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S. Hrg. 113–797 

CHARTING A PATH FORWARD FOR THE 

CHEMICAL FACILITIES ANTI-TERRORISM 

STANDARDS PROGRAM 

HEARING 

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

MAY 14, 2014 

Available via the World Wide Web: http://www.fdsys.gov/ 

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

THOMAS R. CARPER, Delaware Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

JOHN P. KILVINGTON, Acting Staff Director 

JOHN G. COLLINS, Senior Professional Staff Member 

JASON M. YANUSSI, Senior Professional Staff Member 

KEITH B. ASHDOWN, Minority Staff Director 

PATRICK J. BAILEY, Minority Counsel 

WILLIAM H.W. MCKENNA, Minority Investigative Counsel 

LAURA W. KILBRIDE, Chief Clerk 

LAUREN M. CORCORAN, Hearing Clerk 
(III) 

C O N T E N T S 

Opening statements: Page 

Senator Carper ................................................................................................. 1 

Senator Coburn ................................................................................................. 2 

Senator Landrieu .............................................................................................. 9 

Senator Johnson ............................................................................................... 13 

Senator Levin .................................................................................................... 15 

Prepared statements: 

Senator Carper ................................................................................................. 43 

Senator Coburn ................................................................................................. 46 

WITNESSES 

WEDNESDAY, MAY 14, 2014 

Hon. Suzanne E. Spaulding, Under Secretary, National Protection and Programs Directorate, U.S. Department of Homeland Security ............................ 3 

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

of Infrastructure Protection, National Protection and Programs Directorate, 

U.S. Department of Homeland Security ............................................................. 5 

Stephen L. Caldwell, Director, Homeland Security and Justice, U.S. Government Accountability Office .................................................................................. 7 

Dana A. Shea, Ph.D., Specialist in Science and Technology Policy, Resources, 

Science, and Industry Division, Congressional Research Service, Library 

of Congress ........................................................................................................... 28 

Anna Fendley, MPH, Legislative Representative, United Steelworkers ............ 30 

Timothy J. Scott, Chief Security Officer, The Dow Chemical Company, on 

behalf of Dow and the American Chemistry Council ........................................ 31 

ALPHABETICAL LIST OF WITNESSES

Caldwell, Stephen L.: 

Testimony .......................................................................................................... 7 

Prepared statement .......................................................................................... 55 

Fendley, Anna: 

Testimony .......................................................................................................... 30 

Prepared statement .......................................................................................... 87 

Scott, Timothy J.: 

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

Prepared statement .......................................................................................... 92 

Shea, Dana A.: 

Testimony .......................................................................................................... 28 

Prepared statement .......................................................................................... 70 

Spaulding, Hon. Suzanne E.: 

Testimony .......................................................................................................... 3 

Prepared statement .......................................................................................... 47 

Wulf, David M.: 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 47 

APPENDIX 

Statement submitted by the Society of Chemical Manufacturers and Affiliates ........................................................................................................................ 97

Responses for post-hearing questions for the Record from: 

Ms. Spaulding ................................................................................................... 102 

(1) 

CHARTING A PATH FORWARD FOR 

THE CHEMICAL FACILITIES ANTI-TERRORISM 

STANDARDS PROGRAM 

WEDNESDAY, MAY 14, 2014 

U.S. SENATE,

COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Committee met, pursuant to notice, 10:01 at a.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Thomas R. Carper, 

Chairman of the Committee, presiding. 

Present: Senators Carper, Levin, Landrieu, Coburn, and Johnson. 

OPENING STATEMENT OF CHAIRMAN CARPER 

Chairman CARPER. The hearing will come to order. I want to welcome everybody for coming today. I am going to make a very short 

statement, and then turn it over to Dr. Coburn. 

This program that was needed is a program that did not start 

well, had all kinds of problems, as you know. And I think the Department of Homeland Security (DHS) deserves some credit, a good 

deal of credit, for taking a program not well run and making it a 

whole lot better. There are a lot of folks that have been part of 

that, not just at DHS, but we commend you there. 

We also know everything we do we can do better, and we still 

need to do better here. I have some concerns, and we will talk 

about those. I know Dr. Coburn has some concerns. But I think we 

have the prospect here today for a very constructive hearing that, 

if done well and with good followup, would enable us to hopefully 

move forward with a reauthorization bill. And we need that because we have not had authorization for quite a while, and there 

are problems. 

When the government shuts down, we have a real problem with 

this program without the lack of an authorization bill, so thank you 

all for coming. I am looking forward to a really constructive hearing. 

We are going to have, unfortunately, a series of votes that start 

about 11:15, but Dr. Coburn and I have been practicing on how one 

of us stays, the other goes, and we swap back and forth and keep 

things moving. So my goal is to hopefully be finished with the first 

panel by maybe about 11:30 or so, and then we will bring on our 

second panel. Dr. Coburn. 
2 

OPENING STATEMENT OF SENATOR COBURN 

Senator COBURN. Well, good morning and welcome to you, David. 

I did not get to say greetings. I did to Suzanne and Stephen. 

I want to tell you how enthused I am with the leadership at DHS 

and the changes that are occurring, and congratulate you both in 

terms of your Secretary but also in terms of the improvements that 

are being made. And I mean that very sincerely. 

But one of the programs that deserves a robust review is the 

Chemical Facility Anti-Terrorism Standards (CFATS). Since 2007 

we have spent $600 million on the program, and less than 2 percent of the facilities have been inspected for compliance. And in my 

review, I have learned some things: 

One is that CFATS is not significantly reducing the risk that terrorists will use chemicals to conduct attacks against the United 

States. 

The second thing I have learned is that the approach to assessing risk in chemical facilities which guides the CFATS program is 

broken. We will go into that in the questions. 

Third, DHS is far behind in meeting its deadlines in this program, reviewing security plans, and inspecting facilities. That is 

not to say that David has not made a lot of progress. He has, and 

I congratulate him on it. 

My fourth criticism is there is not enough work with the private 

sector or security efforts to fix the problems in the programs, and 

my feeling is that we need to fix it before we make it permanent, 

and that is what I intend to do. 

I wanted to give you a little visual. Here are the requirements 

for a company that has to meet the Coast Guard’s Maritime Transportation Security Act (MTSA) program. Here are the requirements 

if you have to meet the Transportation Security Administration 

(TSA) Pipeline Security Branch guidance. Here is what is required 

if you have to meet the U.S. Environmental Protection Agency 

(EPA’s) Risk Management Program. And here is what you have to 

fill out if you are one of the 41,000 facilities regulated by CFATS. 

And then if you are one of the 4,100, besides filling that out, you 

have to fill this out. It cannot be that complicated. As a matter of 

fact, talking to industry, which I have, it is not that complicated. 

So one of the reasons it is hard to fix is because we have put all 

this gobbledygook that has no attendant impact on what we are 

doing. So if you take all three of these programs—EPA’s, TSA’s, 

and the Coast Guard’s—it does not even come close to what the requirements are for a chemical facility. And then if you are one at 

high risk that is covered by CFATS you have to spend 21⁄2 times 

more than that. 

We have to look at this program. We have to fix it. It is an important thing that we need to do. We need to solve the problems. 

I look forward to your testimony, and I thank you for being here. 

Chairman CARPER. All right. That is a good note to start on, isn’t 

it? We have our work cut out for us. 

One thing, I am not going to introduce our witnesses. You have 

been with us before. We are happy that you are with us again, and 

we appreciate your preparation. 
3 

1The prepared statement of Ms. Spaulding appears in the Appendix on page 47. 

Some of our colleagues will wander in and out during the course 

of this morning, and we will just identify people and recognize 

them as time allows. 

Please proceed. We had Department of Defense (DOD) here with 

us yesterday. Dr. Coburn and I worked them over for a couple of 

hours with our colleagues to try to figure out how they could do 

what you have done at DHS, and that is, to be not just auditable 

but also to get a clean financial audit in record time. And if DHS 

can do that with aplomb, then DOD should as well. In the entire 

testimony that they gave us, only one of them used an acronym, 

and I would just say that is a high standard to set for DOD to be 

able to do that sort of thing, so the Federal Bureau of Investigations (FBI), the Central Intelligence Agency (CIA), EPA, those are 

fine, but the other stuff? Stay away from it. Just stay away from 

it. Your job is to try to explain stuff. My job, our job, is to try to 

understand it. So just do not use acronyms. Thank you. 

Ms. Spaulding, you are recognized. Thank you for joining us. 

TESTIMONY OF THE HON. SUZANNE E. SPAULDING,1 UNDER 

SECRETARY, NATIONAL PROTECTION AND PROGRAMS DIRECTORATE, U.S. DEPARTMENT OF HOMELAND SECURITY 

Ms. SPAULDING. Thank you very much, Mr. Chairman, and we 

will certainly try to meet that high bar. 

I very much appreciate, Chairman Carper and Ranking Member 

Coburn, the opportunity to be here this morning to discuss the 

Chemical Facility Anti-Terrorism Standards program, fostering security at America’s highest-risk chemical facilities. 

Our testimony today focuses on the progress the program has 

made, our efforts to continue strengthening the program, and the 

need for permanent authorization to fully stabilize this program. 

Two years ago, DHS had not approved a single security plan. 

Today that number is 764. Two years ago, DHS had not completed 

a single compliance inspection. The first compliance inspections 

began last September, and today that number is 31, and our inspectors have conducted over 1,000 authorization inspections. 

Ninety-eight percent of Tier 1 facilities have an approved security plan; 66 percent of Tier 2 facilities and 39 percent of Tier 3 

facilities have an approved plan. We are sustaining an average rate 

of more than 80 approvals each month, which would cut in half the 

Government Accountability Office (GAO’s) estimate of how long it 

would take to clear the backlog of plan approvals. 

Approximately 75 percent of these facilities’ plans included measures recommended by DHS or the facility as necessary upgrades in 

order to satisfy the applicable Risk-Based Performance Standards. 

This is significant progress. It is a testament to the dedicated team 

at the Infrastructure Security and Compliance Division (ISCD), the 

program reforms they have put in place, and their efforts to work 

every day with our partners in the private sector and in government to put this program on a stable path. 

That work continues. We continue to engage with stakeholders 

and focus on three core areas to strengthen the program: first, reducing the backlog; two, improving the risk assessment process; 
4 

and, three, ensuring that all potentially high-risk facilities are 

identified. Along with long-term authorization, our continued focus 

on these areas will ensure our stakeholders have the stability they 

need to successfully comply with their regulatory obligations. We 

welcome the opportunity to work with you and our stakeholders on 

these important issues. 

First, the backlog. Successful efforts to streamline the approval 

process include encouraging increased use of Alternative Security 

Programs (ASP) and supporting industry stakeholders’ development of new templates, focusing inspections on key Risk-Based 

Performance Standards at our lower-tier facilities, and working at 

the corporate level to identify efficiencies. 

At the same time we will maintain the quality and thoroughness 

of the security plan approval process and the level of security required at chemical facilities. 

Improving the risk assessment process. DHS has conducted a 

thorough review of the CFATS risk assessment process. We have 

documented the risk assessment methodology, conducted an internal review of the risk assessment process, and initiated an external 

peer review. 

All three of these phases are now complete. We have analyzed 

the peer review recommendations and developed an implementation plan to enable us to address their recommendations in a timely and thoughtful manner. We also recognize that it is essential to 

continue to engage with stakeholders as we assess changes to the 

risk assessment process. We intend to adopt appropriate changes 

to the tiering methodology in an integrated fashion, addressing as 

many issues concurrently as we possibly can, to balance improvements to the methodology with our stakeholders’ need for stability. 

Following the tragic explosion in West, Texas, just over a year 

ago, DHS has taken a number of steps to ensure that facilities are 

aware of their reporting obligations under CFATS. As you know, 

that incident led the President to issue an Executive Order (EO) 

on chemical safety and security with DHS as a co-chair of the implementation group. That group will provide recommendations to 

the President to improve information collection, more effectively 

share information between agencies, improve operational and Federal coordination efforts, and improve the effectiveness of existing 

policies governing chemicals and chemical facilities. 

In addition to enhanced coordination with Federal, State, and 

local partners, these efforts will help ensure that the Federal Government most effectively uses its collective resources for managing 

chemical facility risk. 

Finally, the Department strongly believes that long-term authorization would be beneficial to your oversight activities by ensuring 

the full maturation of the program and the review and approval of 

backlogged Site Security Plans (SSPs). Efforts to codify and enhance this authority to seek out noncompliant facilities will also 

greatly support our ongoing actions to bring those facilities into 

compliance. And perhaps most importantly, long-term authorization will provide industry stakeholders with the stability they need 

to plan for and invest in CFATS security-related measures. An authorization period of 5 years or longer would also enable Congress 
5 

1The prepared statement of Mr. Wulf appears in the Appendix on page 47. 

to send an important message to facilities that may willfully be 

seeking to avoid compliance. 

In conclusion, Mr. Chairman, I am proud of the progress we have 

made and the efforts we are taking to secure America’s highest-risk 

facilities. We are committed to working with you to pass legislation 

to authorize the program. CFATS is making the Nation more secure by reducing the risks associated with our Nation’s chemical infrastructure, and we along with our stakeholders and partners are 

committed to its continued success. 

Thank you for the opportunity to testify today, and I look forward to answering your questions. 

Chairman CARPER. We appreciate that opening statement, and 

we look forward to hearing now from Mr. Wulf. Please proceed. 

