[Senate Hearing 107-309] [From the U.S. Government Publishing Office] S. Hrg. 107-309 WEAK LINKS: ASSESSING THE VULNERABILITY OF U.S. PORTS AND WHETHER THE GOVERNMENT IS ADEQUATELY STRUCTURED TO SAFEGUARD THEM ======================================================================= HEARING before the COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED SEVENTH CONGRESS FIRST SESSION __________ DECEMBER 6, 2001 __________ Printed for the use of the Committee on Governmental Affairs 78-045 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 2002 ____________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpr.gov Phone: toll free (866) 512-1800; (202) 512�091800 Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001 COMMITTEE ON GOVERNMENTAL AFFAIRS JOSEPH I. LIEBERMAN, Connecticut, Chairman CARL LEVIN, Michigan FRED THOMPSON, Tennessee DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska RICHARD J. DURBIN, Illinois SUSAN M. COLLINS, Maine ROBERT G. TORRICELLI, New Jersey GEORGE V. VOINOVICH, Ohio MAX CLELAND, Georgia PETE V. DOMENICI, New Mexico THOMAS R. CARPER, Delaware THAD COCHRAN, Mississippi JEAN CARNAHAN, Missouri ROBERT F. BENNETT, Utah MARK DAYTON, Minnesota JIM BUNNING, Kentucky Joyce A. Rechtschaffen, Staff Director and Counsel Dan Feldman, Counsel/Communications Adviser Jason M. Yanussi, Professional Staff Member Hannah S. Sistare, Minority Staff Director and Counsel Jayson P. Roehl, Minority Professional Staff Member Darla D. Cassell, Chief Clerk C O N T E N T S ------ Opening statements: Page Senator Lieberman............................................ 1 Senator Levin................................................ 3 Senator Collins.............................................. 15 Senator Cleland.............................................. 30 Senator Bennett.............................................. 33 Senator Thompson............................................. 36 WITNESSES Thursday, December 6, 2001 Hon. Ernest F. Hollings, a U.S. Senator from the State of South Carolina....................................................... 6 Stephen E. Flynn, Ph.D., Senior Fellow, Council on Foreign Relations and Commander, U.S. Coast Guard...................... 10 F. Amanda DeBusk, Miller and Chevalier, former Assistant Secretary of the Commerce Department and former Commissioner, Interagency Commission on Crime and Security in U.S. Seaports.. 16 Rob Quartel, Chairman and Chief Executive Officer, FreightDesk Technologies and former Member, U.S. Federal Maritime Commission..................................................... 19 Rear Admiral Richard M. Larrabee, Ret., Director, Port Commerce Department, The Port Authority of New York and New Jersey...... 23 Deputy Chief Charles C. Cook, Memphis Police Department.......... 40 Argent Acosta, Senior Customs Inspector, Port of New Orleans and President, National Treasury Employees Union (NTEU) Chapter 168 43 Michael D. Laden, President, Target Customs Brokers, Inc......... 47 W. Gordon Fink, President, Emerging Technology Markets........... 49 Alphabetical List of Witnesses Acosta, Argent: Testimony.................................................... 43 Prepared statement........................................... 127 Cook, Deputy Chief Charles C.: Testimony.................................................... 40 Prepared statement........................................... 120 DeBusk, F. Amanda: Testimony.................................................... 16 Prepared statement........................................... 93 Fink, W. Gordon: Testimony.................................................... 49 Prepared statement........................................... 138 Flynn, Stephen E., Ph.D.: Testimony.................................................... 10 Prepared statement with an attachment and slide presentation. 57 Hollings, Hon. Ernest F.: Testimony.................................................... 6 Laden, Michael D.: Testimony.................................................... 47 Prepared statement........................................... 133 Larrabee, Rear Admiral Richard M., Ret.: Testimony.................................................... 23 Prepared statement........................................... 114 Quartel, Rob: Testimony.................................................... 19 Prepared statement with slide presentation................... 98 Appendix Slide presentation by Stephen E. Flynn entitled ``Bolstering the Maritime Weak Link''........................................... 80 Slide presentation by Rob Quartel................................ 107 Letter (with an attachment) to Senator Collins from Captain Jeffrey W. Monroe, Director, City of Portland, Department of Transportation, dated October 26, 2001......................... 142 U.S. Customs Service Optimal Staff Levels, Fiscal Years 2000-02, February 25, 2000.............................................. 148 Classification of U.S. Customs Districts and Ports for U.S. Foreign Trade Statistics....................................... 285 Responses to questions for the record from: Mr. Flynn.................................................... 248 Ms. DeBusk................................................... 253 Mr. Quartel.................................................. 259 Rear Admiral Larrabee, Ret................................... 270 Mr. Acosta................................................... 275 Mr. Laden.................................................... 277 Mr. Fink..................................................... 282 WEAK LINKS: ASSESSING THE VULNERABILITY OF U.S. PORTS AND WHETHER THE GOVERNMENT IS ADEQUATELY STRUCTURED TO SAFEGUARD THEM ---------- THURSDAY, DECEMBER 6, 2001 U.S. Senate, Committee on Governmental Affairs, Washington, DC. The Committee met, pursuant to notice, at 9:08 a.m., in room SD-342, Dirksen Senate Office Building, Hon. Joseph I. Lieberman, Chairman of the Committee, presiding. Present: Senators Lieberman, Levin, Bennett, Cleland, Torricelli, Collins, and Thompson. OPENING STATEMENT OF CHAIRMAN LIEBERMAN Chairman Lieberman. Good morning. Thanks to all of you for being here, particularly to Senator Hollings and our other witnesses. This is one of a continuing series of hearings that this Governmental Affairs Committee has held since the terrorist attacks of September 11 which have examined the Federal Government's ability to prevent, prepare for, and respond in the event of future terrorist attacks. In some ways, we ask questions that some have been hesitant to ask in the past, and I suppose some might wonder why we are asking them now--because they may reveal vulnerabilities. And yet, if we do not ask them, we will not close those vulnerabilities and we will be susceptible to further attack. I think all of us felt that, unfortunately, after September 11, we have to start thinking more like the terrorists do, and we are going to try to do it in a very thoughtful and comprehensive way today and we have the witnesses here to make that happen. Not since December 7, 1941, which is 60 years ago tomorrow, has the question of our domestic security so dominated national debate. The Committee has taken a hard look at whether the Federal Government is appropriately structured to meet those challenges. Specifically, we have held hearings on our aviation and postal systems, on cyberspace, and more broadly, on the safety of our critical infrastructure and how we should organize for homeland security. Today, we direct our attention to the security of the Nation's 400-plus ports through which 95 percent of all U.S. trade flows. The picture, unfortunately, is not a reassuring one. U.S. ports are our Nation's key transportation link for global trade and yet there are no Federal standards for port security and no single Federal agency overseeing the 11.6 million shipping containers, the 11.5 million trucks, 2.2 million rail cars, 211,000 vessels, and 489 million people that passed through U.S. border inspections last year. I just want to put an exclamation point there, that as I have studied this more, I must say it surprised me. There are no Federal standards for port security and no single Federal agency overseeing port security. Port security is largely a matter of State and local administration. The Coast Guard, the Customs Service, the Immigration and Naturalization Service, and other agencies all have a role to play, but the plain fact is that the movement of goods into the United States, five million tons a day, is now so efficient in the sense of goods coming into the country and moving rapidly as a matter of commerce to their destination that port security has been sacrificed. It is not possible to physically inspect more than a small sample of containers as they arrive in the United States. Less than 1 percent are actually examined, and that leaves our ports, unfortunately, vulnerable to attack. And not just our ports. Containers arriving from Europe, Asia, or Canada are more likely to be inspected at their final destination rather than at the arrival port. I am sure that would surprise most Americans, but that is the reality and it means that at any given time, authorities have virtually no idea about the contents of thousands of multi-ton containers traveling on trucks, trains, or barges on roads, rails, and waterways throughout the country. The ease with which a terrorist might smuggle chemical, biological, or even at some point nuclear weapons into one of those containers without being detected is terrifying. Even the physical security of ports is minimal. Last year, the Commission on Crime and Security in U.S. Seaports reported that of 12 of the Nation's largest ports, 6 had perimeter fencing that could be penetrated, 4 had no regular security patrols, and 10 never performed routine criminal background checks on employees. The Commission said the state of security, ``at U.S. seaports generally ranges from poor to fair.'' The FBI told the Commission that ports were highly vulnerable to terrorist attack, although at that time, they considered the threat to be marginal. The assessment, of course, has changed since September 11 and 2,000 military reservists have now been activated to shore up port security. Part of the overall problem, as is so frequently the case, is the lack of resources to properly enforce port security. But, of course, we are going to be dealing with that on the Senate Floor in the Department of Defense appropriations bill and the homeland security funding that is part of that bill. The Coast Guard, for example, has 95,000 miles of shoreline to patrol but is at its lowest level of manpower since 1964. International trade has doubled since the mid-1990's, but the number of Customs inspectors has remained the same, just 8,000. The Federal Government is also handicapped by a lack of coordination and communication between agencies. I have heard that a ship with a--this is a hypothetical, but not too improbable--a shadowy record of ports of call, for example, carrying a cargo that does not square with its home port and manned by crew members on a watch list of people with suspected terrorist ties might not necessarily raise any red flags, and that is because the Coast Guard could know about the ship, Customs could know about the cargo, and INS could know about the crew members, but no one would necessarily have all that information, so the pieces would not be pulled together to form a picture that would set off alarms. Even if resources and coordination were adequate, the front-line agencies would still be handicapped by a lack of access to national security intelligence from the FBI and the CIA. That is a complaint that I have heard over and over again from local officials following the September 11 attack. The Committee is particularly pleased to welcome Senator Fritz Hollings and to thank him for his leadership and dedication--lonely, most of the time--to pursuit of better port security in America and the critical role that he has played in keeping this problem on our collective radar screens over the years. I am very pleased that he is with us today to testify about legislation that he and Senator Bob Graham have written to respond to the vulnerability of our ports. Their legislation, which I strongly endorse, addresses some key findings and recommendations of the Commission on Seaport Security. Our ports, goods, and citizens will be safer when it passes. I must say that the more that I study this issue, the more I realize how pervasive the problem is and how much work we have to do on it to make sure that we get our entire system of importing and exporting to a point where it is not only efficient, but it is also safe. The entire commercial structure may need to be addressed systematically, and as some of the witnesses we are going to hear this morning will suggest, the best answer may lie in an entirely new approach that relies on innovative technologies combined with security inspections starting at ports of origin, rather than ports of destination. I am going to be very interested to hear testimony on that. We may need, as one of our witnesses would put it, to push our borders back and create sanitized shipping zones for goods bound for the U.S. from overseas ports. We certainly need to put technologies to work so that containers can be electronically sealed and alarmed after they are inspected, then X-rayed for a baseline record of their contents. Global positioning satellite systems could be attached to all containers to monitor shipments, and a secure Internet tracking system could help place a shipment anywhere along its path. Fortunately, our ports are busy and they do not need a bail out. They just need a sensible strategy to keep them safe and sound as vital economic hubs, and I am hopeful that the testimony we will hear today will help the Congress do just that. Senator Levin. OPENING STATEMENT OF SENATOR LEVIN Senator Levin. Mr. Chairman, thank you. Thank you for these series of hearings that you are holding that are really a comprehensive series, and I think perhaps the most comprehensive look that is being given to our security issues in a whole host of areas. I also want to join you in welcoming Senator Hollings, an old friend of both of ours, or a dear friend, I should say, of both of ours. He has been, indeed, a leader in the subject that you are looking at today. We, who are on the Northern Border, are particularly very keenly interested in this subject. We have twice the Border as exists on the South Borderand yet we have a small, tiny fraction of the security which exists there, and that is inadequate, and you will be hearing more about that. The Northern Border receives about two-thirds of the truck traffic, about 85 percent of the trains, a large number of ships. We have the longest coast, actually, of all the four coasts. People sometimes forget that the St. Lawrence Seaway and the Great Lakes is the longest coastline that we have in this country. We have many ports of entry, lots of ships coming in from overseas, and it is a major issue for us. The issues that the Chairman has identified, are both the security issue as well as trying to move trade, because when we have long lines of trucks, for instance, coming into my home State and leaving my home State, with trade, it means that our plants are not able to run as efficiently when we have to wait 2 or 3 hours at a bridge or a tunnel. What you are looking at today is mainly seaports, but I gather you are including all ports of entry, and I think the third panel will be looking at those, as well. What you have identified, Mr. Chairman, one of the issues that we are pushing very hard on is the reverse inspection issue. It makes a lot more sense to be inspecting cargo before it lands at our ports, before it goes through our tunnels, before it goes across our bridges, because it could be too late. If someone wanted to attack a port or a tunnel or a bridge, they would do so before they entered our country, not afterwards, and they would do it in the process of entering, not after they have entered. So the reverse inspections that we are pushing so hard for, getting our Customs people to get involved in much more actively, could be an important part of added security for our ports of entry, including our bridges and tunnels. Some of the technologies which the Chairman has identified are also very important and we must put more resources into those technologies to identify threats to our ports of entry. And also, we need more resources. We have a huge shortage of resources, particularly on the Northern Border, but I think that is true on the South Border, and also on the East and West Coasts. We have a large number now of temporary employees following September 11. We have got to have permanent employees instead of temporary employees. But we have both resource problems, technology challenges, and just plain common sense that push for those reverse inspections that could provide so much greater security. But while I must leave you, Mr. Chairman, I am very keenly interested in this subject. I want to again thank you for these hearings. I congratulate Senator Hollings for his usual steadfastness in staying with an issue for so long, and I think that, finally, tragically, probably, because it took September 11 to wake us up, but nonetheless, finally, I think we are going to get to the point where Senator Hollings has been for so long. PREPARED STATEMENT OF SENATOR LEVIN It took the tragedy of September 11 and the subsequent need for heightened security along our borders to draw attention to what many of us have known for years; there is an alarming lack of resources along our Northern Border. While much has been done over the last decade to improve security on our border with Mexico, the Northern Border has largely been ignored. For example, only 1,773 Customs Service personnel are present at our border with Canada, while 8,300 protect our Southern Border. Similarly, while 8,000 Border Patrol agents monitor our 2,000 mile Southern Border, only 300 are stationed at our 4,000 mile Northern Border. So, 96 percent of our Border Patrol agents are assigned to a border that is only half as long as the one to which 4 percent of agents are assigned. Although hugely understaffed, we process a large percentage of the country's commercial traffic. The Northern Border has six of the top eight truck border crossings in the country, including the number one truck border crossing, Detroit's Ambassador Bridge. Our Customs officers on the Northern Border process 62 percent of all trucks, 85 percent of all trains, and 23 percent of all passengers and pedestrians entering the country each year. However, our Customs inspectors represent only a small fraction of the currently deployed inspectors in the country, and their numbers have remained essentially static since the 1980's. The Detroit Region has half of all Northern Border crossing traffic yet has only 10 percent of the INS inspectors assigned to the Northern Border and 24 percent of the Customs inspectors assigned to the Northern Border. With this startling lack of resources, it's no surprise that the new security measures at the border have a tremendous impact on our region's economic well being. Auto plants wait days for critical parts. Hospitals can't perform vital services when supplies and staff are trapped in long lines at the bridge and tunnel. We need to find a permanent solution to the staffing shortfall at our borders so that we are able to perform essential security inspections without causing unreasonable backups that hurt our economy. We are grateful for the recent Federal commitment to increase the number of National Guard at the Northern Border and are relying on them to help protect our border and keep traffic and commerce flowing smoothly. However, we need to move quickly to put permanent staff and technology in place. Congress has taken some important steps to achieve this goal, but we are not there yet. The FY 2002 Treasury Postal Appropriations bill provides an additional $28 million for Customs to institute a Northern Border initiative including hiring approximately 285 additional Customs officers. The Commerce Justice State FY 2002 Appropriations bill provides for $66.3 million for 570 new border patrol agents across the nation and $25.4 million for 348 new land border ports-of-entry INS inspectors across the nation. Particular attention will be paid to the needs of the Northern Border. Congress also tripled staffing levels for INS, Customs and Border Patrol staffing on the Northern Border in the anti-terrorism bill. A portion of the $40 billion emergency supplemental should also go to staffing up the security at our Northern Border. But improved border security involves more than just more money. It requires changing policies and practices that don't make sense. On November 13 I held a hearing of the Permanent Subcommittee on Investigations to highlight an obvious gap in our border security. The U.S. Border Patrol is the uniformed law enforcement arm of the Immigration and Naturalization Service (INS) with the responsibility of combating alien snuggling and illegal entries other than at ports of entry. The Subcommittee looked at how people who attempt to enter the country illegally at places other than the official ports of entry are arrested and processed by the Border Patrol. When persons are arrested by the Border Patrol, the large majority voluntarily returns to their country of origin, usually Mexico or Canada. The others, perhaps as many as one-third of those arrested on the Northern Border, are given a notice to appear at a removal hearing. The Border Patrol decides whether the person should be detained, released on bond or, as is often the case, released on his or her own recognizance while awaiting a hearing. This hearing can take several months to occur. In FY 2001 at the Detroit Border Patrol Sector--which encompasses all of Michigan--the Border Patrol arrested more than 2,100 people. A significant percentage of these people were arrested while actually attempting to enter the U.S. illegally. Most of these 2,100 were voluntarily returned to their country of origin. However, more than one-third were given a notice to appear at a removal hearing. Reports from Border Patrol agents indicate that the vast majority of the latter group were released on their own recognizance pending their hearing. The INS wasn't able to tell us how many of the persons arrested in this situation and released fail to show up for their scheduled hearing. However, by looking at related statistics and ballpark estimates, we estimated that the number is at least 40 percent and possibly as high as 90 percent. The conclusion is inescapable: The vast majority of people arrested by the Border Patrol while attempting to enter the U.S. illegally who don't voluntarily return to their own country are released on their own recognizance. Most of those released don't show up for their removal hearing and little or no effort is made to find them. As I said at my Subcommittee's hearing, this is a dysfunctional and absurd system that makes a mockery of our immigration laws. When we release persons into the county who are without