept in 
responding to large-scale, long-duration events. Our 
departments began seeking further training for various 
contingencies. In all the exercises, role players simulated 
their responses, and as a result of the critiques and follow-
ups, they determined that additional training, equipment, and 
manpower resources were needed.
    Because of extreme delays on the Memphis to Arkansas 
bridges across the Mississippi River at I-55 and I-40 caused by 
relatively simple accidents, a multi-agency bridge mitigation 
team was formed in the year 2000. Members of this group came 
from the police departments of Memphis and West Memphis, 
Arkansas; the sheriff departments from Shelby County, 
Tennessee, and Crittenden County, Arkansas; the Tennessee 
Highway Patrol and the Arkansas State Police; the Railroad 
Police; the Tennessee and Mississippi Departments of 
Transportation. Various casualties, including marine accidents, 
terrorist attacks, and any subject threatening bridge security 
became topics of discussion. Decisions regarding multi-agency 
jurisdiction and removing hazards from the roadway were made 
and the agencies took joint responsibility for patrolling the 
bridges and they continue to do so.
    Most police, fire, and emergency management agencies during 
the first few hours of September 11 reacted by encircling the 
government buildings in the downtown area. We deployed our 
resources to include other targets of opportunity, including 
bridges, water supplies, power utilities, and similar 
government-related services. We received numerous phone calls 
from businesses, manufacturers and trucking firms, refineries 
and other facilities. Each caller was interested in information 
on what to expect in the way of local terrorist attacks.
    Their questions were addressed through the media in a press 
conference with public officials, including the Memphis Mayor, 
the Shelby County Mayor, the Police Director, the Shelby County 
Sheriff's Chief Deputy, the Fire Director, and other emergency 
services personnel. These officials made an evaluation of the 
immediate threat to the city based on information from the FBI 
and national and local television news. This resulted in an 
agreement that our response could be reduced at that time. 
Jointly, in an organized setting, this team of city officials 
released information to the public. It was timely, informative, 
and reassuring.
    We have continued to maintain high levels of alertness, 
giving special attention to large sporting events, concerts, 
and the Beale Street entertainment district. We have 
experienced a blow to our budget as a result of September 11 
and our anthrax responses. Sustained actions resulting from 
hoaxes, threats, and actual attacks are devastating to local 
budgets, as you know, draining dollars by eating overtime. 
There is little that can be held in the hand following 
unbudgeted responses.
    Since the events and continuous warning of future threats, 
many cities are looking at budget shortfalls. We have still 
maintained high levels of awareness and are establishing 
communications between our precincts, manufacturers, and 
redistribution.
    Following the New York attack, we have experienced the 
uncertainty and fear of bio-terror. There have been several 
warnings of additional attacks. As we further assess our 
ability to deal with attacks of this type, it is necessary to 
evaluate what is needed in order to defend ourselves against 
attack, to respond to and reduce the damage and loss of life, 
and to fully recover.
    In reviewing the needs of the city, I must mention the Port 
of Memphis, an integral part of the Memphis economy. Memphis is 
known as America's distribution center. I think this notoriety 
comes from its association with Federal Express, the United 
Parcel Service, and other air carriers. However, the marine 
port facilities of the Memphis metropolitan area is one of only 
three cities served by five class one railroad carriers serving 
48 contiguous States, two barge fleeting services, and a 
multitude of barge and truck transport services. International 
shipments come through the Port of New Orleans and are filtered 
to the other States through Memphis, the world's largest cargo 
airport hub.
    The Port of Memphis is the fourth busiest inland port in 
the country. The port facility has immediate access to 
Interstate 40 and Interstate 55 and is located less than 15 
minutes from the Memphis International Airport. The Port of 
Memphis also provides a unique industrial area for the 
convergence of transportation services located near the Memphis 
downtown district.
    This transportation hub has been of interest to organized 
crime due to the large quantity of manufactured goods. The 
Memphis Police, the Shelby County Sheriff's Office, the local 
FBI, the U.S. Customs Service, and the National Insurance Crime 
Bureau was organized through a memorandum of understanding, 
updated yearly, into the Tennessee, Arkansas, Mississippi Auto 
Cargo Theft Task Force. This is a multi-agency investigative 
law enforcement unit targeting organized vehicle theft, 
including heavy equipment and farm and construction machinery, 
and associated criminal activity and thefts from interstate 
cargo shipments. They are involved in activities in and around 
both marine ports and the airport.
    These are the reasons Memphis is considered to be a 
potential terrorist threat.
    The following are suggested measures which should be 
considered in the interest of preventing terrorist attacks, 
attacks which would severely interrupt interstate commerce for 
years if successful, seriously crippling the Nation.
    Use a multi-agency approach to the investigation of 
suspected terrorists and develop the availability of an 
electronic clearing house for all information gathered 
nationally and internationally on suspected terrorists.
    Assign fully-armed U.S. Coast Guard personnel to 24-hour 
operations, providing visible patrols on the Mississippi River, 
Wolf River, McKellar Lake, Tennessee Chute, and the new Frank 
Pidgeon Industrial Park.
    Support a national or international truck driver licensing 
program for drivers entering and exiting the U.S. from Canada 
and Mexico and for crossing major infrastructures, bridges, and 
tunnels. Also, support technology capable of identifying 
drivers and driver history by fingerprint, photos, and newer 
iris scan technology for officers to use in the field.