TESTIMONY OF DAVID M. WULF,1 DIRECTOR, INFRASTRUCTURE SECURITY COMPLIANCE DIVISION, OFFICE OF INFRASTRUCTURE PROTECTION, NATIONAL PROTECTION AND 

PROGRAMS DIRECTORATE, U.S. DEPARTMENT OF HOMELAND SECURITY 

Mr. WULF. Thank you, Chairman Carper, Senator Coburn and 

Members of the Committee. I appreciate the opportunity to testify 

before you today to provide an update on the progress of the Chemical Facility Anti-Terrorism Standards program, the progress the 

CFATS program has made, and to discuss the prospect of long-term 

authorization for this important anti-terrorism program that fosters security at America’s highest-risk chemical facilities. 

Earlier this week, our program reached a new milestone as I had 

the privilege of granting final approval of the 750th Site Security 

Plan that has been approved under CFATS, a security plan belonging to a small chemical distributor in the Midwest. While there certainly remains more to do, the Department, including our Infrastructure Security Compliance Division, is continuing the forward 

momentum the CFATS program has experienced over the past 2 

years. 

The pace of authorizations and approvals is increasing consistently. Through much hard work on the part of our staff and industry stakeholders, we have since September, just 8 months ago, 

more than tripled the number of Site Security Plans that have attained final approval. As I noted, that number now stands at more 

than 750 with more than 1,500 facilities having attained authorization of their Site Security Plans. 

The CFATS program has matured tremendously over the past 2 

years as we have addressed the challenges described in the internal memorandum and associated action plan that was developed in 

the fall of 2011. We have developed improved policies, procedures, 

and training to ensure that inspections are conducted in a consistent and thorough fashion. We have implemented an effective, 

streamlined Site Security Plan review process, a process that has 

greatly enhanced our ability to authorize and, as appropriate, grant 

final approval for Site Security Plans. 

We have also done much to stabilize our leadership cadre by hiring permanent seasoned managers, and we continue to foster 
6 

transparency and open communication throughout the organization. I would like to recognize our workforce, which truly has a passion for the mission of chemical facility security, and is on the job 

every day working hard in concert with our industry stakeholders 

to foster security for America’s highest-risk chemical infrastructure. 

Our pace of inspections, reviews, and approvals will increase further as we continue to achieve efficiencies and to implement gamechanging initiatives to streamline our processes and to work with 

stakeholders. I expect to continue to conduct inspections at a rate 

of more than 100 per month and to continue authorizing and approving security plans while moving further into a regular cycle of 

compliance inspection activity. 

Among other game-changing measures, we are assigning corporate case managers, inspectors who are working directly with 

companies that operate multiple CFATS facilities and which frequently have corporate policies and practices that are consistent 

company-wide in an effort to further streamline the inspection and 

approval process for those facilities. 

I have testified before this and other Congressional Committees 

10 times in the past 2 years, and I have not been hesitant to highlight the challenges that have faced our program. I am pleased to 

tell you today, however, that this program is in a far different and 

much better place than it was 2 years ago. It is a program that 

truly has moved to the next level and that could benefit tremendously from the stability that would come with a long-term or permanent authorization. 

In view of the significant forward progress CFATS has made, it 

is appropriate that Congress is considering authorizing the program on a long-term basis. Long-term authorization will provide industry with the certainty it needs to plan for and invest in CFATSrelated security measures, and it will provide the Department with 

the ability to continue to recruit and retain top talent and continue 

planning and executing improvements to move the program forward. 

It will also reduce the possibility of another lapse in authority 

such as occurred during October’s government shutdown. In addition to the confusion this situation created among industry stakeholders, had the need arisen for the Department to take enforcement action to address a national security threat at a CFATS facility during the period of this lapse, the underlying statutory authority for such enforcement action would have been in doubt. This is 

not a situation anyone wants to see repeated. 

Our chemical security inspectors are today providing compliance 

assistance to facilities and conducting inspections at an unprecedented rate, and I am pleased to report that I have received much 

favorable feedback from our industry stakeholders about their experience with these inspections. As you know—and this is something for which I am profoundly grateful—our stakeholders are not 

shy when it comes to expressing their candid thoughts and concerns about the program. So I am confident that when I am hearing positive things from industry about their facilities’ inspectionsrelated experiences, we are on the right track. 
7 

1The prepared statement of Mr. Caldwell appears in the Appendix on page 55. 

You will hear from one such individual today, Tim Scott, representing Dow Chemical Company and the American Chemistry 

Council. A number of industry organizations have been instrumental in promoting the continued forward progress of CFATS. 

The American Chemistry Council has been a leader in the development of an Alternative Security Program template and, along with 

organizations such as the Society of Chemical Manufacturers and 

Affiliates, the National Association of Chemical Distributors, the 

American Fuel and Petrochemical Manufacturers, and many others, has for years played a critical role in educating chemical companies about CFATS and other regulatory and voluntary programs 

that foster chemical facility security. 

So thank you again for the opportunity to provide an update on 

the forward progress the CFATS program continues to make. It is 

an honor and a privilege to serve with the dedicated professionals 

of the Infrastructure Security Compliance Division and the National Protection and Programs Directorate (NPPD). We are committed 100 percent to the critical mission of securing our Nation’s 

highest-risk chemical infrastructure. Along with the rest of our 

team, I am excited and optimistic about the future of the CFATS 

program. 

Thank you again for the opportunity to be here today. I look forward to any questions you may have. 

Chairman CARPER. Good. Thanks. And let me just say you two 

have done a great job on those acronyms, too. 

Mr. WULF. Well, thank you. 

Chairman CARPER. All right. Mr. Caldwell, please. 

TESTIMONY OF STEPHEN L. CALDWELL,1 DIRECTOR, HOMELAND SECURITY AND JUSTICE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. CALDWELL. Chairman Carper and Ranking Member Coburn 

as well as Senator Landrieu and Senator Johnson, thank you very 

much for inviting GAO to discuss chemical security at the hearing 

today, especially about the path forward and potential reauthorization for the CFATS program. My written statement summarizes 

the work we did in 2012 and 2013 with some updates with the Department that we did in 2014, and I will summarize four key areas: 

identifying the chemical facilities, assessing the risks and 

prioritizing those facilities, reviewing Site Security Plans, and inspecting facilities for compliance. 

Based on the updates that we have had in our work, as well as 

through the hearing today, there are indications of progress in all 

of the four areas that I mentioned. 

Regarding the identification of facilities, the April 2013 explosion 

of the fertilizer factory in West, Texas, raised concerns about 

outliers, which are facilities that never reported to DHS but should 

have. On August 1, as has been mentioned, the President issued 

Executive Order, 13650, to address this issue, which calls for a 

working group to improve Federal, State, and local coordination for 

security and safety of chemical facilities and to, among other 
8 

things, identify additional facilities that, once identified, if appropriate, would be subject to regulation such as through CFATS. 

DHS reports on that and the working group is supposed to report 

back to the White House at the end of May. And in Ms. Spaulding’s 

budget testimony 2 weeks ago, she noted the request for additional 

resources that will be used for data matching between databases 

at CFATS, EPA, and the Occupational Safety and Health Administration (OSHA), and perhaps State and local databases as well. 

From our own data-matching efforts, we know that this is an intensive process from both the technology and from a labor standpoints. 

Regarding the assessment of risk and the prioritization of facilities, DHS is working to implement our prior recommendations on 

this risk management methodology. As was mentioned, they tasked 

the Homeland Security Studies and Analysis Institute to conduct 

an internal review of their methodology. They completed that review in October 2013, and the results were pretty similar to what 

we found in April 2013. So we feel that our finding has been validated, and the Department now has an implementation plan. We 

have not reviewed that plan yet, but we look forward to reviewing 

that plan. 

Regarding the review and the approval of Site Security Plans, 

our earlier report noted a cumbersome review process and a long 

backlog. As has just been reported, DHS reports streamlining the 

processes for CFATS, and the statistics this month indicate they 

have approved more than 700 security plans. That is about 18 to 

20 percent of the 4,000 facilities covered by CFATS. Given that percentage, our upcoming review will certainly look at those approvals, and we will revisit our earlier estimate, which said it would 

be 7 to 9 years to resolve the backlog. 

But the outstanding issue for all of the facilities and one we have 

made almost no progress since GAO started reviewing the program 

is the personnel surety issue. All of these plans that have been approved at the site level have been conditionally approved because 

there is still no resolution to Performance Standard 12, which is on 

personnel surety. So until this is resolved, none of the Site Security 

Plans actually have achieved final approval. Our understanding is 

that this rule is under consideration at the Office of Management 

and Budget (OMB) and has been for some time. That is the one 

area where we would like to see progress, and I think the Department would like to see progress on that as well. 

Regarding the inspection of facilities for compliance, DHS now 

reports they have started that, which is the final part of this process. This month they gave us an estimate that they had completed 

29 of these to date. At the time of our last in-depth audit, we had 

not looked at any of those because they had not started. As part 

of our upcoming review, this will be one of the new areas that we 

will look at to see how that is going. 

In closing, I would like to note that GAO still needs to verify a 

lot of this progress through in-depth audit, and we plan to do so. 

We have a mandate from the Appropriations Committees as well 

as at least one request from the House side from the authorizers 

to continue our audits. 

So with that, I will be happy to respond to any questions. 

Chairman CARPER. Great. Thanks so much, Mr. Caldwell. 
9 

As I mentioned to Dr. Coburn, I am prepared to yield my time 

to the Senator from Louisiana. Great to see you. And then I will 

just turn it over to Dr. Coburn, Senator Johnson, Senator Levin, 

and then I will ask some questions of my own. Nice to see you, 

Senator Landrieu. 

OPENING STATEMENT OF SENATOR LANDRIEU 

Senator LANDRIEU. Thank you, Mr. Chairman. I really appreciate 

the courtesy because I have to slip out, and I thank the Chairman. 

And I know we have votes at 11:15, so let me get right to it. 

As the Chair of the Appropriations Committee for Homeland Security, I have been funding or our Committee has been funding this 

program without authorization now for several years because we 

know how important it is. 

Let me begin by saying that I am proud of the chemical industry 

in our State. It employs 26,000 people directly and tens of thousands of people indirectly. It is a very vital industry, Mr. Chairman, not just to Louisiana but to your State, of course, and to other 

places in this country. 

In addition, not only is it vital to creating high-paying middleclass jobs that are very skilled and highly technical, but we are in 

a boom cycle because of the finding of natural gas. Natural gas is 

used as a feedstock, so getting these regulations efficient and correctly, both for safety and also for efficient permitting of these facilities so they can continue to grow is absolutely essential. 

If I am correct, a few years ago we had a 9-year backlog or an 

8-year backlog. Is that correct, Ms. Spaulding? 

Ms. SPAULDING. Senator, GAO’s estimate was a 7-to 9-year backlog. We believe we are now sustaining a rate that would cut that 

time in half to get through the backlogs. 

Senator LANDRIEU. But it is still too long. I mean, Mr. Chairman, 

this is still too long. And I know, Senator Coburn, you agree with 

this. 

So I am going to be focused on this line item in our appropriations bill and ask my Ranking Member to really focus on what we 

can do to help here. But I think the authorizers could give us some 

good direction on this, and so I am looking forward to hearing from 

the authorizers about how they would like to move forward. But we 

have an opportunity to create literally thousands of jobs. This permitting has to go quickly, of course. The facilities have to be safe. 

So I will just leave it at that and just submit a question to the 

record, Mr. Chairman, since you have been so gracious, that the 

Personnel Surety Program must be implemented in a way that 

does not hurt thousands of contractors that are working every day 

on these facilities. I was encouraged to see the suggestion, a new 

implementation procedure that took some of the initial comments. 

What is the timeline for completion and implementation of that 

rule? And what is the nature of the feedback that you are getting? 

Now, to respect the Committee, why don’t you just submit that 

to me in writing? And then they can proceed with their questions. 

Senator LANDRIEU. Mr. Chairman, thank you very much, and I 

look forward to working with you and Senator Coburn as we move 

forward. 
10 

Chairman CARPER. You bet. A great opportunity for the authorizers and the appropriators to work together in yet other venues, 

so that is great. Thank you. Dr. Coburn. 

Senator COBURN. So let me summarize what I have heard, and 

you all correct me if I am wrong. You have 750 Site Security Plans 

approved? 

Mr. WULF. That is right. It is a little more than 760. 

Senator COBURN. So that means there are still 3,200 that have 

not been approved. 

Mr. WULF. Yes, there are approximately 3,200 that have received 

final tiers, about 4,000 in the entire universe. 

Senator COBURN. But they still have not been approved. 

Mr. WULF. That is correct. 

Senator COBURN. All right. And you are going to do 100 inspections a month. 

Mr. WULF. That is correct. 

Senator COBURN. Right. So we are still 3 years from getting everybody inspected. And I made my point on the paperwork requirement. Somebody ought to review that. 

Secretary Spaulding, one of the questions I have for you—you do 

not have to respond to it, but I would like an analysis from your 

office of here is what the peer review said and here is what we 

have done in response to the peer review because it was valuable. 

Mr. Wulf, the first problems with the risk assessment in DHS 

was found in 2011, before you got there. 

Mr. WULF. Yes. 

Senator COBURN. The GAO identified problems with it again in 

2013, and then the peer review found the same problem again. 

Why haven’t we fixed the assessment process? 

Mr. WULF. Well, we are in the process of implementing improvements to the risk-tiering methodology. Much of what the peer review panel found and observed we also had noted through our own 

internal documentation of the methodology and our own internal 

Department review of the methodology. So we are, moving forward 

aggressively to look at how we can more fully incorporate considerations of vulnerability and threat into the risk-tiering methodology. 