an address, without ties, without any record of who they are, we're abdicating our responsibility to the larger community. This is a practice that has to stop. On November 13, I asked the INS and Border Patrol to report to me on the steps they plan to take to close these enforcement loopholes. If the response is unsatisfactory, I plan to introduce legislation to accomplish it. There is much that needs to be done. Customs and INS officials shouldn't have to rely on temporary fixes--we need permanent workers and we need them now. We also need to find a way to compensate our local law enforcement volunteers and secure funds for technology. We should also consider performing reverse Customs inspections of vehicles entering tunnels and crossing bridges on the Northern Border. With the increased security risks to our nation's infrastructure in the post- September 11 climate, it seems obvious that inspecting vehicles for bombs or explosives AFTER they enter our tunnels or cross our bridges is illogical. To rectify this security vulnerability, we must work with our neighbors to establish a reverse inspection program to inspect vehicles before they have the chance to endanger or destroy important transportation infrastructure. And finally, we need to make common sense changes to our law enforcement and immigration policies to ensure the safety of our people and the integrity of our laws. We are an open and generous country and we welcome persons from around the world who want to contribute their hard work to help build a better America. But we also have a duty to protect ourselves and our country from people who would do us harm. Chairman Lieberman. Thanks, Senator Levin. Thanks for your involvement in this. Because I know of the great interest in Michigan about this, I look forward to the questions you have raised, and to working with you on some responses. Senator Hollings, thanks so much for being here. TESTIMONY OF HON. ERNEST F. HOLLINGS, A U.S. SENATOR FROM THE STATE OF SOUTH CAROLINA Senator Hollings. Thank you very, very much, Mr. Chairman and Senator Levin. I am grateful to the Committee for the chance to appear here. Let me ask consent that my prepared statement be included in the record. Chairman Lieberman. Without objection. Senator Hollings. I will get right into the advance check. I, frankly, had not heard of that, the concept of pre-clearance of cargo in foreign ports. Let me say, Senator Bob Graham of Florida and I, as you indicated, Senator Levin, we have been at it 3 years. We started off really in looking into drugs and the drugs coming in in containers. We were not thinking of explosives and terrorism particularly at the time. President Clinton, at our behest, put in a study commission. The study commission, comprised of 17 Federal agencies, made its report. We put in a bill in the last Congress with no further success. We have one in in this Congress that has been reported out of committee unanimously. And yes, we have been working to advance that bill forward as well. Along that line, the only reason for the hold-up on the floor is OMB. Our Republican colleagues embarrassedly have to stand up and object on account of costs. You can ship a container anywhere into the United States for $5,000, and bring in explosives or chemical weapons. We had one terrorist that was picked up in Italy in a marine container, he had a phone, a toilet, cooking and sleeping equipment, and plans and security passes for some of the airports, false documentation to get into any and every entry point into the United States and everything like that. He was living in the container. So either one can come in for $5,000, or you can get in the contraband needed to destroy our Nation. We have spent billions for the threats from outer space and a ballastic missile defense system but we do not want to spend port security. We know the cost of everything and the value of nothing. This is an emergency situation. Let me, if the Committee will please, read from an article in the London Times entitled, ``Secret Fleet Supplied Bombers,'' published over a month ago. ``Three years ago, nobody paid much attention to a crew unloading a cargo from a rusting freighter tied up on the K- side at Mubasa, Kenya. The freighter was part of bin Laden's merchant fleet and the crew was delivering supplies by the team of suicide bombers who weeks later would blow up the U.S. embassies in Kenya and Tanzania. Bin Laden's covert shipping interests were revealed at the trial of the bombers, but until now, security services have been slow to track down how many vessels he operates.'' Well, we have tracked it down now and he operates over 20 vessels, but he could easily hijack an oil tanker he does not own. Some company like Chevron, Exxon, or responsible owner's tanker could be hijacked and used as a weapon. You can operate one with four suicidalists, or martyrs, and run it right into the Golden Gate Bridge or the Brooklyn Bridge or any place in the United States. So we are into an emergency situation and we have to go to the 50 largest ports, at least, and very quickly. There are some 361 ports, and let me join in, in support of the very comprehensive opening statement made by the distinguished Chairman. He has covered the subject. We have 361 ports, we have 50 major ports, and we have got to really move forward as fast as we can to have a plan of security there. Currently we don't have Federal security plans. I think the big problem is that the whole thrust in port operations, and I used to operate one when I was a Governor and have been a big supporter of port facilities and economic expansion and everything else of that kind, but they are many splendored things. Some are owned privately. We are getting one privately developed right now in the State of South Carolina. Some are owned by the State itself. We have a State Ports Authority, and some are owned by the State Ports Authority but are leased out. For instance, the largest carrier in New York, Maersk lines, leases major portions of the port. Also associated in the operations of ports are the Customs Service, the Immigration Service, the Drug Enforcement Administration, the local police, the Coast Guard, and everything else. To show you the lack of attention we did have, and it was not Admiral Loy, the Commandant, but another admiral was before our committee just 3 weeks ago and we asked who was in charge of security at the port. He said he did not know. Under law, the Captain of the Port, namely the Coast Guard official, is really, under present law today, responsible for the security of the port, but it is joined in by the local FBI, DEA, all these other agencies that I mentioned. And what we really need and the thrust of our bill is to get them all together and submit as judiciously and as expeditiously as possible a plan, to the Secretary of Transportation, a plan for security. They are all required to do that in the measure. There is some $1 billion overall provided with respect to quadrupling Customs agents and so forth at the port, buying the inspection equipment for the screeners. To my knowledge, the best screening equipment is down in Miami. That not only X-rays, but it scans the heat and can pick up drugs and articles in there. They tell me down in Georgia they are producing one that can even do better than that. It requires the ocean shipping manifests of cargo coming in, but as I indicated, you can have a good check-off on an oil tanker, but it can easily be hijacked and brought in, so there is still that threat that has got to be taken care of, and we need maritime protection and to establish greater controls of foreign vessels. I would be glad to try to respond to any questions. We have to get this bill out, and Senator Bennett, I was just saying our Republican colleagues embarrassingly have to object to it. I know they are for port security, but OMB has got them putting up a hold. Incidentally, Senator Levin, it also includes the truck traffic coming in and the rail security and other modes of transport. We are trying our best to prepare the New York and Baltimore tunnels and so forth. You are going to hear before we leave about Amtrak and the tunnels over here in Baltimore, particularly going into New York and Grand Central Station. Those kinds of things have got to be cared for, or we will have problems. So we are trying our best to clear it, and pass the bill through the Senate, and ours was passed out totally bipartisan, unanimously from the committee, and I again, will be glad to try to respond to any questions you have. Chairman Lieberman. Thanks very much, Senator Hollings. So the bill is on the calendar now? Senator Hollings. Oh, yes. It has been on the floor twice now and asked for its consideration, but there has been objection and my best look-see at it has been at the behest of the Office of Management and Budget on the matter of cost. Like I said, you can get a container brought in that has 60,000 pounds and thousands and thousands of those containers come in each day, largely unchecked. Incidentally, you cannot find out the ownership of those containers or the ship. I have been working on that as well. Some are owned by the Chinese, and we have got one port out on the West Coast operated by the Cosco, a Chinese government controlled company. Others are operated out of Hong Kong. Some are holding companies and everything else like that. The biggest difficulty I am having at the moment on the safety side of the equation at seaports is where the poor truckers that come onto the port facilities there and they spend 2 hours trying to get a safe container chassis, because nobody maintains the chassis. If they get an unsafe one that blows a tire, or has defective lights, the patrolman pulls them over and they have lost their livelihood because they have gotten a fine and penalties to their driver's license, and the poor truck driver trying to work around the clock to feed his family has lost out. So he has to come there 2 hours early on the lot at the port itself trying to find something safe, and we have been trying to get some kind of requirements and everything at the port itself to check these things out. But, ultimately, the maritime business operates under a cloak of secrecy. There are all kinds of problems, but the biggest is security, and there is no idea of security. The whole idea is, move it. If we can move it faster than New York can or some other port can, brother, we are going to get the business. Chairman Lieberman. So we have a very efficient but insecure system now at ports? Senator Hollings. Yes, sir. Chairman Lieberman. Is there money for port security in the $7.5 billion homeland security component of the DOD appropriations? Senator Hollings. The amount that is in that homeland security is only $50 million, but that will give us a good start to do the planning. Chairman Lieberman. A beginning. Senator Hollings. Yes, sir. Chairman Lieberman. I wonder, before Senator Hollings leaves, do any of my colleagues have a question? Senator Levin. Thank you. Chairman Lieberman. Senator Hollings, thanks very much. We look forward to working with you. Senator Hollings. I thank the Committee very, very much. Chairman Lieberman. We will share the results of our hearing today with you, and once again, we thank you for your leadership. Senator Hollings. Yes, sir. Chairman Lieberman. Do either of my colleagues have an opening statement, Senator Bennett or Senator Torricelli? Senator Bennett. No thank you. Chairman Lieberman. Let us go to the first panel, then, and I am going to call Commander Stephen Flynn of the U.S. Coast Guard, who is now a Senior Fellow of National Security Studies at the Council on Foreign Relations, to go first. In a very real sense, although I suppose we would have eventually found our way to port security as a result of this series of hearings, Steve Flynn's testimony before this Committee on the subject of homeland security really educated and alarmed us, and I think he has become something, at least in my mind, of the Paul Revere of 21st Century port security. So I do not want to work out whether the terrorists are coming, but they will come unless we raise our guard at the ports. So I am going to give you a little more time than the 5 minutes because I know you have a presentation. I think it may frame a lot of the rest of the hearing. Go right ahead. TESTIMONY OF STEPHEN E. FLYNN,\1\ PH.D., SENIOR FELLOW, COUNCIL ON FOREIGN RELATIONS AND COMMANDER, U.S. COAST GUARD Mr. Flynn. Thank you very much, Mr. Chairman. It is a real honor to be back in front of you again today to talk about this very, very serious issue, and I certainly commend you, sir, for hosting these hearings, because at the end of the day, I think we are talking about not just trying to protect the American people from potentially another catastrophic terrorism event, but we are also talking here, as well, about the sustainability of global commerce, because how the terrorists do their work may force us to respond in a way that could sacrifice the movements of peoples and goods that are so essential for us to continue to prosper. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Flynn with an attachment appears in the Appendix on page 57. --------------------------------------------------------------------------- We saw that in the week immediately following September 11, when the United States had to do what no Nation could do to it, which was essentially to impose a blockade on its own economy. What we did was not just ground our aircraft, but we closed most of our major seaports and effectively sealed our borders with Canada and Mexico, and we did that because we did not have much confidence that we had the capacity to filter bad from good in all those flows coming our way. We started the engine back up again and we have done a good scrubbing on the aviation side, but in my view, the aviation sector is the virtual Fort Knox of security by comparison to the other two sectors. The maritime and surface sector continue to be extraordinarily vulnerable, and we really have not come to grips with those issues. I would like to talk a little bit about that, because I think what we have to take is another lesson from the September 11 time frame, is what we saw here is not a singular event by a single crazed individual or a network of individuals. I believe, as I think some others in the national security field, which I am a part, believe that what we witnessed on September 11 was really how warfare will be conducted in the 21st Century. What this means is that at the end of the day, regardless of what goes on in Afghanistan now, and it looks to be a very successful campaign, is that, essentially, we are only defeating the terrorists of the moment. The United States may be an unrivaled power in terms of global military and economic and cultural reach, but the fact of the matter is, there are limits to that power. There will always be corners of the world for terrorists to hide in or failed states or failing states that have corners in their rural countrysides or mega-cities. So we have to begin with the assumption here that there will be for the foreseeable future anti-American terrorists with global reach; that, second, they will continue, because of the age we are in, to have access to weapons, including chemical and biological, that could lead to a catastrophic terrorist attack here on U.S. soil; and we also have to conclude that terrorists and our adversaries who cannot take us on frontally in a conventional way because they will lose in that enterprise, that are thinking about attacking America asymmetrically, whatever their mode may be, will be inspired by what happened by September 11, inspired because these folks made it look easy, and equally inspired and more soberly, perhaps, by the amount of particular economic disruption they have caused as a result of that single attack. We have to realize at the end of the day that terrorism is not about just killing people or toppling buildings. There is military utility to engaging in a terrorist act if you can generate societal and economic disruption that weakens the power of your adversary and forces it to change its behavior. That is why, militarily, you would decide to engage in an attack in the way that we saw on September 11, or what I worry about, alternatively, potentially exploit or target our other very open and vulnerable systems. What we saw on September 11, I believe, is the exposure of the soft underbelly of globalization. That is the very thing that has made America so successful and prosperous, our global reach and the networks that feed energy and labor and transport goods and people. It is also a system that remains extremely vulnerable. The best way, I think, to illustrate that problem, and not just in our ports but in the broader issue, and I think this is the important point, I guess, I hope to leave, is that we cannot think about our transportation sector in isolated nodes. Unfortunately, our government is constructed that way. We look at surface, aviation, rail, and we divide it up and we often make these modes compete with one another for resources. The fact is, it is a network that allows for global commerce to move and global travel to move and it is almost interoperable in today's world. We call that intermodal. The best way to illustrate, though, our current security measures, I would argue, is by taking a look at the container problem that you have mentioned this morning, Mr. Chairman. Let me try to illustrate it a little bit more. Of course, we are talking about these 20-foot, 40-foot boxes that are so ubiquitous I think so few of us pay any attention to them. They are hurtling down the highways. They are on rails. They are on ships. We drive by them. But we think things so often that show up in Wal-Mart just magically appear there from a back room. They, of course, come from all corners of the world and they come to us via those containers. We are talking about, in 1999, they represented about 80 percent of all general cargo, but today, the numbers look to be well over 90 percent of general cargo that comes into the United States transoceanic comes in a container. [A slide presentation was shown.] \1\ --------------------------------------------------------------------------- \1\ Copies of the slide presentation by Mr. Flynn entitled ``Bolstering the Maritime Weak Link,'' appears in the Appendix on page 80. --------------------------------------------------------------------------- Mr. Flynn. Now, a little over a year ago, I had written in foreign affairs and I brought this up here as a way to illustrate this, a scenario where I put this man's face up and I said, if I had been a consultant to bin Laden, he had done this little job on one of our embassies, but instead, what he might alternatively want to do, as I suggested, is to buy a company that had been moving ceramics in the New York area for the last 30 years and then load that out of the port of Karachi and the container would perhaps move on, like you see these throughout the Asia area here, one of these container movement operations, just from a barge that gets on one of these rusty freighters. And we bring it to a place like Hong Kong. This is just one of five major terminals in the Port of Hong Kong. It is getting almost cartoon-like as you see the numbers. We are talking about 1.1 million container movements a month in the Port of Hong Kong. They are going to be loaded on something like perhaps the Virginia Maersk. This is a 6,600 TEU. If you can imagine, that is right there 3,300 railroad cars, 3,300 18- wheelers that are sitting not just on top there, but in the hull of that ship. That could be loaded in under 30 hours in Hong Kong. And it would steam for Long Beach, perhaps, and then, because it is going to Newark, it would probably travel in bond. That means we would unload it right from the pier and it would go onto a rail car, like this, and it would head into the inland of the United States. Our Customs inspection system is built to inspect--it is confusingly called the port of entry, but it is basically the point where it enters the economy, which in this case would be Newark. So it would be the Customs inspector in Newark who would actually have responsibility to examine the manifest and to ultimately look at the container when it got to Newark. Chairman Lieberman. And that would be the first American to do so? Mr. Flynn. That is right. It would go directly from the ship. Customs could, if alerted, stop it, of course, in the port of arrival, but the routine is to allow it to move directly in and move it. And so it may travel through a place like Chicago. I have--you do actually see passenger freight, on that bridge there coming through is one. If I had a chemical weapon with a GPS transponder on it, I could set off that device. And what I would have done is, before anybody knows what is in the container and where it is from, I would have caused, obviously, a real catastrophic event near a major population center where--and this is a major rail hub, of course, near the airport, and that would be very disruptive. Now, let us imagine we just had some of that, even on a smaller scale, and it led America to ask the question, how do we know what is in these boxes? And I think most people would be rather mortified to realize that we do not really have real command on that. There are upwards of 500,000 entities out there that can load boxes around the world. There are 40,000 freight forwarders that load the box, seal it with a plastic seal, typically with a number on it, and then it is off to the races. It goes from any where in the way I just illustrated onto a ship and is coming here. And then the verification is a Customs function done again at the port of entry. Now, we would then say, well, gee, if we do the inspection at the port of entry, what happens if there was a bomb in there that was triggered when you opened it up? If we take--and this, by the way, is sort of a rail yard. It gives you just a sense of what we are talking about trying to manage and sift through. But let us take the Port of Newark, for instance, and Admiral Larrabee will talk a little bit more directly about this here. This is the biggest container port, of course, on the East Coast, but this, I think, is a very important picture for us to realize what we are talking about. Let me step up perhaps and point out, these are the container terminals here. This is an aerial view of Newark International Airport. I call this an intermodal moment. In a mile, you have container ships coming in off-loading. This is actually one of the major rail hubs that spiders off to the Northeast and the rest of the continent, along with the New Jersey Turnpike, along with the Newark International Airport. So we inspect the container in Newark and it turns out to be a bomb. Where is the plume going to go? I think we could imagine where it could go. Out of that would be, I think most folks would suggest, let us not open the box and inspect it in Newark anymore. We do not want any uninspected boxes coming in. So, therefore, I guess we do not have any boxes coming into Newark. Forty-million people within 