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92–837 PDF 2003

LOWERING THE COST OF DOING BUSINESS IN

THE UNITED STATES: HOW TO KEEP OUR

COMPANIES HERE

HEARING

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

WASHINGTON, DC, NOVEMBER 20, 2003

Serial No. 108–46

Printed for the use of the Committee on Small Business

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house

COMMITTEE ON SMALL BUSINESS 

DONALD A. MANZULLO, Illinois, Chairman 

ROSCOE BARTLETT, Maryland, Vice 

Chairman 

SUE KELLY, New York 

STEVE CHABOT, Ohio 

PATRICK J. TOOMEY, Pennsylvania 

JIM DEMINT, South Carolina 

SAM GRAVES, Missouri 

EDWARD SCHROCK, Virginia 

TODD AKIN, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

TRENT FRANKS, Arizona 

JIM GERLACH, Pennsylvania 

JEB BRADLEY, New Hampshire 

BOB BEAUPREZ, Colorado 

CHRIS CHOCOLA, Indiana 

STEVE KING, Iowa 

THADDEUS MCCOTTER, Michigan 

NYDIA VELA ́ ZQUEZ, New York 

JUANITA MILLENDER-MCDONALD, 

California 

TOM UDALL, New Mexico 

FRANK BALLANCE, North Carolina 

DONNA CHRISTENSEN, Virgin Islands 

DANNY DAVIS, Illinois 

CHARLES GONZALEZ, Texas 

GRACE NAPOLITANO, California 

ANI ́BAL ACEVEDO-VILA ́ , Puerto Rico 

ED CASE, Hawaii 

MADELEINE BORDALLO, Guam 

DENISE MAJETTE, Georgia 

JIM MARSHALL, Georgia 

MICHAEL MICHAUD, Maine 

LINDA SA ́ NCHEZ, California 

ENI FALEOMAVAEGA, American Samoa 

BRAD MILLER, North Carolina 

J. MATTHEW SZYMANSKI, Chief of Staff and Chief Counsel 

PHIL ESKELAND, Policy Director 

MICHAEL DAY, Minority Staff Director

(II) 

C O N T E N T S 

WITNESSES

Page 

Kapp, Robert A., United States-China Business Council ..................................... 4

Norman, William S., The Travel industry Association of America ..................... 7

Johnson, Randel K., U.S. Chamber of Commerce ................................................. 8

Yanni, Palma R., American Immigration Lawyers Association ........................... 11

APPENDIX

Opening statements: 

Manzullo, Hon. Donald A. ................................................................................ 26

Velazquez, Hon. Nydia M. ............................................................................... 34

Prepared statements: 

Kapp, Robert A. ................................................................................................ 40

Norman, William S. .......................................................................................... 72

Johnson, Randel K. .......................................................................................... 80

Yanni, Palma R. ................................................................................................ 97

(III) 

(1)

THE COST OF DOING BUSINESS IN THE 

UNITED STATES: HOW TO KEEP OUR COMPANIES HERE 

THURSDAY, NOVEMBER 20, 2003

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS

Washington, D.C. 

The Committee met, pursuant to call, at 9:37 a.m. in Room 2360, 

Rayburn House Office Building, Hon. Donald Manzullo presiding. 

Chairman MANZULLO. Good morning and welcome to everyone. 

Today we are looking at ways of lowering the cost of doing business 

in the United States. This will be, along with our Subcommittee 

hearings, the 51st hearing that we have had with regard to manufacturing and the loss of jobs in the United States. Today’s hearing 

deals with, really, how to keep jobs here by changing government 

policies so that people who want to buy our good stuff can come to 

the United States, examine the products, order them, buy them, 

and then take them back to their respective countries. 

We have numerous problems going on with the sale of our products and problems to do with our manufacturers. Today deals with 

the visa restrictions. We have dealt, in the past, with currency imbalances, taxes, market access restrictions, health care costs, energy costs, tort costs, regulatory burdens, et cetera. 

The visa restrictions implemented since 9/11 could be changed 

administratively in a very short period of time, without legislation, 

so as to ease the way for foreign nationals to do business with and 

spend money in the United States without threatening our national 

security. Moreover, everyone seems to agree that at least half of 

the entire backlog of these visas is attributable to China. That is, 

the Chinese who are ready, willing, able and eager to buy our manufacturing products, have a difficult, if not impossible, time of getting visas to come here and place their orders. And that is what 

this hearing centers on today. 

I have taken a hard look at the business visa backlog, because 

it is a huge U.S. trade barrier, that costs American companies 

enormous businesses, and it will encourage the companies that 

cannot receive foreign visitors here to move overseas where they 

can visit with their customers much easier than here. To understand and document this backlog, this Committee has held an oversight hearing, requested a GAO investigation, researched and resolved visa issues during travel to Asia, discussed these matters 

with numerous Chinese officials, and convened regular meetings 

with industry and the relevant U.S. agencies. Unfortunately, these 

2

meetings have occurred separately, which is part of the problem. 

Much of the backlog could have been avoided or now solved, 

through closer cooperation and consultation between U.S. agencies 

and industries. 

The backlog remains a serious problem. I know this through our 

Committee oversight work, my personal experience with our own 

constituents, reports from Congressional colleagues, preliminary reports from the GAO and numerous press reports such as the November 17th Washington Post editorial which is on the table. While 

many foreigners endure these delays, many others decide to change 

their plans to avoid the need to come to the United States. One of 

my constituents, Ingersoll Corporation, waited in vain for buyers 

from China to secure visas so they could inspect Ingersoll machines 

they wanted to buy. After seven months of waiting, bureaucratic 

bungling, with the United States Government presuming that any 

person with an engineering degree who comes here is a terrorist, 

making it difficult to buy U.S. products, and forcing companies to 

go overseas just to visit with customers. After seven months of 

waiting, the Chinese abandoned their efforts to come to the United 

States and buy products from Ingersoll Milling and the giant and 

proud 130-year-old Ingersoll Milling went bankrupt. And one of the 

reasons was caused by the United States Government. 

The official policy of the United States Government is to discourage foreign visitors from coming to the United States to buy our 

products. The official position of the U.S. Government is to discourage foreign visitors from coming to the United States to buy our 

products. The official government position of our United States 

Government is to discourage foreign visitors from coming to the 

United States to buy our products. Do I have to mention it more 

than three times? 

Because I am tired of it. And whoever is listening, anybody from 

the White House, anybody from the relevant agencies, would you 

help out our manufacturing base? Would you help my people, with 

111⁄2 percent unemployment, where we lose a factory a week? 

Would somebody realize that in the war in terrorism, you cannot 

presume that every visitor to this country is a terrorist. And that 

is the official policy of our United States Government, and that policy is destroying our manufacturing base, especially the high-tech 

manufacturing base where you need a validated license to sell. And 

even in those cases we don’t need a validated export license. You 

can’t blame that one on the Chinese, you can only blame it on 

Washington, D.C. 

And Ingersoll isn’t alone. According to one survey, half of all our 

companies operating in China lost opportunities because of delays 

in business visas. Half the companies in the United States that sell 

valuable exports to China couldn’t do it, because of huge delays in 

bringing the Chinese here to look at products. They lose direct 

business, as happened to Ingersoll. They also lose as suppliers 

when their U.S. customers lose business. And we develop the reputation as an unreliable supplier. Why buy from the United States 

when you can’t even come here to shop for the goods that we make. 

And that is caused by the official policy of our U.S. Government 

which presumes that anybody with an engineering degree or from 

a tier-three country is a terrorist. 

3

Amway, one of the world’s largest direct sale companies, decided 

against holding its convention in Los Angeles or Hawaii for its 

8,000 South Korean distributors in the face of the new visa requirements. Instead, Amway will hold its convention in Japan. The 

United States Government is directly responsible through these 

foiled and stupid policies, for causing a great American company to 

hold a convention overseas because of the inability to get visas for 

the people that come to visit the United States. That cost at least 

$10,000,000 to the people of the United States in lost business. 

Besides the literal cost to our economy in terms of lost business 

and tourism dollars, the visa delays result in loss of goodwill from 

people from all over the world who wish to come here for exchange 

programs and educational opportunities. Since its inception, this 

country has enjoyed a reputation for welcoming people from all 

over the world. Now it enjoys a reputation for not welcoming people 

from all over the world. 