    Support smart card technology for trucks and loads, capable 
of immediately identifying driver, cargo, origination point, 
destinations, and route plans. This would also do well for 
marine vessels.
    Organize a U.S. Coast Guard inspection boarding team to 
meet and board vessels above and below the Mississippi River 
bridges to identify operators and crew and to monitor 
approaches to sensitive infrastructure, such as bridges, 
industrial complexes, and production facilities with river 
access.
    Assign U.S. Army or Army Reserve troops to provide 24-hour 
security and surveillance to the more critical targets, where 
attacks would cause severe repercussions for America.
    Provide security gates and barricades limiting access to 
Presidents Island, refineries, and chemical plants from 
vehicles without proper identification and authorization.
    Establish privately-owned police agencies, like the 
Railroad Police and Federal Express Security Police, for the 
protection of businesses which produce or manage critical 
materials.
    Also, establish a Homeland Security Block Grant to meet 
such needs as police and fire overtime, training, communication 
and rescue equipment, and for security measures to protect 
airports, waterways, utilities, public transit, and other 
public infrastructures.
    Thank you once again for inviting me here to testify today. 
I will be happy to work with the Committee in the future in any 
way and I will be glad to answer any questions you may have.
    Chairman Lieberman. Thanks, Chief Cook. That was excellent 
testimony and I appreciate the specificity of the 
recommendations. We are going to hold a hearing in the 
Committee, I believe at the end of next week, particularly 
having local officials come in from around the country to talk 
about some ideas, and the idea of federalism Senator Thompson 
talked about earlier. But your proposals here really set the 
table for that and I appreciate it.
    Mr. Cook. Thank you, sir.
    Chairman Lieberman. Mr. Acosta, thanks for being here. You 
bring firsthand experience as a longtime Customs inspector and 
we appreciate your willingness to be here and look forward to 
your testimony.

 TESTIMONY OF ARGENT ACOSTA,\1\ SENIOR CUSTOMS INSPECTOR, PORT 
OF NEW ORLEANS AND PRESIDENT, NATIONAL TREASURY EMPLOYEES UNION 
                       (NTEU) CHAPTER 168

    Mr. Acosta. Thank you. Chairman Lieberman, Members of the 
Committee, thank you for inviting me here today to talk about 
port security. My name is Argent Acosta and I am a Senior 
Customs Inspector at the Port of New Orleans. I am also the 
President of Chapter 168 of the National Treasury Employees 
Union. My chapter actually encompasses five States, Louisiana, 
Mississippi, Tennessee, Arkansas, and Alabama. There are 19 
ports in that region of Customs and the majority of those are 
seaports.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Acosta appears in the Appendix on 
page 127.
---------------------------------------------------------------------------
    I have been a Customs inspector for 30 years, the Chapter 
President for 26 years. My job is to ensure that illegal 
contraband, from knock-off designer jeans to cocaine to bombs, 
does not enter the country, and that legal goods that enter the 
country are assessed the correct duties.
    At seaports like the Port of New Orleans, the mainstay of 
the job is boarding incoming vessels, primarily cargo ships, to 
inspect for illegal goods. It can be a very dangerous and not 
very glamorous job, but there is a great deal of commitment by 
the front-line inspectors to do the best job possible, 
especially since the events of September 11.
    I would like to share with the Committee a recent example 
of that commitment. Inspector Thomas Murray, a 31-year veteran 
of the Customs Service, died tragically during an inspection of 
the hold of a vessel at the Port of Gramercy, Louisiana, on 
October 30 of this year. He was killed by toxic fumes, as was a 
member of the vessel's crew and the ship's captain, who 
followed him into the hold. A second Customs inspector was 
overcome by the fumes, but is recovering.
    Inspector Murray was aware that the vessel he was searching 
previously brought illegal drugs into the United States, so he 
was determined to be as thorough as possible. He did not know 
what dangers he would encounter when he went below the deck, 
but he went anyway. Tragically, his commitment to doing his 
job, despite potential danger, cost him his life. His fellow 
inspectors, especially those of us from Louisiana, will mourn 
his loss for a long time to come, but we will also remember his 
bravery and commitment every time we are faced with boarding a 
suspect vessel or searching a hold that we believe to be 
dangerous.
    Mr. Chairman, you asked in your letter of invitation that I 
address several questions regarding port security in my 
testimony. The first was, what is the current adequacy of port 
security? I am afraid that I must answer that question by 
saying I believe port security is currently not adequate and 
poses serious potential threats to those not only in the 
immediate area of the port, but to those who may come in 
contact with uninspected material that arrives through our 
ports and moves throughout the country in other modes of 
transportation.
    The Customs Service is currently only capable of inspecting 
about 2 percent of the 600,000 cargo containers that enter our 
seaports every day. From my own experience in New Orleans, 
despite the huge increases in trade since I started with 
Customs in 1970, the number of Customs inspectors at the Port 
of New Orleans has dropped from approximately 103 in 1970 to 29 
this year. In addition, since September 11, Customs inspectors 
from around the country have been temporarily reassigned, 
primarily to Northern Border ports to cover the gaping holes in 
security there.