200 miles would have a very disrupted market as a result. So I lay that out as a sense of what we are talking about is not just simply that we have a vulnerability and that somebody could bring something in and cause disruption, but really, this is again about the sustainability of global commerce. How we respond and are set up to respond to this threat could, in fact, itself have real ripple effects. Out of those scenarios, I think there are three key things that we have to have in regard to the hearing today. First is that seaports cannot be separated from the international transport system to which they belong. Ports are really just, in essence, nodes in a network where cargo is loaded or unloaded from one mode, a ship, into other modes--trucks, trains, and on occasion, planes. Therefore, seaport security must always be pursued against the context of transportation security, and this has been very difficult because we have been taking this rather balloon effect approach to it. Second, the port security initiatives must be harmonized within a regional and international context. One of the major ports for the Northeast is Montreal and Halifax. They bring in about a million containers between the two of them, half of which come into the United States. If you only regulated ports inside the United States, you may push some of these problems offshore into Canada, Bahamas, Vancouver, or even into Mexican ports that could come online here. So we have to be talking about this network not just within the U.S. domestic context, but also overseas. Finally, since U.S. ports themselves are perhaps America's most critical infrastructure, they should not be viewed as the primary line of defense in an effort to protect the U.S. homeland. They are essentially the last line of defense. Now, the fact that seaport security must be considered within the broader transportation logistic context that includes ports outside U.S. jurisdictions has obvious implications for how the U.S. Government is organized to safeguard them. First, I would argue we have three major structural impediments. One is that the agencies with responsibilities for a specific transportation mode rarely communicate with their counterparts in the other modes. In fact, there is a pervasive culture of competition among the modes, often reinforced by the Congressional advocates, I think most rather dramatically illustrated just this last couple of weeks, when the House has decided to bankroll additional airport security by taking $60 million out of the supplemental monies promised the U.S. Coast Guard to pay for port security. It's a little bit, from my view, here of the classic horse leaving the barn and closing the gate afterwards on that one. The security challenge associated with seaports is not just one posed by conveyances, ships, but the operators, passengers, and cargoes on those ships. So we have a complicated problem of we have to get a handle on people, we have got to get a handle on conveyances, and we have got to get a handle on goods. But people is an issue of consular affairs. That is State and INS. Goods are U.S. Customs, USDA, and FDA. Ships and the non-land side of the ports are Coast Guard, but the land side is a smorgasbord, depending on what port you are here, of local, State, and private entities. And then there are the trucks. About 10,000 trucks come into the Port of Newark each day, entirely unregulated activity. And then, finally, since the jurisdiction of most of these agencies runs out at the water's edge, they tend to approach the regulatory enforcement issue with some strictly domestic contest or framework, rather, than an international one, and the international security community pays no attention to this problem. So that is the state of affairs we are in, in a very quick framework, as I think many of the witnesses can fill in the blanks. But I think the key here, I hope that this illustration provided highlights the importance of not thinking that we can achieve homeland security in this regard at home. We have to be looking at this as a network and for what it is, which is one that moves overseas. Our ultimate objective should be, go to the point of origin, and how we get to this is, I think, first, with some standards about how one gets to load a container, who gets to load it, and the process that is done. It has to be done in a sanitized way. Standards have to be identified in that and pushed through, whether it is the International Maritime Organization or the World Customs Organization, to say, if you stuff a box and you want to be off to the races to come to a port in the United States or in any of the other large ports in the world, you have to meet some basic requirements, and if you cannot do it there and we cannot feel comfortable with that, you have to restuff the box at a place that we feel comfortable that we know what is there and that there is a trusted partner who is doing that loading. Second, when it is loaded, we want you to track it. We want you to know where it is. This is sort of what I call in-transit visibility and accountability, using technologies like GPS and electronic transponders and so forth. As soon as it leaves the factory, it goes from there to the terminal and we can account for it every step of the way. There are two purposes for in-transit accountability and visibility. One is ideally to deter it. There is not much time for a bad person to bring something in. But most importantly, as well, is that when you have intelligence that there may be a compromise, which is perhaps the only way we are going to find, in many instances, a problem, it becomes actionable intelligence, that you can pinpoint immediately where the problem is and go in and, working with the carrier, you will be able to identify and figure out where the best way to manage that compromise might be. Then the terminal operator itself would have to have accountability of the box. That happens as a matter of routine in most places. And then the ship mills where it is, and then the same on the receiving end when it is loaded off, and in the case of in bond shipment, again at trails along the way. Then we have this complete control, sanitized control, and if that is done with the technologies and the cooperation--and the final piece is sharing data about who and what you are up front to allow agencies to assess that against any watch list they may have--if you do those three things, security up front, in-transit visibility and accountability, and the sharing of data, you get the easy trade lane. We are going to move you quickly, which makes sense from a security standpoint, because goods that rest often are most vulnerable to crime. So you actually have a security incentive, not only a market one, to accelerate if you can be confident up front. That is why I am confident this is going to be workable if we think in these terms, because we can really--it has always been a false proposition in my view, openness versus control. Without control, the whole system is in jeopardy. That is what we saw on September 11. With smart controls, there actually is a national security rationale to fix things that have been broken for a long time, agencies that have paperwork requirements that make no sense or that are duplicative and redundant, bottlenecks in infrastructure that should not be there. We need to fix that from a security standpoint, and that, I think, parades an opening for this to be dealt with, not just here at home, but also overseas. Thank you very much, Mr. Chairman. Chairman Lieberman. Dr. Flynn, thank you for an excellent opening statement. The country is fortunate that you have had the practical and academic experience you have had and you have brought them together at a time when, post-September 11, we need that very much, so I look forward to questioning you. I am pleased to say Senator Collins is sitting today as the Ranking Republican Member of the Committee, and I think it is appropriate that I ask her now if she would like to make an opening statement before we go on to the other witnesses. OPENING STATEMENT OF SENATOR COLLINS Senator Collins. Thank you very much, Mr. Chairman. I apologize for being a few minutes late for the hearing. I want to thank you for convening this important hearing. Coming from the State of Maine, as I do, the vulnerability of our ports is of particular interest and importance. Our seaports are as important in the war against terrorism as the safety of the food we eat and the security of the planes we fly in. With more than 95 percent of our imports flowing through our ports and with millions of passengers and maritime containers passing through them with only limited inspections, we must have a far better security system in place than we do now. Correspondence that I recently received from Captain Jeffrey Monroe, the Director of Ports and Transportation for Portland, Maine, makes the need for better port security very clear. Captain Monroe, in commenting on the security of our ports, put it bluntly. ``Our local, State, and Federal agencies were, in many cases, ill prepared for September 11 and the coordination of information and effort was almost nonexistent,'' he wrote. Captain Monroe's letter includes a series of specific recommendations and I would ask that this correspondence be made part of the record.\1\ --------------------------------------------------------------------------- \1\ The letter from Captain Monroe with an attachment submitted by Senator Collins appears in the Appendix on page 142. --------------------------------------------------------------------------- Chairman Lieberman. Without objection. Senator Collins. Since September 11, the Coast Guard has expanded its patrols in Portland's harbor and has increased its surveillance of ships entering the port. But given the volume and the lack of personnel, this is a daunting and exhausting task. We must improve coordination between Federal, State, and local agencies, as well as the private sector. We must have highly trained and a sufficient number of employees. We must have a clear chain of accountability to achieve port security. It is evident that we have a great deal to do and I am very pleased that the Chairman has assembled such a distinguished list of witnesses to assist us in this goal today. Thank you, Mr. Chairman. Chairman Lieberman. Thanks, Senator Collins. I really look forward to working with you on this. I think this is an area where the Committee together can make an important contribution and I thank you for that excellent opening statement. The next witness is Amanda DeBusk, now with Miller and Chevalier, former Assistant Secretary of Commerce, former Commissioner, Interagency Commission on Crime and Security in U.S. Seaports. Thanks so much for being here. TESTIMONY OF F. AMANDA DeBUSK,\1\ MILLER AND CHEVALIER, FORMER ASSISTANT SECRETARY OF THE COMMERCE DEPARTMENT AND FORMER COMMISSIONER, INTERAGENCY COMMISSION ON CRIME AND SECURITY IN U.S. SEAPORTS Ms. DeBusk. Thank you very much. I am honored to be here today. I am speaking to you as a former Commissioner on the Interagency Commission on Crime and Security in U.S. Seaports. President Clinton established the Commission by executive order on April 27, 1999. Senator Bob Graham was particularly instrumental in the Commission's establishment. I served on the Commission as the Commerce Department representative in my capacity as Assistant Secretary for Export Enforcement. The Commission issued a report in August 2000 with 20 findings and recommendations. I would like to highlight those that are most important for this Committee post-September 11. --------------------------------------------------------------------------- \1\ The prepared statement of Ms. DeBusk appears in the Appendix on page 93. --------------------------------------------------------------------------- Let me provide some background. One of the underlying concerns was how wide open our seaports are compared to our airports. In most cases, there is free access to the seaports. The Commission found that significant criminal activity was taking place at most of the 12 seaports that we surveyed. At many seaports, it is legal to carry firearms, so criminals with arms may have access to terminals where passengers embark for cruises. Concerning cargo, because of misreporting and lack of reporting, no one knows in a timely fashion, if ever, what is in those containers at our seaports. One of the cases my former office investigated involved a riot control vehicle that was exported to China as a fire truck. The vehicle, it was a huge thing. It resembled a tank. It had a turret on top for spraying pepper gas all around. It was all boxed up in a container and at the time of export, no one knew what was inside the container and so it was exported as a fire truck. The Commission approached the crime and security problem with the possibility of terrorist activity associated with the new millennium. Thankfully, nothing happened. At that time, the FBI considered the threat of terrorism directed at any U.S. seaport to be low. However, even though the threat was low, the FBI considered that our vulnerability to attack was high. The Commission found that the state of security at seaports generally ranged from poor to fair, with a few exceptions where security was good. We looked at fundamental activities for combatting terrorism, protective measures, crisis management, and consequence management. These activities require comprehensive interagency coordination. They involve law enforcement, intelligence agencies, emergency response agencies, and if needed, the military. Outside the Federal context, coordination is needed with the State and local authorities and the private sector. Today, I would like to highlight recommendations in four areas relevant to this Committee: Enhanced interagency coordination, physical security at the ports, better and more timely information about cargo transiting the ports, and increased use of technology. First, we need better interagency coordination. There are 361 seaports. Most ports are chartered by States or local government. Some terminals are operated by public port authorities. Others are private. There is no central Federal authority. There are at least 15 Federal agencies with jurisdiction at the seaports. In addition, there are State and local agencies and the private sector. Every single group is important for combatting terrorism and has something to contribute, but coordinating these groups is a monumental undertaking. Perhaps a Department of National Homeland Security could play a leadership role in this coordination. The Commission found that there needed to be a comprehensive and definitive statement of Federal responsibility. The Federal Government needs to conduct threat assessments to determine where the threat is greatest and where we urgently need preventive measures. The Federal Government should strengthen coordination to more effectively address terrorism. It should work with all stakeholders. Key information available to the Federal Government should be disseminated to others, as needed. Let me provide an example of where better coordination would be useful. The FBI has excellent regional counterterrorism task forces that consist of Federal, State, and local agencies. However, at the time of our study, these groups did not focus on the seaports. They should do so. S. 1214, an amendment to the Merchant Marine Act, has some good proposals on establishing local port security committees. Second, the Commission found that we need better physical security at the seaports for both vehicles and people. At many ports, access is virtually uncontrolled. At one of the ports I visited, we saw a line of vehicles that was parked right beside the vessel. We were told that these were the dock workers' vehicles that were parked there for convenience. At the time, and as Senator Hollings alluded to, we were trying to figure out if this is someplace where drugs could be hidden for things coming off of vehicles, or coming out of containers and being stashed into the vehicles. But now what we have to do is think about the possibility that these vehicles lined up right beside the vessels might contain a car bomb or even a ``dirty nuclear weapon'' that could be hidden inside them. Many ports do not have ID cards for personnel. I observed all sorts of people that were milling around at dockside. There was no way we could tell who should be there and who should not. The Commission found that at one point, pedestrians could freely walk through the purported access control points without even being questioned. We did not even want to contemplate a group of terrorists taking over a cruise ship, but it is a possibility. Training of security personnel is also a problem. Many seaports use private security personnel who lack crime prevention and enforcement training. The Commission recommended developing regulations to create a secure area where passengers board and disembark vessels. We also recommended proceeding with an INS project to manage risk with respect to both passengers and crew. We recommended creating shared dockside inspection facilities so that all relevant agencies have ready access to conduct inspections. The Commission called for the establishment of minimum guidelines for physical security, such as fences, lights, gates, restrictions on vehicle access, restrictions on carrying firearms, the establishment of a credentialing process so you would know who is supposed to be there, considering criminal background checks for those with access to sensitive areas of the port, and development of a private security officer certification program. S. 1214 moves in the direction of these recommendations, but it does so through voluntary security guidance. The Committee should consider making some of those requirements mandatory. Third, we need better information about cargo transiting the ports. On the import side, information is often vague and import entries may be filed 5 days after arrival. On the export side, information tends to be very general, with descriptions like ``general merchandise'' that really do not tell you anything, and is required 10 days after export. One of the concerns with providing earlier and more detailed information is that it would allow specific cargo to be targeted for theft by those with access to the information, and this concern needs to be addressed. Fourth, we need better technology at the seaports. Better technology is needed for a whole variety of applications, which include X-raying containers, using computer systems to target cargo associated with high-terrorist risk, collecting data on crimes at seaports, and providing real-time information for tracking high-risk cargo and personnel. In sum, the Commission said, ``A terrorist act involving chemical, biological, radiological, or nuclear weapons at one of these seaports could result in extensive loss of lives, property, and business, affect the operations of harbors and the transportation infrastructure, including bridges, railroads, and highways, and cause extensive environmental damage.'' We need to take action now to reduce the risk of future catastrophes. Thank you for inviting me here today to testify on this important subject. Chairman Lieberman. Thank you, Ms. DeBusk, for excellent testimony, which, unfortunately, continues to paint a harrowing picture as I listen to it. Rob Quartel is our next witness. He is the CEO and Chairman of FreightDesk Technologies and a former member of the U.S. Federal Maritime Commission. Thanks for being here. TESTIMONY OF ROB QUARTEL,\1\ CHAIRMAN AND CHIEF EXECUTIVE OFFICER, FREIGHTDESK TECHNOLOGIES AND FORMER MEMBER, U.S. FEDERAL MARITIME COMMISSION Mr. Quartel. Thank you, Senator. The last time I think I saw you up close was about 6 or 8 months ago at Sutton Place Gourmet, and I cannot remember what you were buying---- [Laughter.] --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Quartel with attachments appears in the Appendix on page 98. --------------------------------------------------------------------------- But I would observe that probably half of what you and I bought came in on a container. The meat probably came from Australia. The flowers and other vegetables probably came from Latin America, and so on and so forth, so this is a problem that is right here, wherever you are, every day. You are standing there in the middle of the system. It is probably a good thing you cannot remember what I was buying. Chairman Lieberman. I certainly cannot remember what I was buying. Mr. Quartel. I know that what I was buying was something fattening. Chairman Lieberman. Senator Collins and I were saying, I wish I could say it was all American, but I am sure it was not. [Laughter.] Mr. Quartel. But that is the beauty of the system---- Chairman Lieberman. Yes. Mr. Quartel [continuing]. The fact that we are able to access all these markets worldwide, whether they are food, whether they are the subcomponents of manufacturing. That is really what makes us efficient as a country and contributes to the national economy. I would like to thank you for the invitation. I have got a quick slide show, and because of the time, what I am going to do is kind of truncate some of this and really kind of talk to the slides. But I think based on Commander Flynn's and Ms. DeBusk's statements, this is really a scary issue and I would like to make one point of policy that I think the Committee ought to adopt, which is very straightforward. Every container destined to either land in or go through the United States, and the last point is really important, in my mind should be treated as a potential weapon of mass destruction, every ship that carries it as a delivery device, and every port as a potential target, and that suggests several things. First, it suggests you cannot let a terrorist container get into the port. The port is the target. You saw the map where you had everything within a mile there in the Port of Newark, which, by the way, is what makes that a very efficient port, because you can switch from mode to mode to mode, whatever happens to be the most efficient way to do it. It also suggests you cannot let it on a ship, and so one of the concepts I would like to talk to today is the notion of pushing the border back electronically. Ms. DeBusk talked about the fact that we collect a lot of data. Every part of the process is documented. This slide I am going to talk to in a minute shows the complexity of it, but you need to bear in mind that everything in the process is documented. From the time it is purchased, a buyer or seller transaction creates a purchase order that says what it is, how many you want, the weights, eventually all the rest of that, to the trucker who picks it up, to the train who moves it, to the ship that carries it, to the train that delivers it, or truck in the United States, all of that is documented in a series of documents. What does not happen, as Ms. DeBusk said, is that it does not all get there to Customs or anyone else early. It gets there strung out across the process. [A slide presentation was shown.] \1\ --------------------------------------------------------------------------- \1\ Copies of the slide presentation appears in the Appendix on page 107. --------------------------------------------------------------------------- Mr. Quartel. This first slide really is intended to talk to the issue of complexity. The international trade process is hugely complex. It is not like domestic trade, which goes from point to point. You have in every single trade 20 to 25 involved parties, whether they are the buyer, the seller, the transportation modes, all the rest of those. You have as many as 30 to 40 documents. You have a couple of hundred data elements. The messages all arrive in a variety of different kinds of platforms, some electronic, some fax, some by E-mail. But it is a tremendously complex process. Admiral Loy has pioneered a concept called Maritime Domain Awareness, and I think that is very relevant to this port issue here. By the way, I also would ascribe to what Commander Flynn said earlier. I view the port as really too late. In my mind, the port is the least of the problems. Yes, you have to protect the port. Yes, you have to protect the physical integrity of it. Yes, you have to have all the security measures. The real problem is at the beginning of the cargo. That is where you have to interdict it. I would take Admiral Loy's thought and actually press it a little further. I really suggest that there are five domains in international trade. The first is the origin of the cargo. In manufacturing today, you might have a company that does virtual manufacturing in Asia, where they will have 20 different factories that are all subcomponents of the process. It starts in one. It moves by truck to another. It moves by truck to another, by train to another, and another to another to another, literally that many, and then is assembled in one place and forwarded to the United States. So that is part of the process that includes inland transportation, all of the parties engaged in manufacturing. The second, at the port of loading. And on this chart, by the way, one of the things I have done is just very quickly, and it is not necessarily 100 percent accurate, I did it on a plane in the middle of the night the other night, is to talk to some of the agencies on the issue of where some of their authorities might lie in the process, U.S. Government agencies, and also, as has been said earlier, these authorities tend to be sort of stovepiped. They are aimed at a specific part of the process. That is really all they can do under the law. The second part of it is in transit. There are a number of protective things you need to do there. One of the things from end to end, of course, is visibility. Companies are going to that, to tracking the cargo, though tracking is not nearly so pervasive as we seem to think it is, based on when we go to the web, we seem to know where everything is. One of the reasons is that much of what we think of as being tracked is in FedEx packages, typically air freight, which is different than ocean and land, which are in containers. The fourth is the port of discharge, which is really, I think, the point of the hearing today. And then finally, multiple destinations. If you want to figure out what is happening to a cargo, you really need to know what it is, where it came from, where it is going to, who has touched it, what did they do with it, what did it cost, who paid for it, and that is all the kind of data that is collected in a system. The information process itself provides an attraction because, if you work at it, you can hide the transaction. This really kind of talks to the issue of how cargo moves. Forty or more days before it gets here and just in time, you may have a buyer-seller transaction. They generate a letter of instruction and a commercial invoice. On this slide, the red documents are reported to Customs. It goes to a warehouse. It finally gets to a ship and the ship creates a master bill of lading. A single container might contain as many as 10 or 20 different cargoes. It may be 10 containers which are the same shipments, they are all the same thing to the same manufacturer. Containers are not just packed by one person. They may be packed by multiple people. You have people at each end who consolidate what is in a container. You have people at the other end who deconsolidate it and send it off in a bunch of different directions. Carriers generate documents. Throughout the process today, you typically have an intermediary, a freight forwarder or a customs broker or a third-party logistics provider. That, by the way, is one place that I think in the future we need to focus some of our thinking about how you manage the process for the government, because they are the ones who typically handle the paperwork as well as the financial documentation. You have additional carrier reporting at the end. And then, finally, you have another set of documents generated. What I would like to suggest to you is today, we tend to think of the border at the bottom there as being the physical border where the ship comes in. The concept I would ask the Committee to consider is to push that border to the top of the page between the warehouse and the port of embarkation and to do that electronically. The next two slides--this is a sample of the kinds of data that comes out of the documents that are generated in a typical commercial transaction. By the way, when a ship lands in the United States, it drops off 40,000 documents. Chairman Lieberman. Forty thousand? Mr. Quartel. Documents for 6,000 containers. So that is my 10 to 20 to 30 documents per container. Chairman Lieberman. And who gets those documents? Mr. Quartel. Customs gets some of them. The shippers get some of them. Letters of instruction and financial letters go off to the people who handle that. So there is a lot of data. That is one of my key points to you. This is not a new process. Part of what we have to do and the opportunity here is to manage the data process, and we can talk to that. If you go across this, you can get everything I am talking about. You can find out--and this is the other part of it, is another 60 different elements. You could find out who paid for it, what it is, what it weighed, where it was coming from, how it went, by truck on the way, on the way back, the ship. If you go to the ship, you can actually tell what was going with it side by side. Now, the process I would like to suggest to you--I am going to go actually one slide further and then come back. The process I would like to throw at you for your consideration is a kind of profiling process. You create a commercial database from the kind of data which is currently provided by the commercial sector, some of which goes to the government and some of which does not, and some of which should not go to the government because it is essentially competitive data. But you can create a commercial database. We already have a database and bases of government data. The Coast Guard, for example, has what is called a fusion center, where they fuse conceptually data from a variety of different kinds of law enforcement sources. Right now, that data is not always compared against each other and it is certainly not compared when a cargo originates. What I would suggest to you is that you create a new process, perhaps driven by Customs, in which you collect the commercial data, you collect the law enforcement data, and you run it through a decision algorithm which basically says, well, what is wrong with this? Is it--and I can show you back here two slides--is the cargo something that is said to be coming from a place where it is not manufactured? Is it steel coming from Romania, where they do not have a steel factory? Is it coming from Afghanistan but going to the heart of New York? Is it something going by a nuclear power plant? If you go through the documents, and this is just kind of an example of it, you can actually see where you can find these anomalies, and while I am not an expert in the mathematical profiling aspect, I do know a lot about the data management process. But there are people who are expert in profiling and we are dealing with some of those and I have been working with the National Defense University, which looked through some of this, who create the kinds of algorithms which can help you decide, and we use some of this today with drug enforcement, but not to this extent. Chairman Lieberman. Mr. Quartel, excuse me, but you have gone beyond the 5 minutes now---- Mr. Quartel. I am sorry. I am going to finish right now. Chairman Lieberman [continuing]. So if you can begin to think about wrapping up. Mr. Quartel. I am done, virtually. Chairman Lieberman. That was good timing. Mr. Quartel. Thank you. Chairman Lieberman. Thanks very much for very thoughtful and helpful testimony, which we will look forward to questioning you on. Our final witness on this panel is Richard Larrabee, who is a retired Rear Admiral of the U.S. Coast Guard and now Director of the Port Commerce Department of the Port Authority of New York and New Jersey, so a person with great experience and right in the middle of the topic that we are discussing today. Thanks so much for being here. TESTIMONY OF REAR ADMIRAL RICHARD M. LARRABEE,\1\ RET., DIRECTOR, PORT COMMERCE DEPARTMENT, THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY Rear Admiral Larrabee. Mr. Chairman, thank you. Members of the Committee, good morning. Thank you for the opportunity to testify this morning. --------------------------------------------------------------------------- \1\ The prepared statement of Rear Admiral Larrabee appears in the Appendix on page 114. --------------------------------------------------------------------------- I have provided written testimony and would ask that that would be placed in the record. Chairman Lieberman. It will. Rear Admiral Larrabee. What I would like to do is just take a couple of minutes in the interest of time to touch on some of the things that the prior testimony has talked about, but do it from a ports perspective. Mr. Chairman, as you said before, the ports of this country are a vital intermodal link in our transportation system and a large part of our economy. The Port of New York handled about three million containers last year, about 560,000 automobiles, and over 30 billion gallons of petroleum products, the largest petroleum port in the United States. That system, as the Chairman suggested, is based on speed, reliability, and cost, and we are living in a ``just in time'' society where the movement of those goods are critical. On the morning of September 11, the Port of New York and New Jersey was closed. It was closed by the Coast Guard captain of the port. Other law enforcement agencies were involved in that decision, but it was done in a very orderly way. There was a tendency in the port from one perspective to keep the port closed because of the fear of the threat of terrorism. On the other hand, the pressures that Commander Flynn talked about of keeping commerce moving were obviously part of that discussion. Because petroleum resources were going low, because of a shortage of other supplies that would normally come through the port, we felt a great deal of pressure to open the port up as quickly as possible, and on the morning of Thursday the 13th, we reopened the port with a large number of security measures in place--all ships boarded by the Coast Guard at sea, all manifests, both cargo and crew manifests, checked, tug escorts into the port, and an extensive cargo inspection program by both Customs and Coast Guard and other law enforcement agencies, a heightened level of activity in terms of spot checks and patrols in the port. That level of activity, along with an extensive effort by the Coast Guard to protect vital assets of the Port of New York and New Jersey, certainly was an extraordinary effort on the part of all of those Federal agencies, but it simply was not sustainable, and today in the Port of New York, we are seeing far fewer resources doing those kinds of things when today the level of our security might have to be higher than it was perhaps the day after September 11. I want to talk just briefly about this notion of who is in charge, because we certainly heard Senator Hollings talk about that. I think we have other models that we can look at. In my own experience, I can tell you that in the wake of Exxon Valdez, the U.S. Senate and the administration at the time certainly supported efforts to improve that system. The end result was OPA 1990, and since that time 10 years ago, we have seen a dramatic decrease in not only the number of spills and the size of spills, but an increase in our ability to respond. One of the key issues in that legislation was answering the question: Who is in charge? As it was suggested this morning, I believe the Coast Guard Captain of the Port currently has the jurisdiction to do a number of things that we have heard about. Perhaps his position needs to be strengthened, but I believe the Coast Guard is in the right position to manage both the prevention and the response to an incident like the one we are talking about this morning. We have heard an awful lot about this notion that perhaps the greatest threat in one of our ports is not a large tanker hitting one of our bridges but the entry of a weapon of mass destruction using our very efficient container movement system, and there is no question about that. I believe that last week, Admiral Loy, the Commandant of the Coast Guard, addressed the Assembly of the International Maritime Organization and proposed that a working group be established to look at port security and terrorism, specifically at the issues of cargo visibility and accountability. We certainly support the Coast Guard's proposal and believe that the IMO is one of those appropriate forums to address the issues of international concern, and I think there certainly are parallels in this area, too. The shipment of hazardous materials these days is a process that has seen dramatic improvements over the last 20 to 30 years. Today, the kinds of accountability and responsibility of moving those kinds of materials certainly gives us opportunities to look at parallels when it comes to moving other cargoes. We have heard a little bit this morning about this notion that communications is the foundation of coordination, and certainly there is a real need to share intelligence and threat assessments among the Federal, State, and local agencies, and I would have to say to you this morning that as Director of the Port of New York and New Jersey, I am not in a very good position today to tell you whether our measures that are underway right now are adequate for the threat that is out there. We simply are still not sharing the kind of threat assessments that I think need to be in place. Chairman Lieberman. That is a very important statement. Forgive me for interrupting, but I hope we all listened to it. That is an unacceptable situation. You just feel you are not getting the intelligence information you need? Rear Admiral Larrabee. As Senator Hollings said, this is a system that really is being managed day to day by the private industry, and it is not only the Port Authority, but more importantly, terminal operators and shipping lines which need to be brought into this circle and be made more aware of what the threats are and what they can be doing in a practical way. I think there is a need for standards, and Senator Hollings talked about that this morning. My Port Authority Board is asking me what I should be doing and my answer to them is--I am waiting for Federal legislation. We desperately need to pass the Hollings bill in the very near future and I would ask you to support Senator Hollings' efforts. Just to conclude my statement, this is a system that, as you have heard this morning, is the responsibility of an awful lot of people, whether it is the paperwork or the number of agencies involved or the number of hands that move this particular cargo. It simply is a system that requires the diligence and responsibility of an awful lot of people. We believe that there are ways to make the system more secure. We believe that we have to do that. We are very appreciative of the kind of support that we have gotten from agencies like the Coast Guard, the FBI, and Customs, and we are very hopeful that you are going to be able to give them the kind of resources that they are going to need to do their job. Finally, I want to thank Senator Torricelli and others for supporting us in the local New York area. Supplemental legislation has been passed, and I know, for one, we are going to be getting some extra resources in the port in order to improve our security level. Thank you. Chairman Lieberman. Thanks, Rear Admiral, for very helpful testimony from a particularly important perspective. Let me focus in on this question of coordination. It is a fascinating and, in many ways, troubling picture, even from an organizational point of view. And again, as I said in my opening statement, when I got more into this, I was surprised to be reminded that there is no Federal coordinating role here, that the ports are State and locally overseen, that there is a lot of private interests involved. Ports in Connecticut, for instance, most of them are owned privately, the harbor facilities. Give me a sense of what happens at a typical port, either privately owned, and/or locally regulated. Are there Federal agencies present at the major ports? Are they coordinating now? Maybe, Rear Admiral Larrabee, you could give me a picture of what is happening at a typical port of entry. Rear Admiral Larrabee. Well, I do not think there is any question that there is a great deal more coordination today than there was on September 10. Chairman Lieberman. Yes. Rear Admiral Larrabee. The boardings that I talked about that the Coast Guard is conducting, vessels are being boarded on a priority basis based on an analysis of that vessel and what sort of threat it might pose to the port 96 hours before the vessel arrives, and my understanding is that both Customs and the Coast Guard and INS are looking at cargo manifests and crew manifests, ports of destination, and making decisions about whether or not to board and what to look for. So that is there. Chairman Lieberman. Is that the universe we are talking about, Customs, Coast Guard, and INS, of Federal presence at the ports? Rear Admiral Larrabee. I think, for the most part, that covers all of the issues that we have talked about this morning. Chairman Lieberman. Let me then ask what can be done to either facilitate better communications between the front-line agencies in securing our ports, and more broadly, whether you think there is a need for active Congressional involvement here through legislation to create some kind of new overarching Federal organization to be concerned about the ports and to guarantee coordination. Ms. DeBusk. Ms. DeBusk. Yes. First to answer your question, I do think there is a very strong need to have an umbrella to coordinate all this, perhaps through homeland defense. Let me just sort of give you a little vignette of what happens there. You have 15 Federal agencies with some sort of authority at the port, and---- Chairman Lieberman. Fifteen, well beyond the three I mentioned. Ms. DeBusk. Absolutely. Chairman Lieberman. Just name a few more. Ms. DeBusk. You have the Commerce Department and you have the Agriculture Department, you have the Food and Drug Administration, you have all these, and let me just take a few of the older ones that you do not necessarily think about, like EPA, for instance. Let us just take the Agriculture Department. They would perhaps know how to be on the lookout for contaminated food coming in. Let us just think about a terrorist who decides to sprinkle a little cyanide in all the Cheerios, right. They would know how to be on the lookout for that, but that is not the expertise of the Coast Guard. In my former office, Export Enforcement, we knew how to target, to look for things that might be used for weapons of mass destruction or chemical or biological agents. But again, that is not the job of the Coast Guard. The Customs folks, they know how to look very well for the drugs that are coming in or going out. That is one of their specialties, and obviously the drug trade supports terrorism. But again, no one is bringing all these pieces of the puzzle together and I think there is a strong need for perhaps the Office of Homeland Defense or some other body to be able to do that. Chairman Lieberman. Dr. Flynn, I know that you and Mr. Quartel are asking us to consider pushing the border back, a very interesting idea which I know the Committee will want to get to in a few moments. But what about the border where it is, even if you push it back? What do you suggest from your experience and work as to what we should do, if anything, to facilitate better communications and coordination among the 15 Federal agencies and the State and locals and privates involved to guarantee a more secure and efficient situation? Mr. Flynn. Let me say, Senator, that while I am talking about pushing the border back, that we think about this problem as one that starts much farther away than our border. I am not calling for the end of the border. Chairman Lieberman. Right. Mr. Flynn. That is, it is really a series of concentric circles that to the best of our ability, we put the most intensity at the origin point and then the number of inspections narrows down as we have to get to our own entry because of the volume and velocity issue that we face here. What is clear is that we need a general pool of data, and there was an effort that Customs was involved with in the former administration to create what was called the International Trade Data System that would bring all the kinds of things that Mr. Quartel outlined there all in one pool and allow the agencies to shop within that data. Most of what we find is things also, as Mr. Quartel talked about here, is this anomaly detection, the things that do not make sense, a high-value good going on a slow boat to China originating from a place, as he said, that does not make steel. And so what you need there is this data up front and you need it in a pool, and ideally you also would be housing people together. We have models for this in the drug world. We have the EPICs, the El Paso Intelligence Center. We have similar efforts in Jonestown and so forth here. But what we have learned here is that just to try to take that small segment of high-risk drugs, we really have to now think about all general cargo as at risk, as it always has been, and it is not just for narcotics, of course. Now it is human trafficking, but especially this concern with weapons of mass destruction. So there are various useful models of how we bring data and infuse it that is brought out of the drug world. We just need to expand, in part, upon that. But we rushed with some legislation here right after September 11 to put more primary inspectors. You look at everything, you see nothing in this business, and we all know this from those people with the glazed eyes who look at the X- ray machines as the luggage goes by. That