In the post 9/11 world, we must remain vigilant to keep terrorists away from our shores. But we can’t shut the world out. We 

need to find better ways of distinguishing between friends and foe. 

Based on our work to date, I know the State Department, Homeland Security Department, FBI and other agencies are working to 

find better solutions to balance security with business necessity. 

But all we get is talk, interagency, looking at one another, agreeing 

there is a problem, but nothing gets done. 

Just one such solution is to offer qualifying Chinese nationals a 

one-year multiple entry visa. The people who work within those departments are actually tremendous public servants. We have had 

a great response from them, and we can sense and know firsthand 

the frustration, because they know that the best interests of the 

United States are not being served by a bureaucracy that keeps 

them all from doing what they really want to do. 

China also offers long-term business visas to frequent U.S. travelers. I have got a letter here from the Embassy of the People’s Republic of China, Lee Ri-ho, Consul General. He simply makes reference to the Web site, the Chinese, the PRC Web site, that says 

that they will grant a one-year visa, multiple-entry visa, if the applicant has visited China at least twice within the past 12 months 

and submits a copy of it, because why not? 

So Americans can go to China to buy their stuff, but the Chinese 

can’t come to America to buy our stuff, and there is something dramatically wrong with that. 

We are exploring numerous opportunities for closer agency-industry cooperation. Just one example, we have suggested a consulartrade partnership against terrorism, for visa issuance similar to the 

customs-trade partnership against terrorism that already exists for 

container and port security. In such programs, industry works with 

the agencies to address a security concern in exchange for a business benefit, such as faster, more efficient processing and transport 

of goods or people. 

And when our ranking member comes back, I will give her the 

opportunity to do her opening statement. 

Our first witness is Robert Kapp, President of the U.S.-China 

Business Council. You can tell I am excited, Bob. You can tell I am 

4

excited, and here we go again, the opportunity to sell frustrated by 

our own government. 

We have set the time clock at eight minutes, and we look forward 

to your testimony. The entire testimony of the witness will be part 

of the record. I will keep the record open for ten days. Anybody else 

who wants to submit something for the record can do so, however 

it is limited to two typewritten pages and the print is not to be less 

than 10 point print. 

Mr. Kapp, we look forward to your testimony. 

STATEMENT OF ROBERT A. KAPP, PRESIDENT, UNITED 

STATES-CHINA BUSINESS COUNCIL 

Mr. KAPP. Thank you very much, Congressman. I am glad to be 

back, but I am sorry to be back. This, to me, is an update. Your 

own introductory remarks have pretty much said what we try to 

say in this testimony. The situation is not markedly improving for 

our corporate and business members who are trying to develop 

their business with China and in China. 

Chairman MANZULLO. Bob, could you pull the microphone closer? 

Mr. KAPP. Sure. It is now 15 or 16 months since we first wrote 

to the State Department to try to get a handle on what was happening in the visa issuance process, because it began to happen 

without anybody really knowing what was coming down. And I 

must say, to my regret, that I don’t really feel that we have made 

a lot of progress. 

The purpose of my coming here is not to cast aspersions on individual agencies. We know people are overworked. We know there 

are not enough computers. We know there are data-handling problems, and so forth. And we hear, as I say in my testimony, privately, that measures are being planned to help with some of the 

mechanical problems associated with this massive increase in the 

reviewing of applications. But the bottom line is that we are just 

not seeing very much progress. 

In the attachments to my own testimony, there are a succession 

of items that relate specifically to the State Department, starting 

with my own first letter to Secretary Powell, and concluding with 

a message to Undersecretary Al Larson from the American Chamber of Commerce in Beijing just a few days ago. And those are in 

there not to say that the State Department specifically is the 

source of the problem. They are to say that the problems that I adduced as long ago as August of 2002 are still very much on the 

minds of the business community at the end of 2003. 

Following that, you will find three examples of individual companies’ experiences with the visa mess, as I call it. One of them is 

a small firm out of West Virginia that has spoken to your committee before. Another is a subsidiary out of North Branford, Connecticut, the story taken from a news report. And the third, I hope 

it is in here—I am quite sure it is—the third is just the expression 

of extreme impatience from a Beijing-based figure with Rockwell 

Automation, a company you would know well. He himself, a former, 

I believe, Air Force general, former attache ́, defense attache ́, or air 

attache ́ in our embassy there, now working for Rockwell, which is 

a very interesting and specific case of a company that just is not 

getting through this process. 

5

In the couple of minutes that I have left, let me say that I think 

in one sort of philosophical sense, there is a little bit of a sign of 

hope here. If you live in Washington long enough, you begin to realize that there is a pattern to the way things happen here. An 

emergency takes place, the political system reacts with tremendous 

force and pushes way over to one side. The media pile in, everybody rushes over to the side of the boat. The boat practically capsizes, the rail goes under water, and then gradually, slowly, the 

ship begins to right itself. The media begin to notice that there is 

more complexity to the story than initially met the eye. Civil society groups, interest groups, social organizations, others affected by 

what is happening begin to find their voice and to speak back. 

And I think that in a very, very tentative way that is beginning 

to happen now on the visa problem: The Washington Post editorial 

that you mentioned, Senator Cornyn’s very interesting piece on another aspect of the visa system in The Washington Post the same 

day, November 17th are just two examples of the beginnings of a 

sign that the media are picking up on the fact that there are terrific collateral damages and downside costs to the measures that 

were taken in the aftermath of 9/11. 

The signs of hope, though, are very thin. And the reason is, of 

course, that at the end of the day there is no arguing with the need 

to defend the borders of the country against the arrival of those 

who would cause this country grievous harm. None of us for a 

minute, of course, would argue that that principle or that goal 

needs to be compromised in any way. 

But what has to happen and has not happened yet, is that people 

need to understand that nothing is absolutely, totally black and 

white; that everything is a question of probabilities and a question 

of costs and benefits. I understand, as I say in my testimony, informally understand, that the Technology Alert List review process 

which is designed to screen out people who might come to this 

country and gain access into inappropriate technology, the yield 

rate, if that is the term for it, is .04 percent out of all of these 

cases, which is the real hangup on the China side, the great source 

of delay, leaving aside the more recent imposition of a requirement 

that every single applicant has got to have a personal interview 

with a visa officer, which has created a backlog from two weeks to 

a month or more. 

Leaving the interview question aside, the real source of the backlog on the China side is the so-called Security Advisory Opinion reviews here in Washington, interagency reviews of people who are 

vulnerable under this list called the Technology Alert List of sensitive technological areas. And I gather that the yield rate there is 

.04 percent, at least globally. The yield rate on CONDOR, I am told 

by the same source, which is the program we are not directly concerned with, a program aimed primarily at people of particular concern from certain countries in the Middle East and elsewhere, that 

is zero I am told, zero. 

So the question becomes, isn’t there a way to try to redefine the 

task so as to eliminate as much as possible of the unnecessary and 

concentrate on the necessary. Now, the security organizations that 

run this review process, their job is not to help American business. 

I gather, not to me but to others, they have been quite blunt about 

6

that. Secondhand we get told, look, there are parties to this review 

process who just don’t care whether you have got business problems. That is not their job and they are not going to budge on this. 

And what we have to try to get to is a redefinition of the—as you 

have said so well yourself, Congressman—we have got to get back 

to the idea that the costs, the downside, the collateral damage of 

the lost business, of the lost tourism, of the canceled trade shows, 

of the redirection of business to European subsidiaries or Asian 

subsidiaries of U.S. firms or to foreign firms altogether, all of that 

somehow has got to be taken into the calculus with which we decide both law and policy. Most of this is administrative, but I have 

to say, and I know it is an uphill battle in this body and in the 

Senate, but my instinct after having pushed on this pillow now for 

15 or 16 months, everybody says yeah, we are with you, we would 

really like to do it but it is not our pay grade or it is not our agency 

or it is not our bureau, or it comes from on high, or one of those 

things. My sense is that the incentives are not there in the executive agencies to redefine this calculus and begin to articulate and 

carry out policies that minimize the wastage and the collateral 

damage here. 

I just don’t see where it is going to come from. It is not even 

clear to me, for example, whether the agencies of government 

which we would most associate with the interests of American businesses seeking to thrive internationally, namely Commerce and 

USTR, are even part of the SAO process at all. Somebody told me 

they were not. You will probably know the answer to that. I don’t 

know the answer to that. 