    Since I had previously volunteered for emergency response 
team duty, not realizing, of course, that September 11 was on 
the horizon, I was among the first to do a temporary tour of 
duty in Michigan, at Port Huron, one of the busiest truck 
crossings in the country. On September 14, I was given 4 hours 
to go home, pack, board a Customs flight at the Gulf Port 
Airport and go to Michigan, at which time I found out I would 
be in Port Huron.
    There was an incredible amount of pressure on inspectors at 
Port Huron since many ``just in time'' auto parts headed from 
Canada to the big three auto makers go through the port. I know 
my biggest personal concern was not to be the one who let a 
terrorist into the country, and some supervisors seemed to 
support that view, the view that extreme caution was necessary. 
However, others seemed to be sending the signal that we needed 
to move things through more quickly because of the need for the 
auto parts, so it is a very difficult balance and I can 
appreciate the problem that they are faced with.
    I will begin another temporary assignment at Port Huron in 
January. These temporary assignments, while currently necessary 
due to the extreme shortage of personnel, leave home ports, 
like my Port of New Orleans, able to inspect even fewer vessels 
than usual. Also, the more an inspector knows about a 
particular characteristic of his port, what the main goods that 
go through the port are, what are the main carriers, the 
destinations, etc., the more effective he or she can be. 
Obviously, 30-day temporary assignments at different ports does 
not lend itself to building this kind of experience.
    The use of the National Guard at some ports may be 
temporarily necessary due to the unprecedented threats we are 
facing, but in many cases, due to their lack of training and 
experience in the area of cargo and vessel inspection, the 
National Guard provides the appearance of security rather than 
any real increase in security. In any case, having military 
personnel perform these duties is obviously not a long-term 
solution.
    In addition to the severe limitations on the ability to do 
actual inspections, the technology that is supposed to help us 
do our jobs by providing us with advance information on 
oncoming vessels is outmoded, subject to brownouts, and often 
incompatible with the technology of those we need to 
communicate with. In addition, the advance information about 
what cargo may be aboard a vessel often is not sent early 
enough to do any good, and even more often is not accurate. 
Customs has determined through its own system that the accuracy 
rate of vessel cargo information is only 56 percent accurate, 
and let me give you a real current story to point out this 
aspect.
    In April of this year, a vessel arrived from the Port of 
Savannah. It was a foreign flag vessel with containers on board 
for discharge throughout the United States. Our enforcement 
team targeted the vessel for boarding. We targeted the vessel 
to look at the cargo that was available. It had empty 
containers and full containers. By doing that, we set certain 
containers aside that we wanted to pull off and take a look at 
and we wanted to verify all the rest of the containers, 
including the fact that the empty containers were empty, and 
you will see why we do this.
    We looked at the vessel and encountered one of the empty 
containers and upon opening it found out that it had cargo in 
it. We sealed the container and sent it to our cargo 
examination station. It sat for a day or two. When the two 
inspectors who worked the station went to open it up, their 
radiation detectors went off. They went off big time. One of 
the inspectors was our actual HAZMAT coordinator and trainer, 
so she backed everybody off, moved everybody away. We called in 
the experts. The container was very hot. It had drill testing, 
well testing equipment on it, but it was a serious threat to 
everybody around it. Fortunately, after testing and after a 
period of time, it appears as though the inspectors did not 
suffer any long-lasting effects. We hope they did not.
    But were it not for us targeting the vessel and looking at 
the containers, this empty container would have moved 
throughout the country to wherever it was going to go, and 
whoever else who might have walked up to it who did not have 
equipment to note that there was something wrong with it might 
easily have been harmed or killed.
    There are also problems with regard to the physical 
security of the port. Access to cargo and cruise vessels in 
many ports is not limited to those with prior approval to be in 
the area. Virtually anyone can gain access to the areas where 
vessels unload passengers and cargo. While there are secure 
areas in the Port of New Orleans, access to those areas is 
overseen by contract security personnel, who, like airport 
baggage screeners, receive low wages and little training.
    In fact, in the immediate aftermath of September 11, while 
Customs was and still is on its highest state of alert, I noted 
as I passed a secure area, the checkpoint going into the port 
area of the port, that there was no one in the security 
checkpoint. I sat for a few minutes thinking that maybe 
somebody had stepped into the bathroom, and it was the case. 
They had stepped away from the access. So access to the secure 
area was totally insecure.
    The second question you asked me to address is what 
problems confront the Customs Service and other Federal 
agencies charged with securing our ports. I believe that the 
biggest problem is a lack of personnel. As I mentioned earlier, 
trade has grown exponentially. The number of airports, 
seaports, and border crossings have increased and have seen 
huge increases in passenger traffic. Funding and personnel 
levels have not kept up. I believe that funding is also an 
issue with regard to the use of low-wage contract personnel to 
provide security services to the port.
    Another problem facing Customs in securing our ports is 
that I believe the balance between rigorous enforcement and 
facilitation of the trade can tip too much towards trade 
facilitation. In the aftermath of the September 11 attacks, 
there has been a renewed focus on our enforcement role and it 
has revealed great vulnerabilities. Yet we need to move trade 
and people throughout ports quickly, but we also need to make 
sure that we are doing it in a way that protects our security. 
In order to do both, we need more personnel.