is not the way to do it. You have to be smarter. And so the challenge here is analysts, well-trained people who know their segments and markets--and this issue of information sharing is huge. I am almost confident, for instance, that Rear Admiral Larrabee has not been given a clearance and it would probably take him about a year or two, perhaps, to get a security clearance. He was a former flag officer in the U.S. Coast Guard that has been doing this for years and we cannot find a way to clear him into a system to share intelligence that would be useful for him as a decision maker and a manager at work here. These stovepipes are huge and have to be addressed. Chairman Lieberman. Well said. My time is up. Do you have a clearance? Rear Admiral Larrabee. No, sir. I had a clearance, but I have not gotten it back yet. Chairman Lieberman. Yes. Senator Collins. Senator Collins. Thank you, Mr. Chairman. Commander Flynn, I understand from my staff that through discussions that they have had with Rear Admiral Naccara that you have been involved in developing a Northern New England Border security project. Could you tell me about that project and whether you think it would help solve some of the coordination and communication problems that we have heard about today? Mr. Flynn. Sure. This is actually spawned out of the State of New Hampshire, and Governor Jeanne Shaheen actually took a real leadership role and interest on this. This is obviously a real concern by most of the Northern States, and Senator Levin was here as well, about the hardened border and what that would mean. In the New England context and Northern New England context, this is about the Port of Montreal and Halifax, as well. About half the containers coming to Halifax and Montreal come into the United States. So getting a handle on the cross-border trade is central without a kind of hardened, sealed border approach. The notion here is that I was very excited to hear in terms of this interest in New England, and I think it is something that we need as a model overall. We have to do some experimentation, and I think the way this is done is some delegation by the headquarters here to regional commanders, such as Rear Admiral Naccara and the Regional Director of Customs and let them work with the governors and private sector, trusted partners, and with their counterparts across the border in the provinces and the ports in Halifax and begin to do this process of vetting legitimate players and finding ways to expedite their movements, applying some of these technologies. Ideally, we will find some companies up there who will want to play. There will be some resources found to test some technologies and you bring together INS, Coast Guard, and the other players, FDA and so forth, to try to get a handle on this. So what there seems to be, I know she has contacted Governor King in Maine and Governor Dean in Vermont and there is interest, I think, in Massachusetts, and I have been up in Ottawa last week, in fact, testified before their House of Commons on this issue. There is real interest on the other side of the border to try to come to arrangements where--this, I think, is so important. What we are trying to do here is not just find the needle in the haystack bad thing. What we are trying to do, as well, is to take the legitimate trade and travel and validate it as such we can set that haystack aside. That way, even if we had something as horrific as happened on September 11, we do not have to stop that flow. We know what it is. We do not have to stop those people, stop that train. And so part of our efforts should be not entirely driven towards finding that one needle, but it should be focused on how to take the vast majority of legitimate goods, validate as such, so even if a terrorist attacked, we do not have to disrupt that. Thank you very much. Senator Collins. I think it is interesting that at every single hearing we have had, no matter what the areas we are looking at, we find that agencies are not talking to one another or not sharing information or there is a lack of coordination. That is the common theme, whether we are talking about immigration policies or airports or our seaports. It does seem to be something that ought to be able to be solved. Ms. DeBusk, I want to ask you about a comment you made about having voluntary standards for port security. You expressed some concern that voluntary standards might not be enough. What particular standards do you think need to be made mandatory rather than leaving it up to the individual ports? Ms. DeBusk. Firearms would be an excellent example. I do not know why you would want anyone with firearms to just be strolling around at the port, so I do not know why you could not just say, no, you cannot have firearms at the port, as opposed to see if ports want to have--you put out a guideline that says it is better if you do not have firearms at the port. That would, to me, be a perfect example. Senator Collins. Mr. Quartel, I am very intrigued by the notion that both you and Mr. Flynn brought up of pushing the borders back. If we can inspect at the point of origin, it seems to me that really is the way we have to go, because if we do not inspect until the container gets to the United States, and we know we do not inspect most of them in any event, it is too late in many cases. Assuming we could get agreements from countries and companies to have a system that pushes the borders back, do we have the technology that would allow us, once a container is inspected, to electronically seal it and alarm it and have a monitoring system? I am just unfamiliar with the technology in this area. Does that exist now? Mr. Quartel. Some of that technology exists, and I think one of the later panels is going to be talking to the specific physical aspect of technology. If I might, I think what I would like to conceptualize for you, though, is a non-physical means of inspecting, which is really, I think, what we are suggesting to you here. In the hierarchy of things you want to do, you want to first screen a cargo electronically. You know the data. You can funnel out 80 percent of it just by knowing with some certainity that they are good people, they are good companies, they have security in place, you know they maintain it. Then you go to a scan. There are passive scans. There is an issue there of the cost, which you will probably hear about later, and we cannot mandate that a foreign port use it. Then you go to search, and then you go to actually seizing it. So it is screen, scan, search, stop, basically. There are technologies for the physical control of the process. They are a lot more expensive than most people can actually afford to introduce across a system of 40-some million containers worldwide. Senator Collins. Thank you, Mr. Chairman. Chairman Lieberman. Thank you, Senator Collins. Senator Cleland, good morning. OPENING STATEMENT OF SENATOR CLELAND Senator Cleland. Thank you very much, Mr. Chairman, and thank you for having the hearing today. Thank you, panelists, for coming. I would just like to follow up on Senator Collins' observation. I am on the Commerce Committee as well as this Committee. Whether we are talking about aviation security, bus security, port security, rail security, homeland security, it does seem to us that, and to me as I connect the dots, that we are talking about three basic bugaboos: Coordination, cooperation, and communication between and with Federal agencies. Now, that is no rocket science there, but it is coordination, cooperation, and communication. I have been briefed on the Dark Winter exercise, the attack or presumed attack by smallpox on the country, and Senator Nunn played the role of the President with the Johns Hopkins mock attack on smallpox back in June. That exercise was called Dark Winter, and Senator Nunn, who was in this body for 24 years, former chairman of the Armed Services Committee, said, as President, as he got into the mock exercise, he found himself becoming more and more impatient with bureaucracy. What he was running across was the lack of coordination, cooperation, and communication. [The prepared statement of Senator Cleland follows:] PREPARED STATEMENT OF SENATOR CLELAND Mr. Chairman, as a Senator from a State with several ports, I appreciate your holding this hearing today. I am also a member of the Senate Commerce Committee, which has oversight of our Nation's seaports. I welcome our chairman, Senator Hollings, here today to tell us what the Commerce Committee has done to help secure the Nation's ports. I supported these efforts, and voted for S. 1214, the Port and Maritime Security Act of 2001. Given the 2000 Report of the Interagency Commission on Crime and Security in U.S. Seaports which found that security at U.S. seaports ``generally ranges from poor to fair, and, in a few cases, good,'' there was not time to waste after this country realized its vulnerabilities on September 11. S. 1214 contains several provisions that I believe would help strengthen port security. The bill calls for a vulnerability assessment at our ports, and the review of this assessment should involve all relevant authorities for each port, which usually includes local, State, and Federal officials. At the Nation's 50 most economically and strategically important ports, the vulnerability assessment would be updated on a regular basis. The Department of Transportation would develop procedures for screening passengers, cargo and crew members at maritime facilities, and those employed at security sensitive jobs at ports would have to undergo criminal background checks. Attempts would also be made to work with foreign ports to assess security vulnerabilities abroad, which is an important part of this equation. Also, S. 1214 authorizes loan guarantees and grants to help fund security improvements and upgrades. This bill provides for funding of research initiatives to develop technology for detection of chemical and biological agents, which is vitally important as we continue to hear of the potential that terrorists may have access to ``dirty'' bomb materials. Unfortunately, there have been some Senate colleagues who have blocked consideration of this legislation despite the efforts of Senator Hollings and others to bring this bill to the floor. I am hopeful that we will be able to address this bill soon. Since September 11 was not an attack on our ports, it is difficult to raise this issue with the public in order to have the public demand action. But, the facts point to the need for better port security: 95 percent of foreign goods enters or leaves by ship, only 1-2 percent of cargo containers are inspected, and the U.S. has 95,000 miles of shoreline. In Georgia, over 12 and a half tons of cargo on over 2,500 vessels entered our State ports during fiscal year 2001. I must be able to reassure my constituents and all Americans that the vast amount of material entering the U.S. via ship is safe. How do I do this under the current regime? I hope to get some answers today from our panelists. Senator Cleland. Now, how do we improve that? I just want to ask some basic questions based on the fact that I have a State which has two major ports, Brunswick, Georgia, and Savannah, Georgia. As a matter of fact, Brunswick is very close to the Trident nuclear submarine base at King's Bay, which stores nuclear weapons. That has been a real eye-opener to see how the lack of security at Brunswick, the Port of Brunswick, impacts, say, a nuclear sub base just to the South and how the nuclear sub base has had to take extraordinary measures just to protect its nuclear weapons. I will say first, Mr. Commander, since the President says we are at war and the Coast Guard is supposed to be under the Navy, coordinated by the Navy in wartime, are we remiss by not having the Coast Guard under the Navy so at least at a nuclear submarine base like King's Bay, you have the coordination built in because the Navy is in command of the Coast Guard and the Coast Guard could help out with the protection of nuclear weapons? I just throw that out to you. Mr. Flynn. Sure, Senator. The cooperation between the Coast Guard and Navy has always been ongoing. Of course, even the Vietnam War, the Coast Guard was actively involved in the Vietnam War. We did a lot of river patrols and so forth, but we never felt officially under the Department of Navy in that instance. Today, in fact, you have the CND offered to Admiral Loy naval assets to assist the Coast Guard in this new war, that is, helping in the patrolling, giving some Naval patrol craft to help the Coast Guard do its mission. You already have a Maritime Defense Zone Commander who is a Coast Guard Commander who is dual-hat and works with the Atlantic Fleet Commander. So I am not worried about the ability for the Coast Guard to work with the Navy in an integrated way. I am more worried and concerned about the rest of that tapestry. What we know about these terrorists is that they are blending into the real estate. They are blending into the day- to-day movements and trying to look as legitimate as possible, whether it is as a fisherman or a charter boat or whatever might be on the water, or that their commerce blends into legitimate commerce, and we are trying to get a handle on the people, the conveyances, and the cargo and have a sense of being able to fuse the details of that in advance. The Coast Guard will have some knowledge about the conveyance, in this case a ship. That actually works. Our intelligence people sit with the Office of Naval Intelligence and the Navy works closely with that, as well, in tracking those. Customs will know about the cargo and INS will know about the people, and obviously Consular Affairs, who give the visas, will know about the people. The FBI and CIA will have the backlist. The challenge here, just to illustrate quickly, though, is--I heard this from a Customs agent who was involved with designing a scenario, he said, last April that followed this weapon of mass destruction, the container, and it was built out of--the FBI had given Customs some information about a household goods from Asia which actually had a dirty bomb in it and it was going to be arriving in New York on the Fourth of July. This had to go up to headquarters to get scrubbed before they used it. It got kicked back initially. They said it was unrealistic because the FBI would never give the information about the household goods being contaminated to the Customs organization. Senator Cleland. May I just interrupt? Mr. Chairman, we have run across this with the CDC---- Chairman Lieberman. That is right. Senator Cleland [continuing]. A couple of times--and we just had the Postmaster General here--we have demonstrated in hearings that the FBI, once it gets hold of the anthrax letters, whether it is Senator Daschle's letter or Senator Leahy, does not send it to the CDC. It sends it to Fort Detrick, Maryland, who does it, and Fort Detrick, Maryland, looks upon that as the FBI as a customer, so they are not going to tell anybody, and the FBI does not tell anybody. Therefore, the CDC winds up in the dark and ultimately gives bad advice to the Postmaster General about a Postal Service entity one step removed from Daschle's office while two people are dying at Brentwood. The point is that it is not healthy for the right hand to not know what the left hand is doing. Again, coordination, cooperation, communication. So I just want to get your take on whether the Coast Guard, since the President said we are at war and the Coast Guard in wartime is under the Navy, ought to be under the Navy, but that is not your concern. Your concern is working with the other entities, right? So let me move on to Ms. DeBusk. You mentioned the possibility of the fact that there is no central authority, controlling authority, in terms of port security in America. You mentioned the creation maybe of a Department of Homeland Security. As a matter of fact, that is exactly what the Hart- Rudman Commission recommended over a year ago, that an entity, an agency with budgetary authority and troops, people, infantry to command, be instilled in our Federal Government to coordinate this kind of thing. Instead, we have an Office of Homeland Security with 18 people. Tom Ridge is a good guy, a fellow Vietnam veteran, but I doubt that 18 people are going to go up against 60 different agencies. So we still are left with the challenge of coordination, cooperation, and communication. Any thoughts about what this Committee ought to do in furthering our strong interest in strengthening an Office of Homeland Security or creating a Department of Homeland Security? Ms. DeBusk. Yes, and I think you have already answered the question and that is resources. The only way you really get good coordination is through resources to back it up in addition to jawboning and saying, let us all talk together. The resources would come in for basic things like computer systems that talk to each other. There is a lot of good will in the agencies. They like to cooperate. For instance, my former office got along excellently with the Customs Service, but we did not have the same database for going back and forth on the computer system with the information. And so I think in terms of getting coordination and the concept of pushing back the border, it only works if there are resources that would be committed to doing things like letting the agencies talk to each other over the computer system. Senator Cleland. Thank you very much. My time is up. Just to highlight, I mentioned this in the Commerce Committee, I will mention it here, that Georgia Tech in Atlanta has developed a little chip, a little glass sensor to pick up biological and chemical agents, which might be helpful in this war against terrorism and detecting early on what is in some of these containers. Thank you very much, Mr. Chairman. Chairman Lieberman. Thank you, Senator Cleland. That is very interesting. You know, you are right. Something is going on here, and probably my colleagues on the Committee have had the same experience I have, which is that a lot of complaints from local officials about difficulty in working with the Federal intelligence agencies and the FBI. I wonder if the Committee might not have a role to play in calling in the agencies, either in a public or private session, and talk about this problem. The examples that you just gave, Dr. Flynn, and I think it was Rear Admiral Larrabee gave another example earlier on, they are just not acceptable, because you are now--ports are now the front lines, so we have got to arm you with the information to protect us. Senator Bennett. OPENING STATEMENT OF SENATOR BENNETT Senator Bennett. Thank you very much, Mr. Chairman, and for your pursuing this continued issue. In the spirit of full disclosure, I am going to be very shameless in pushing my bill. Chairman Lieberman. It would not be the first time that has happened around Congress. [Laughter.] I was not speaking of you, but it has been done in Congress before. Senator Bennett. Right. In July, the Defense Threat Reduction Agency, DTRA, gave me a top secret briefing on air vulnerability analysis of the Port of Baltimore, and, of course, the members of the panel might not know, but my hobby horse, my focus here is on critical infrastructure protection generally, but the computer portion of it more specifically. Some people say to me, well, why are you focused on computers because homeland defense, homeland security involves so much more than computers. I will give you an example that I use in speeches. With the ability that currently exists for hackers and others who want to get into computers, this is not a theoretical. This has happened. Someone got into the computer system at a dam and was in a position to control whether or not the floodgates would be opened or closed. Downstream from the dam was a military installation which would have been flooded and destroyed had the hacker or activist or whoever it was decided to open the floodgates. So when you think of homeland security and you want to protect the military installation, or fill in the blank, put in whatever you want, downstream, you want to protect the facility downstream, it was the vulnerability of the computer that made that possible. And as I sit here and listen to all of you describe your frustrations and your problems, I realize that we cannot stovepipe port security away from the issue of computer security. You talk about anomalies, Commander Flynn and Mr. Quartel, you wanted to look for an anomaly in the situation, suppose I was the individual loading that dirty bomb in a place where it would not show up, should not show up, and that would be an anomaly that would immediately appear on a computer screen somewhere. And prior to learning that, I break into the computer system and change the data so that the data that comes says this is not an anomaly. This really is woolen goods or cotton goods or something coming from an agricultural country, and yes, it has an unstable political background, but these are T-shirts that we do not need to worry about because I have changed the computers to have the information that comes to you say it is T-shirts. And when we talk about the theme that Senator Cleland talked about and Senator Collins talked about of not talking to each other and not getting the proper analysis, we come back to the fact that I have heard several of you say a very large portion of the ports are under private control, and unless we pass a law that requires private people to give us all of the information as to what is happening in terms of the threat on their computers, which law does not exist now, again, shamelessly, we need to pass my bill which says they can voluntarily share that information with a common analysis center in the government without worrying about a FOIA request being filed by Osama bin Laden saying, I want to know what the private sector is telling the government about my attempt to break into their computers. So, as I say, shamelessly, I am laying this out. Now, I would like your responses to that and your comments about that and see if I have misread some of your testimony about vulnerabilities here. Mr. Quartel. I actually have not read your bill, but I like what you are saying. In the specific example--by the way, I have also a port story. I was at the Port of Los Angeles Tuesday afternoon and they had a similar story to this one about information sharing. There are reasons for not information sharing, which we know, firewalling various kinds of data. But there are also ways to share data by tapping databases electronically without violating all of these other provisions, which I think is what you are talking about. No terrorist is going to tell you he has got 20 tons of nitrate kinds of fertilizers and a $80 GPS and a $3 blasting cap that he is going to load through there. There is a hierarchy of responses. Data by itself will not tell you anything. Customs today has a program they call BASC, for example, which they use in the drug process, where they work with trusted parties, people who have procedures in place where they seal and load and they know the people there, they have security as to