So the system now is institutionally set up in a way that creates 

stasis and paralysis, as you have said yourself. And I just don’t see 

the incentive structure for the executive agencies to get themselves 

out of it. I mean, if you are a 27-year-old visa consul and you saw 

the head of the Assistant Secretary of State with consular authority axed in the aftermath of 9/11 and the furor over how these people got into the United States, if you had a choice between making 

a decision on the spot and sending something back to Washington 

for an indeterminate review, what would you do? You would send 

it back. 

So I have to say that in a slow, patient way, and we are very 

grateful to you, Congressman, for sticking with this issue, we somehow have to get the attention of people on the Hill as well, and get 

the Hill weighing in and saying look, guys, there is an economic 

loss going on here, as well as an international goodwill loss. This 

leaves aside the question of U.S. relations with other countries, 

large and small, who matter very much to us, even in noncommercial terms, and whose visitors and whose officials even are getting 

stiffed by the visa process. That is really a summary of what I had 

to say. Thanks. 

Chairman MANZULLO. Bob, I appreciate your statement. The 

next witness is William S. Norman, President and CEO of the 

Travel Industry Association of America. We look forward to your 

testimony. 

7

STATEMENT OF WILLIAM S. NORMAN, PRESIDENT AND CEO, 

THE TRAVEL INDUSTRY ASSOCIATION OF AMERICA 

Mr. NORMAN. Thank you, Chairman Manzullo and members of 

the Committee. I appreciate the opportunity to testify before you 

on how the U.S. visa policy is impacting international travel to the 

United States. I am Bill Norman, and I am President of the Travel 

Industry Association of America, or TIA. As you may know, TIA is 

a national, nonprofit organization representing all components of 

the $525 billion U.S. travel and tourism industry. Our mission is 

to represent the whole of the U.S. travel industry, to promote and 

facilitate increased travel to and within the United States. And the 

travel industry is predominantly comprised of small businesses. In 

fact, approximately 95 percent of all of our businesses have 50 employees or fewer. 

International business and leisure travel to the United States is 

a vital component of our national economy. In 2002 over 42,000,000 

international visitors generated $83.5 billion in expenditures, $12 

billion in federal, state and local tax revenues, and accounted for 

one million jobs nationwide. International travel and tourism to the 

United States is a service export, and in 2002 the United States 

had a positive balance of trade of $5.5 billion. However, these numbers are much lower than they have been in previous years, and 

our industry continues to see a decline in travel to the United 

States. Over the past three years, international travel to the 

United States has fallen by 20 percent, with over $15 billion in lost 

visitor spending. 

International travel to the United States has suffered greatly for 

a variety of reasons, for all of the events that have affected the 

international inbound international visitation, one fact that remains a deterrent are the many new U.S. policies on international 

travelers. TIA recommends Congress and the Administration take 

the following three actions to improve our policies affecting international visitors and to better facilitate these visitors. 

First, we believe the State Department should revise the interim 

rule on interviews for visa applicants. State has raised the rate of 

applicant interviews to 90 percent or more at all posts. TIA agrees 

with this new security measure in principle. However, the State 

Department lacks the personnel or the space to meet the demands 

of this new requirement at several key locations. TIA urges the 

State Department to increase the interview rate only as new resources become available at high-volume visa issuing posts. Additionally, TIA urges Congress to appropriate increased funding to 

meet these new security requirements. 

Secondly, we believe the State Department should not raise the 

visa application fee in 2004. The fee for non-immigrant B–1 and B–

2 visas was raised in November of 2002 from $65 to $100 U.S. 

Raising the fee again will make the U.S. that much less attractive 

when compared to competing international destinations that do not 

require visas. If necessary, Congress will have to appropriate additional funds to support effective and efficient visa processing. 

Third, Congress must immediately introduce and pass legislation 

that would postpone the deadline for use of biometric visas and 

visa waiver programs, passports, by two years, to October 26, 2006. 

TIA does support the use of biometrics in travel documents. CapVerDate 0ct 09 2002 18:12 Apr 15, 2004 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 G:\HEARINGS\92837.TXT NANCY
8

turing a person’s fingerprint, eye, face, or other biometric and 

using it as part of the entry process will allow inspection officials 

to know the person before them is the same person to whom the 

passport or visa were issued. 

However, TIA has learned that the countries participating in the 

Visa Waiver Program will not be ready to issue these new biometric passports until late 2005 at the earliest. And this requirement 

is a condition of continuation in the Visa Waiver Program. A postponement of the deadline will provide much-needed time for our 

major allies and trading partners to implement this necessary security program without disrupting legitimate international visitation. 

Without a postponement, these countries will miss the deadline 

and the Visa Waiver Program could be effectively terminated. 

Travelers who could normally visit here free would now have to 

apply for a U.S. visa. According to a GAO study performed just last 

fall, the resulting fall-off in travel would cost our economy nearly 

475,000 jobs. 

T.I.A. and the U.S. travel industry strongly support efforts by the 

Federal Government to protect our homeland from attack by those 

who would seek to harm our citizens, residents, and international 

guests. However, our government must consider the impact these 

efforts are having on the jobs of American workers. I urge the Congress and the Administration to seriously consider the recommendations I have made today. 

Mr. Chairman, we greatly appreciate the continued leadership 

the House Small Business Committee has demonstrated on these 

issues. The hearing held by this Committee in June of 2002 was 

instrumental in highlighting the many deficiencies in the Immigration and Naturalization Service’s proposed rule on B–1 and B–2 

visa holders. And we appreciate the Chairman’s attempt to make 

sure the indirect impact these visa rules have on small businesses 

will be documented and researched by agencies with the introduction of H.R. 2345. 

Thank you, Mr. Chairman, and the members of the Committee, 

and I look forward to your questions. 

Chairman MANZULLO. Thank you very much. Our next witness 

is Randy Johnson, Vice President for Labor, Immigration and Employee Benefits with the U.S. Chamber of Commerce. Mr. Johnson, 

we look forward to your testimony. And could you pull the mike a 

little bit closer to you. 

STATEMENT OF RANDEL K. JOHNSON, VICE PRESIDENT FOR 

LABOR, IMMIGRATION AND EMPLOYEE BENEFITS, U.S. 

CHAMBER OF COMMERCE 

Mr. JOHNSON. I was wondering if I could have Mr. Norman’s remaining two minutes. But I do thank you, Mr. Chairman, for holding this hearing on the issue of delayed entry of legitimate travelers to the United States, and with particular focus on——. 

Chairman MANZULLO. Randy, it is not an omnidirectional mike. 

You have got to speak directly into it. 

Mr. JOHNSON. All right, thank you, Mr. Chairman. 

Chairman MANZULLO. No, a little bit closer. 

Mr. JOHNSON. How about this? 

9

Chairman MANZULLO. If I say it a third time I will have to move 

it myself. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Chairman MANZULLO. You have been here before, you know how 

it works. 

Mr. JOHNSON. I do. 

Chairman MANZULLO. Thank you. 

Mr. JOHNSON. Thank you, Mr. Chairman for holding this important hearing. I would like to broaden my testimony a little bit from 

the problems associated with visa issuance, also to include some 

mention of some of the issues arising at our border communities. 

And in this regard I would like to note that I do represent the 

Chamber on a Congressionally created task force to study entry/

exit issues at the borders, now called the U.S. VISIT System. And 

I also chair the Americans for Better Borders Coalition. 

Now, Mr. Chairman, as the other speakers have pointed out, we 

are all aware of the new environment we live in post-9/11. The 

Chamber has been a strong supporter of increased security. We 

were a strong supporter of the creation of the Department of Homeland Security. We key voted the legislation. However, we also 

strongly lobbied and were successful in lobbying for inclusions in 

that legislation which, in our view, protected the business community in the sense that it reassured us that the new Department 

would look at functions of economic security, it would look at the 

interests of the private sector. 

And unfortunately, however, I think to reflect the same theme as 

the other speakers today, what we are seeing is that although the 

rhetoric of the Administration is reassuring in the sense that the 

Government will always seek a balance between security and keeping legitimate trade and travel moving, the rhetoric is not, frankly, 

living up to the actions. Some of that may be just a function of the 

fact that the laws do not really have standards to direct the decisionmakers to know how to strike this balance. I am not sure, but 

I think we are all here today to just try and educate the Congress 

as to the fact that regardless of what the State Department may 

be saying, there are, in fact, real problems out there. 