    Other problems mentioned earlier include lack of adequate 
technology and timely and accurate manifest information. It 
also includes the sharing of information.
    The final issue you asked me to address was whether I had 
any recommendations to address the problems discussed above. 
The most important recommendation I would make is that Customs 
needs to be provided with adequate funding. In February 2000, 
the Customs Service commissioned a study, referred to as the 
Resource Allocation Model, that set optimum staffing levels for 
Customs at ports throughout the country. That report, which I 
would like to submit for the record, showed a need for 14,000 
additional Customs positions. That was before September 11. I 
would hope that Congress would act to provide those additional 
positions.
    I believe that there is also a need to look at recruitment 
and retention issues for Customs inspectors. The compensation 
and benefits are less generous than many State and local law 
enforcement officers and there is a serious concern that 
experienced Customs inspectors will leave to go to other 
professions, including the air marshals, due to the more 
generous compensation package, particularly in the area of 
retirement. Customs inspectors should receive the 20-year 
retirement benefit available to other Federal law enforcement 
officers if Customs is to remain competitive.
    Customs also needs upgraded technology. Congress has 
provided initial funding for the Automated Commercial 
Environment, or ACE, system, which will make remote inspection 
of cargo more accurate. I must point out, however, that this 
kind of technology can never take the place of physical 
inspection.
    There is also a need to address the physical security 
issues at our ports by setting up secure areas for incoming 
cargo and personnel and by ensuring that port security 
personnel are well trained.
    I would add just one more thing. Customs recently has 
entered into a program which has taken away the option of 
boarding vessels midstream for Customs. This really has serious 
consequences, because, in effect, it leaves Customs inspectors 
such as myself and my counterparts blind as to what is in a 
vessel sitting in the river.
    Many vessels arrive in the Port of New Orleans. They go to 
anchor. They actually load or discharge their cargo all while 
at anchor, so we will never have an opportunity to board the 
vessel to fully look at the manifest, and we use--in the case 
of the radioactive container, there are many needs that we have 
to look at. We have to match all of these up just to try to 
come up with a picture that is reasonably accurate, and this is 
about accuracy.
    I have heard other panel members discuss the fact that 
Customs' area of expertise is the cargo. I believe that is 
true. I believe it is supposed to be. But I want to impress 
upon you that, by our own study, 56 percent accurate is not a 
very good rate.
    So we have to use whatever means that are available to us. 
That includes the vessel, the chief officer of the vessel, the 
information that the steamship line provides us, stevedore 
information. We get it from anyplace that we can, and then what 
we have to do is basically put all that information together 
and extrapolate what we think is the best possible picture of 
what is on the vessel.
    Thank you. I would be happy to answer any questions.
    Chairman Lieberman. Thanks very much to you, Mr. Acosta. We 
have got a lot of work to do.
    Mr. Acosta. Yes, sir.
    Chairman Lieberman. Mr. Laden, you bring a unique 
perspective and a very important one here as President of 
Target Customs Brokers, and that is the private sector, the 
customers. Thank you for being here.

  TESTIMONY OF MICHAEL D. LADEN,\1\ PRESIDENT, TARGET CUSTOMS 
                         BROKERS, INC.

    Mr. Laden. Thank you, Mr. Chairman. Mr. Chairman, Members 
of the Committee, good morning. My name is Michael Laden and I 
am the President of Target Customs Brokers, Inc., a wholly 
owned subsidiary of Target Corporation. I am also the current 
Chairman of the American Association of Exporters and 
Importers, and I am an appointee to the Treasury Advisory 
Committee on the Commercial Operations of the U.S. Customs 
Service, otherwise known as COAC. I would like to thank you for 
allowing me the opportunity to express my views under 
consideration today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Laden appears in the Appendix on 
page 133.
---------------------------------------------------------------------------
    Without trying to become too prophetic or philosophical in 
my comments, the atrocities committed against us all on 
September 11 have forever distorted the way in which we as a 
people will live. It is reshaping and transforming the way we 
think about everything, security first, everything else second. 
``Just in time'' for some companies has morphed into ``just in 
case,'' adjusting lead times and building safety stocks to 
offset potential security delays.
    Our industry, perhaps more than any other in America, will 
be deeply impacted just by the very nature of the business 
itself. As you have heard, the fabric of our industry is an 
intricate weave of very complex components and stakeholders. A 
single import shipment and the documents accompanying it pass 
through many hands and many different checkpoints as it travels 
to our country. Every one of those handoffs creates new 
vulnerabilities.
    Now, before I continue with my comments, please allow me to 
make one very important distinction. I am not holding myself 
out as a security expert. I do rely on others, including the 
U.S. Customs Service, for advice and assistance. What I can 
offer this Committee today, however, is more than 25 years of 
practical operations experience in international logistics and 
on Customs matters.
    Target's bottom line is this: We want no more nor any less 
than exactly what we have ordered when it comes to an 
international consignment. Simply put, we want no contraband of 
any kind--drugs, laundered money, weapons of mass destruction, 
bio- or chemical-hazards contaminating our shipments, and we 
certainly do not want to fathom the possibility of fouling our 
domestic supply chain. You do not need a very vivid imagination 
to know that the consequences of that would be catastrophic.