who the people are, so they can actually certificate across the process and that helps them speed it. So while you use data to look for anomalies and suspect situations, you also do what Steve Flynn was saying, which is you also can channel big chunks of that out. If it is a Cisco, for example, they may have a procedure in place that you cannot load a nuclear weapon or a dirty bomb in any of their systems. So maybe those cargoes go through faster. There may be small players in the business who can also get through that process. In fact, most of our cargoes that come from Asia have a lot of small players, so we actually have to deal with the real world as it really is. If I have one message to the Committee beyond that I have already said, it is that what we should do is tap into the way business works, and one of the things as government we do not do very well, particularly in transportation, is ever ask the shipper, meaning the guy who owns the cargo, what they think. We go to the carriers, we go to the labor unions, we go to this, we go to that, but we do not go to the shipper, and these are the guys who have the holistic view of the process. We have talked about tracking. Most shippers do not care where a cargo is every minute. It is not useful data. What is useful is to know it arrived at the port or it is going to be 3 days late at the port or it missed the train, because then they use it for planning. So if we talk about tracking, for example, it should align with what a customer wants to do with it. It should align with his commercial interests. And if we do not align the interests, you are going to find things like port shopping. Senator Hollings said, well, let us concentrate on the top 25 ports. You should, but on September 11, the guys came through a minor airport, an out-of-the-way crossing at the border, and then fed into a major funnel and you will have exactly the same kind of thing in shipping unless you align your interests with the way the commercial sector operates and data is a key part of it. Ms. DeBusk. Let me just add something on that from one of the concerns of the private sector, because the security of the data is incredibly important for getting the cooperation of the private sector. Senator Bennett. That is right. Ms. DeBusk. One of the big concerns is the very mundane concern of theft. If you know exactly what is coming in, exactly where it is, you can find it exactly with this high- tech device. It turns out that it is great new color TVs, which, unfortunately, can disappear before reaching its final destination. So a major private sector concern in trying to do the public-private sector cooperation on data would have to be addressed through the security of the data. Senator Bennett. That is exactly the point of my bill. It says you can share this information and it will stay secure within the government. Ms. DeBusk. And also secure within the government, and then you have to think about a limited number of people within the government that would have access encrypted passwords, the whole thing. Senator Bennett. Sure. Mr. Flynn. And absolutely, Senator, I would support this, as well. You find most sophisticated ports are actually run virtually by computer, the gantry cranes and everything else. You take down the computer system, you shut down that port, as well. So the cyber attack could do it as much as a physical bomb kind of thing with huge disruption effects, so there is that area. The other is, ultimately, of course, we must be talking about sharing data overseas. We are dealing with multinationals, not just private sector domestic, but multinationals, and we are also, as with Canada, in an effort to enhance our data shopping there, if there is not comfort about the security of the data, that is going to make that much more problematic. I think taking that wartime analogy, though, that we are in, as the President said, about trying to apply it in this area, I think it would behoove us to think about--I get from a number of private sector people up in New York who have really been, obviously, mobilized by the tragic events of September 11 and are waiting for the call, basically. These are the people who understand how to do data management, understand how to do data mining. We have huge companies out there who solved how to bring legacy systems together and make mainframes go and they are just sitting idle. I think some calling in of a red team, almost, to solve this information issue from private sector folks, anoint them, give them 9 months' charter, give them all the resources they need to fix this problem. Everything we are talking about in the government is 5- or 7-year, multi-year programs in one sector that we are not going to finance anyways until whenever. That is unacceptable. I do not think we are going to fix it through our traditional public sector needs. If it is a wartime, let us treat it as such and fix this by getting the smart people into this. Senator Bennett. That is a good summary, because in World War II, a lot of information from the private sector was considered secret, classified, shared with the government with the understanding that it would not be available, and in the war we are talking about here, with 90 percent of the critical infrastructure in private hands, that means an intelligence officer trying to see what is happening on the battlefield has 90 percent of the battlefield blacked out to him if the private sector does not share the data. But as you indicate, Ms. DeBusk, the private sector will not share the data if they think it is going to be made public. Thank you, Mr. Chairman. Chairman Lieberman. Thanks, Senator Bennett. Your questioning may have been shameless, but it was quite productive, I thought, and very interesting. Senator Thompson. OPENING STATEMENT OF SENATOR THOMPSON Senator Thompson. Thank you, Mr. Chairman. Sorry for being late. I was a witness this morning, an uncustomary role though it may be, at a U.S.-China Commission hearing. I wanted to get over here as quickly as I could. Chairman Lieberman. We are glad you are here. Senator Thompson. It occurs to me in listening to this that one of the things that is happening here is going to cause us to really look at the issue of federalism in a different way. One of the things this Committee deals with, of course, the relationship between the various levels of government. I listened to you and once again we see various Federal agencies are involved to one extent or another, but so is State, so is local. And, law enforcement is on one side, while prevention is on the other. The real question, I think, that we are grappling with is who ought to be doing what? What should we be doing and who should be doing it? If you think about it, that is really the main question of the government and it is not an easy one. I think that what we are seeing now after September 11 is that we are going to be doing some reassessing and we are probably going to be bringing the Federal Government into some areas, at least on the prevention side, that maybe they have not been before. We need your help on that. Hopefully, we will learn to stop doing some things at the Federal level that we should not be doing and let those responsibilities go to the State and local governments. We should consider a realignment, a reprioritization, as it were, to look at federalism anew and start concentrating and spending more of our resources on the things that the Federal Government can do and must do best. We should look for standardization. I think in areas of national security, we have to really look at that. The other thing that is kind of related that concerns me is what is the economic impact of all of this going to be and what are we going to be willing to tolerate. We can devise all these systems, but as we have seen at the bridge in Detroit, a little bit of slowdown, a little bit of disruption and things start backing up. What is that going to do, what is our toleration level going to be, and to what extent are we going to have to start looking at things differently? We have been called upon to sacrifice in this country, but so far, about the only sacrifice we have been called upon to do is shop at the mall, and buy more. What if we have to get used to doing more, not just at our airports, but here? My testimony today before the China Commission had to do with the extent to which we should be allowing foreign companies that are engaged in proliferation activities, that our government determines that are engaged in proliferation activities, to raise billions of dollars in our capital markets, no questions asked, without disclosing to the investors that they are engaged in proliferation activities. It seems like a no-brainer to me, but that is what is happening, billions and billions of dollars by companies, including Chinese companies that our country knows are engaged in proliferation activities, making the world more dangerous, which we say we need a national missile defense system to protect us against. But they can come and raise billions of dollars and hand it over to the military, as far as we know. As I am speaking, half of Wall Street is downstairs explaining why I am wrong because the measures I recommended will not do any good, because they will have an economic impact, it is going to cost us business. How much are we going to be willing to do? Has anybody made an assessment of the economic impact of the preventive measures that are being put on the table? Rear Admiral Larrabee. In the Port of New York and New Jersey, we have estimated that it will cost us about $150 million in the next couple of years to implement just some of the things that the Hollings bill has suggested. As we begin to talk about other ways to prevent terrorism, I think that the cost goes up. You are absolutely right. My job every day is to find a way to balance a system that works very well because of its speed and its economy with the need to slow it down and be more deliberate in terms of making sure that we know what comes across the border, and that is a very, very difficult challenge, because the system that we operate today is what drives the engine of our economy, and the minute that that system slows down and we cannot bring oil in on the basis that we bring it in now, the system comes to a grinding halt. Mr. Quartel. If I can add to that, too---- Senator Thompson. Liquid nitro gas, which is very much a concern. Mr. Quartel. Maybe I can take it from the micro to the macro. Every trip I now take on an airplane, and I used to travel a lot, adds 4 hours. That is half a day. So I travel 80 percent less. So I am certainly not helping the aviation system, nor, frankly, are a lot of the rules, the way they are being implemented across the system. In logistics, the cost of transporting and moving goods and logistics and storing and maintaining them as inventories in the United States 20 years ago was 25 percent of GDP. Today, it is 15 percent. We have saved $1 trillion annually in terms of the kinds of things we have built into the system by moving cargo swiftly, reducing inventories, reducing the cost---- Senator Thompson. Just in time? Mr. Quartel. Just in time. Although even ``just in time'' is only in a small percentage of the economy, these things affect everybody, from the biggest to the smallest. Senator Thompson. Some people are saying we are going from ``just in time'' to ``just in case'' now. Mr. Quartel. Well, there is some issue there, but let me give you a number there. If you only increase inventories by 5 percent, you add $75 billion in costs to the American economy. That is 75,000 jobs you have just lost. Mr. Flynn. I might add here, though, I think the key, again, about this prescription, if we are willing to take this in a comprehensive networked approach, Rear Admiral Naccara, the First District Commander up in Boston, has a very creative and ultimately successful model for how to deal with the liquified natural gas. What he is doing is he is sending inspectors to Trinidad where it is loaded. They are inspecting the facility, which actually is a pretty good, secure facility, to board the vessel when it leaves the harbor, inspect it before it goes to make sure there are no bad people on it, sail the harbor and get off at the pilot buoy. If it was hijacked in between, there would obviously be some communication of that. The advantage is when it gets to Boston, we are actually able to speed it in. I mean, you are going to still do some controls, but you do not want it harboring out there for a few days having a big advertisement, LNG is waiting here as a target. You actually want to get it in relatively quickly. So they will be met with an escort, but it will be moving very quickly. The company loves it because it now has expedited treatment in. We are more secure. The same modeling applies, I think, even as we think about cargo. If we are talking about building this in as a standard up front, the market will adapt, I think, to it. I would propose that, for instance, that perhaps Governor Ridge--well, the President would issue a homeland security Presidential directive to the Secretary of Transportation to meet with his counterparts in the six or seven major megaports to essentially say, we are not going to allow mystery boxes anymore into our ports because they are a critical infrastructure and here are the standards. And as soon as that is harmonized, the cost issue starts to get adjusted, just as it has with oil tankers. When we had this real problem many years ago, there were a lot of unsafe tankers, people were saying we could not impose standards. The oil would not come in anymore. Well, we have rationalized and adjusted. The real cost, though, for me, the one that most keeps me awake almost every night, knowing what I know about the system, is the cost of turning the spigot off. Ninety-five percent of general cargo coming into the United States comes in a container. This makes the anthrax in the mail service pale by comparison. We went to E-mail and faxes and UPS and FedEx. When you compromise this system and you turn off the switch, there is no alternative. Cargo stops coming in. That is the cost matrix I think we need to balance against, the dollars that we are talking about here and putting in a smart approach. Senator Thompson. Ms. DeBusk. Ms. DeBusk. Yes. One of the important things that is in the Hollings legislation, and that was recommended by the Seaports Commission, has to do with threat assessment. Because it is simply not possible to do everything that we can or should do at every single one of the 361 ports. So an important way to weed out spending priorities would be to conduct threat assessments and figure out where the greatest vulnerabilities are and tackle those first. Rear Admiral Larrabee. And then with better information, you can adjust your reaction with the idea that you cannot do everything, and---- Senator Thompson. It seems to me like a threat assessment, certainly, everything has got to be prioritized and all that, but it looks to me like once we do that, it has got to be the most closely held information in all of our government. Ms. DeBusk. I agree. Senator Thompson. If the bad guys have that information, then it is all for naught. Ms. DeBusk. I agree completely, and even some of the information that was put out by the Seaports Commission is no longer available. Mr. Flynn. On the reverse, I just might say, Senator, is the schemes that we talked about, the criminals are there. They know--we are not talking about a hypothetical--about containers being used. They have been used for the last 15 years to smuggle narcotics into this country, as a matter of routine, almost. So bad guys know the vulnerabilities of this system. Mr. Quartel. And I would suggest to that, every one of us can tell you how to get it in, and if we can, someone else can, as well. Senator Thompson. Knowing what we are watching and what we are not watching is what I am talking about. Mr. Flynn. Oh, yes, sir. Senator Thompson. Thank you, Mr. Chairman. Chairman Lieberman. Thanks, Senator Thompson. Thanks to the four of you. We have got to move on to the next panel, and we really did not go into some of the very big ideas that you gave us for reform, such as pushing the border back and how that would work, how we station our personnel there or do we, and does that require international treaties and agreements. And then, although we will get into both of these matters in the next panel, too, I hope, the use of technologies that are available now to create new ways to track containers without slowing them up so that there is no adverse economic effect. Perhaps either with the Committee or our staffs, we could ask you to give us some more time to better develop those ideas, because it may be that this Committee can take a leadership role, hopefully after Senator Hollings' bill is passed, which I hope will happen soon, to implement some of those ideas. But in the meantime, I thank you very much. It has been excellent testimony. Chairman Lieberman. We will call our third panel, Argent Acosta, Customs Inspector, Port of New Orleans, and President of the NTEU Chapter 168; Deputy Chief Charles Cook of the Memphis Police Department; W. Gordon Fink, President of Emerging Technology Markets; and Michael Laden, President of Target Customs Brokers, Inc. Thank you all for being here. Chief Cook, we are going to call on you first. You come from a great city. Mr. Cook. Thank you, sir. Chairman Lieberman. You even have some great Senators representing your State here in Washington. TESTIMONY OF DEPUTY CHIEF CHARLES C. COOK,\1\ MEMPHIS POLICE DEPARTMENT Mr. Cook. Thank you very much, Mr. Lieberman. I would like to say good morning to the Members of the U.S. Senate, witnesses, and others present. I want to give special thanks to Senator Fred Thompson and, in particular, his staff, Hannah Sistare, Jason Roehl, and Morgan Munchik, for inviting me to speak here today on behalf of the people of Memphis. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Cook appears in the Appendix on page 120. --------------------------------------------------------------------------- I am here today to talk about the City of Memphis, how we have responded to the events of September 11, and the needs of Memphis in the area of homeland security. I am sure our situation is much like those of other cities our size. Prior to September 11, the Memphis Police Department, the local FBI, the Memphis and Shelby County Emergency Management Agency, the Memphis and Shelby County Fire Departments, the City of Bartlett, the City of Germantown Police and Fire Departments began training with incident command tabletop exercises. Our focus was on natural disasters, the threat of terrorist attacks, school shootings, and plane crashes. This multi-agency training developed a team concept in responding to large-scale, long-duration events. Our departments began seeking further training for various contingencies. In all the exercises, role players simulated their responses, and as a result of the critiques and follow- ups, they determined that additional training, equipment, and manpower resources were needed. Because of extreme delays on the Memphis to Arkansas bridges across the Mississippi River at I-55 and I-40 caused by relatively simple accidents, a multi-agency bridge mitigation team was formed in the year 2000. Members of this group came from the police departments of Memphis and West Memphis, Arkansas; the sheriff departments from Shelby County, Tennessee, and Crittenden County, Arkansas; the Tennessee Highway Patrol and the Arkansas State Police; the Railroad Police; the Tennessee and Mississippi Departments of Transportation. Various casualties, including marine accidents, terrorist attacks, and any subject threatening bridge security became topics of discussion. Decisions regarding multi-agency jurisdiction and removing hazards from the roadway were made and the agencies took joint responsibility for patrolling the bridges and they continue to do so. Most police, fire, and emergency management agencies during the first few hours of September 11 reacted by encircling the government buildings in the downtown area. We deployed our resources to include other targets of opportunity, including bridges, water supplies, power utilities, and similar government-related services. We received numerous phone calls from businesses, manufacturers and trucking firms, refineries and other facilities. Each caller was interested in information on what to expect in the way of local terrorist attacks. Their questions were addressed through the media in a press conference with public officials, including the Memphis Mayor, the Shelby County Mayor, the Police Director, the Shelby County Sheriff's Chief Deputy, the Fire Director, and other emergency services personnel. These officials made an evaluation of the immediate threat to the city based on information from the FBI and national and local television news. This resulted in an agreement that our response could be reduced at that time. Jointly, in an organized setting, this team of city officials released information to the public. It was timely, informative, and reassuring. We have continued to maintain high levels of alertness, giving special attention to large sporting events, concerts, and the Beale Street entertainment district. We have experienced a blow to our budget as a result of September 11 and our anthrax responses. Sustained actions resulting from hoaxes, threats, and actual attacks are devastating to local budgets, as you know, draining dollars by eating overtime. There is little that can be held in the hand following unbudgeted responses. Since the events and continuous warning of future threats, many cities are looking at budget shortfalls. We have still maintained high levels of awareness and are establishing communications between our precincts, manufacturers, and redistribution. Following the New York attack, we have experienced the uncertainty and fear of bio-terror. There have been several warnings of additional attacks. As we further assess our ability to deal with attacks of this type, it is necessary to evaluate what is needed in order to defend ourselves against attack, to respond to and reduce the damage and loss of life, and to fully recover. In reviewing the needs of the city, I must mention the Port of Memphis, an integral part of the Memphis economy. Memphis is known as America's distribution center. I think this notoriety comes from its association with Federal Express, the United Parcel Service, and other air carriers. However, the marine port facilities of the Memphis metropolitan area is one of only three cities served by five class one railroad carriers serving 48 contiguous States, two barge fleeting services, and a multitude of barge and truck transport services. International shipments come through the Port of New Orleans and are filtered to the other States through Memphis, the world's largest cargo airport hub. The Port of Memphis is the fourth busiest inland port in the country. The port facility has immediate access to Interstate 40 and Interstate 55 and is located less than 15 minutes from the