And I think it is important to understand that the visa issuance 

is part of one puzzle. There are pyramiding deadlines approaching. 

All of us out here, on top of the August 1st State Department person-to-person interview requirement, there is a December 31st 

deadline for the U.S. VISIT requirements at airports and seaports. 

As another speaker mentioned, there is the October deadline for 

U.S. visas and passports by October 26th, biometrics, and full implementation of U.S. VISIT at the land borders at the end of 2004 

and 2005. 

And these are all parts of a puzzle that impact how a person can 

come into this country. It is not just the State Consulate, it is not 

just the Department of Labor, it is not just INS or Customs at the 

borders, or DHS. They are all part of a puzzle and the focus of this 

hearing today is on the visa issuance, but it is still really just one 

part of it. 

And, for example, with regard to the borders, we have met with 

representatives from Laredo and McAllen, Texas Chambers of 

Commerce, representing many small businesses, Mr. Chairman, 

10

and there is a strong feeling by these local communities, and I have 

been down there, that the government is listening, but they are 

really moving ahead with new requirements at the land borders 

without, I guess, paying much attention to what these very serious 

concerns are. And as one person pointed out at a State Corps meeting down there, is this because it is simply easy to ignore border 

communities? And now that these deadlines are approaching, there 

is a real sense of urgency on these businesses along the borders 

that a way of life is at stake. 

And the same urgency is on the visa front. Our American Chambers of Commerce in places like China and South Korea report that 

they are actually losing businesses to European and other competitors because of the difficulties in obtaining visas for the customers 

and clients. Impending changes to the Visa Waiver Program will 

disproportionately affect key American allies such as the United 

Kingdom and Japan, who have told us they will not be able to meet 

the October 2004 deadline for issuing biometric passports, in spite 

of their best efforts. 

In that regard we would strongly urge the other recommendation 

made here already, that the Congress reconsider that deadline and 

allow the State Department and the Department of Homeland Security to perhaps waive the October 24th deadline, or 26th deadline 

in appropriate circumstances. 

I think there is just a sense among us that the Government may 

not be carefully evaluating the impact of their decisions. And the 

rhetoric is there, but there is a failure to understand that a way 

of life is at stake in many of these communities. There are true dollars and cents at stake, and dollars and cents, as you well know, 

Mr. Chairman, do get translated into lost jobs. 

Maybe that is a communication issue on our part, or maybe it 

is on their part, but the perception is there, and that perception is 

backed up by reality. And this is not to demean these people in 

government. I worked half of my career in government. But I think 

we all know that sometimes when you are inside the bureaucracy 

it is easy to insulate yourself from the decisions you make, and say 

well, this is just what we have got to do, and then you go on. And 

we will continue to hammer away at these issues. 

Now, Mr. Chairman, my testimony goes through many sort of 

specific problems that our companies have faced, our IngersollRand who chairs our Immigration Subcommittee has had many 

problems with delayed visas, costing thousands and thousands of 

dollars. There are problems with timely processing of visas in 

Korea, and that is impacting the travel community. We have a 

major industrial and chemical equipment and electronics manufacturer that has had, with a prestigious Russian institute, and the 

key scientist in this partnership waited six months for a visa even 

though the same person has been in the country many times over 

the last ten years. So the record was there that this guy was not 

a security risk. And this delay has threatened this long-continuing 

relationship. 

I won’t go on. There are many examples in the testimony. You 

mentioned The Washington Post article, the Amway Corporation 

issue—Amway is a huge member of the U.S. Chamber, by the way. 

It is just somewhat amazing when you hear some representatives 

11

of the State Department continue to, I guess, take the position that 

really these are very isolated circumstances, and overall the process is simply working fine. 

I think we are frustrated, sometimes, on the outside because we 

are not sure who to go to, and the government appears to us, particularly in this new reorganization, as a huge black box. And the 

best we can do at this stage is try and educate those people within 

that there are problems out here and we hope the message gets 

through, and we hope that that message can also get through, 

through a hearing such as this, Mr. Chairman. 

So we do appreciate that. We have made some suggestions for 

improvements in the processing system in our written testimony. 

And I would like to thank you for this opportunity to present our 

views. 

Chairman MANZULLO. Thank you very much. Our next witness 

is Palma Yanni of the American Immigration Lawyers Association. 

Palma, again, thank you for coming and we look forward to your 

testimony. 

If you could pull the mike closer; do it the first time. It took 

Randy three times, but you know. 

Mr. JOHNSON. All right, all right. I am only a vice president. 

Ms. YANNI. He can help me out if it is not close enough. 

STATEMENT OF PALMA R. YANNI, PRESIDENT, AMERICAN 

IMMIGRATION LAWYERS ASSOCIATION 

Ms. YANNI. Mr. Chairman, distinguished members of the Subcommittee, I am Palma Yanni, President of the American Immigration Lawyers Association, and I am honored to return to this Committee representing AILA, the national bar association of more 

than 8,000 attorneys who practice immigration law. 

Since I last talked to this Committee in June, the situation has 

further deteriorated. I will summarize my written testimony and 

ask that the whole be submitted into the record. 

In any category of visa that you can name, there are severe 

delays or situations that hamstring or defeat the purpose of having 

that visa in the first place. These situations have a disproportionate impact on small businesses. And as we have discussed this 

morning, one thing to keep in mind regarding all these delays in 

visa issuance is the FBI has recently acknowledged they have not 

excluded a single terrorist from the United States through all of 

these security measures. 

When we talk about visa issuance, we are generally referring to 

the process by which a consulate or embassy abroad issues a document that enables a person to come into the U.S. for a particular 

purpose. The delays in that visa issuance process have been discussed and are indeed monumental. But visa problems for key employees and consultants with small businesses actually begin long 

before the individual applies for a visa at a U.S. Consulate, and 

they continue after they arrive in the U.S. As was noted previously, 

people who have been here for years either working or studying, 

sometimes, frequently go home and then cannot return, even 

though they have already been cleared multiple times before. 

In many cases, visas for individuals critical to small businesses 

cannot be issued until the Department of Homeland Security, the 

12

Citizenship and Immigration Services, which was formerly INS, 

has approved the petition, which also includes a security check. 

There has been a marked increase in the number of cases where 

these visa petitions that are denied or delayed endlessly, or demands for additional documentation which are not even required in 

the regulations, and these burdens fall disproportionately and particularly on small businesses, which are asked to provide an incredible array of documents, from wire transfers, confidential contracts, 

years of bank statements and payroll records and r ́sume ́s for employees that are not even related to the petition, tax returns and 

more. 

These delays can mean that the temporary professional visa, the 

H-Visa, will not even be available to small businesses, which use 

them very heavily, for this fiscal year because there are reduced 

numbers of those visas and bigger businesses are not subjected to 

these demands by the formerly-known-as-INS. 

The people that are coming to these smaller employers from 

abroad bring unique experience in markets and technology to help 

the small businesses expand and fuel growth and jobs for American 

workers. 

I was recently on a panel in an immigration conference, where 

I suggested that we produce posters to be distributed throughout 

the service centers—we probably also need them at consulates—

touting the economic contributions of small business. My thought 

was big posters that said small business is the engine that drives 

the economy. They would also do well to have facts from your Committee’s Web site that say 99 percent of the employers in the U.S. 

are small businesses, and they produce two-thirds to three-quarters 

of the net jobs in the U.S. Perhaps the Committee can help me 

with my poster project. 

The delays at the consulate have very serious consequences for 

businesses, families, schools and others in the United States provided that you get to the point of having the initial petition approved, or you are in a category where that is not needed. The 

State Department cites a 15 percent decrease in the number of 

non-immigrant visa applications from 2002 to 2003. People are simply not coming to the U.S., in large part due to the delays and 

roadblocks in the visa process. 

The other members of the panel have discussed the tourist problem and made reference to students, scholars and scientists who 

cannot bring their experience and talents to the U.S. and are going 

elsewhere. The National Academies of Science has issued a statement with a very dire warning. The U.S. scientific, engineering and 

health communities cannot hope to maintain their present position 

of international leadership if they become isolated from the rest of 

the world. And that is what is happening. 

Security clearances triggered by a person’s nationality, line of 

work or study, or unknown factors, delay the process. The special 

checks relating to someone’s employment in a field of study, include a list of occupations that was referred to, the Technology 

Alert List, that is so broad that virtually any scientific or technology field could be included. 