The peer review panel did validate that consequence is an appropriate driver of tiering. Our model right now is very heavily focused on consequence. The model can certainly be improved. We 

are committed to improving it. And as the Under Secretary noted, 

we are going to move forward to do that in a way that balances 

the need for improvement with the need for industry to have some 

measure of stability in our risk tiering. 

Senator COBURN. One of the things you have in risk tiering is the 

location, the State. Each State has a different one. Let us take 

Kansas City, for example. If you are in Kansas City, Kansas, you 

have a different rating than if you are in Kansas City, Missouri. 

Correct? 

Mr. WULF. That—— 

Senator COBURN. And you may be 2 miles away from each other. 

Mr. WULF. Yes. 

Senator COBURN. That does not make sense. Would you agree? 
11 

Mr. WULF. I would agree, and we will be looking to enhance the 

granularity with which we assess threat in the tiering methodology, absolutely. 

Senator COBURN. One of the things that I have noted, having 

been a manufacturer at one time—and I am not going to list these 

specifically, but we have a number of explosive precursors that are 

not on your list. I have 12 sitting in front of me. And my question 

is, and I will give this to you: Why not? 

And so what I cannot understand is why they were not included 

in the first place. Can you give me any history on that? 

Mr. WULF. Well, the CFATS regulation was directed to be put 

into place within, I think, a 6-month period by Congress when the 

initial authority was—— 

Senator COBURN. Seven years ago. 

Mr. WULF. Seven years ago, that is correct. So, I think it was 

some good work. I will not say that there is not room for improvement in that list, and we are anticipating in the very near future 

issuing an Advanced Notice of Proposed Rulemaking to open up the 

entirety of the CFATS regulation to comment and suggestions from 

our stakeholders and other interested parties for improvement. 

That will include the Appendix A list of chemicals of interest. So 

if there are additional chemicals that should be added, adjustments 

that should occur in the screening threshold quantities, et cetera, 

this is the opportunity to get that done. 

Senator COBURN. And some that should be removed. 

Mr. WULF. Conceivably. 

Senator COBURN. Yes. 

Mr. WULF. Conceivably. But our assessment now is, given our 

current authority, that is something that has to occur through the 

rulemaking process. 

Senator COBURN. One question for you. Are there any chemical 

plants right now that are considered higher risk than what they 

are just because they are on the wrong side of a State border? Is 

somebody falling into this tougher tier because they happen to be 

in a State with a high threat score, but, they are not really at a 

higher risk? 

Mr. WULF. The model is largely consequence driven, so not driven very heavily by the threat variable, so that is another of the 

things we are looking at. So I would say that is very unlikely. 

Senator COBURN. I have some significant chemical distributors in 

Oklahoma, and when I talk with them about the paperwork load— 

and they are small businesses—and one of the things that bothers 

me is the regulatory cost for a smaller chemical distributor versus 

a large one. And what we are doing—with the amount of paperwork and the compliance costs for a small firm—we are going to 

drive the small firms out of business. 

Now, the larger firms here do not care about that. As a matter 

of fact, the large firms routinely use the Federal Government to enhance their capability toward oligopolies. Where is your concern 

with that? What do we do about that? How do we make it easier, 

even though they might have, appropriate chemicals that need to 

be safeguarded against their use for terrorism? 

Ms. SPAULDING. Senator, we share your concern about ensuring 

that the regulatory burden does not fall to heavily on small and 
12 

medium-sized businesses. We feel a particular obligation to assist 

those businesses, and Director Wulf will be able to speak in some 

detail to all of the things that we have in place, including visits by 

our inspectors, compliance assistance visits to sit down with those 

facilities and give them assistance as well as all kinds of online activities. 

But perhaps most significantly, this is one of the reasons we 

have worked so hard to make Alternative Security Programs a viable alternative for facilities and to work with the trade associations 

to develop templates, but, again, to sit down with facilities one on 

one to help them work their way through what is a more streamlined process. Director. 

Mr. WULF. Yes, I think that is all right. Compliance assistance 

is a high priority. We will send our inspectors out to smaller facilities upon request to consult on security measures, on options. Our 

goal is to provide a maximum degree of flexibility and options for 

facilities to comply. 

With respect to the Site Security Plan questionnaire, we agree. 

We have assessed it. It is too cumbersome. We have already taken 

actions to streamline it. We have removed approximately 100 questions that we deemed to be not necessary or redundant in different 

places. We are going to continue to do that, continue to streamline 

that. And as the Under Secretary noted, the use of Alternative Security Program templates is another way in which facilities can tailor plans in a way that may work better for them, for a particular 

industry segment, and for that matter for companies that have 

multiple facilities doing similar things. 

Senator COBURN. Great. Have you all thought about the unintended consequences of what is happening right now in terms of 

storage of chemicals now, not in a facility but in a railroad car, just 

outside the facility or the fact that—because I do not want to have 

to be vulnerable to this regulation—my shipments are now in 

smaller quantities but 10 times as frequent? Have we thought 

about that? 

Ms. SPAULDING. We have, Senator. We are aware that there are 

other regulatory regimes that are complementary to ours that we 

believe limit the prospect that risk has merely been shifted with regard to storage and transportation of hazardous materials, for example. But we are looking at and continue to work at developing 

effective and granular metrics to make sure that we are, in fact, 

enhancing security in America with regard to the risk from highrisk chemical facilities. 

And so we have, for example, determined, with regard to Tier 1 

and Tier 2 facilities, that their Site Security Plans have been approved, at least in part, based on, about 75 percent of them, upgrades in their security. So we know that they are making investments that are, in fact, enhancing their security. 

But we are going back and verifying with—looking at bills of lading, shipping records, et cetera, what has happened with regard to 

these facilities that have reduced, modified, or eliminated their 

chemical holdings that make them no longer highest risk. 

Senator COBURN. All right. I am out of time. Thank you. 

Chairman CARPER. You bet. 

Senator Johnson, thanks for being here. 
13 

Senator JOHNSON. Thanks for having me. 

Chairman CARPER. Always asking good questions. 

Senator JOHNSON. I appreciate your welcoming me back. 

Chairman CARPER. Thank you. 

OPENING STATEMENT OF SENATOR JOHNSON 

Senator JOHNSON. Ms. Spaulding, you made a statement about 

companies willfully avoiding compliance. I just want to kind of drill 

down on that. Why would they willfully avoid compliance? 

Ms. SPAULDING. Senator, I do not know that we can say with any 

certainty that there are companies out there that are willfully 

avoiding compliance. But what I did say is that if there are companies that think they could perhaps wait us out because the program may not be reauthorized, that a long-term reauthorization 

would send a helpful message to them that this program is here 

to stay and they—— 

Senator JOHNSON. I understand, but, again, I am just trying to— 

why would anybody willfully not comply? It is a pretty basic question. Why is it? Do you ask yourself that question? 

Ms. SPAULDING. Senator, as I indicated, I think that the program 

that Congress has created here, the Chemical Facilities Anti-Terrorism Standards program, is promoting enhanced investments in 

security. Companies are making greater investments and more importantly, more effective investments in security than they would 

without this program. And so there may well be companies that 

choose not to make those investments and do not want to, therefore, come under this regulatory regime. 

Senator JOHNSON. Coming from business, having been International Organization for Standardization (ISO) certified, having to 

pay insurance, having to worry about the liability of something 

going wrong, from my standpoint I would think an awful lot of 

business people would want to comply, want to do it voluntarily if 

the government is facilitating their compliance versus, dictating a 

regulatory regime that might be considered onerous. So that is 

what I am trying to get in terms of what your feedback is from people that are having to comply with this, why would people try and 

avoid it? 

Ms. SPAULDING. Senator, I completely agree with you that the 

overwhelming majority of chemical facilities, are willingly complying with this and understand the value of this across the board 

with regard to the industry and—— 

Senator JOHNSON. Have you calculated, getting to Senator 

Coburn’s point about the thick stack of papers that have to be apparently filled out and the questions have to be answered, have you 

just done a calculation of what it costs to comply for a particular 

company? 

Ms. SPAULDING. Senator—— 

Senator JOHNSON. And different tiers, I mean, do you have any 

idea of the cost to companies? 

Ms. SPAULDING. I would defer to the Director as to whether we 

have tried to calculate the cost. We are certainly aware that this 

can be a burdensome process, which is why we have tried to establish as many mechanisms as we can to reduce that burden and con-
14 

tinue to look for ways to streamline not only our processes but the 

ability for industry to streamline their compliance. 

Senator JOHNSON. Let us go to Director Wulf then. Do you have 

any idea what it costs to comply? 

Mr. WULF. I think we will be in a better position to assess that 

as part of the rulemaking process as we move forward with our Advanced Notice of Proposed Rulemaking, a Notice of Proposed Rulemaking, and doing that cost-benefit analysis. I do not think that 

data existed as much when the program was getting started the 

last time rulemaking occurred. I—— 

Senator JOHNSON. In other words, that is something you really 

have not considered yet, you have not really—— 

Mr. WULF. Well, I think we are cognizant—— 

Senator JOHNSON [continuing]. Put a pencil to that or get feedback from companies? Have you ever had a company say, ‘‘This has 

already cost me $100,000’’ or—— 

Mr. WULF. Yes. We hear those things from companies, and our 

inspectors work with those companies to discuss options, in many 

cases much lower cost options than ones they had been considering, 

but options that will work to meet our non-prescriptive Risk-Based 

Performance Standards. So that is one of the great things about 

the CFATS program and why I think it is really uniquely well tailored to this industry, which is not a cookie-cutter industry. It is 

not even one industry. It is just a probably, I am going to say, almost in the hundreds of different types of facilities that are part 

of the CFATS universe. What works for one company to meet a 

Risk-Based Performance Standard may not be appropriate for another company. So CFATS is about providing options and flexibility. It is non-prescriptive. We absolutely will work with companies to discuss a variety of options. 

Senator JOHNSON. I am new to this issue. Are there penalties for 

noncompliance? 

Mr. WULF. Yes, there can be. There can be fines. 

Senator JOHNSON. And are those already being implemented? 

Mr. WULF. We have not fined a company for—— 

Senator JOHNSON. But you have the power to do that? 

Mr. WULF. We do. 

Senator JOHNSON. Have you tried to look at any private sector 

compliance or other, for example, the insurance market or ISO certification, have you looked at any other types of private sector certification programs that you can tie into to make this far more costeffective? I mean, ISO certification, when I am listening to the 

delays in getting people compliant, ISO certification is a very big 

deal for a manufacturer, but it does not take 3 or 4 years to get 

certification. It takes, if really done well, you can do it in a year. 

Have you looked at tying into those systems that are already in 

place? 

Mr. WULF. We have had discussions with industry associations, 

which manage some, I think, very effective stewardship programs, 

things like the Responsible Care program, the ChemStewards program, the relatively new Responsible Ag program, which promote 

security at different types of chemical facilities. So we will continue 

to discuss the ways in which we can leverage those programs. 

Senator JOHNSON. How familiar are you with ISO certification? 
15 

Mr. WULF. I am not very familiar with it. 

Senator JOHNSON. That would be something I would highly recommend you get up to speed on, and I would talk to the certification companies that do ISO certification, because this is exactly 

what manufacturers go through. They do a risk assessment. They 

have to comply to make sure that, if something catastrophic were 

to happen, they know how to handle that, how to prevent those catastrophes from occurring. I mean, I would think that would be a 

natural coordination between ISO certification and then also the 

insurance market. If you want to drive compliance in business, 

probably the best way to do it is, well, if you comply, your insurance rate is going to be lower. It is a natural way to facilitate compliance as opposed to having—holding penalties over somebody’s 

head. Does that make sense? 

Mr. WULF. Yes. 

Senator JOHNSON. OK. From my standpoint, I would love to see, 

again, the government contact ISO certification companies. I think 

you would be able to move this process forward at a much more 

rapid pace. 

Mr. WULF. We can certainly do that. 

Senator JOHNSON. And I doubt there are any of the large chemical manufacturers that are not ISO certified. You can just plug 

right into that process. 

Ms. SPAULDING. Senator, thank you. As Director Wulf said, we 

certainly have been in discussions with industry and are looking at 

all of the ways in which we might be able to hasten the elimination 

of this backlog consistent with our national security imperative, 

and that is certainly one of the ones that we are looking at. 

I did want to note that, with regard to your earlier question 

about the burden of compliance, we do have—each of our processes, 

the Top-Screen, the Security Vulnerability Assessment, and the 

Site Security Plan, are considered information collection requests, 

and pursuant to OMB process, we did have to provide them with 

estimates on the burden of this regulatory compliance, and I believe that is information we can provide you. 

Senator JOHNSON. OK. I would appreciate that. Thanks. 

Chairman CARPER. Thanks, Senator Johnson. Those were good 

points. Thank you. Senator Levin. 

OPENING STATEMENT OF SENATOR LEVIN 

Senator LEVIN. Thank you very much, Mr. Chairman. It is a very 

important hearing. We thank you and Dr. Coburn for having this 

hearing. It is a big industry in my State, the third largest, as a 

matter of fact, manufacturing industry in my State. I think there 

are 28,000 employees. And so to make sure that this program is 

fairly and effectively working is really important to us. 

I have a couple quick questions. One has to do with the fines 

that Senator Johnson asked about. As I understand, there are no 

fines for not filing. Is that correct? If you do not file, if an industry 

does not file, there is no fine. 

Mr. WULF. I think there is a school of thought to suggest that 

until a facility becomes regulated, goes through the process of filing 

its Top-Screen, being determined to be high-risk and having a Site 

Security Plan approved, the enforcement mechanisms may not 
16 

apply. I think our view is that we can issue a notice requesting or 

essentially ordering a facility to comply, to file, and then move forward in the enforcement process. 