    In part, some of the answers to our security concerns lie 
in newer developing technologies, but we must also rely on good 
old-fashioned common sense and American ingenuity. All 
stakeholders in the supply chain must closely examine their 
processes end to end.
    I am pleased to report to you and the Committee Members 
today that the trade community and the U.S. Customs Service, 
under the direction of the Treasury Department, are working 
cooperatively together to improve many of the security features 
already in place. At the U.S. Customs Trade Symposium held last 
week in Washington, Customs Commissioner Bonner called upon the 
trade community to advance the partnership currently embracing 
Customs and the trade to a new plateau. Speaking on behalf of 
Target, COAC, and AAEI, we stand prepared to work side-by-side 
with Customs and other areas of the Federal Government in 
establishing practical, effective, and cost-efficient methods 
to ensure the safekeeping of our supply chain.
    In my written statement submitted to the Committee, I 
discussed the industry partnership programs currently in place 
at U.S. Customs and some of the programs that Target employs to 
assure compliance and security. For example, Target's approved 
for purchase and vendor compliance programs are well positioned 
to complement our active participation in the Business Anti-
Smuggling Coalition, otherwise known as BASC. BASC is a 
voluntary industry-led, Customs-supported program that was 
established in 1995. It was a natural evolution of the Carrier 
Initiative Programs launched by Customs in the late 1980's and 
early 1990's.
    As Customs' air and sea interdiction efforts successfully 
closed off the smuggling corridors, the drug cartels 
increasingly looked for new and more innovative methods of 
moving their illicit products to market. As a result, they 
began targeting ordinary, law-abiding, legitimate commercial 
cargo and the BASC program was the end result of the trade 
community coming together and telling the world that we do not 
want contraband in our shipments.
    All of these programs are vigorously enforced and engaged 
at Target and we will be coordinating our deterrence and 
detection efforts throughout the company. As we speak, these 
programs are being strengthened and retrofitted to discourage 
supply chain incursions.
    And so now that we may begin a lively and active dialogue 
on these vital matters, I relinquish the rest of my time to the 
Committee for questions. Mr. Chairman, thank you for allowing 
me to appear before you today.
    Chairman Lieberman. Thanks very much, Mr. Laden, a very 
interesting piece of the picture. That is what one of the 
witnesses on the first panel said. Sometimes when folks go, and 
unfortunately, he mentioned another store chain in Wal-Mart, 
but when they go into Target, they just think about the 
inventory coming out of the back room, but obviously a lot of 
it comes from all around the world and it puts you--I am 
fascinated that this company, Target Customs Brokers, exists, 
but I obviously understand why. So thanks for your testimony.
    Mr. Laden. Sure.
    Chairman Lieberman. Gordon Fink is President of Emerging 
Technology Markets and is well positioned to testify about the 
range of technologies that can be used either by the government 
or the private sector to improve security at our ports. Thanks 
so much for being here.

TESTIMONY OF W. GORDON FINK,\1\ PRESIDENT, EMERGING TECHNOLOGY 
                            MARKETS

    Mr. Fink. Thank you very much, Mr. Lieberman. I appreciate 
the opportunity to summarize my statement, which I ask be 
included in the record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Fink appears in the Appendix on 
page 138.
---------------------------------------------------------------------------
    Chairman Lieberman. We will do it, without objection.
    Mr. Fink. Other Members of the Committee, and I applaud 
your holistic approach to looking at government programs. I am 
going to give you some personal examples from my career in the 
government where I can cite technology that can help out.
    Technology is being used, and I will mention and highlight 
just a few areas. One, to improve the asset utilization of the 
industry, the truck tractors, the trailers, and the use of the 
chassis. I am going to give you some examples of that; to meet 
the demands of the shippers and the constant need to know where 
their shipment is so that they know when they can advertise--
when they can start moving product into their stores.
    But significantly, just recently announced by the FBI is 
the increase in cargo theft. This was announced by the FBI at 
an American Trucking Association meeting a couple months ago. 
It is the fastest growing crime in the United States, and they 
mentioned it is at $12 billion a year. A lot of that cargo 
theft crime goes unreported. One of the reasons is that the 
penalties are lax, there is a high priority or a high payment 
for some of the cargo value. Pentium chips are more than worth 
their weight in equivalent cocaine and they are not marked so 
it is easy to resell them. And low risk as far as the law 
enforcement--the risk of being caught and the penalties are not 
very good.
    This also raises the thrust of stealing one of the trucks 
or one of the cargo containers even after it has arrived in the 
United States and use it as a delivery mechanism, as a weapon 
of terror. I have some ideas I will share with you about the 
technology that can address that.
    The technology is used extensively by the truck tractors 
now. The long-haul trucking firms, such as Schneider, J.B. 
Hunt, etc., know where their tractors are, the status of the 
engine, the behavior of their drivers. They can remotely shut 
it down. But more recently, they have chosen to put in the same 
technology in their trailers, because that asset can be 
decoupled from the tractor. They need to know its status, its 
location, when the doors are open, when the doors are closed, 
and it is part of asset management as well as knowing where 
their cargo is.
    The chassis--some on the Committee may not know what I mean 
by chassis, is a frame with pins on the end of it that the 
container sits down on and it is the device that moves a lot of 
these containers out of the ports, either to railheads or to 
their destination. There are about 750,000 of those chassis in 
use right now.