As you have emphatically said, Mr. Chairman, any engineer is 

deemed to be a terrorist. It is not just engineers. It is anyone inVerDate 0ct 09 2002 18:12 Apr 15, 2004 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 G:\HEARINGS\92837.TXT NANCY
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volved in technology, in science, in almost any field, including 

health professionals. 

Chairman MANZULLO. Hold on. Could you go to the anecdotal 

stories that are on the last page? Because this is what really, when 

you read these things, this gets me mad. 

Ms. YANNI. Well, I can make you very angry. 

Chairman MANZULLO. Well, go ahead, do that; make my day. But 

if you could get into those accounts. 

Ms. YANNI. There are many. There was a classic example of stupidity, which I believe was the word you used, Mr. Chairman. A 

German professor, who has visited the Institute for Surface and 

Interface Science at the University of California in Irvine, had 

come for 25 years and didn’t come this year because the visa 

issuance situation was so onerous. He would have had to go and 

stand in line at 6 in the morning, and come back for days. This is 

a gentleman, that could have, if he wanted to, stretch the rules, 

just get on a plane with his German passport. But he wanted to 

play by the rules and get the right visa because he was going to 

be compensated in the U.S. He is not coming. 

An engineer who had worked in the U.S. for four years under an 

L–1 visa status, so again, he was approved many times before in 

clearances, applied in Jakarta in 2002 to renew his L–1 visa. The 

visa still has not been issued. Some agency is conducting a check. 

The company could not wait longer. They transferred the engineer 

to an overseas project and moved the project out of the U.S. because this engineer was key. 

A telecommunications engineer waited over a year for an H-visa 

in Saudi Arabia. The company and the engineer gave up. They 

could never get an answer. 

A businessman coming to the U.S. to be the president of a subsidiary of a British company applied for his visa a month ago. He 

has a common name, so his name came up in the security database 

system of the FBI; his fingerprints were taken; he is still waiting. 

The U.S. subsidiary does not have their president, does not have 

a leader. 

A Panamanian couple in their seventies have visited their adult 

daughter in the U.S. every year for 15 years. Normally they come 

and renew their visitors visas consistently. They happened to be 

born in Morocco. Because of the accident of where they were born, 

they have waited several months for their visas and cannot come 

to the U.S. to visit their family. 

There is more, but I have hit the stop button. Thank you very 

much. I am pleased to be here today. 

Chairman MANZULLO. I appreciate that. I would like to ask the 

same question of the other three witnesses for the anecdotal stories 

of people similar to Ms. Yanni’s experiences. Bob, do you want to 

share with us? What I am trying to do is I want to quantify how 

much the United States loses, or at least come to some kind of 

guesstimate of the money that we are losing and the jobs that we 

are losing because of the inability of the United States Government 

to be a welcome host to visitors who come here for both business 

and pleasure. I hate to say this of my own country, but it is true. 

Mr. KAPP. Well, Congressman, in the written testimony I threw 

in these cases from Bill McHale of Kanawah Scales and Systems 

14

out of West Virginia. They have been at this for endless months 

now. The situation just doesn’t get any better. 

Many of our companies are large companies, but they, as you 

pointed out yourself, they source from American vendors and from 

American component makers and suppliers, and the list just goes 

on. I mean, I am a little reluctant to cite cases without having the 

documents in front of me and to talk about other companies’ experiences. But if I recall correctly, there was public mention of a situation where a leading U.S. airplane manufacturer couldn’t get the 

pilots in to pick up the planes and drive them home. That is real 

money. A billion here, a billion there, as Senator Dirksen once said, 

and pretty soon you are talking about real money. 

I remember an instance which I would want to check for veracity 

before it was finalized, in which the United States Government 

bent over backwards to advocate for an American company seeking 

a very significant contract in China. The company got the contract, 

and the first batch of trainees sent by the PRC to the United 

States to start working up the product, which was a product that 

had to be developed for this contract, were denied entry to the 

United States. The list just goes on and on. 

Quantifying is tough. And one of the reasons quantifying is tough 

is that it is very hard to put a dollar value on time. But the theme 

that comes out here, I am fascinated by the utter unanimity of 

what we are saying here today. What is really interesting to me is 

that just the black box, as our friend from the Chamber put it, the 

dropping of these applications into a file where you can’t know 

where it is, you can’t know who is looking at it, you can’t know who 

has got a problem with it, and you can’t know when it is ever going 

to come out, that uncertainty is the worst part of the problem for 

many of our companies. 

In that regard, as I quit this question, Congressman, I do think 

that we have to try, again, the China cases, most of the ones that 

we work with have to do with the Technology Alert List and the 

SAO Security Advisory process. The great loss there was the elimination of this clock, this certainty that if the bureaucracies didn’t 

make their decision after a certain number of days, the visa was 

going to be approved. That was killed after 9/11 and I think that 

is an area we really need to try to get some focus back into here. 

It doesn’t have to be an old ten-day clock any more. We understand 

it is a different world. But there has got to be an understanding 

that there is a limit to this. And a reasonable limit. Not a sixmonth limit. Business can’t run on six months for a visa application. But a reasonable limit, after which if the bureaucracy has not 

been able to make its mind up, let alone say no, then the visa goes 

forward. That has got to be high on the list of priorities. 

Chairman MANZULLO. Bill, any anecdotal stories you want to add 

to this? 

Mr. NORMAN. There are so many, Mr. Chairman, I am not sure 

where to start. 

Chairman MANZULLO. Give us your most egregious. 

Mr. NORMAN. I would like to just mention two, because what has 

happened to the U.S. travel industry has been phenomenal in the 

past three years. We have seen international travel to the United 

States fall by some 20 percent in the past few years alone. And alVerDate 0ct 09 2002 18:12 Apr 15, 2004 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 G:\HEARINGS\92837.TXT NANCY
15

though all of it can’t be directly attributable to what is happening 

with visas, that is a very large part, because we have become a 

very unwelcoming society. You ask for anecdotal information. If I 

may, I will just mention two. 

You take our top ten trading partners in terms of travel to the 

United States and bear in mind that we have had a positive balance of trade which just a few years ago was running around $15 

billion positive, and now it is down to five, and with all the other 

declines that we have seen. 

Use Brazil. In order to come to the United States, one of our top 

trading partners, in order to come to the United States, I will use 

an anecdotal story, an actual story, about a family of five coming 

here. First of all, in order to come to the United States they have 

to apply for a visa. It takes anywhere in the neighborhood of four 

to six weeks just to get the interview. They then have to travel. In 

order to travel to get the interview, because they have to come to 

one of our consulate offices, they have to take care of hotels there, 

and, by the way, each member of the family must come. The visa 

application for a family of five is five times $100. You add to the 

hotel, the air, that has already been done to the $500, and the result? Four of the five family members will get the visa, but not the 

fifth. If the family is going to go together, they are not going to go. 

So after all of that trouble they have lost $500, they have lost the 

hotel, and they are going to go to Europe where they do not need 

a visa otherwise. 

Take another top trading partner. Same situation, with South 

Korea, very important, and used as an example of what is happening overall to conventions and meetings. But let me use another 

example. 

The Visit USA Committee, which we work with very closely here, 

indicates that the new visa policies and delays and everything is 

resulting in one of every six visitor from that country being deleteriously affected, which results in a loss to the United States of 

some $200 million. 

And I could go on and on and on, but that is just a flavor of what 

is happening, and we see it, and it is affecting everyone. And it 

isn’t out of the bounds of reality that if we go on and exacerbate 

it even farther by what we are talking about next year of moving 

into a situation in which we are going to ask for the biometrics, 

which they are not going to be able to do and they get out of the 

Visa Waiver Program, we can see a travel industry that is already 

decimated, is going to be in a situation that we could conceivably 

lose up to almost another 500,000 jobs, most of which are small 

businesses. 

Chairman MANZULLO. Randy, do you have an anecdotal story to 

add? 

Mr. JOHNSON. Yes, one general statement, three anecdotal stories, Mr. Chairman. The United States Chamber of Commerce has 

a broad network across the world through our American Chambers 

abroad, and the message—I mean, I have rarely dealt with these 

American Chambers abroad until after 9/11 for lots of reasons. But 

one of the biggest reasons was the whole slowdown in international 

commerce due to the problems we are discussing today. And the 

message they are telling us is, one, can’t you help us? But the other 

16

one is, look, we are losing business to our competitors because our 

competitors are telling clients don’t deal with the United States, it 

is too much of a hassle. Can I quantify that? I have some examples 

here. I can’t quantify that. We will try and do a better job of that, 

Mr. Chairman. But these groups would not be coming to us unless 

this was a serious problem. 