Senator LEVIN. Is that the way you are operating. 

Mr. WULF. Yes. 

Senator LEVIN. Are you fining people who do not file when you 

find out about their existence? 

Mr. WULF. We have issued I think 66 administrative orders—— 

Senator LEVIN. No, that is not my question. Do you fine people 

for not filing? I know you have issued orders. After you find out 

about them—— 

Mr. WULF. We believe we could fine them, yes. 

Senator LEVIN. But you have not fined any—— 

Ms. SPAULDING. We have not. 

Mr. WULF. Everyone has come—— 

Senator LEVIN. But you think you have the power. 

Mr. WULF. We do. 

Senator LEVIN. Do you have any idea as to what number of people have not filed who should file? 

Mr. WULF. Well, I think that is a difficult—— 

Senator LEVIN. You have no idea. 

Mr. WULF [continuing]. Number to know. I think we know that 

we have engaged in extensive outreach, 11,000 or more separate 

outreach engagements, and that has generated upwards of 48,000 

Top-Screen filings. We believe we have a good handle on the known 

universe of high-risk chemical facilities, and we are working with 

our partner agencies to cross-walk data sets and to ensure that we 

are doing all that we can to identify potentially noncompliant facilities and bring them into the program. We are also working with 

State agencies, with State homeland security advisers to reach 

down—— 

Senator LEVIN. OK. I was asking about penalties for non-filing. 

At any rate, I want to ask also about your budget. Your budget has 

been cut, I see. Is there any effect on this program by the cuts in 

funding for the program? Has that had an effect? And does that 

help create the backlog? 

Ms. SPAULDING. Senator, we do not believe so. We have had to 

make some difficult choices with regard to our budget—— 

Senator LEVIN. But that is not one of the causes—— 

Ms. SPAULDING [continuing]. But the approval process has picked 

up speed over time. 

Senator LEVIN. All right. So there is no relationship between 

budget and the backlog or the speed of administration of the program? 

Ms. SPAULDING. Senator, at this point we believe we have the resources we need to sustain this pace and reduce this backlog. 

Senator LEVIN. All right. If you had more resources, could you 

speed up the pace? 

Ms. SPAULDING. Again, at this point we believe that we—we have 

streamlined the process—— 

Senator LEVIN. I understand. My question is: Could you pick up 

the pace if you had more resources? It is pretty straightforward. 

Ms. SPAULDING. Yes, frankly, Senator—— 

Senator LEVIN. I am not asking if you are asking for them—— 
17 

Ms. SPAULDING [continuing]. If there were more—— 

Senator LEVIN. I am just asking you a straightforward question. 

If you had more resources, could you pick up the pace? It is a very 

direct question. 

Ms. SPAULDING. If there were more people reviewing the Site Security Plans and if there were potentially more inspectors, although I am not sure the approval—that there is any backlog in 

inspections, but certainly with regard to reviewal of Site Security 

Plans and working with industry on the Alternative Security Plans, 

it is entirely possible, Senator. 

Senator LEVIN. There is a question of background checks for employees and unescorted visitors that I want to ask you about that 

provide identifying information to the DHS for use in screening employees against the terrorist screening database. The DHS is still 

in the process of finalizing how exactly facilities ensure that individuals with known terrorist affiliations do not gain access to highrisk facilities. A major chemical company, Dow Chemical in my 

State, told me that they are concerned that DHS does not tell them 

if someone in their facility is on the terrorist screening database. 

And labor groups are concerned that there is no transparency in 

the process, and for workers who might be inaccurately classified, 

that there is no appeal process. 

Well, let me put it, Director Wulf, to you: When will the process 

for which personnel surety or screening is going to be finalized by 

the DHS? 

Mr. WULF. We hope it will be finalized soon. We—— 

Senator LEVIN. Can you give me just an approximation? 

Mr. WULF. I think you would have to ask OMB, because the documentation is up there for final approval right now. 

Senator LEVIN. Well, what are you recommending? 

Mr. WULF. We are recommending a—well, we have proposed a 

program which would provide a number of different options for facilities to ensure vetting of persons who are seeking unescorted access to high-risk chemical facilities and the chemical holdings 

thereon. So the ability to directly vet those individuals by directly 

submitting information to the Department for vetting, the opportunity to leverage other vetting that has taken place, such as 

through the Transportation Workers Identification (TWIC) program, or the Hazardous Materials Endorsement program, as well 

as the opportunity to conduct vetting electronically and the opportunity to propose an additional option or options that we may not 

have considered. 

So we have tried to design a program that affords maximum 

flexibility. That is what we propose, and that is what is sitting 

at—— 

Senator LEVIN. And that is what you proposed to OMB? 

Mr. WULF. That is right. 

Senator LEVIN. And if they approve that program, how long after 

they approve it would it be in place? 

Mr. WULF. I think it would be within months. But we would proceed in a measured fashion. We would work first with a handful 

of facilities to ensure that we were getting everything right, that 

facilities were able to work well with the online system that we 

have developed to facilitate this vetting. But we do believe that this 
18 

is an important hole in the program that needs to be filled soon, 

ensuring that folks who are seeking unescorted access to our higher-risk chemical infrastructure are, in fact, vetted against the terrorist screening database. 

Senator LEVIN. Has OMB told you when they are going to give 

you an answer? 

Mr. WULF. They have not. 

Senator LEVIN. Thank you. 

Thank you, Mr. Chairman. 

Senator COBURN. Could I? You tell me if I am wrong on this. All 

of the DHS proposals for personnel surety require submitting information to CFATS, even if they have already been vetted by other 

DHS agencies? 

Ms. SPAULDING. Not exactly, Senator. There is an option there 

for facilities to use—to better leverage existing credentials from 

DHS that—— 

Senator COBURN. When did that go out to industry? Because that 

is not what I am hearing from industry. 

Ms. SPAULDING. We have spent months talking with industry to 

make sure that we understand their concerns and to talk with 

them about the ways in which we are thinking about this program 

and have shared—again, it is difficult to get out to all of the 4,000- 

plus facilities that are regulated, but we have in our notice or request that is with OMB included a proposal that would allow an 

electronically verified TWIC card to be used for meeting the personnel surety standard. And that does not require that they submit 

any information to the Department beyond what is already done in 

the TWIC program. 

Senator COBURN. What about a Hazardous Materials Endorsement (HME)? 

Mr. WULF. I do not believe there is currently a way to electronically verify a hazardous material—— 

Senator COBURN. But if somebody has that card, why do they 

have to get verified again by DHS? That is the question I am asking. It is make-work. If they have already cleared one agency in 

DHS, why do they have to clear another one? If they are good 

enough for part of it, why can’t they be good enough for this? 

Ms. SPAULDING. Senator, our concern is to make sure that the 

credentials that are being used to access the most sensitive parts 

of chemical facilities, where the chemicals of interest, highest-risk 

chemicals are located, that those credentials are still valid and are 

still held by the person who should be—— 

Senator COBURN. I understand that, but if they have been 

cleared by one agency in the Department of Homeland Security and 

termed a ‘‘chemical handler,’’ why isn’t that good enough? Why 

can’t they just submit this employee has this card, you have already approved them for handling the highest-risk chemicals, now 

you are going to make them go and get another certification from 

the same department of government to say, oh, yes, by the way, 

you are OK? Why can’t a business just say these people right here 

already have a TWIC card, already have a Hazardous Materials 

Endorsement, why aren’t they cleared automatically? 
19 

Mr. WULF. We would just be asking those facilities that are looking to leverage that existing vetting to provide us information like 

that in a number—— 

Senator COBURN. Well, why should they have to—why can’t they 

just keep it on file there and avow that we have these people covered? Why would we make them do it again? I mean, their TWIC 

card is not forever. 

Ms. SPAULDING. Senator, under the Maritime Transportation 

Safety Act, which the Coast Guard administers at maritime chemical facilities, that regime always envisioned the use of an electronic reader as an essential and important—— 

Senator COBURN. You are missing my point. I am not talking 

about electronic. I am talking about if a company says these people 

are certified and we can prove it in our files, when you come in to 

inspect that, rather than make them go through the process of 

sending a whole lot more information to you, which you really do 

not need, and their assumption is there is a penalty if I am lying 

about somebody’s access, there is nothing to be gained by having 

them have another surety requirement when they have already 

passed two surety requirements from the same department. That 

is my point. 

Ms. SPAULDING. Senator, those regimes are—those credentials 

are for different purposes, and what the Personnel Surety Program 

is about is access to the most highest-risk chemicals within a facility, unescorted access to those chemicals. And the HME card is for 

a different regulatory purpose. 

Senator COBURN. But you would agree, if somebody has an HME 

card, they have access to them anyway. So what is the difference? 

I mean, you have already done a security check on them. 

I am finished. Sorry. 

Ms. SPAULDING. Senator, I take your point, and I understand the 

point you are making. Again, our interest is in making sure that, 

with regard to people who have unescorted access to these chemicals, that this card, the credential that they have, is still valid and 

they are the appropriate card holder. We will continue to work 

with industry and with the Committee to find ways to accomplish 

that security objective that is least burdensome to industry that we 

can possibly—— 

Senator COBURN. But what I hear you saying, they are still going 

to have to submit to the CFATS that we have an HME card or we 

have a TWIC card, and then they are going to have to apply. 

Ms. SPAULDING. Senator, there is a fourth option under our request with OMB, and that is for chemical facilities to present us 

with their alternative to meet the security standard, and that reflects our ongoing commitment. We do not necessarily have all the 

answers. There may be alternatives there that we have not yet 

thought of that industry will come forward with, and we are open 

to that possibility. 

Senator COBURN. If a truck driver with a TWIC card is carrying 

a load of isopropyl percarbonate, which is a catalyst which can explode if you lose the refrigeration on it, they have access to a bomb. 

And if we are going to recheck that truck driver when they are unloading into a special area in a special plant, again, against a code 
20 

that is redundant and not efficient and cost prohibitive. That is the 

kind of point I am trying to make. 

I will make one other point. I think it was during the Clinton Administration under OSHA that they decided that they were going 

to take a period of time where they were going to not be a penalizing organization; they were going to be a fixing organization. And 

the response of the industry was miraculous. OSHA came in, said, 

‘‘You have these problems. We want you to fix these problems. We 

are not going to penalize you. Fix them. We will come back in 6 

months and look at it.’’ And that approach did more for employee 

safety than all of the other OSHA regulations we have ever done. 

And I hear from Mr. Wulf that that is the kind of approach you 

are trying to take. And what I would say is that is the approach 

that is going to work best with industry: a cooperative, compliant 

partnership that solves these problems. 

Chairman CARPER. This past Sunday was Mother’s Day, and I 

am sitting here not channeling my mother but my father, and my 

father was always saying to my sister and me, when we would do 

some bone-headed stunt, he would say, ‘‘Just use some common 

sense.’’ This may be one of those situations where a little common 

sense would go a long way. And I think Dr. Coburn raises some 

important points. I think you know that. Let us just figure out how 

we can address that, those concerns. 

The other thing I would say is you all are interested in if not a 

permanent reauthorization, at least a multiyear reauthorization. I 

think I heard 5 years from you, Ms. Spaulding, and the House, our 

counterparts in the House, reported out a reauthorization of, I 

think, 3 years. I think we started off, maybe when this program 

was created, with a 3-year authorization, I believe. And since then 

we have been pretty much without authorization, as I understand. 

And somewhere between no authorization and permanent, there is 

a number there that probably works. And to the extent that you 

can continue to take seriously the concerns Dr. Coburn is raising 

and others are raising, to the extent that you can take seriously 

those concerns and address them in a way using some common 

sense, we are going to get closer—we are not going to go to permanent, but we will get closer on that end of the scale than to zero. 

So that would be my knowledge that I would share with you on 

this. 

Mr. Caldwell, I do not think you have been talking nearly 

enough today, and we are going to give you an opportunity to rectify that. And put yourself in our shoes. I am reminded a little bit, 

Tom and Ron, I am reminded a little bit of what DHS did in moving from the high-risk list, unable to even be auditable much less 

get audited, to move not with lightning speed but to move pretty 

fast from a point of being auditable to getting—passing a clean 

audit. It was pretty impressive. We urged our DOD friends yesterday to take a chapter out of that book. 

I think that this program in terms of going where it needs to go, 

you are sort of at the same point where—it is not the right analogy, but I will say you are auditable, close to auditable. But what 

we need to do is just not to say, OK, well, things are going fine 

and we will rest on our laurels. I mean, this is time to put our foot 

on the pedal to the metal and just push it on through. And to the 
21 

extent that we can do that—and we would play a role in that obviously—we will all be better off. 

All right, Mr. Caldwell. We are not going to talk about it right 

now, about all the good things that are being done. There are a 

number of those, and we applaud that. But I want you to help us 

focus on that which still needs to be done by the Department, by 

Mr. Wulf and the folks who work in this program under the direction of Ms. Spaulding. Focus on the stuff that still needs to be addressed and that you guys have pointed out, and just let us talk 

about that. You have heard from Dr. Coburn and others some of 

our concerns on what needs to be done. Just speak to those, please. 

What I want to get here, I want to get some consensus, sort of 

a to-do list coming out of here, what we think you need to be doing 

and what you all think we need to be doing, and let us just move 

forward. 

Go ahead, please. 

Mr. CALDWELL. Well, in terms of your analogy to the high-risk 

list, there are a couple of areas where we pointed out serious problems with the programs. We had help from the Department doing 

that, when their internal memo was leaked a couple years ago, that 

these were indeed serious problems. 