    While Senator Collins has left--one of the things that I 
would like to address is the fact that electronic seals for 
containers is now being tested. There is a pilot program in the 
Northwest part of the United States where cargo entering 
Seattle has an electronic seal affixed to it. It is for Customs 
in-bond shipments that go across the border at Blaine and into 
Canada. The technology is starting to emerge and most of the 
technology is now available. I am happy to see that it is 
available from several different vendors so that you can start 
to get some competition and help make the business case in the 
decision to adopt the technology.
    I have chosen to spend a lot of my time working with the 
Maritime Administration in a program they call the Cargo 
Handling Cooperative Program, which is described in my 
statement. It is a program to look for technology and make it 
available to the members of the industry--the carriers, the 
shippers, so that they can help understand what the technology 
is, make sure that they know what its maturity is, and then 
also help them make the business case for it.
    Some of the technology that is very relevant is non-
intrusive inspection, the so-called gamma ray inspection, which 
was started at the land border crossings between Mexico and the 
United States by U.S. Customs Service to inspect the trucks and 
some containers--mostly trucks and vehicles with a high degree 
of success. It does fit very well--with reference to some of 
the comments by previous panel members--to be deployed overseas 
at the point of embarkation.
    So in addition to getting a manifest of that particular 
container, you can get the electronic image of it. It can be 
rescanned when it comes into the United States. The scanners 
scan so when it is in motion, not at 60 miles an hour, but 
roughly up to 10 miles an hour, and it is also used on railroad 
trains the same way. They can rescan it to see if there has 
been any change. The scanning device can see if there is 
anything that is inconsistent with the manifest. These 
technologies are mature and ready for application.
    I would just like to conclude by making a couple of 
comments. My bio mentions that I helped set up, and run the El 
Paso Intelligence Center for DEA. The reason it was in El Paso 
was to put outside of the Washington area so that we could get 
Customs, Coast Guard, and INS agents, along with DEA agents, to 
work in harmony against the drug interdiction problem. It did 
work and it was very highly successful, including sharing that 
information with State and local authorities.
    There is a model that works in trying to get the different 
organizations to work and provide strategic intelligence--what 
may be coming in in what form, as well as tactical 
intelligence. Approximately 50 percent of the phone calls that 
were made by people in the field got some form of intelligence 
back. There was a high hit rate in the databases.
    I appeared before many committees of the Congress that did 
not want me to merge those databases together as is now being 
done in the counterterrorism area. When I was with the CIA, I 
helped set up the Counterterrorism Center with technology 
support. But at the time, there was a fear of merging those 
databases. So we had the individual agents go into their 
databases, pull out what they had, and made an assessment. So 
we had kind of a round robin assessment and provided the 
information back in the field.
    I also did have the pleasure, of working for Bob Ehinger, 
who headed the International Trade Data System activity under 
the Department of Treasury. One of the significant outcomes of 
that activity is to combine all of the information requirements 
of the 100-plus Federal agencies that were mentioned before 
into one common database so that those people that import goods 
into the United States only have one form to fill out. It makes 
the scanning, the review of that data, it was mentioned 
earlier, much easier to do.
    So I have come here as a technologist talking about the 
maturity of technology, but I must also say that the response 
has got to be balanced by some of the other techniques, such as 
looking at the documentation--where that container has been, 
where the vessel has been, the crew on the vessel--as a part of 
the whole operation.
    That concludes my summary.
    Chairman Lieberman. Thanks, Mr. Fink. That is very 
interesting.
    Maybe I will take off from your testimony and ask the other 
witnesses the extent to which we are seeing some of the 
technologies that Mr. Fink describes embraced or utilized by 
the private and the public sectors, the idea of--mostly in the 
trucking business, but the idea that you can not only follow 
where the truck is, but almost what the truck driver is doing 
and then what is being opened and closed and when, and also 
this very interesting X-ray technology, which I gather lets you 
look inside a container----
    Mr. Fink. Yes, sir.
    Chairman Lieberman [continuing]. To see what is there 
without having to open it. What is the rate of acceptance of 
these? Maybe I will just go down, to the extent that you know, 
starting with you, Mr. Laden, in the private sector?
    Mr. Laden. The rate of acceptance is good. Some of the 
technology, though, is cost prohibitive still, as Mr. Fink 
suggested. There is an increase in availability of this kind of 
technology, but today, on seaborne--most of Target's business 
is marine.
    Chairman Lieberman. Right.
    Mr. Laden. On Target's business, we are not using 
transponders or GPS technology yet. We are using reusable 
seals. But we have found there is other technology or design 
flaws. The drug and contraband smugglers will just literally 
take the doors of the container off, defeating any seal that 
you have on, and replace the doors. We need as an industry to 
look at better design and what can be done.
    Chairman Lieberman. Mr. Acosta, are you seeing much of this 
new high-tech stuff coming into your work as a Customs 
inspector?
    Mr. Acosta. Yes. We utilize a gamma ray machine. Our 
problem is, I think we have the second prototype of the gamma 
ray machine, so we did real good in getting in there early to 
get a machine, but----
    Chairman Lieberman. Yes.
    Mr. Acosta [continuing]. So we have some down time with it. 