Second, with regard to specific examples, Ingersoll-Rand, the 

chairman of our immigration subcommittee is waiting to close a 

$2.5 million deal with an entity in China, but they can’t get the 

visas to bring these engineers over from China to inspect the equipment to close the deal so they can move the compressors back to 

China. 

Chairman MANZULLO. Randy, if you could have her get in contact 

with me, I will work personally on it, and I will set a hearing. I 

want to ask the people that are not issuing the documents to personally show up here. If they are not here I will have an empty 

chair with their name. Okay? Maybe we should do one of those 

every 30 days until somebody realizes that we mean business 

around here. Go ahead. 

Mr. JOHNSON. She is excellent on this, Elizabeth Dickson, so I 

will, Mr. Chairman, thank you. 

We have an example here in our list of problems on page 5, 

where a logistics manager has waited over ten months for renewal. 

A logistics management company has waited over ten months for 

renewal of a manager visa, losing, according to this company, 

$75,000 to $100,000 per month in revenues. 

We had a situation in Texas with a company that deals with the 

government in Saudi Arabia and private sector concerns in Saudi 

Arabia, and ultimately they were able to close this deal, but the 

message they gave to us was—the entity in Saudi Arabia to the 

Texas company here was, look, we got it done this time, but this 

is a real hassle for us and we are going to start looking elsewhere. 

So in that case it was done, but these are all things that pressure 

international customers to look elsewhere. So those are a few. But 

again, the overall message is clear from those people who are out 

there in the real world dealing with these problems. 

Chairman MANZULLO. Ms. Bordallo? 

Ms. BORDALLO. Thank you very much, Mr. Chairman. And good 

morning to all our visitors. 

Chairman MANZULLO. Tell us your ship story first about the 

Navy not using your ports so maybe some of those people will understand why you have 20 percent unemployment. 

Ms. BORDALLO. The Chairman has asked me to share a story 

with you on Guam. We have closed bases during 1993 and 1995, 

and we have a private enterprise taking over our ship repair facility. And, of course, at one time it was all MSC ships, Navy business. Then they found a loophole, and according to Navy regulations, if a ship is homeported in the U.S. you have to have it repaired in a U.S. port. But they have found that the MSC ships 

roam around in the Pacific, so therefore they are not really homeported in the U.S. So they go to Singapore and Japan and have 

their ships repaired at a fourth of the cost. And meanwhile, this 

private entrepreneur over in Guam is hardly making it. And so the 

Chairman has been very interested and very helpful, and we are 

17

looking at that very carefully, and I think they did realize that this 

was something very, very unfair to us in Guam. 

But let me talk about the visa waiver now. The tourist industry 

is the largest private-sector employer on Guam. In 1997 Guam’s 

tourism volume reached its historical peak of 1.38 million annual 

visitors, more than 80 percent of them haling from Japan. However, a number of factors, including the Japanese financial crisis, 

9/11, the SARS and storms and so forth have contributed to a 

steady decline. Visitor arrivals fell below one million last year for 

the first time in a decade. With unemployment, as the Chairman 

stated, estimated at as much as 20 percent on Guam, we cannot 

simply wait for the Japanese economy to rebound. 

A large minority of residents on Guam, 26.3 percent to be exact, 

are of Filipino descent. Many have been waiting years and years 

for family members to obtain visas to visit them on Guam. With 

a population of 18 million and a strong regional connection to 

Guam, increasing the number of Filipino visitors would be a pragmatic solution to both increasing and diversifying our Island’s visitor base. I personally would like to see us move toward including 

the Philippines as part of the State Department’s Guam-only Visa 

Waiver Program. 

And I might add, Mr. Chairman, that we do have a strong interest in China as well. And we have suggested that Guam be a pilot 

program for this biometric system for Chinese visitors. 

Now, I do have some questions. To Ms. Yanni, given the many 

reforms implemented by the Philippine President, Gloria 

Macapagal Arroyo, to combat terror and strengthen economic ties 

with the U.S., do you feel that the current visa backlog which currently dates back to visa applications from 1995 is constructive to 

improve cultural interaction and commerce, and what are the reasons for this tremendous backlog? 

Ms. YANNI. Obviously this is in no way constructive to improve 

cultural interaction and commerce. There are various reasons for 

the different backlogs. The Philippines are now on the list of special countries or countries of interest, which I am afraid may mean 

even more barriers. I think that your suggestion of that specific 

program that not everybody knows about, where you can get a visa 

to Guam only and cannot continue on to the U.S. should, in large 

part, answer the security programs. There is a cost/benefit analysis. Essentially, you are saying you are willing to take the risk in 

Guam for these relatives of the people living there, and I really 

think that that is an excellent suggestion that could really help 

your economy. It is going to have to be agreed upon now because 

of the new structure, by both the Department of Homeland Security and the Department of State. But I think you have an excellent possibility for really improving you economy with that. 

Ms. BORDALLO. So what you are saying is we should continue to 

do it. We have been working on it for many years, but we will continue. Thank you. 

Mr. Johnson and Mr. Norman, given the unique situation encountered by island economies such as Guam, as well as their geographic isolation, what special alternative policies specific to travel 

visas could be adopted that would enhance our local economies 

without adversely affecting national security? 

18

Mr. JOHNSON. Well, it is an interesting question, Congresswoman. It might, given the unique nature of an island economy 

and the population, it might, I am putting this out as a suggestion 

to perhaps approach State with, this might be an area where State 

or DHS could explore a Trusted Traveler type of program, where 

individuals who chose to go through—who may go back and forth 

more than just once every two years or whatnot, choose to be 

prescreened in a streamlined process but then they get a certificate—and this is done with laser visas at the Mexican border, for 

example, it is done in the Nexis Program, I think, in Canada. They 

are prescreened and so they get an expedited clearance when they 

go through Legacy Customs and Legacy INS. But what appeals to 

me is because of perhaps the unique geographic location and the 

population, this might be an interested test case for that idea. That 

is certainly something we have been trying to push generally with 

regard to the broader visa areas. 

Ms. BORDALLO. Yes, go ahead Mr. Norman. 

Mr. NORMAN. I would concur with that. But I will also add something else. There are many things that we simply are doing that 

is making it more difficult. Guam and Hawaii are two classic examples. I will just use one country, Japan, where you have had a large 

number of visitors, it is a very important aspect of the economy, 

and with all of the things that we have been doing now, with the 

delays and others that don’t allow any of the welcoming concepts 

in here, if we simply would look at some of the policies that we currently have. And I want to get into the issue of visa delays. 

As an example, the notion that you have to interview everyone 

from a trusted country like Japan or South Korea, that has been 

doing this forever, and with these interviews, which in essence are 

cursory, and now moving to an arrangement by which we are going 

to have to add next year, biometrics, means that the already deteriorating situation is going to be even worse. 

Simply delaying it. Japan simply is not in a position, as is South 

Korea—Japan is a Visa Waiver Country, as an example, is not in 

a position to have biometrics ready for next year. It then means 

that they are at risk of coming out of that which will cause even 

greater risk. So some things that could be done immediately, is to 

delay that so that when they are in a position it is not going to 

make any impact at all in terms of stopping any terrorism, as others have indicated. So just by taking simple steps of that particular 

nature, looking at what we do, and being more realistic about it 

will actually send a better picture that we are, in fact, welcoming 

you and we want you. 

Ms. BORDALLO. When will the biometrics system be implemented? 

Mr. NORMAN. It has now been set for October 26, 2004, it will 

have to be implemented, and if a country does not have the biometrics ready then they will come out of the Visa Waiver countries. 

These are the 27 countries that are our trusted trading partners. 

We know for a fact, given the fact that we operate with Visit USA 

committees, which is U.S. companies operating in countries, some 

39 different countries. And we have found out from them and from 

our contacts overall that there are a significant number of countries in Europe, in Asia, our valued trading partners, that will not 

19

be able to meet this deadline. By the way in which this is set up, 

if they are not able to have biometrics ready—which, by the way, 

the United States is not going to be fully ready either, with all of 

its passports, then they would have to come out of the Visa Waiver 

Programs, they would have to then get B–1 or B–2 visas. And as 

a consequence we would have backlogs now that would pall in comparison to what would happen there without visa waiver. 