We have found—and we think that our involvement helped 

this—that the Department has put together some very specific action plans. For example, they had a 94-item action plan to address 

the serious management problems they had. Now they have an annual operations plan to actually operationalize that plan so that 

they are tracking some of these things that they are doing. At least 

for some of those management problems, we are beyond the most 

serious problems to focus on actually running the program, so I 

think that is positive. 

In terms of running the program, the biggest issue that we have 

at this point as an open issue is the vulnerability assessments. We 

have open recommendations on that. And going back to the questions you had asked about the risk management that Senator 

Coburn had talked about. In terms of the consequence, even their 

own rules said that certain types of consequences are going to be 

included, and they did not include those. For example, economic 

consequences, according to their own rule, were going to be looked 

at, but they did not look at them. 

And in terms of vulnerability, they said they were going to look 

at vulnerability, but late in the process when they actually inspect 

the facility plans. To us, vulnerability is one of the things you consider up front. I do think it makes perfect sense to look at consequences first. But the reason that we got for them not including 

vulnerability is it was self-reported information, at the beginning 

of the process. 

Well, everything about the program is self-reported. So that just 

did not make sense to us. That is the biggest issue. DHS did have 

an internal review by the Institute for Homeland Security Analysis. 

The issue that we have not even looked at is the personnel surety one, which I have already talked about. 

Chairman CARPER. On the point he just made, very briefly, 15 

seconds, just respond please, Ms. Spaulding. 
22 

Ms. SPAULDING. So we did get recommendations from the external peer review on ways in which we might be able to better incorporate vulnerability in our risk-tiering methodology, and we are 

working through those recommendations now. 

Chairman CARPER. Good. Thank you. 

Mr. Caldwell, please proceed. 

Mr. CALDWELL. We are talking about them tweaking their methodology to have something consistent with the National Infrastructure Protection Plan (NIPP) and some of the standard risk management methodologies the Department uses. We think those are good 

criteria. 

We do not want them throwing new facilities on the list or off 

the list. At this point it would be reasonable as they go forward to 

amend as they go. Or else you are never going to get to a stable 

list of facilities that have requirements to be met. 

From our standpoint, obviously, the service we at GAO provide 

is going in and actually verifying the information. So we are about 

to start on our next phase of that audit work. We have, as I said, 

mandates from the appropriators as well as from the House side 

on the authorizers. We can work with this Committee if you want 

to be part of that audit. So that is it there. 

In terms of the bigger issue before you, which is authorization, 

I think that there are certain advantages of that. It provides some 

stability in terms of the CFATS workforce. Industry wants it as 

well. They want the stability, too. They want to know that CFATS 

is going to drop off. As Senator Johnson said will there actually be 

incentives for industry, not joining to joining or not reporting or reporting. 

The House bill also codifies some of the current practices based 

on regulation. But there is less authority if the regulations are not 

in the law. The House bill which we have been working with them 

on does emphasize certain corrective actions that need to be taken. 

So, I think we are on a path forward. There is impatience, and that 

is understandable. But, DHS appears to have a commitment to 

change, we are seeing that. 

Chairman CARPER. I feel like Dr. Coburn wants to jump in here. 

Senator COBURN. Well, I would just make two points. 

One, if we were starting over, what I think this Committee 

would recommend is much what the TSA did with the Pipeline Security Branch. It was a total collaborative process from the beginning where you had industry input working with committed government individuals to create a pipeline program against terrorism. 

It created a small amount of paperwork with massive compliance 

on part of the industry because they were part of it. 

The second example I would give is the President’s Executive 

Order on cybersecurity. It was a total collaborative process where 

the Administration listened to the players and we are getting a 

good result. And we did not do that in this. 

The final point I would make is if you have an explosives permit 

from the Bureau of Alcohol, Tobacco and Firearms (ATF), under 

your proposed guidelines, you still have to get another clearance 

from Homeland Security. That makes no sense whatsoever. And so 

you have to fix that. 
23 

So I do not know what you have at OMB, but I know what is 

rumored to be there, and what is rumored to be there is not going 

to be acceptable. So you have to figure out a way to utilize the resources of the rest of the government when we give clearances to 

somebody, especially an explosive permit. To say they have to go 

to another agency to get another permit again is absolutely—well, 

I will not use the word that I am thinking. 

Chairman CARPER. Now we are just going to wonder what word 

he was thinking. Let me reclaim my time—— 

Mr. CALDWELL. I think it was an acronym, sir. 

Chairman CARPER. It was an acronym? OK, probably. 

I want to turn to a concern relating to the ease of compliance for 

a large company, think DuPont, think Dow, as opposed to a small 

company that deals with some of these dangerous chemicals and 

has maybe a half dozen employees, and they are just trying to figure out how to keep afloat and meet payroll and sell their products 

and so forth. 

There are some concerns I have heard that some of our larger 

chemical companies may actually be advantaged by this program 

because it is easier for them to comply, and their small competitors, very small competitors, find it very difficult to comply. And I 

just want you to respond to that concern, Ms. Spaulding, if you 

would, please, and sort of the point here is similar to what Dr. 

Coburn raised earlier, ease of compliance, particularly for smaller 

companies, keeping an eye on risk. 

Ms. SPAULDING. Senator, it is a legitimate concern, and it is one 

that we share, and which is why we have worked hard to have in 

place as many mechanisms as we can to assist small and mediumsized businesses to comply with this important regulatory program. 

And that includes, onsite compliance assistance visits by our inspectors who are all across the country, who will come in and sit 

down with that facility, and provide whatever assistance they need 

in meeting their requirements. 

We have, the ability to call someone, a help desk. We have online 

resources. And, again, one of the things that we recognized sometime ago was perhaps most helpful was this option for an alternative security program, which can be a much more streamlined 

way of meeting the regulatory requirements with regard to submitting a security plan for your facility. And we have worked very 

hard with—industry has come to the table in full collaboration on 

this to help their industry partners by developing templates that 

will significantly ease the burden for companies to comply. 

Director Wulf, if you want to add anything to that? 

Mr. WULF. I think that is all covered very well. With respect to 

compliance assistance, as we work with these smaller companies to 

discuss options for meeting the Risk-Based Performance Standards 

and getting those Site Security Plans or Alternative Security Programs into shape, such that we are at a point where we can authorize the plan and go ahead and inspect it, I think it is important 

to recognize that although we have only gotten to—we have inspected, done formal inspections of a little more than 1,000 facilities, our inspectors have been out at other facilities that have not 

yet gotten to the point of inspections. So we are working particularly with smaller companies on a regular basis, and security is 
24 

being enhanced at those facilities, even prior to the formal inspection and approval. 

Chairman CARPER. All right. Thank you. We are going to start 

a vote, a series of several votes, in just a couple of minutes, and 

I think Dr. Coburn, when we start that, will go over and vote early 

and come back so I can vote on the first and second votes, and then 

we will switch places again, and when I come back, I will ask questions. 

I want us to drill down on the backlog. It used to be 7 to 9 years. 

It is now maybe half that. That is progress, but can we do better? 

You bet we can. And I want to just talk about specifically what you 

all need to do better, what we need to do to enable you to do better, 

and maybe what industry needs to do. 

Tom, would you like to ask anything else before you head out? 

Senator COBURN. No. I just would remind Under Secretary 

Spaulding we really want that analysis of what the peer review 

said versus what your response was. 

Ms. SPAULDING. Absolutely, Senator. We will get that to you. We 

very much valued the peer review’s recommendations, and as we 

have indicated, we have an implementation plan, and we would be 

happy to get that information over to you. Thank you, Senator. 

Chairman CARPER. All right. Thank you. Senator Johnson. 

Senator JOHNSON. I will just reinforce the point that you have 

literally thousands of private sector inspectors out there that can 

help you out. Whether it is people rating for insurance, whether it 

is ISO certification, those surveillance auditors, use them. No sense 

creating an extra burden for businesses. You have one inspection 

here, you have another inspection here. Rather than actually producing products, rather than concentrating in innovation, we are 

just worrying about audits and inspections. It gets pretty burdensome. 

So utilize what is already out there. Try and kill two or three or 

four birds with one stone. I would really encourage that. I think 

you would be far further ahead if you tied into ISO certification 

problems, if you tied into the insurance rating systems. It would 

work. 

Ms. SPAULDING. Thank you, Senator. 

Chairman CARPER. When our witnesses were before us yesterday 

from the Department of Defense, the Comptroller and others, we 

were acknowledging that they are making some progress toward 

moving toward being auditable. At least within the Marine Corps 

they are making some progress, the Navy, Department of Navy, the 

others beginning to but not nearly enough. And I said to our witnesses—Bob Hale, the Comptroller who is leaving, a good man. But 

I said to him and to them, ‘‘We acknowledge that it is not all on 

you. Part of this is on us.’’ And he said, ‘‘Well, we tried to make 

progress toward becoming auditable and to get a clean audit. But,’’ 

he said, ‘‘it has been challenging in the fiscal environment we have 

operated in recent years—shutdowns, fiscal cliffs, continuing resolutions, lack of certainty, lack of predictability.’’ And he is absolutely right. 

Part of this—what is it?—‘‘We have looked at the enemy, and it 

is us.’’ There is some of that going on here with respect to their 
25 

becoming auditable at DOD and our doing an even better job on 

this particular program. 

Before we break and bring on the second panel, let me just ask 

this: What can we do—and I think part of it would be a reauthorization, but just what can we do with some specificity, feel free to 

mention that, but then drill down a little bit beyond the 3, 5, or 

whatever period of time would be most helpful. And, Mr. Caldwell, 

I am going to ask you to go last on this, but, Suzanne, if you would 

just start off, and then David and then Steve, but, please, our responsibilities. 

Ms. SPAULDING. Mr. Chairman, thank you very much. Thank you 

for the question, and thank you for your interest and hard work 

and efforts to make sure that this program is on track and is where 

it needs to be. I indicated earlier how much we valued the peer review, outside input and recommendations. We very much value 

GAO’s second set of eyes, third, fourth set of eyes on our program, 

and we very much value the oversight of this Committee in helping 

us make sure that we are meeting the national security imperative 

in a way that makes sense for industry and keeps America safe. 

And so that continued oversight—— 

Chairman CARPER. I am going to interrupt you. 

Ms. SPAULDING [continuing]. Will be helpful. 

Chairman CARPER. Give me some specifics. I want some specifics. 

This is your chance to ask us, this is your—to say, ‘‘Here is your 

to-do list.’’ Give us your order. Or we will take the order, so, please, 

take advantage of it right now. 

Ms. SPAULDING. Thank you. I would, say again that the longterm authorization, permanent authorization for this program is 

probably the single most important thing that Congress could do to 

help advance this program. 

Chairman CARPER. All right. 

Ms. SPAULDING. For all of the reasons that we have talked about, 

and you mentioned in yesterday’s hearing the references to—— 

Chairman CARPER. I have that. Let us go—OK. 

Ms. SPAULDING [continuing]. The economic challenges. 

Chairman CARPER. You can move on from that. I have that. 

Thank you. 

Ms. SPAULDING. Right. And with regard to further legislative proposals, we are looking at that, at ways in which the current statutory regime, might be strengthened to give us authority. We are 

looking at, for example, is the compliance regime and our ability 

to bring enforcement actions, does that need to be strengthened? 

Does that need to be streamlined? And that is something we are 

looking at, and we will come back to the Committee, when we have 

finished looking at that. 

Again, I think Congress, in creating this Risk-Based Performance 

Standard Program, which does not require facilities to build a 15- 

foot fence but gives them the leeway to develop the measures based 

on an outcome, is the right approach. And so I would encourage 

that authorization to continue that approach, which is, again, an 

outcome-based approach. 

We are looking at, in the context of rulemaking, whether we 

want to open this up and make some changes to our rule. But, 
26 

again, I think authorizing the program more or less as it currently 

stands is really, what we are looking for from Congress. 

Chairman CARPER. All right. 

Ms. SPAULDING. Director Wulf may have some—— 

Chairman CARPER. Before you say anything, David, when Jane 

Holl Lute was the Deputy, she used to come before us and testify, 

Deputy Secretary at DHS, we would ask her, ‘‘How did DHS get 

off the high-risk list at GAO for any number of sins?’’ And she said 

one of the things that she did, she would go meet with Gene 

Dodaro, the Comptroller General, literally in his office, and say, 

‘‘We want to get off your high-risk list. What do we need to do to 

do that?’’ And they were just like chapter and verse: This is what 

you need to do, this is what you need to do. And I think her leadership and Rafael Borras, his leadership in the Department, were 

enormously helpful in that, I am sure the Secretary’s admonitions 

as well. 

Mr. Wulf, far be it from me to tell you what to do, but if the Deputy Secretary of the Department can go call on the Comptroller 

General and his staff again and again and again to, clear out the 

underbrush and get off the high-risk list in a variety of ways, you 

may want to consider some visits over here to the Hill. And my 

wing man here, Dr. Coburn, he has some real reservations—you 

have heard them today—real reservations on what—not to take 

away from the work that has been done, but actual things that 

need to be done. And to the extent that you can almost one on one 

with some of your team work with him and his team, that would 

be enormously helpful to you and I think to us, so I would urge you 

to do that. 

Mr. WULF. Yes, we absolutely will do that. 

Chairman CARPER. All right. Thank you. 

Mr. Caldwell, any closing statements here to help us along. 

Mr. CALDWELL. Yes, a couple of things. Some are asking the really big question about CFATS, like: Is this the right approach, or 

should we start over again? If we start over again, it is going to 

be years before we have anything in place. At GAO, the most important criteria is the laws that Congress passed, and CFATS was 

passed, and there has been appropriations for it, so we see that as 

a sign of congressional support. There are advantages of authorizing the program in terms of the stability, both to the people running the program as well as to industry. 