They are looking at it right now and hopefully we can upgrade 
that. We could probably use more than one, and because we have 
so many ports that are involved in our area, we take it on the 
road on occasion. So we have an opportunity to travel, for 
example, to the Gulf ports in Mississippi.
    Chairman Lieberman. And the containers go through it 
relatively quickly?
    Mr. Acosta. Yes. It is funny because it is hard to--
people's paradigms. So you have a truck driver and you explain 
that you can drive through this at about five miles an hour. It 
is OK. And they will drive up to a certain point and they will 
stop, because their idea is, well, if they are taking a picture 
of the container, it is going to be blurry. It is difficult to 
change that paradigm, but yes, you can.
    Chairman Lieberman. Of course, that is a great advance, 
because then you do not have to open it up. And the 
reliability, you have found, is pretty good?
    Mr. Acosta. It is reasonably good. Our picture is very 
small for what we have, so it is a little more difficult. What 
is good for us, for example, as in the story that I told you 
before, we can set this up and we can run empty containers 
through so we do not have to pop a seal and open the door, 
because it will tell us for sure that a container is empty. It 
will tell us if there is something in the container.
    Mr. Fink. I might mention, Mr. Chairman, the Port of Miami 
has found a lot of stolen vehicles leaving their port in what 
were thought to be empty containers, through X-raying empties 
that are departing the United States.
    Chairman Lieberman. Yes. That is important.
    Mr. Acosta. We do the same thing. We have an inbound and an 
outbound team, and, of course, they are looking for armaments, 
they are looking for stolen vehicles, they are looking for 
currency. So we can use that gamma ray technology both on 
inbound cargo and outbound cargo.
    One thing I would say about containers, though, is we talk 
about containers and containers can simply be thought of as a 
box. It is no more or no less than a box that you can put 
things in, just like any other box. But we are talking a lot 
about what you might find that is put into the box, maybe 
something in the cargo that is put into the box or something 
that is thrown in along with the cargo. But along those lines, 
we have to remember that the box itself accounts for about half 
of the seizures that we make. So within the walls, in the 
floor, in the roofing, in the tubing that the container is 
constructed in, many times, that is where we find contraband 
hidden, and a lot can be done--there is a lot that can be 
hidden in the box itself without talking about the space where 
you store cargo.
    Chairman Lieberman. Thanks. Chief Cook, have you seen any 
of this high-tech stuff coming into use in the Port of Memphis?
    Mr. Cook. Our Auto Theft Cargo Task Force has and is more 
and more familiar with this type of equipment every day. But 
usually when we come into contact with these boxes, they are 
already empty. We have found contraband in quite a number of 
them while doing other investigations, but yes, we are becoming 
more familiar with it every day.
    Chairman Lieberman. Thanks to all of you very much. I am 
going to call on Senator Thompson because I notice we have a 
vote that has just started, so I want to give my two colleagues 
time to ask some questions.
    Senator Thompson. Thank you, Mr. Chairman.
    I want to follow up on the technology question. I guess 
most people would wonder, if we have developed this technology 
to this advanced stage, why are we not inspecting more? What 
are the limits of technology? I mean, just for the layperson to 
understand, can scanning technology with a high degree of 
accuracy make a determination with regard to potential weapons 
of mass destruction or other things of that nature, and to what 
extent is it a technological limitation and to what extent is 
it a cost limitation?
    Mr. Fink. I think it is----
    Senator Thompson. Why are we not scanning more stuff and 
why do we not feel more secure if we have this capability?
    Mr. Fink. One of the things is the initial cost. These 
systems range up to $1 million apiece, and as you get more of 
them in operation, that cost will go down. Then there is the 
person who is looking at the image. We can do a lot to make 
that process move into pattern recognition into the computer to 
assist an operator.
    But there still are all deterrents, and while the payoff is 
high, it is not going to be 100 percent, and one of the things 
that we saw, of course, in the drug business and we now see in 
the theft business are organized criminal elements involvement. 
So they are very much aware and drilling out parts of the 
container and inserting some of their cargo in it, but you can 
still see some of those.
    I am encouraged because the technology is proven, and I 
think with quantity purchases it will be deployed. As you move 
inspection overseas, it raises another issue. Now you are 
asking the port of embarkation of that container to perform the 
imaging. But it is a global problem. Terrorism is a global 
problem. Maybe that will be part of what will help induce some 
of them to do it.
    One other thing I would just add. I do not know if Rear 
Admiral Larrabee is here, but in some of the U.S. ports, they 
have volunteered to put some of this scanning equipment in just 
to keep the flow of containers going. When Customs decides to 
pull something, it disrupts that flow. So they have said to me, 
I would invest in the gamma-ray equipment in a joint project 
with Customs in order to keep the cargo flowing. Some of the 
terminals do not have a lot of land to store the cargo on when 
Customs decides they want to conduct inspection, they disrupt 
the flow. So there are a number of business factors.
    Senator Thompson. Mr. Acosta, what would be your response 
to my question on why we are not inspecting more than 2 percent 
in some categories?
    Mr. Acosta. Somewhat the same. The systems are very costly, 
and so Customs has X amount of systems. We, of course, would--
ideally, if I could set it up in New Orleans, I would like to 
see a system up-river and one down-river--there are two 
separate areas that are sort of divided areas--and then another 
system that we could lend to some of the smaller ports, but we 
have one system.