Ms. BORDALLO. Thank you. Thank you, Mr. Chairman. 

Chairman MANZULLO. Let me make a clarification for the record. 

There are two Ingersoll companies. One is Ingersoll Milling Machine out of Rockford, Illinois, and the other one is Ingersoll-Rand 

which is headquartered in New Jersey. And we have a preliminary 

report from the GAO. They interviewed in their sampling and testing methods which have always impressed me on how they do that. 

They interviewed representatives of 48 U.S. companies in China regarding their experiences obtaining U.S. business visas for their 

employees and customers. These are Chinese customers that want 

to come to the United States to look at equipment, for example. 

Almost half the companies reported lost business opportunities 

because of delays in obtaining U.S. business visas. That is based 

on 44 responses of the 48 companies. That is half. So these 22 companies, and these are major, major companies, that have lost business opportunities, and more than half the companies reported at 

least some additional expenses because of delays in obtaining U.S. 

business visas. 

What I would like to do is, I want to establish a foreign visitors 

visa delayed misery index. Bob, you are in charge of it. 

Mr. KAPP. Congressman, if you go to our Web site you will see 

the visa incident report form right there on the front page. You can 

click it. 

Chairman MANZULLO. It is right on your Web site? 

Mr. KAPP. It is for our companies, but we have the same impulse 

you do. Get people, easy, user-friendly. 

Chairman MANZULLO. But you will be the point person on this. 

Don’t stutter, I have just given you another job. And what we are 

going to do is I am going to publicize the names of the companies 

plus the individual names of the individuals that are sitting on 

these applications, and the people in charge worldwide. I want accountability to this U.S. Government. I am tired of incident after 

incident after incident where people want to come to the United 

States to buy our goods and are simply not able to come here because of the delays. And so it is accountability time. 

And in January I am going to have a hearing, Bob, probably on 

the first ten that you give me. The ten most egregious cases where 

it is pending. And I am going to ask the people in charge, here in 

Washington, to personally show up and explain to this Committee 

the delays in each and every one of those. And I will give them the 

names so they can do their homework and come here. They may 

spend a lot of time in this room, and I may run a hearing that will 

last 10 or 12 hours, with stacks of files on my desk. If they can’t 

process those visas, I will do it personally, because I am tired of 

the unemployment in my Congressional district. My heart just 

breaks in half that we have people that want to sell high-end quality products, and one of the finest went into bankruptcy, probably 

20

forced there by the inability to sell to people because they simply 

could not get visas. This is disgusting. And it is the fault of the 

U.S. Government. 

You know, we have had hearings on beat up on the Chinese because of their trade barriers. Beat up on the Chinese because of intervening with their currency. Blaming everybody in the world, but 

here is a thing that we can do ourselves and we are all stuck because there is a premise here in Washington that business visitors 

with certain backgrounds are terrorists. And the FBI check has 

turned up zero on them. 

Mr. Akin, do you have some questions? 

Mr. AKIN. Yes, thank you, Mr. Chairman. I guess one of the 

questions I would like to ask is, if there were one thing that you 

would change, you don’t get to choose number two or number three 

or number four, but there is just one thing that you would like to 

see changed. And I understand, I guess, there must be a tension 

on this whole situation between the fact that we are trying to take 

care of homeland security, our borders are like Swiss cheese, we 

have people coming across. Essentially, as soon as anybody gets in 

this country they might just as well be an American citizen because 

we have almost no mechanism to ship them out, or at least we 

don’t seem to. So you have got that problem. 

On the other hand, you have got legitimate people coming and 

going for business purposes. With that tension, if you had to choose 

one thing, or let us say that you could get into whatever it is, INS, 

that is controlling these things. What would be the one thing that 

you would change in still keeping that balance but trying to deal 

with the problem in a balanced kind of way. 

I will let a couple of you go. I don’t want to overuse my five minutes, but if a couple of you want to respond to that, what would 

be the one thing you would change? 

Ms. YANNI. The suggestion, if I may go first, that one of my colleagues made, that would solve it, is the fixed time period for clearances. Businesses can deal with a—there is a maximum of 60 days 

or 30 days—it used to be 30 to get a visa. And those agencies that 

are so concerned, the 21 agencies, some of whom we don’t even 

know who they are, if they are told that visa will issue unless you 

say no within a certain period, they are going to start moving. So 

I think that that would solve the problem very quickly. 

Mr. AKIN. Is whoever it is that has to issue these things, are they 

represented here? What is their problem? Why can they not do it? 

Are they just overloaded? 

Ms. YANNI. We don’t know. The 21 agencies are all different 

kinds of intelligence agencies, the nuclear, the nonproliferation 

group, Defense Intelligence Agency, CIA, a whole array of agencies. 

And they have other missions. As another member of the panel 

said earlier, their mission is not to improve trade with the U.S. 

Their mission is otherwise, and they sometimes just don’t seem to 

think that this is important. 

Mr. AKIN. In terms of the way they are being measured, their 

safest thing is to issue none of them at all, because therefore there 

has been no security problem, because we didn’t let anybody in. In 

a way, right? I mean, they are measured on trying to protect our 

21

security, right, not on trying to process visas in a timely way, 

right? 

Ms. YANNI. That is correct. 

Mr. AKIN. Okay. Does somebody else want to add to that? 

Mr. KAPP. Well, Ms. Yanni took one of mine, but we are in agreement on so much of this. It is possible, as Congressman Manzullo 

suggested, it is possible to work bilaterally with countries to come 

up with longer duration, multiple-entry visas that would vastly reduce the workload at the consular windows and in this whole process. 

If a guy has come into the United States, and he is vetted, you 

know, and he is cleared and he is fine, and he goes back and forth 

on business, why make him come back any more often than you 

possibly have to? I mean, do year-long multiple entries. Do 18-

month if you can get 18-month. The sheer reduction in the 

flowthrough at the windows is doable, I think. The bringing of 

fewer people into the process by recognizing that there is a logic 

here. If you cleared the guy, you have gone through all of this stuff, 

eight months ago, ten months ago, twelve months ago, why stick 

him through it again? And in the business sector a great deal of 

the travel is repeat travel, those who go back and forth. 

Mr. AKIN. I was going to say, Bob, doesn’t it seem like it is going 

to be one of these things, we used to call it the 80/20 rule at IBM. 

You see it applying a lot. And that is that 80 percent of the people 

coming across, those are people that are going back and forth multiple times. So that if you can deal with that you have got a huge 

bulk of the visas already taken care of and not having to keep reissuing. Isn’t part of the problem that if you did put a specific timeframe on it that all these agencies couldn’t really check their backgrounds in that amount of time? Isn’t that what part of the problem is? 

Ms. YANNI. We know that most of the agencies, anecdotally we 

know that virtually all of them do respond back quickly or very, 

very quickly. But the information is not public. I think some of it 

may even be classified. You cannot find out who the—you can find 

out—who the agencies are that are holding it up. 

Mr. AKIN. Well, it sounds like also you need some sort of a customer service front-end window to those agencies. However they 

want to organize themselves from the back side, the bureaucrats 

can set that up. But from the front end, you need some simple front 

end, an easy in and out, and this is the procedure, and run through 

it. I think that is what you are saying. 

Mr. KAPP. There is no organized interface now between the affected constituencies and the people who are making these decisions. There is nothing. I mean, we can have meetings, mostly with 

the State Department. You can get a meeting, sit down with people. They are very nice and they have been very forthcoming about 

sitting down with us. But there are 21 agencies involved here. 

There is no structured dialog between the affected constituencies 

and those who are making these decisions. 

Mr. AKIN. Just off the top, do you know who is—is this within 

the Department of Homeland Security at this point? 

Ms. YANNI. No, these agencies, the clearance comes if a consular 

officer determines that somebody might have one of these sensitive 

22

technologies. The process has changed recently. They send, essentially, a broadcast e-mail to all of the indicated agencies, and say 

we need a clearance. And then they have to wait for each agency 

to return. It used to be that it all came through the visa office in 

Washington, and only the visa office knew, if they knew, who was 

the holdup. Now, I think consular officers may have access to that, 

but it is secure information. Even the exact nature of the CONDOR 

visa is classified. The list of countries that we all know is classified. 

It was published in The New York Times, so we know anecdotally 

which they are, but officially that is classified information. So obviously it is not available to the visa applicant. 