In terms of authorizing legislation, the House has already taken 

that up, and there are ways to nudge the Department to do things 

where there is congressional interest in particular improvements. 

One thing that comes to mind is discussion about the small business community and how to help them. The House bill does have 

a section to help small business. So that is an example where Congress can make sure things happen by putting them in legislation. 

On the personnel surety side, I am not really sure what is going 

to happen. I do not know how to get that rule out of OMB. I am 

not sure the Department knows or Congress knows at this point 

how to move OMB. 

Chairman CARPER. All right. At least we can have a conversation 

with OMB, and we are going to have that this week, and this hearing has spurred us to do that. Sometimes that can be helpful. 
27 

Mr. CALDWELL. So that would be good. 

Chairman CARPER. All right. I have these guiding principles that 

I try to follow. They are kind of like my moral compass. And we 

have actually touched on a number of them here today. 

One, if it is not perfect, make it better. 

Another one is just use some common sense. I think we see some 

opportunities to do more of that here. 

I have a friend who, if you say to him, ‘‘How are you doing?’’ he 

says, ‘‘Compared to what?’’ And if you compare this program to 

where it was a half dozen years ago, you have come a long way. 

But we are not in the end zone; we are not in the red zone. And 

we need to get there. 

I used the analogy yesterday, I will use it again today: In naval 

aviation, when—I was an old Navy P–3 aircraft mission commander for a number of years. In our airplane, the P–3 aircraft— 

the plane that has been used over the Indian Ocean to do a lot of 

these searches. But in aircraft, you are coming down the runway 

to begin your takeoff roll, and you reach a spot in your takeoff roll 

called ‘‘the refusal speed.’’ And refusal speed is the point where the 

pilot in command either pulls back on the throttle and you stay on 

the ground, or you push ahead and fly. I think we are really sort 

of—I thought we were—yesterday I said, ‘‘I think we are at refusal 

speed at DOD in the work they are moving toward, getting a clean 

audit.’’ I think this program is at refusal speed, too. And just like 

DHS decided to push ahead and to fly to the goal of getting a clean 

audit, I think that is pretty much where we are. And just like DOD 

needs to go to school on DHS and how they got a clean audit, there 

are, I think, some opportunities here for us to learn as well. And 

a big part of it was Jane Holl Lute and probably Rafael Borras 

coming over personally and meeting with GAO folks and saying, 

‘‘OK, what do we need to do? What are we doing? And what more 

can we do? And what help do we need?’’ So keep that in mind. 

With that, we are going to call our second panel of witnesses forward, and, Ms. Spaulding, I think we get to meet with you on a 

different subject later today. 

Ms. SPAULDING. I am looking forward to it, Senator. Thank you. 

Chairman CARPER. We look forward to it as well. Thank you so 

much. 

Ms. SPAULDING. Thank you very much. 

Chairman CARPER. Thanks, Mr. Wulf. 

Mr. WULF. Thank you. 

Chairman CARPER. Thank you, Mr. Caldwell. And, Mr. Caldwell, 

everybody at GAO who worked day and night very hard and who 

provide great service and assistance to us in our jobs, we want to 

again thank you. And we need your help. Just like you have been 

helpful to our friends over in the House as they fashioned their bill, 

we would like to have some of the same. 

Mr. CALDWELL. And such meetings have already started, so 

thank you. 

Chairman CARPER. Thanks so much. 

[Pause.] 

All right. Good morning. I am not going to introduce or provide 

a formal introduction for our witnesses. We are happy you are 

here. It is nice to see you all, and we welcome your testimony. 
28 

1The prepared statement of Mr. Shea appears in the Appendix on page 70. 

We are going to go ahead and start, and Dr. Coburn may well 

come back and spell me so I can run and vote the first and second 

votes, but the idea is to keep moving and to give you full opportunity to hear—it will give us a full opportunity to hear your testimonies and then for us to be able to have a good conversation. So 

welcome. Dr. Shea, why don’t you go first? 

TESTIMONY OF DANA A. SHEA,1 PH.D., SPECIALIST IN SCIENCE 

AND TECHNOLOGY POLICY, RESOURCES, SCIENCE, AND INDUSTRY DIVISION, CONGRESSIONAL RESEARCH SERVICE, 

LIBRARY OF CONGRESS 

Mr. SHEA. Thank you for the opportunity to testify before the 

Committee today about Federal efforts to secure chemical facilities 

within the United States from terrorist attack. In addition to my 

remarks today, the Congressional Research Service (CRS) has several reports on this topic, and in accordance with our enabling statutes, CRS takes no position on any related legislation. 

My testimony has three parts. First, I will reference the CFATS 

program’s progress and challenges; second, I will identify several 

policy issues regarding authorization—— 

Chairman CARPER. Let me just say, were you here when I made 

my earlier admonition to our first panel about acronyms? 

Mr. SHEA. I was. 

Chairman CARPER. I thought didn’t they do a great job? I would 

just ask that you follow their example. 

Mr. SHEA. Third, I will briefly analyze H.R. 4007, the Chemical 

Facility Anti-Terrorism Standards Program Authorization and Accountability Act of 2014. 

The 109th Congress authorized DHS to regulate chemical facilities for security purposes. Subsequent Congresses have extended 

this authority, which now expires on October 4, 2014. Advocacy 

groups, stakeholders, and policymakers have called for its reauthorization, though they disagree about the preferred approach. 

Since 2007, the CFATS program has received more than 46,000 

Top-Screen submissions from over 36,000 chemical facilities. DHS 

currently regulates approximately 4,100 facilities as high risk. 

DHS has had challenges in implementing the CFATS regulations. These include a persistent backlog of high-risk facilities not 

assigned a final risk tier, an ongoing effort to develop and implement a personnel surety Risk-Based Performance Standard, and a 

failure to meet DHS expectations for inspecting regulated facilities 

and approving Site Security Plans. 

That said, the pace of DHS authorization, inspection, and approval of Site Security Plans at regulated facilities has increased 

compared to the early days of the CFATS program. 

Policymakers have considered chemical facility security in the 

113th Congress. Some of the issues debated include: how to assess 

facility risk, whether to employ third parties as inspectors, and 

whether DHS should be allowed to mandate facilities use certain 

approaches or chemical process practices, also known as ‘‘inherently safer technologies.’’ 
29 

A key underpinning of the CFATS program is its assessment of 

facility security risk. The DHS is currently determining how to best 

address recommendations for improving its risk assessment process. 

Congressional policymakers may be interested in how changes in 

how DHS determines risk affect the regulated community and 

what plans DHS has to minimize financial impacts. The regulated 

community’s investment in security measures will increase as program implementation continues. 

Regarding third-party inspectors, DHS has implied that its existing statutory authority allows their use. Policy issues include 

whether third parties should perform CFATS inspections and, if so, 

who might be appropriate, and how to harmonize training and inspection standards. 

If CFATS program performance challenges arise from insufficient 

inspection capacity, third-party inspectors might help. If the challenges arise from other factors, third-party inspectors might have 

little effect on performance. 

The Obama Administration has stated its support for inherently 

safer technologies to enhance security at high-risk chemical facilities. Currently, DHS cannot require a regulated facility to adopt 

specific security approaches or chemical process changes, including 

inherently safer technologies. A fundamental challenge is how to 

compare a technology with its potential replacement. 

Congressional policymakers might mandate the implementation 

or consideration of certain inherently safer technologies, or they 

might direct DHS to identify specific approaches. Alternatively, policymakers might establish an incentive-based structure to encourage regulated entities to adopt inherently safer technologies. 

To some extent, the CFATS regulation provides such an incentive 

since DHS might assign such facilities to lower-risk tiers. 

I will now summarize how H.R. 4007 compares with the existing 

statute. The bill incorporates much of the existing statute, but it 

also has key differences. Some examples are: The current statutory 

authority will terminate on October 4, 2014; the authority granted 

under H.R. 4007 would be permanent. 

The current statute does not specify how DHS should consider 

security risk. The bill directs DHS to use specific criteria when assessing chemical facility risk. 

The bill would expressly allow the Secretary to use third-party 

inspectors in the inspection process, and the bill would provide certain limitations on the Secretary with respect to issuing a personnel surety standard. These limitations would conflict with the 

current DHS personnel surety approach. 

Thank you for the opportunity to appear before the Committee, 

and I would be happy to answer any questions you might have. 

Senator COBURN. [Presiding.] Mr. Shea, thank you. Sorry for the 

back and forth. The votes will continue while we will do this. Ms. 

Fendley. 
30 

1The prepared statement of Ms. Fendley appears in the Appendix on page 87. 

TESTIMONY OF ANNA FENDLEY,1 MPH, LEGISLATIVE 

REPRESENTATIVE, UNITED STEELWORKERS 

Ms. FENDLEY. Good morning. Thank you for the opportunity to 

testify today. I am here on behalf of the United Steelworkers 

(USW) International Union. Our 850,000 members include the majority of unionized workers in the chemical industry and hundreds 

of thousands of men and women whose workplaces use and store 

large quantities of industrial chemicals. 

Our members are well aware of the hazards and the potential for 

widespread damage to critical infrastructure and the communities 

where they work and live. Small accidental releases occur more 

often than the public realizes, and it is only a matter of time before 

the next large explosion or release. 

Events in West, Texas, and at the Chevron refinery in Richmond, 

California, have brought acute national attention to the danger of 

chemical facilities and the need to prevent catastrophic events 

caused either by accident or by the intentional actions of terrorists. 

The CFATS program was an interim measure when the 109th 

Congress gave DHS statutory authority to regulate chemical facilities for security purposes. Since that time subsequent Congresses 

have continued to extend the authority to DHS for the program 

without addressing recognized problems with its implementation 

and scope. 

A legislative path forward needs to address the inherent weaknesses of CFATS, five of which I will cite in detail today. 

First, CFATS coverage does not extend to chemicals shipped or 

stored outside of a facility’s fence line in nearby rail yards or elsewhere that may have little or no security measures. Currently 

CFATS does not prevent and DHS does not systematically document whether chemicals and the risks associated with them are 

merely shifted from one location to another. 

Second, DHS is prohibited from requiring a CFATS-covered facility to use any particular security measure, including a fence in a 

particular area, a specific control on a unit, or any other measure 

that is well documented through past practice in the industry. 

Third, CFATS should develop and promote the most effective 

means of preventing a chemical incident, which is reducing the potential consequences by using safer chemical processes. DHS, the 

Environmental Protection Agency, and the U.S. Chemical Safety 

Board (CSB) have cited the effectiveness of assessing and, where 

feasible, implementing safer processes at high-risk facilities. 

According to a report from DHS, since the inception of the 

CFATS program nearly 1,900 facilities have removed or reduced 

their chemicals of interest. But many companies will never even 

look into innovating with safer processes without a legal requirement to do so. 

Fourth, many have expressed concerns today about duplication of 

efforts and the burden for multiple background checks under the 

Personnel Surety Program. The Transportation Worker Identification Credential is an option to use under CFATS. Many of our 

members have successfully obtained a TWIC card, but it is not 

without some concerns. 
31 

1The prepared statement of Mr. Scott appears in the Appendix on page 92. 

Another concern about personnel surety is that CFATS does not 

prevent the collection of unnecessary personal employee data by 

employers or third parties. There is not an adequate appeals process for workers who are wrongly discriminated against during the 

personnel surety process. In a February 3 Federal Register notice, 

DHS stated that employment decisions based on background 

checks are outside of the scope of CFATS and that DHS expects 

employers to comply with applicable Federal, State, and local law 

regarding employment and privacy. 

Workers are seeing DHS apathy about their jobs play out in facilities across the country. In fact, one of our local unions recently 

received a letter from their employer that said, ‘‘Although [our company] and its representatives are not required to notify its employees or union leadership of this requirement prior to conducting 

background investigations, we believe it is a prudent and a good 

business practice to do so.’’ 

Not all employers will do the right thing by telling their employers about new security measures without a requirement. On the 

whole this is inadequate. Workers need to be informed about security measures, including background checks being performed on 

them, and workers need an appeals process should they be unjustly 

disqualified from their job due to an employer-conducted background check. 

This brings me to my fifth point. CFATS lacks the requirement 

for a meaningful role for workers in chemical security. It is our observation that DHS stakeholder engagement with industry is frequent and productive. However, DHS does not adequately engage 

workers and their representatives either at the Federal level or 

within a facility. Workers at facilities would be hurt first and worst 

in an attack. CFATS should require meaningful involvement of 

plant employees in developing security plans and provide whistleblower protections for those who engage in the process. At a very 

minimum this could help DHS identify facilities that are covered 

by CFATS but are not complying with its requirements. 

In closing, any legislation authorizing the program must be responsive to the identified shortcomings and challenges of CFATS. 

Thank you again for the opportunity to testify today. 

Senator COBURN. Mr. Scott. 

TESTIMONY OF TIMOTHY J. SCOTT,1 CHIEF SECURITY OFFICER, THE DOW CHEMICAL COMPANY, ON BEHALF OF DOW 

AND THE AMERICAN CHEMISTRY COUNCIL 

Mr. SCOTT. Chairman Carper, Ranking Member Coburn, and 

Members of the Committee, I am Tim Scott, chief security officer 

and corporation director for emergency services and security at 

Dow Chemical. I am here today representing Dow and the American Chemistry Council. 