    The second thing is that it requires personnel to run the 
system. So when you set up a gamma ray machine, you have to 
establish the perimeter. There is an element in there that can 
be hazardous to individuals, so we have to be able to make sure 
that we have the truck run through and to set up the flow of 
trucks. We have to have people inside working the machine, 
setting the machine up. We also have to have people available 
who, if necessary, will open and look in the containers 
immediately. Some containers we will target for further 
examination. Others, we are so interested in the image that we 
are seeing, we need to get into it right away.
    So that is upwards of 10 people, and I do not know if you 
remember, but when I told you that the personnel put in New 
Orleans today is 29 inspectors, that is a third of your 
workforce. It is very difficult. It is cost for the equipment 
and it is personnel. If you could give us more equipment and 
the personnel to operate it, we would do all of those things.
    Senator Thompson. Why did you stop instream, or were you 
told to stop instream?
    Mr. Acosta. They said it was a safety issue. I think that 
is bogus. I really think it is bogus.
    The second thing, and I did not mention it because I was 
conscious of the fact that I had a small period of time to 
deliver the statement, the second thing is that we have been 
questioned recently on the number of enforcement boardings that 
we have determined. I guess that is a budget issue and that is 
a problem because we do target vessels and we are conscious 
of--and I worked on the task force that gave us a boarding 
policy 2 years ago and we are not living up to that boarding 
policy. As a matter of fact, it just changed.
    So it bothers me that if we are true to what the policy 
said and we are doing vessel targeting based on all the 
information we had, and understand that sometimes it is 
difficult to get that information, that now, we have somebody 
that comes back and questions, well, you have too many 
enforcement boardings, and I do not understand that.
    Senator Thompson. Thank you for that. That is important.
    I do want to thank Chief Cook for being here. He is 
responsible for the investigation of all the crimes at the 
international port in Memphis. You have one of the better 
interagency coordination groups, I think, going. You pointed 
out the unique circumstances there that you have to deal with. 
It is not only the fourth largest inland port in the country, 
but the second largest inland port on the shallow draft portion 
of the Mississippi River and serves as a transportation hub and 
warehouse and distribution center, and perhaps no other port in 
the country shares the same characteristics as Memphis.
    I am wondering about a law or an approach by the Federal 
Government that is a one-size-fits-all. It seems to me that 
Memphis has some unique characteristics--inland port, heavier 
concentration of activity, and so forth. Do you see your 
situation as maybe needing some kind of different attention, 
than some other places?
    Mr. Cook. I think it is not recognized as the port that it 
is. Memphis has never, until the last few years, really 
recognized its own potential as a distribution center, but it 
is growing leaps and bounds by day. In fact, I mentioned the 
Frank Pidgeon Industrial Park, which is a new industrial park 
that is being developed on the Southwest corner, just South of 
what is now called President's Island, and it is going to be at 
least half as large as the industrial complex on President's 
Island.
    So much of the industry that I said is in Memphis, and 
those that come into Memphis, a large portion comes into 
Memphis, but it is distributed within 600 miles of Memphis. And 
because of the bridges, we estimated that about $2 billion 
worth of commerce crosses those bridges each day. We do not 
think that it gets enough attention as far as the types of 
visibility patrols.
    Now, we are doing things as far as our agencies that I 
mentioned, Tennessee and Arkansas agencies who both join in 
taking care of riding on the bridges and removing vehicles and 
so forth on the bridges. But as far as the actual, what I think 
should be 24-hour marine surveillance of the bridges from 
below, and also attention to the barges that are so large and 
so potentially dangerous as far as striking the bridges and 
just completely removing them from the river itself.
    I think that is a major concern, because one barge can 
actually take out both bridges, and especially from a vessel 
that is coming down-river. If that were to happen, it would 
really destroy commerce in the surrounding area. In fact, I 
believe it would actually kill it for at least 2 or 3 years it 
would take to rebuild the bridges.
    Senator Thompson. I think you are right. A lot of people do 
not understand the amount of traffic and the amount of activity 
going on there and that makes it a port that deserves much more 
attention. We appreciate what you are doing there.
    Mr. Cook. Thank you very much, sir.
    Senator Thompson. We also appreciate you taking a real 
leadership role in terms of the Southeast in your interagency 
work.
    Thank you, Mr. Chairman.
    Chairman Lieberman. Thank you, Senator Thompson.
    I thank the members of this panel as well as those on the 
first panel. I think the Committee has learned a lot as a 
result of the testimony today. I would like to think about, at 
the next hearing on this subject, calling the heads of the 
Federal Government agencies involved and ask some of the same 
questions of them that you have raised here.
    There is never enough time at these hearings, but there are 
a lot of questions unanswered, so I am going to leave the 
hearing record open for 2 weeks, and if it is all right--and 
even if it is not all right--we are going to submit some 
questions to you in writing to follow up and look forward to 
your answers.
    In the meantime, I thank you very much for your time and 
the great contribution you have made. I hope we can serve as 
advocates for what all of you want, which is a system that is 
both economically productive and efficient but is also secure, 
most important of all.
    The hearing is adjourned.
    [Whereupon, at 11:58 a.m., the Committee was adjourned.]

                            A P P E N D I X

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