Chairman MANZULLO. Ms. Napolitano? 

Ms. NAPOLITANO. Thank you, Mr. Chairman. I apologize for my 

being late, but I had other meetings that demanded my attention. 

But I have a great interest in this, first of all from the small business standpoint, but secondly because it has been a problem in 

some of my areas of business. 

I am interested in the question and answer you were giving 

about the 21 agencies not having a standardized focal point that 

you can go. So you are saying there are 21 agencies involved that 

have jurisdiction over the application process? Anybody? 

Ms. YANNI. That is right. Once the clearance is requested, all of 

those agencies must sign off before the visa can be granted. 

Ms. NAPOLITANO. And do you have any idea or any knowledge of 

which ones work together in tandem? 

Ms. YANNI. No, I don’t. 

Mr. KAPP. Congresswoman, I had a conversation the other day 

with a person in one of the agencies who suggested that in the next 

few months one progressive step is going to be made, first on a 

pilot basis and then on a broader basis. And that is, the extension 

of what I believe he called the consular database for use throughout all of the agencies in this multi-agency review process. He suggested that there are technical problems that have slowed everything down, and that they are working on them, of course, and that 

one of these has to do with the standardization of the database on 

which everybody draws to see if a person is a bad guy or a good 

guy. And he was a little surprised that we weren’t giving credit 

where credit was due, and I explained to him that this would be 

a pilot project three months from now and it wouldn’t be fully installed for six months or a year. So how could we give credit when 

we had seen no results? 

But if you do probe further into this, you may discover that there 

is something going on at the technical database sharing level that 

I, for one, didn’t know about until yesterday. 

Ms. NAPOLITANO. Thank you, Mr. Kapp. I am just curious, when 

you are talking about systems, do the systems talk to each other? 

Mr. KAPP. Well——. 

Ms. NAPOLITANO. Do they have connection so they are able to 

bring up information to at least have an idea whether or not they 

need to delve further into this particular individual. 

Mr. KAPP. You know, we all use the word anecdotal at this moment. I used it in my testimony, and I am sure we all did, because 

a lot of this is gossip. We are talking about classified processes 

here that the uncleared, namely us, we, are not permitted to know. 

23

So you get rumors, and people say well, it is not our agency, it is 

those guys over there. We have heard anecdotally, and I think staff 

to this Committee has heard, that there were particular problems 

of data compatibility in certain agencies on the law enforcement 

side of the fence. But I can’t comment with any authority on which 

agencies those are or whether they had or have solved their problems, because we just don’t know. It is a black box, as Mr. Johnson 

suggested. 

Mr. JOHNSON. Congresswoman, I do serve on a task force that 

studies entry and exit issues at the borders, and I note that you 

are originally from Brownsville, Texas. 

Ms. NAPOLITANO. Right. 

Mr. JOHNSON. So I am sure you are familiar with sort of crossborder traffic and how important it is to those communities. But 

one of the demonstrations we have had, and I think I can say this 

without violating any confidentiality, is in Los Alamos, on the 

interaction of all these computer systems, and they put it up on a 

board, and I can tell you, it makes spaghetti look organized. But 

they are working on it. Now, to what degree——. 

Ms. NAPOLITANO. They being who, sir? 

Mr. JOHNSON. The government. 

Ms. NAPOLITANO. Which government? Big Brother? 

Mr. JOHNSON. Justice, DHS, the State Department, they have 

their class systems, IBIS. You look at a GAO report and you look 

at the list of computers and computer data bases and there are 

probably 50 of them and it is an alphabet soup that boggles the 

imagination. But they are working on that. How far along they are, 

it does depend on who you talk to. 

Ms. YANNI. I can tell you that the FBI and Department of State 

databases are not compatible. 

Mr. KAPP. But I have to say, we will wait forever if we say it 

is a technology problem and it is all fixable, just give us time to 

fix the technology, we are going to wait forever on this thing. This 

has to do with the definition of goals and a provision of incentives 

to behave in certain ways. And the incentives are not there now 

to maximize the economic value to the United States from the flow 

of persons in and out of this country. There are no visible incentives that we can see in that regard. All of the incentives are on 

the other side. And the institutional arrangements that flow from 

those incentives are on the other side. So we can sit here and talk 

about whether the computers mesh or not, and I agree, it is important, of course. It is a national effort that is being done on shipping, on containers, on everything. It is a huge reorganization of 

the whole notion of data for national security in this country. 

But that alone is not the only problem to be resolved here. It has 

to do with behaviors and instincts, and the instincts right now, the 

incentives tell you your instincts should be, throw it into the black 

hole. First of all, you will cover your rear end by doing so, and second of all, at least you don’t do any harm by doing so. 

Ms. NAPOLITANO. Mr. Chair, I am not sure what you would propose, but I would certainly love to see you convene an agency meeting or task force or organization to bring these people before them. 

Chairman MANZULLO. Matthew Szymanski, who is the Chief of 

Staff of our Committee has met with folks from State, from HomeVerDate 0ct 09 2002 18:12 Apr 15, 2004 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 G:\HEARINGS\92837.TXT NANCY
24

land Security, FBI and CIA. These people are stellar. I mean, several testified here. They get A-plus in their devotion to duty, their 

honesty. They are just great people. And they work with us and 

they are not stroking us, and they are very, very—Randy, you 

know what I am talking about. These are some of the finest public 

servants that we have. And they are really frustrated because with 

all the different agencies they are trying to get a hold on this thing. 

Because they know the stakes. They know the frustration that is 

going on. And we want to work with them, and we have been. 

But we just can’t break this thing loose. It is not a matter of incompetent people. 

Ms. NAPOLITANO. Well, no, I am not saying it is. 

Chairman MANZULLO. I know that. But I just want to state for 

the record that these are just fabulous public servants. 

Ms. NAPOLITANO. Well, just continuing on with my statement is 

that we need to be able to help business be able to continue to put 

some pressure not only—and this is talking to business—because 

business is too busy making money and doing business and trying 

to stay afloat and trying to survive during this recession. But they 

need to understand that if they do not call and advise, whether it 

is the administration or their elected officials about how it is affecting your ability to get foreign business, because you can’t bring 

people in, or you can’t travel within the United States. 

And I have heard from my businesses, well, what have you done? 

And unfortunately they do not feel—first of all, they don’t know 

how, they don’t know who, and they are afraid that if they do they 

are not going to be able to have a voice later because they will be 

labeled as rabble-rousers, et cetera, whatever. 

But my contention is that business needs to come to the table 

and raise their voices. Your travel agents, your business people, 

and start saying to this administration you need to make this 

change so that they can then tell the agencies, sit at the table. Get 

this done, and get it done soon, because we need to improve our 

economy, and we can’t do it if we are sitting there trying to figure 

out which agency has jurisdiction over the approval. 

Thank you, Mr. Chair. 

Chairman MANZULLO. Well, we want to thank you all for coming. 

Randy, I am still trying to figure out this idiom, make spaghetti 

look organized. You know, being an Italian American, I——. 

Mr. JOHNSON. My oversight. 

Chairman MANZULLO. I know there was no reference there, but 

I understand that we in America are—you are turning red there, 

but that is all right. We appreciate it very much. 

Again, I want to thank each of the panelists for your input. Bob, 

I have tasked you with helping us, I guess, on our Web site for the 

Small Business Committee, to be the Foreign Visitors Visa Delayed 

Misery Index. If you could work with Matthew again, on another 

project, maybe we could do it by a link to your Web site or however 

we do it. 

And the other thing I want to do is I want to try to quantify this 

loss so that when it comes time to fund the agencies, I want to put 

in an amendment to cut the agencies by that amount of money in 

lost business, just to drive home the point in the form of an amendment. Again, we are out of the appropriations cycle, that is the 

25

time to do it, and the amendment will probably not be in order. I 

am used to that. It has happened time and time again. 

But the agencies have to understand that what is at stake here 

is American jobs. We have lost three million manufacturing jobs. 

Yesterday word came out, the statistic is 750,000 high-tech jobs 

have gone overseas. We continue to bleed in this economy, and we 

would address those issues and try to come up with some solutions. 

But this is an easy one. It simply asks the United States Government to allow people to come here within a relatively short period 

of time of application to buy the products that we sell. 

Again, we want to thank you for coming, and this Committee is 

adjourned. 

[Whereupon, at 11:00 a.m. the Committee was adjourned.]

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