The security of our Nation’s chemical industry has been in the 

media, legislative, and regulatory spotlight since 9/11. But industry’s efforts to be a safe and secure partner in the communities 

where we operate and transport our products started well before 

then. 
32 

When DHS was given the authority to regulate the chemical industry relative to security, the industry was an active and enthusiastic partner in the development of the Risk-Based Performance 

Standards. The Responsible Care Security Code matched these 

standards in many areas and is a mandatory requirement for the 

American Chemical Council (ACC) membership. 

The launch of DHS, CFATS, and the Responsible Care Security 

Code is a successful example of what defines a partnership: everyone working toward a common goal, perhaps in a different manner, 

but with one focus. 

During that time and still today, ACC is very proactive in supporting CFATS legislation in order to bring everyone to the table. 

The launch of DHS and CFATS was tenuous at first, but it is successful based on a partnership approach with open communication. 

Through the last few years, the implementation became difficult for 

many reasons. The communication and the partnership was 

strained. I am here today to say that we have turned the corner 

and we are once again on the right path. The partnership is working. Progress is being made, and the security of the chemical industry is stronger today than ever before. 

There have been many positive developments over the last several months with the most significant being the progress toward 

multiyear authorization for CFATS. A multiyear authorizorization 

puts DHS and CFATS closer in line to the industry’s capital planning process and allows for some certainty for industry to take action. 

A multiyear authorization also brings stability to DHS in planning and implementing CFATS and also in staffing to be sure that 

the necessary expertise is in place and will remain in place to accomplish the mission. 

Maintaining the original premise of Risk-Based Performance 

Standards and allowing individual sites the flexibility to determine 

the local solution that will meet the standards also spurs progress. 

No two sites are the same, but all must meet the same goal. This 

flexibility allows each unique site to identify the solution that 

meets the performance standard in the best manner for that site, 

and improving security to meet the performance standard is the 

goal. 

We are not done. Industry, DHS, and this Committee are not 

done. We are making progress, but we need to complete the mission. We need to fine-tune the personnel surety process so that it 

adds value to all concerned. We need to share critical information. 

We need to ensure that risk is being determined in a fair and consistent manner. And we need to leverage the plethora of industry 

security programs that are already in place today such as the ACC 

Responsible Care Program. 

We have improved communications between DHS and the sites, 

but we need to do more. We need to give the regulators the resources needed to ensure compliance, to understand the regulations, understand how the industry works, understand the sites 

and their area of responsibility, and visit those sites on a regular 

basis. And industry needs to challenge our peers. We need to selfregulate and bring everyone included in what is considered the 
33 

chemical sector into the process. And we need to include the communities around our sites and along our transportation routes. 

CFATS is making the chemical industry more secure. DHS is 

maturing and finding its balance and reaching its goals. Industry 

is doing its share, but we are not done. A multiyear reauthorization 

and a commitment to continue the partnership in a risk-based approach are essential. 

Just as important, we need to bring all the players to the table 

to work toward our common goal. We are not there yet on either 

the public or the private sector sides. We are encouraged by the 

progress being made, but we need your help in maintaining this 

forward momentum. 

Thank you. 

Senator COBURN. Thank you. 

Senator Johnson, I am going to let you go first since I am going 

to go late to the vote. 

Senator JOHNSON. Thanks, Senator Coburn. 

Mr. Scott, I really want to explore private sector cooperation in 

terms of achieving that goal, that shared focus that you were talking about. I would imagine Dow Chemical is ISO certified? 

Mr. SCOTT. Yes, sir. 

Senator JOHNSON. Do you believe within that framework you 

could utilize the surveillance audits of certification of ISO to work 

in coordination with what we are trying to do here with CFATS? 

Mr. SCOTT. Yes, sir, it would be a very good fit, very close fit, and 

it would be a good foundation for the whole process, yes. 

Senator JOHNSON. Can you just talk about, as a private sector 

company, the duplication of audits of certification, of, whether it is 

insurance, whether it is ISO, whether it is the multiple regulatory 

agencies you comply with and the cost of that duplication? 

Mr. SCOTT. There is a significant amount of overlap, and on secu- rity, on CFATS alone, we, Dow Chemical, have spent about $300 

million on a global basis. Now, probably about half of that or twothirds of that has been spent in the United States, but we implement everything on a global basis. So to our company at least, it 

has been significant. 

Senator JOHNSON. How much would you have spent without 

CFATS? Just because you recognize within the private sector your 

insurance ratings, insurance expenses, how much do you think you 

would have spent without CFATS? 

Mr. SCOTT. Well, it would probably be a little bit less, but we implement the Responsible Care Code, and it does very similar 

things. We tier our sites, and, again, we implement the Responsible 

Care Code on a global basis. So our higher-tier sites under Responsible Care already have a higher level of security in place. 

CFATS brings some more specifics focused on things like the vehicle barricades at gates that need to be in place, so there would 

be some difference. But CFATS does add some cost, but Responsible Care implementation also adds some cost, and we have been 

moving to bear that. 

Senator JOHNSON. Let me move on. You talked about the American Chemical Council. There are certain standards that you have 

to meet just to be a certified member of that, correct? Can you just 

speak to those a little bit? 
34 

Mr. SCOTT. The Responsible Care standards are very strict. You 

have to implement Responsible Care across the board at your sites 

in order to be a member of ACC. It is audited. You do a self-assessment audit on an annual basis. You have external auditors on a 

3-year cycle. So we look at the whole picture of the Responsible 

Care Codes, which includes things in my area, obviously, are security, the Responsible Care Security Code, but we also have codes 

that are specific to transportation security, transportation emergency response, site emergency response, which includes—those include the Community Awareness and Emergency Response program, plus the Transportation Community Awareness and Emergency Response (TRANSCAER) program for transportation emergency. So it is an all-inclusive code. 

Senator JOHNSON. What has happened to those standards since 

September 11, 2001? 

Mr. SCOTT. We have added the Security Code, it was added after 

9/11. The rest of those codes were in place well before 9/11. I think 

we have bulked up a lot of them. We have gone back and looked 

at the details and added some specifics around particularly transportation. There is a process safety piece to the Responsible Care 

Codes that we have now linked that with the Security Code, so we 

can do vulnerability assessments from both a security perspective 

and a process safety perspective. So I think we have built on what 

we already had in place to make it stronger. 

Senator JOHNSON. Dow Chemical is obviously one of the big guys. 

Are you concerned about your distribution system, your smaller 

customers, your smaller suppliers and their ability to—obviously, 

you have the financial wherewithal to spend money on this. Can 

you speak to the difficulty maybe smaller companies, smaller suppliers are having trying to comply with this? And do you have any 

solutions? 

Mr. SCOTT. Solutions. 

Senator JOHNSON. Just start background the problem. 

Mr. SCOTT. I will start with the problem first. Yes, smaller companies find it very difficult to meet some of the standards in place 

just because of the size and the cost of the standards that are in 

place. But I think as we heard with DHS, they are doing a very 

good job of going out and working with people that—especially the 

smaller companies, to find a reasonable approach to upgrade the 

level of security. So I think there has been a lot of progress made 

working with that. 

Many of the associations—ACC and the other industry associations—have been out working with their member companies to 

work through the whole process. I think that has been helpful. 

There is a cost involved, and there are a lot of companies, small 

companies out there, that do not belong to a member company. 

Dow works through its supply chain network and its customer network. So we work on both ends, not just at our sites but on the 

transportation routes and our customers and our suppliers and 

those who carry our products. So we work very closely with all 

those companies to make sure they are meeting the standards. 

Senator JOHNSON. Dr. Shea, Ms. Fendley talked a little bit about 

background checks. I would like you to address the problem that 

employers have when they are kind of caught between a rock and 
35 

a hard place trying to comply with a regulation, from one agency 

and then privacy concerns and employment law on the other. Can 

you speak to—how does business deal with those? 

Mr. SHEA. I think there have been several concerns that have 

been raised in the context of personnel surety here. One is regarding information and its sharing from the Federal Government down 

to companies. The other one is related to the employees themselves 

knowing the results of any sort of background check that is performed. And then the third one, which was brought up earlier in 

this hearing, is about whether or not, if you have already undergone a background check under one program, should you also then 

undergo some sort of vetting to either validate the credential that 

you have or to be certified under another program. 

The Department of Homeland Security has said that the information sharing that it would be doing would not be necessarily to 

a facility but potentially to local law enforcement. Similarly, the information that it would have about positive hits in its database 

may not be provided back to a person that is being vetted. The 

proper recourse from their perspective is either an intelligencebased one or a law enforcement-based one. 

Of course, as probably Mr. Scott can refer to, the stakeholders 

believe that this information is information that is important to 

them, either for business decisions or potentially for liability. And 

so the personnel surety proposal that DHS has put forward, stakeholders have had a series of concerns and wish DHS to modify it 

in a variety of ways. 

This proposal, as was pointed out by DHS, has gone through two 

comment periods, actually, and is now up in front of OMB for final 

determination. 

Senator JOHNSON. But specifically I want you to address employers trying to comply with CFATS. Are they vulnerable? Are they 

going to be subject to lawsuits in terms of employment discrimination? What kind of vulnerability exists there? And how can you address that? How can we prevent that? 

Mr. SHEA. I think that is a very challenging problem, and it 

probably falls into the area of legal counsel and determinations by 

general counsel. That would be out of the scope of what I would 

really be able to discuss. 

Senator JOHNSON. Ms. Fendley, you raised the issue which raised 

the question in my mind. Can you speak to that a little bit? 

Ms. FENDLEY. Sure. I think that the most important thing that 

we are looking for is some transparency. As the letter I referenced 

that one of our local unions received from its company said, they 

feel like they have no obligation to even tell their employees that 

they are going to be undergoing background checks due to their 

CFATS Site Security Plan. And any employment decision that 

would result in a worker getting fired, if that worker had a local 

union, certainly that would be challenged and questioned. But 

many workplaces do not have unions, and workers could potentially 

be fired and not understand why. 

Senator JOHNSON. Well, even non-unionized workers have recourse through the courts, and that is the problem I am having 

with the regulations requiring that. Again, employers end up being 

just in an impossible situation. But I am over time. Thank you. 
36 

Senator COBURN. I will submit the majority of my questions to 

the record since we have about 4 minutes left on this vote, Ron, 

if you want to take off. 

Transparency is key, I agree with you. But the fact is if somebody has to pass a CFATS personnel surety check and they cannot 

pass it, what is the legal basis—if there is transparency—for a suit 

against somebody for not allowing that person to have that employment, if they cannot meet the requirements that the government 

says? 

Ms. FENDLEY. I agree with you, and I think that you make a very 

accurate point. I think what we are concerned about is decisions 

that are made due to inaccurate information, whether we hear all 

the time reports about people’s credit checks or criminal histories 

being inaccurate. And what is the recourse for someone who gets 

an adverse employment decision based upon inaccurate information? I recognize, we all recognize the hard place that employers 

are in in this case, and we really want to work with DHS and with 

industry to get to a solution that works for everyone. 

Senator COBURN. All right. Thank you. I will submit the rest of 

my questions for the record. 

Chairman CARPER. [Presiding.] All right. Thanks, Dr. Coburn. 

Sorry to be gone for so long. The first vote, they stretched it out 

27 minutes. It is supposed to be 15 or 20. 

Anyway, I am back so I missed the questioning that took place. 

I think what I would like to ask is—one of the things I like to do 

at these hearings is we have a diverse panel here, and we need 

help in developing consensus. I said earlier that I very much would 

like to see us authorize the CFATS program, not permanently, 

probably not for 5 years, but certainly for more than zero, which 

is where we are right now. 

Would you just talk with us about why it is important from your 

perspectives for the Congress to do something, not just anything 

but something constructive, and what might be most important in 

that something constructive for us on our to-do list as we approach 

authorization, reauthorization of this program? Do you want to go 

first, Dr. Shea? 

Mr. SHEA. Certainly. So with regards to concerns about the program, as has been pointed out previously, the duration of, or actually if there would be, any reauthorization of the program has been 

brought up both by stakeholders and by the agency itself in terms 

of providing consistency and a sense that the program would be an 

enduring program. 

The current proposal in the House would be a permanent authorization with a 3-year authorization of appropriations. The President has requested in his budget a 1-year extension of this authority. So, there is a range of potential durations for any potential extension that Congress might want to put into place. 

The longer that that duration is, then the more constancy the 

program might have. On the other hand, the shorter that reauthorization period is, the greater the potential for Congress to come 

back and review how the program is going because of these deadlines. 

The program has been extended essentially in 1-year increments 

through the appropriations process. That has, since the original 
37 

statute was put in place, caused Congress to come back and look 

at this basically in each Congress. I think one might be able to 

make a strong case that a medium-term or a short-term authorization would increase congressional oversight on the progress. 

I think the other issue that has come to the fore is about the rate 

of implementation. Part of this is, I believe, a question of what is 

the intent of Congress regarding how quickly this program should 

be fully in place. During the time that the original statutory authority was provided, there was a sense that this needed to be in 

place rather quickly with the 6-month requirement for the interim 

final rule. As we heard earlier today, DHS is projecting at least 

multiple years before they will reach completion on the first round 

of these facilities. So direction from Congress about how long this 

process should take might assist them in their priorities. 

Chairman CARPER. All right. Thank you. 

Ms. Fendley, I notice you have a Ph.D., we have Mr. Scott, and 

he has nothing after his name; and for you we have a Master of 

Public Health ‘‘(MPH).’’ And I turned to my staff, and I said, ‘‘Is 

that ‘miles per hour’?’’ They said, ‘‘No. It might be ‘Master’s in Public Health.’ ’’ I do not know. What is it? 

Ms. FENDLEY. Yes, sir, that is what it is. 

Chairman CARPER. All right. Fair enough. 

Well, speaking of miles per hour, we are trying to move into the 

fast lane as we move toward some kind of authorization here. At 

least we get off the curb and move us down the road to help us 

with that. 

Ms. FENDLEY. Wonderful. So I think from our perspective, the 

most important thing that Congress could do when looking at, authorizing the program is find a way to protect the workers at these 

sites. Ultimately this does affect conditions of work, and workers 

who report a security vulnerability do not have whistleblower protections. As I mentioned in my testimony, there are concerns within the Personnel Surety Program, and workers are not involved by 

DHS or their employers in the development of these plans, which 

we think harms security. We think workers really understand better than anyone else the vulnerabilities at a site and what can be 

done to prevent a catastrophic incident. So those would be our topline items for your to-do list. 

Chairman CARPER. All right. Thank you. Mr. Scott, are you here 

representing Dow? 

Mr. SCOTT. Dow Chemical and the American Chemistry Council. 

Chairman CARPER. And how long have you been with Dow? 

Mr. SCOTT. Thirty-five years. 

Chairman CARPER. Did you start right out of school? 

Mr. SCOTT. No. I started right out of the Navy. 

Chairman CARPER. Oh, really? What did you do in the Navy? 

Mr. SCOTT. I was on the first crew of the USS Nimitz, which is 

now the old nuclear aircraft carrier. 

Chairman CARPER. How about that. Good for you. I once took a 

bunch of Boy Scouts down to Norfolk Naval Station. My sons were 

both Scouts, and had about, 20 or 25 Scouts and some adults with 

them, and we visited the Theodore Roosevelt. This was about 6, 7, 

8 years ago. And it was a Sunday morning, and the captain of the 

ship was there to greet us, took us up to the conning tower, and 
38 

we were talking with him. He was talking with us about our boys 

and about what the Roosevelt could do, and he said, ‘‘Boys, when 

our ship goes to sea, it is a thousand feet long.’’ The boys went, 

‘‘Oooh.’’ He said, ‘‘When the Roosevelt goes to sea, we have 5,000 

sailors on board.’’ And the boys went, ‘‘Oooh.’’ And he said, ‘‘And 

when the Roosevelt goes to sea, we have 75 aircraft on board.’’ And 

the boys went, ‘‘Oooh.’’ 

Then he said, ‘‘And the USS Roosevelt’’—which is a nuclear ship. 

‘‘The USS Roosevelt stops to refuel every 25 years.’’ And the adults 

went, ‘‘Oooh. Very impressive.’’ 

So talk to us, if you will, please? 

Mr. SCOTT. The Roosevelt is a Nimitz class carrier, that is right. 

And I apologize. A lot of people put things after my name, but I 

do not put them out there to—— 

Chairman CARPER. Some put things before my name. [Laughter.] 

Mr. SCOTT. There you go. 

Chairman CARPER. It is probably better to have them after your 

name. 

Mr. SCOTT. We talked a little bit about the extension and the 

length of the extension, and that is a critical point for industry and 

for DHS, just to provide some certainty. And I think it is certainty 

for industry so they know that the program is going to be in place. 

But it is also certainty for DHS. And 3 years is the minimum to 

really match up with the capital planning process for industry. If 

you tell me today I have to go do something, I will get the money 

next year and probably finish the project the year after that. So, 

3 years is the minimum as far as working with industry and making it a little bit easier to do the planning process. So three is good, 

four is better. 

But it is also certainty for DHS. They have had a lot of people 

moving in and out of DHS and change jobs, and I think part of the 

issue is that there is no certainty in DHS that DHS is going to be 

in existence, that CFATS is still going to go on. And that hurts the 

whole process when we have a lot of changeover in personnel. 

So I think that is a key benefit for them—nothing to do with 

CFATS, the process itself, but just with maintaining personnel and 

qualified personnel and keep them in place long enough to get the 

job done. 

The other thing that I would like to clarify just on the Personnel 

Surety Program, there are two pieces of this: The background 

checks is one piece, and that is the typical background check on the 

criminal history, anything that might keep you from being a good 

employee at the site. And there are processes in place for people 

to talk about that because things that happen when you are 18 

years old and you are now 40 are different things. So I think that 

part of the process has been in place in most companies, as a matter of fact—for many years, and that process is working through. 

The issue on this one, in my opinion, is the terrorist database 

screening, so you separate those two, and industry can and has always typically done background checks, some specific to industry, 

some specific to a site. But, in general, they cover the same things. 

But the new edition is a terrorist database screening, and only the 

government can do that. 
39 

So you have to submit the information to DHS or you use a process like the TWIC card that is already there. Everybody going out, 

especially small sites, going out and buying the equipment to implement the TWIC process is expensive and burdensome for some. 

We could do that at some of our smaller sites. We already do it at 

our MTSA sites. And that lets you see if this TWIC card still 

works. Then you know they have passed the terrorist database 

screening, and that is what we need to know for this sort of thing. 

There are also other credentials out there that if you validate 

that they are still current, they have also gone through a terrorist 

database screening, and those ought to be approved. But then there 

are some people that do not have any of that, and the site would 

have to submit that information to get the clearance and the terrorist database screening, which is essential to good security. 

The issue that I have is we never get a yes or a no from DHS. 

We do not give any—they do not issue a card. You just submit the 

information. Then you let the person go to work. And what I have 

asked for is, if somebody—just like the airlines, if there is somebody that is on the no-fly list, they cannot get on the airplane until 

they get the letter that says, ‘‘No, this is the wrong John Doe. This 

one is good to go.’’ 

There needs to be that process in place so that we can be sure 

that everybody that is coming into our site does pass the terrorist 

database, and if there is somebody on the terrorist database list, 

there is a stop, a hold in place, until we get it cleared up. So that 

is the issue as far as the background, the personnel surety. It is 

the terrorist database screening and getting that information communicating between industry and DHS to get a hold versus just 

send in the information, let the person go to work, and we do not 

know if he is on it or not on it. 

Chairman CARPER. All right. Of the audience—I do not normally 

ask questions of the audience, but I am going to ask a question. 

Anybody still here from DHS? Oh, good. I hope you took good notes 

on those comments, and that could be very helpful in terms of moving us along in a smart way. Thank you. 

The other thing I wanted to ask of all of you is just sometimes 

I will say, when we are looking to build consensus on an issue, you 

had an earlier panel that spoke, and I thought that was constructive, the interaction there with them. But think back on some of 

the conversation and reflect anything you want to reflect on, on 

what was said or maybe not said, maybe in their statements or in 

answering our questions, just some things that we should be mindful of that you agreed with, maybe did not agree with. Please. 

Some things you would like to underline, put an exclamation point 

at the end? Please. 

Ms. FENDLEY. Sure. So there are two things that came to mind 

when I was listening to the first panel. The first speaks to a point 

I have made multiple times, and that is when DHS talked about 

their stakeholder engagement, it was always stakeholder engagement with industry. And we would like to underline the point that 

workers, labor, is also a key stakeholder here, and we have not 

been engaged as much as we would like, we have not been able to 

do that with DHS, either at the Federal policy level or at the facility-by-facility level. 
40 

The second thing that I would underline is, due to the backlog, 

due to the slow approval of Site Security Plans, our members are 

just now seeing and reporting in a few cases where the sites are 

beginning to implement plans. So we are hopeful that the flexibility 

within the program can continue because we want to make sure 

that these plans actually work. I do not think we are—as someone 

said, we are not—I believe it was you, Chairman—at the end zone 

yet, we are not even in the red zone. These plans are just beginning to be implemented, and we are just seeing the effects on workers at these sites. 

Chairman CARPER. All right. Thank you. I am probably not the 

first to have said that. I am the first one that said it here today, 

so I will take credit. 

Others, just reflecting back on the first panel, what was said, 

maybe on what was unsaid. 

Mr. SCOTT. I would say there are more positives now than negatives, which is a great sign. I think the fact that they are recognizing—DHS is recognizing Alternative Security Plans makes it 

easier on everybody, especially the smaller companies. 

Chairman CARPER. I thought that was a good takeaway. 

Mr. SCOTT. They are doing a great job there, and the various associations are helping the smaller companies by developing Alternative Security Plans that they can get out. So there is a good 

team effort there. 

I think the inspectors that are coming onsite now, it is more of 

a partnership approach, coming up with the right solution for each 

particular plant instead of coming in with a cookie-cutter approach, 

and that is significant progress. And I think the number of inspectors that they have out in the field now is increasing. So I think 

that is—the good news is I think the positives are outweighing the 

negatives as far as the implementation. I mean, everybody is still 

not happy that we are not farther along, but we are making a lot 

faster progress than we were in the past. 

Chairman CARPER. Good. My staff was good enough to give me 

some questions I might want to consider asking. You just answered 

one without my asking it, so very good. 

Mr. Shea, anything you want to reflect back on the first panel? 

Mr. SHEA. Certainly. The Department has talked about how it is 

currently undergoing a process to assess the recommendations for 

the way that it calculates risk. One of the things that has happened in the past when anomalies were discovered in the way that 

they calculated risk for facilities was that facilities changed risk 

tiers underneath the CFATS program. So, when DHS does implement whatever changes it makes to the way that it considers facility risk, regulated facilities might find themselves in a different 

risk tier. If you are moving from a lower to a higher tier, that 

might lead to your facility incurring more security costs; and, of 

course, if you are going from a higher-risk tier to a lower-risk tier, 

potentially lower security costs. 

This, of course, would have an impact on the facility itself. How 

DHS rolls that process out and how it considers the costs of implementation may be something to look at. 

Chairman CARPER. All right. Thank you. 
41 

One last question, if I can. I am going to ask this to Mr. Scott 

and to Dr. Shea. As I think we discussed earlier, DHS reports that 

roughly 3,000 chemical facilities around the country have tiered 

out of the program by removing or modifying or reducing the 

amount of chemicals of interest in their processes at their facilities. 

Do either of you have any more specific information about these facilities and how they did that or maybe you have some examples 

from Dow or some other place? But do you believe that we ought 

to be gathering some best practices from these facilities, maybe 

even ask GAO for a review and looking at those 3,000 a bit more 

closely to see what we can learn from them? Mr. Scott. 

Mr. SCOTT. Well, a lot of the changes were in inventory, the 

amount of the chemical of interest that you have onsite or that you 

use in the process. So I think that is one of the bigger reasons that 

made people move down in the tiering process. 

There are some that just by changing the percentage, the chemical makeup of a product, has taken it out of the process. So there 

are some things like that. 

I think there are some sites that we have just moved out of. The 

site for whatever reason—I mean, typically there is a business reason. Then you add security to it, and we have moved away from 

that site totally now. I know that has happened. And then there 

are other places where we have moved the process from one area, 

for example, in the Houston Ship Channel, which is a high population area, and a plant is an old type of manufacturing process, 

open-air type of manufacturing process, and we have moved it to 

our Texas operations area, which is south of Texas, and put the 

process into our new design process, which we use on a global 

basis, which is a fully contained—the part of the process that is 

critical, that has a chemical of interest, is fully contained in a pressurized container. So the safety is much higher for that particular 

site. So it is a combination of all of the above that really makes 

it work. 

Chairman CARPER. Good. That is helpful. 

Mr. Shea, just briefly, and then we will wrap it up. 

Mr. SHEA. I think to the extent that DHS has been following why 

these 3,000 facilities or how these 3,000 facilities have modified 

their holdings, I think that might be very enlightening. Whether or 

not they, for example, have not changed any of their processes and 

just, as has been pointed out, gone to a lower amount stored. This 

brings in this question of risk shifting that was addressed by the 

Committee earlier. The amount of risk that is contained in transporting chemicals more frequently, is that offsetting the risk that 

is reduced by having less at the facility? 

But the other issue that I would raise here is that the chemical 

industry has regularly said that these sorts of chemical process assessments are done as part of their business model. Then when 

they look at their process, they try to determine whether or not 

there is a different way that would be safer for them and cost-competitive with what they are doing. To the extent that that information is core to their business model, the sharing of that information 

may provide competitive advantage to their competitors who have 

not undergone as effective or efficient a process. 
42 

Chairman CARPER. OK. Well, our third and last vote for the 

morning is underway—actually, the morning is over—and so I am 

going to slip off and do my constitutional duty to vote. 

I had come here today hoping that we would hear from the first 

panel and the second panel and from my colleagues just a good exchange of ideas and information that would enable us to actually 

make some progress on cobbling together an authorization bill, a 

multiyear authorization bill that we could get strong support for 

here that Dr. Coburn and I might be able to support together. And 

this has been helpful. I thank you as well. 

We are fortunate in our State that we have—Dow is one of our 

corporate citizens. They acquired Rohm and Haas several years 

ago. Rohm and Haas had acquired a company called Rodel, a great 

company. And so we are blessed with Dow in our State and grateful not only for the employment opportunities they provide but 

really for the good that they do in our State. And I know that is 

true in other places around the country, so a special thanks to your 

compadres at Dow. 

I am going to ask our staffs, both Senator Coburn’s staff, a key 

staff person on this issue, and several people on ours, just to stay 

together for a few minutes back in the anteroom and just reflect 

on what we have heard and talk about how we might build on this 

conversation going forward. 

The hearing record will remain open for 15 days—that is, until 

May 29, 5 p.m.—for the submission of statements and for questions 

for the record. And if you would hand me that gavel over there— 

would you just do a favor for me, just like bang it? With that, our 

hearing is adjourned. Thanks so much. 

[Whereupon, at 12:14 p.m., the Committee was adjourned.] 
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Æ