Memphis International Airport. The Port of Memphis also provides a unique industrial area for the convergence of transportation services located near the Memphis downtown district. This transportation hub has been of interest to organized crime due to the large quantity of manufactured goods. The Memphis Police, the Shelby County Sheriff's Office, the local FBI, the U.S. Customs Service, and the National Insurance Crime Bureau was organized through a memorandum of understanding, updated yearly, into the Tennessee, Arkansas, Mississippi Auto Cargo Theft Task Force. This is a multi-agency investigative law enforcement unit targeting organized vehicle theft, including heavy equipment and farm and construction machinery, and associated criminal activity and thefts from interstate cargo shipments. They are involved in activities in and around both marine ports and the airport. These are the reasons Memphis is considered to be a potential terrorist threat. The following are suggested measures which should be considered in the interest of preventing terrorist attacks, attacks which would severely interrupt interstate commerce for years if successful, seriously crippling the Nation. Use a multi-agency approach to the investigation of suspected terrorists and develop the availability of an electronic clearing house for all information gathered nationally and internationally on suspected terrorists. Assign fully-armed U.S. Coast Guard personnel to 24-hour operations, providing visible patrols on the Mississippi River, Wolf River, McKellar Lake, Tennessee Chute, and the new Frank Pidgeon Industrial Park. Support a national or international truck driver licensing program for drivers entering and exiting the U.S. from Canada and Mexico and for crossing major infrastructures, bridges, and tunnels. Also, support technology capable of identifying drivers and driver history by fingerprint, photos, and newer iris scan technology for officers to use in the field. Support smart card technology for trucks and loads, capable of immediately identifying driver, cargo, origination point, destinations, and route plans. This would also do well for marine vessels. Organize a U.S. Coast Guard inspection boarding team to meet and board vessels above and below the Mississippi River bridges to identify operators and crew and to monitor approaches to sensitive infrastructure, such as bridges, industrial complexes, and production facilities with river access. Assign U.S. Army or Army Reserve troops to provide 24-hour security and surveillance to the more critical targets, where attacks would cause severe repercussions for America. Provide security gates and barricades limiting access to Presidents Island, refineries, and chemical plants from vehicles without proper identification and authorization. Establish privately-owned police agencies, like the Railroad Police and Federal Express Security Police, for the protection of businesses which produce or manage critical materials. Also, establish a Homeland Security Block Grant to meet such needs as police and fire overtime, training, communication and rescue equipment, and for security measures to protect airports, waterways, utilities, public transit, and other public infrastructures. Thank you once again for inviting me here to testify today. I will be happy to work with the Committee in the future in any way and I will be glad to answer any questions you may have. Chairman Lieberman. Thanks, Chief Cook. That was excellent testimony and I appreciate the specificity of the recommendations. We are going to hold a hearing in the Committee, I believe at the end of next week, particularly having local officials come in from around the country to talk about some ideas, and the idea of federalism Senator Thompson talked about earlier. But your proposals here really set the table for that and I appreciate it. Mr. Cook. Thank you, sir. Chairman Lieberman. Mr. Acosta, thanks for being here. You bring firsthand experience as a longtime Customs inspector and we appreciate your willingness to be here and look forward to your testimony. TESTIMONY OF ARGENT ACOSTA,\1\ SENIOR CUSTOMS INSPECTOR, PORT OF NEW ORLEANS AND PRESIDENT, NATIONAL TREASURY EMPLOYEES UNION (NTEU) CHAPTER 168 Mr. Acosta. Thank you. Chairman Lieberman, Members of the Committee, thank you for inviting me here today to talk about port security. My name is Argent Acosta and I am a Senior Customs Inspector at the Port of New Orleans. I am also the President of Chapter 168 of the National Treasury Employees Union. My chapter actually encompasses five States, Louisiana, Mississippi, Tennessee, Arkansas, and Alabama. There are 19 ports in that region of Customs and the majority of those are seaports. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Acosta appears in the Appendix on page 127. --------------------------------------------------------------------------- I have been a Customs inspector for 30 years, the Chapter President for 26 years. My job is to ensure that illegal contraband, from knock-off designer jeans to cocaine to bombs, does not enter the country, and that legal goods that enter the country are assessed the correct duties. At seaports like the Port of New Orleans, the mainstay of the job is boarding incoming vessels, primarily cargo ships, to inspect for illegal goods. It can be a very dangerous and not very glamorous job, but there is a great deal of commitment by the front-line inspectors to do the best job possible, especially since the events of September 11. I would like to share with the Committee a recent example of that commitment. Inspector Thomas Murray, a 31-year veteran of the Customs Service, died tragically during an inspection of the hold of a vessel at the Port of Gramercy, Louisiana, on October 30 of this year. He was killed by toxic fumes, as was a member of the vessel's crew and the ship's captain, who followed him into the hold. A second Customs inspector was overcome by the fumes, but is recovering. Inspector Murray was aware that the vessel he was searching previously brought illegal drugs into the United States, so he was determined to be as thorough as possible. He did not know what dangers he would encounter when he went below the deck, but he went anyway. Tragically, his commitment to doing his job, despite potential danger, cost him his life. His fellow inspectors, especially those of us from Louisiana, will mourn his loss for a long time to come, but we will also remember his bravery and commitment every time we are faced with boarding a suspect vessel or searching a hold that we believe to be dangerous. Mr. Chairman, you asked in your letter of invitation that I address several questions regarding port security in my testimony. The first was, what is the current adequacy of port security? I am afraid that I must answer that question by saying I believe port security is currently not adequate and poses serious potential threats to those not only in the immediate area of the port, but to those who may come in contact with uninspected material that arrives through our ports and moves throughout the country in other modes of transportation. The Customs Service is currently only capable of inspecting about 2 percent of the 600,000 cargo containers that enter our seaports every day. From my own experience in New Orleans, despite the huge increases in trade since I started with Customs in 1970, the number of Customs inspectors at the Port of New Orleans has dropped from approximately 103 in 1970 to 29 this year. In addition, since September 11, Customs inspectors from around the country have been temporarily reassigned, primarily to Northern Border ports to cover the gaping holes in security there. Since I had previously volunteered for emergency response team duty, not realizing, of course, that September 11 was on the horizon, I was among the first to do a temporary tour of duty in Michigan, at Port Huron, one of the busiest truck crossings in the country. On September 14, I was given 4 hours to go home, pack, board a Customs flight at the Gulf Port Airport and go to Michigan, at which time I found out I would be in Port Huron. There was an incredible amount of pressure on inspectors at Port Huron since many ``just in time'' auto parts headed from Canada to the big three auto makers go through the port. I know my biggest personal concern was not to be the one who let a terrorist into the country, and some supervisors seemed to support that view, the view that extreme caution was necessary. However, others seemed to be sending the signal that we needed to move things through more quickly because of the need for the auto parts, so it is a very difficult balance and I can appreciate the problem that they are faced with. I will begin another temporary assignment at Port Huron in January. These temporary assignments, while currently necessary due to the extreme shortage of personnel, leave home ports, like my Port of New Orleans, able to inspect even fewer vessels than usual. Also, the more an inspector knows about a particular characteristic of his port, what the main goods that go through the port are, what are the main carriers, the destinations, etc., the more effective he or she can be. Obviously, 30-day temporary assignments at different ports does not lend itself to building this kind of experience. The use of the National Guard at some ports may be temporarily necessary due to the unprecedented threats we are facing, but in many cases, due to their lack of training and experience in the area of cargo and vessel inspection, the National Guard provides the appearance of security rather than any real increase in security. In any case, having military personnel perform these duties is obviously not a long-term solution. In addition to the severe limitations on the ability to do actual inspections, the technology that is supposed to help us do our jobs by providing us with advance information on oncoming vessels is outmoded, subject to brownouts, and often incompatible with the technology of those we need to communicate with. In addition, the advance information about what cargo may be aboard a vessel often is not sent early enough to do any good, and even more often is not accurate. Customs has determined through its own system that the accuracy rate of vessel cargo information is only 56 percent accurate, and let me give you a real current story to point out this aspect. In April of this year, a vessel arrived from the Port of Savannah. It was a foreign flag vessel with containers on board for discharge throughout the United States. Our enforcement team targeted the vessel for boarding. We targeted the vessel to look at the cargo that was available. It had empty containers and full containers. By doing that, we set certain containers aside that we wanted to pull off and take a look at and we wanted to verify all the rest of the containers, including the fact that the empty containers were empty, and you will see why we do this. We looked at the vessel and encountered one of the empty containers and upon opening it found out that it had cargo in it. We sealed the container and sent it to our cargo examination station. It sat for a day or two. When the two inspectors who worked the station went to open it up, their radiation detectors went off. They went off big time. One of the inspectors was our actual HAZMAT coordinator and trainer, so she backed everybody off, moved everybody away. We called in the experts. The container was very hot. It had drill testing, well testing equipment on it, but it was a serious threat to everybody around it. Fortunately, after testing and after a period of time, it appears as though the inspectors did not suffer any long-lasting effects. We hope they did not. But were it not for us targeting the vessel and looking at the containers, this empty container would have moved throughout the country to wherever it was going to go, and whoever else who might have walked up to it who did not have equipment to note that there was something wrong with it might easily have been harmed or killed. There are also problems with regard to the physical security of the port. Access to cargo and cruise vessels in many ports is not limited to those with prior approval to be in the area. Virtually anyone can gain access to the areas where vessels unload passengers and cargo. While there are secure areas in the Port of New Orleans, access to those areas is overseen by contract security personnel, who, like airport baggage screeners, receive low wages and little training. In fact, in the immediate aftermath of September 11, while Customs was and still is on its highest state of alert, I noted as I passed a secure area, the checkpoint going into the port area of the port, that there was no one in the security checkpoint. I sat for a few minutes thinking that maybe somebody had stepped into the bathroom, and it was the case. They had stepped away from the access. So access to the secure area was totally insecure. The second question you asked me to address is what problems confront the Customs Service and other Federal agencies charged with securing our ports. I believe that the biggest problem is a lack of personnel. As I mentioned earlier, trade has grown exponentially. The number of airports, seaports, and border crossings have increased and have seen huge increases in passenger traffic. Funding and personnel levels have not kept up. I believe that funding is also an issue with regard to the use of low-wage contract personnel to provide security services to the port. Another problem facing Customs in securing our ports is that I believe the balance between rigorous enforcement and facilitation of the trade can tip too much towards trade facilitation. In the aftermath of the September 11 attacks, there has been a renewed focus on our enforcement role and it has revealed great vulnerabilities. Yet we need to move trade and people throughout ports quickly, but we also need to make sure that we are doing it in a way that protects our security. In order to do both, we need more personnel. Other problems mentioned earlier include lack of adequate technology and timely and accurate manifest information. It also includes the sharing of information. The final issue you asked me to address was whether I had any recommendations to address the problems discussed above. The most important recommendation I would make is that Customs needs to be provided with adequate funding. In February 2000, the Customs Service commissioned a study, referred to as the Resource Allocation Model, that set optimum staffing levels for Customs at ports throughout the country. That report, which I would like to submit for the record, showed a need for 14,000 additional Customs positions. That was before September 11. I would hope that Congress would act to provide those additional positions. I believe that there is also a need to look at recruitment and retention issues for Customs inspectors. The compensation and benefits are less generous than many State and local law enforcement officers and there is a serious concern that experienced Customs inspectors will leave to go to other professions, including the air marshals, due to the more generous compensation package, particularly in the area of retirement. Customs inspectors should receive the 20-year retirement benefit available to other Federal law enforcement officers if Customs is to remain competitive. Customs also needs upgraded technology. Congress has provided initial funding for the Automated Commercial Environment, or ACE, system, which will make remote inspection of cargo more accurate. I must point out, however, that this kind of technology can never take the place of physical inspection. There is also a need to address the physical security issues at our ports by setting up secure areas for incoming cargo and personnel and by ensuring that port security personnel are well trained. I would add just one more thing. Customs recently has entered into a program which has taken away the option of boarding vessels midstream for Customs. This really has serious consequences, because, in effect, it leaves Customs inspectors such as myself and my counterparts blind as to what is in a vessel sitting in the river. Many vessels arrive in the Port of New Orleans. They go to anchor. They actually load or discharge their cargo all while at anchor, so we will never have an opportunity to board the vessel to fully look at the manifest, and we use--in the case of the radioactive container, there are many needs that we have to look at. We have to match all of these up just to try to come up with a picture that is reasonably accurate, and this is about accuracy. I have heard other panel members discuss the fact that Customs' area of expertise is the cargo. I believe that is true. I believe it is supposed to be. But I want to impress upon you that, by our own study, 56 percent accurate is not a very good rate. So we have to use whatever means that are available to us. That includes the vessel, the chief officer of the vessel, the information that the steamship line provides us, stevedore information. We get it from anyplace that we can, and then what we have to do is basically put all that information together and extrapolate what we think is the best possible picture of what is on the vessel. Thank you. I would be happy to answer any questions. Chairman Lieberman. Thanks very much to you, Mr. Acosta. We have got a lot of work to do. Mr. Acosta. Yes, sir. Chairman Lieberman. Mr. Laden, you bring a unique perspective and a very important one here as President of Target Customs Brokers, and that is the private sector, the customers. Thank you for being here. TESTIMONY OF MICHAEL D. LADEN,\1\ PRESIDENT, TARGET CUSTOMS BROKERS, INC. Mr. Laden. Thank you, Mr. Chairman. Mr. Chairman, Members of the Committee, good morning. My name is Michael Laden and I am the President of Target Customs Brokers, Inc., a wholly owned subsidiary of Target Corporation. I am also the current Chairman of the American Association of Exporters and Importers, and I am an appointee to the Treasury Advisory Committee on the Commercial Operations of the U.S. Customs Service, otherwise known as COAC. I would like to thank you for allowing me the opportunity to express my views under consideration today. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Laden appears in the Appendix on page 133. --------------------------------------------------------------------------- Without trying to become too prophetic or philosophical in my comments, the atrocities committed against us all on September 11 have forever distorted the way in which we as a people will live. It is reshaping and transforming the way we think about everything, security first, everything else second. ``Just in time'' for some companies has morphed into ``just in case,'' adjusting lead times and building safety stocks to offset potential security delays. Our industry, perhaps more than any other in America, will be deeply impacted just by the very nature of the business itself. As you have heard, the fabric of our industry is an intricate weave of very complex components and stakeholders. A single import shipment and the documents accompanying it pass through many hands and many different checkpoints as it travels to our country. Every one of those handoffs creates new vulnerabilities. Now, before I continue with my comments, please allow me to make one very important distinction. I am not holding myself out as a security expert. I do rely on others, including the U.S. Customs Service, for advice and assistance. What I can offer this Committee today, however, is more than 25 years of practical operations experience in international logistics and on Customs matters. Target's bottom line is this: We want no more nor any less than exactly what we have ordered when it comes to an international consignment. Simply put, we want no contraband of any kind--drugs, laundered money, weapons of mass destruction, bio- or chemical-hazards contaminating our shipments, and we certainly do not want to fathom the possibility of fouling our domestic supply chain. You do not need a very vivid imagination to know that the consequences of that would be catastrophic. In part, some of the answers to our security concerns lie in newer developing technologies, but we must also rely on good old-fashioned common sense and American ingenuity. All stakeholders in the supply chain must closely examine their processes end to end. I am pleased to report to you and the Committee Members today that the trade community and the U.S. Customs Service, under the direction of the Treasury Department, are working cooperatively together to improve many of the security features already in place. At the U.S. Customs Trade Symposium held last week in Washington, Customs Commissioner Bonner called upon the trade community to advance the partnership currently embracing Customs and the trade to a new plateau. Speaking on behalf of Target, COAC, and AAEI, we stand prepared to work side-by-side with Customs and other areas of the Federal Government in establishing practical, effective, and cost-efficient methods to ensure the safekeeping of our supply chain. In my written statement submitted to the Committee, I discussed the industry partnership programs currently in place at U.S. Customs and some of the programs that Target employs to assure compliance and security. For example, Target's approved for purchase and vendor compliance programs are well positioned to complement our active participation in the Business Anti- Smuggling Coalition, otherwise known as BASC. BASC is a voluntary industry-led, Customs-supported program that was established in 1995. It was a natural evolution of the Carrier Initiative Programs launched by Customs in the late 1980's and early 1990's. As Customs' air and sea interdiction efforts successfully closed off the smuggling corridors, the drug cartels increasingly looked for new and more innovative methods of moving their illicit products to market. As a result, they began targeting ordinary, law-abiding, legitimate commercial cargo and the BASC program was the end result of the trade community coming together and telling the world that we do not want contraband in our shipments. All of these programs are vigorously enforced and engaged at Target and we will be coordinating our deterrence and detection efforts throughout the company. As we speak, these programs are being strengthened and retrofitted to discourage supply chain incursions. And so now that we may begin a lively and active dialogue on these vital matters, I relinquish the rest of my time to the Committee for questions. Mr. Chairman, thank you for allowing me to appear before you today. Chairman Lieberman. Thanks very much, Mr. Laden, a very interesting piece of the picture. That is what one of the witnesses on the first panel said. Sometimes when folks go, and unfortunately, he mentioned another store chain in Wal-Mart, but when they go into Target, they just think about the inventory coming out of the back room, but obviously a lot of it comes from all around the world and it puts you--I am fascinated that this company, Target Customs Brokers, exists, but I obviously understand why. So thanks for your testimony. Mr. Laden. Sure. Chairman Lieberman. Gordon Fink is President of Emerging Technology Markets and is well positioned to testify about the range of technologies that can be used either by the government or the private sector to improve security at our ports. Thanks so much for being here. TESTIMONY OF W. GORDON FINK,\1\ PRESIDENT, EMERGING TECHNOLOGY MARKETS Mr. Fink. Thank you very much, Mr. Lieberman. I appreciate the opportunity to summarize my statement, which I ask be included in the record. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Fink appears in the Appendix on page 138. --------------------------------------------------------------------------- Chairman Lieberman. We will do it, without objection. Mr. Fink. Other Members of the Committee, and I applaud your holistic approach to looking at government programs. I am going to give you some personal examples from my career in the government where I can cite technology that can help out. Technology is being used, and I will mention and highlight just a few areas. One, to improve the asset utilization of the industry, the truck tractors, the trailers, and the use of the chassis. I am going to give you some examples of that; to meet the demands of the shippers and the constant need to know where their shipment is so that they know when they can advertise-- when they can start moving product into their stores. But significantly, just recently announced by the FBI is the increase in cargo theft. This was announced by the FBI at an American Trucking Association meeting a couple months ago. It is the fastest growing crime in the United States, and they mentioned it is at $12 billion a year. A lot of that cargo theft crime goes unreported. One of the reasons is that the penalties are lax, there is a high priority or a high payment for some of the cargo value. Pentium chips are more than worth their weight in equivalent cocaine and they are not marked so it is easy to resell them. And low risk as far as the law enforcement--the risk of being caught and the penalties are not very good. This also raises the thrust of stealing one of the trucks or one of the cargo containers even after it has arrived in the United States and use it as a delivery mechanism, as a weapon of terror. I have some ideas I will share with you about the technology that can address that. The technology is used extensively by the truck tractors now. The long-haul trucking firms, such as Schneider, J.B. Hunt, etc., know where their tractors are, the status of the engine, the behavior of their drivers. They can remotely shut it down. But more recently, they have chosen to put in the same technology in their trailers, because that asset can be decoupled from the tractor. They need to know its status, its location, when the doors are open, when the doors are closed, and it is part of asset management as well as knowing where their cargo is. The chassis--some on the Committee may not know what I mean by chassis, is a frame with pins on the end of it that the container sits down on and it is the device that moves a lot of these containers out of the ports, either to railheads or to their destination. There are about 750,000 of those chassis in use right now. While Senator Collins has left--one of the things that I would like to address is the fact that electronic seals for containers is now being tested. There is a pilot program in the Northwest part of the United States where cargo entering Seattle has an electronic seal affixed to it. It is for Customs in-bond shipments that go across the border at Blaine and into Canada. The technology is starting to emerge and most of the technology is now available. I am happy to see that it is available from several different vendors so that you can start to get some competition and help make the business case in the decision to adopt the technology. I have chosen to spend a lot of my time working with the Maritime Administration in a program they call the Cargo Handling Cooperative Program, which is described in my statement. It is a program to look for technology and make it available to the members of the industry--the carriers, the shippers, so that they can help understand what the technology is, make sure that they know what its maturity is, and then also help them make the business case for it. Some of the technology that is very relevant is non- intrusive inspection, the so-called gamma ray inspection, which was started at the land border crossings between Mexico and the United States by U.S. Customs Service to inspect the trucks and some containers--mostly trucks and vehicles with a high degree of success. It does fit very well--with reference to some of the comments by previous panel members--to be deployed overseas at the point of embarkation. So in addition to getting a manifest of that particular container, you can get the electronic image of it. It can be rescanned when it comes into the United States. The scanners scan so when it is in motion, not at 60 miles an hour, but roughly up to 10 miles an hour, and it is also used on railroad trains the same way. They can rescan it to see if there has been any change. The scanning device can see if there is anything that is inconsistent with the manifest. These technologies are mature and ready for application. I would just like to conclude by making a couple of comments. My bio mentions that I helped set up, and run the El Paso Intelligence Center for DEA. The reason it was in El Paso was to put outside of the Washington area so that we could get Customs, Coast Guard, and INS agents, along with DEA agents, to work in harmony against the drug interdiction problem. It did work and it was very highly successful, including sharing that information with State and local authorities. There is a model that works in trying to get the different organizations to work and provide strategic intelligence--what may be coming in in what form, as well as tactical intelligence. Approximately 50 percent of the phone calls that were made by people in the field got some form of intelligence back. There was a high hit rate in the databases. I appeared before many committees of the Congress that did not want me to merge those databases together as is now being done in the counterterrorism area. When I was with the CIA, I helped set up the Counterterrorism Center with technology support. But at the time, there was a fear of merging those databases. So we had the individual agents go into their databases, pull out what they had, and made an assessment. So we had kind of a round robin assessment and provided the information back in the field. I also did have the pleasure, of working for Bob Ehinger, who headed the International Trade Data System activity under the Department of Treasury. One of the significant outcomes of that activity is to combine all of the information requirements of the 100-plus Federal agencies that were mentioned before into one common database so that those people that import goods into the United States only have one form to fill out. It makes the scanning, the review of that data, it was mentioned earlier, much easier to do. So I have come here as a technologist talking about the maturity of technology, but I must also say that the response has got to be balanced by some of the other techniques, such as looking at the documentation--where that container has been, where the vessel has been, the crew on the vessel--as a part of the whole operation. That concludes my summary. Chairman Lieberman. Thanks, Mr. Fink. That is very interesting. Maybe I will take off from your testimony and ask the other witnesses the extent to which we are seeing some of the technologies that Mr. Fink describes embraced or utilized by the private and the public sectors, the idea of--mostly in the trucking business, but the idea that you can not only follow where the truck is, but almost what the truck driver is doing and then what is being opened and closed and when, and also this very interesting X-ray technology, which I gather lets you look inside a container---- Mr. Fink. Yes, sir. Chairman Lieberman [continuing]. To see what is there without having to open it. What is the rate of acceptance of these? Maybe I will just go down, to the extent that you know, starting with you, Mr. Laden, in the private sector? Mr. Laden. The rate of acceptance is good. Some of the technology, though, is cost prohibitive still, as Mr. Fink suggested. There is an increase in availability of this kind of technology, but today, on seaborne--most of Target's business is marine. Chairman Lieberman. Right. Mr. Laden. On Target's business, we are not using transponders or GPS technology yet. We are using reusable seals. But we have found there is other technology or design flaws. The drug and contraband smugglers will just literally take the doors of the container off, defeating any seal that you have on, and replace the doors. We need as an industry to look at better design and what can be done. Chairman Lieberman. Mr. Acosta, are you seeing much of this new high-tech stuff coming into your work as a Customs inspector? Mr. Acosta. Yes. We utilize a gamma ray machine. Our problem is, I think we have the second prototype of the gamma ray machine, so we did real good in getting in there early to get a machine, but---- Chairman Lieberman. Yes. Mr. Acosta [continuing]. So we have some down time with it. They are looking at it right now and hopefully we can upgrade that. We could probably use more than one, and because we have so many ports that are involved in our area, we take it on the road on occasion. So we have an opportunity to travel, for example, to the Gulf ports in Mississippi. Chairman Lieberman. And the containers go through it relatively quickly? Mr. Acosta. Yes. It is funny because it is hard to-- people's paradigms. So you have a truck driver and you explain that you can drive through this at about five miles an hour. It is OK. And they will drive up to a certain point and they will stop, because their idea is, well, if they are taking a picture of the container, it is going to be blurry. It is difficult to change that paradigm, but yes, you can. Chairman Lieberman. Of course, that is a great advance, because then you do not have to open it up. And the reliability, you have found, is pretty good? Mr. Acosta. It is reasonably good. Our picture is very small for what we have, so it is a little more difficult. What is good for us, for example, as in the story that I told you before, we can set this up and we can run empty containers through so we do not have to pop a seal and open the door, because it will tell us for sure that a container is empty. It will tell us if there is something in the container. Mr. Fink. I might mention, Mr. Chairman, the Port of Miami has found a lot of stolen vehicles leaving their port in what were thought to be empty containers, through X-raying empties that are departing the United States. Chairman Lieberman. Yes. That is important. Mr. Acosta. We do the same thing. We have an inbound and an outbound team, and, of course, they are looking for armaments, they are looking for stolen vehicles, they are looking for currency. So we can use that gamma ray technology both on inbound cargo and outbound cargo. One thing I would say about containers, though, is we talk about containers and containers can simply be thought of as a box. It is no more or no less than a box that you can put things in, just like any other box. But we are talking a lot about what you might find that is put into the box, maybe something in the cargo that is put into the box or something that is thrown in along with the cargo. But along those lines, we have to remember that the box itself accounts for about half of the seizures that we make. So within the walls, in the floor, in the roofing, in the tubing that the container is constructed in, many times, that is where we find contraband hidden, and a lot can be done--there is a lot that can be hidden in the box itself without talking about the space where you store cargo. Chairman Lieberman. Thanks. Chief Cook, have you seen any of this high-tech stuff coming into use in the Port of Memphis? Mr. Cook. Our Auto Theft Cargo Task Force has and is more and more familiar with this type of equipment every day. But usually when we come into contact with these boxes, they are already empty. We have found contraband in quite a number of them while doing other investigations, but yes, we are becoming more familiar with it every day. Chairman Lieberman. Thanks to all of you very much. I am going to call on Senator Thompson because I notice we have a vote that has just started, so I want to give my two colleagues time to ask some questions. Senator Thompson. Thank you, Mr. Chairman. I want to follow up on the technology question. I guess most people would wonder, if we have developed this technology to this advanced stage, why are we not inspecting more? What are the limits of technology? I mean, just for the layperson to understand, can scanning technology with a high degree of accuracy make a determination with regard to potential weapons of mass destruction or other things of that nature, and to what extent is it a technological limitation and to what extent is it a cost limitation? Mr. Fink. I think it is---- Senator Thompson. Why are we not scanning more stuff and why do we not feel more secure if we have this capability? Mr. Fink. One of the things is the initial cost. These systems range up to $1 million apiece, and as you get more of them in operation, that cost will go down. Then there is the person who is looking at the image. We can do a lot to make that process move into pattern recognition into the computer to assist an operator. But there still are all deterrents, and while the payoff is high, it is not going to be 100 percent, and one of the things that we saw, of course, in the drug business and we now see in the theft business are organized criminal elements involvement. So they are very much aware and drilling out parts of the container and inserting some of their cargo in it, but you can still see some of those. I am encouraged because the technology is proven, and I think with quantity purchases it will be deployed. As you move inspection overseas, it raises another issue. Now you are asking the port of embarkation of that container to perform the imaging. But it is a global problem. Terrorism is a global problem. Maybe that will be part of what will help induce some of them to do it. One other thing I would just add. I do not know if Rear Admiral Larrabee is here, but in some of the U.S. ports, they have volunteered to put some of this scanning equipment in just to keep the flow of containers going. When Customs decides to pull something, it disrupts that flow. So they have said to me, I would invest in the gamma-ray equipment in a joint project with Customs in order to keep the cargo flowing. Some of the terminals do not have a lot of land to store the cargo on when Customs decides they want to conduct inspection, they disrupt the flow. So there are a number of business factors. Senator Thompson. Mr. Acosta, what would be your response to my question on why we are not inspecting more than 2 percent in some categories? Mr. Acosta. Somewhat the same. The systems are very costly, and so Customs has X amount of systems. We, of course, would-- ideally, if I could set it up in New Orleans, I would like to see a system up-river and one down-river--there are two separate areas that are sort of divided areas--and then another system that we could lend to some of the smaller ports, but we have one system. The second thing is that it requires personnel to run the system. So when you set up a gamma ray machine, you have to establish the perimeter. There is an element in there that can be hazardous to individuals, so we have to be able to make sure that we have the truck run through and to set up the flow of trucks. We have to have people inside working the machine, setting the machine up. We also have to have people available who, if necessary, will open and look in the containers immediately. Some containers we will target for further examination. Others, we are so interested in the image that we are seeing, we need to get into it right away. So that is upwards of 10 people, and I do not know if you remember, but when I told you that the personnel put in New Orleans today is 29 inspectors, that is a third of your workforce. It is very difficult. It is cost for the equipment and it is personnel. If you could give us more equipment and the personnel to operate it, we would do all of those things. Senator Thompson. Why did you stop instream, or were you told to stop instream? Mr. Acosta. They said it was a safety issue. I think that is bogus. I really think it is bogus. The second thing, and I did not mention it because I was conscious of the fact that I had a small period of time to deliver the statement, the second thing is that we have been questioned recently on the number of enforcement boardings that we have determined. I guess that is a budget issue and that is a problem because we do target vessels and we are conscious of--and I worked on the task force that gave us a boarding policy 2 years ago and we are not living up to that boarding policy. As a matter of fact, it just changed. So it bothers me that if we are true to what the policy said and we are doing vessel targeting based on all the information we had, and understand that sometimes it is difficult to get that information, that now, we have somebody that comes back and questions, well, you have too many enforcement boardings, and I do not understand that. Senator Thompson. Thank you for that. That is important. I do want to thank Chief Cook for being here. He is responsible for the investigation of all the crimes at the international port in Memphis. You have one of the better interagency coordination groups, I think, going. You pointed out the unique circumstances there that you have to deal with. It is not only the fourth largest inland port in the country, but the second largest inland port on the shallow draft portion of the Mississippi River and serves as a transportation hub and warehouse and distribution center, and perhaps no other port in the country shares the same characteristics as Memphis. I am wondering about a law or an approach by the Federal Government that is a one-size-fits-all. It seems to me that Memphis has some unique characteristics--inland port, heavier concentration of activity, and so forth. Do you see your situation as maybe needing some kind of different attention, than some other places? Mr. Cook. I think it is not recognized as the port that it is. Memphis has never, until the last few years, really recognized its own potential as a distribution center, but it is growing leaps and bounds by day. In fact, I mentioned the Frank Pidgeon Industrial Park, which is a new industrial park that is being developed on the Southwest corner, just South of what is now called President's Island, and it is going to be at least half as large as the industrial complex on President's Island. So much of the industry that I said is in Memphis, and those that come into Memphis, a large portion comes into Memphis, but it is distributed within 600 miles of Memphis. And because of the bridges, we estimated that about $2 billion worth of commerce crosses those bridges each day. We do not think that it gets enough attention as far as the types of visibility patrols. Now, we are doing things as far as our agencies that I mentioned, Tennessee and Arkansas agencies who both join in taking care of riding on the bridges and removing vehicles and so forth on the bridges. But as far as the actual, what I think should be 24-hour marine surveillance of the bridges from below, and also attention to the barges that are so large and so potentially dangerous as far as striking the bridges and just completely removing them from the river itself. I think that is a major concern, because one barge can actually take out both bridges, and especially from a vessel that is coming down-river. If that were to happen, it would really destroy commerce in the surrounding area. In fact, I believe it would actually kill it for at least 2 or 3 years it would take to rebuild the bridges. Senator Thompson. I think you are right. A lot of people do not understand the amount of traffic and the amount of activity going on there and that makes it a port that deserves much more attention. We appreciate what you are doing there. Mr. Cook. Thank you very much, sir. Senator Thompson. We also appreciate you taking a real leadership role in terms of the Southeast in your interagency work. Thank you, Mr. Chairman. Chairman Lieberman. Thank you, Senator Thompson. I thank the members of this panel as well as those on the first panel. I think the Committee has learned a lot as a result of the testimony today. I would like to think about, at the next hearing on this subject, calling the heads of the Federal Government agencies involved and ask some of the same questions of them that you have raised here. There is never enough time at these hearings, but there are a lot of questions unanswered, so I am going to leave the hearing record open for 2 weeks, and if it is all right--and even if it is not all right--we are going to submit some questions to you in writing to follow up and look forward to your answers. In the meantime, I thank you very much for your time and the great contribution you have made. I hope we can serve as advocates for what all of you want, which is a system that is both economically productive and efficient but is also secure, most important of all. The hearing is adjourned. [Whereupon, at 11:58 a.m., the Committee was adjourned.] A P P E N D I X ---------- [GRAPHIC] [TIFF OMITTED] T8045.001 [GRAPHIC] [TIFF OMITTED] T8045.002 [GRAPHIC] [TIFF OMITTED] T8045.003 [GRAPHIC] [TIFF OMITTED] T8045.004 [GRAPHIC] [TIFF OMITTED] T8045.005 [GRAPHIC] [TIFF OMITTED] T8045.006 [GRAPHIC] [TIFF OMITTED] T8045.007 [GRAPHIC] [TIFF OMITTED] T8045.008 [GRAPHIC] [TIFF OMITTED] T8045.009 [GRAPHIC] [TIFF OMITTED] T8045.010 [GRAPHIC] [TIFF OMITTED] T8045.011 [GRAPHIC] [TIFF OMITTED] T8045.012 [GRAPHIC] [TIFF OMITTED] T8045.013 [GRAPHIC] [TIFF OMITTED] T8045.014 [GRAPHIC] [TIFF OMITTED] T8045.015 [GRAPHIC] [TIFF OMITTED] T8045.016 [GRAPHIC] [TIFF OMITTED] T8045.017 [GRAPHIC] [TIFF OMITTED] T8045.018 [GRAPHIC] [TIFF OMITTED] T8045.019 [GRAPHIC] [TIFF OMITTED] T8045.020 [GRAPHIC] [TIFF OMITTED] T8045.021 [GRAPHIC] [TIFF OMITTED] T8045.022 [GRAPHIC] [TIFF OMITTED] T8045.023 [GRAPHIC] [TIFF OMITTED] T8045.024 [GRAPHIC] [TIFF OMITTED] T8045.025 [GRAPHIC] [TIFF OMITTED] T8045.026 [GRAPHIC] [TIFF OMITTED] T8045.027 [GRAPHIC] [TIFF OMITTED] T8045.028 [GRAPHIC] [TIFF OMITTED] T8045.029 [GRAPHIC] [TIFF OMITTED] T8045.030 [GRAPHIC] [TIFF OMITTED] T8045.031 [GRAPHIC] [TIFF OMITTED] T8045.032 [GRAPHIC] [TIFF OMITTED] T8045.033 [GRAPHIC] [TIFF OMITTED] T8045.034 [GRAPHIC] [TIFF OMITTED] T8045.035 [GRAPHIC] [TIFF OMITTED] T8045.036 [GRAPHIC] [TIFF OMITTED] T8045.037 [GRAPHIC] [TIFF OMITTED] T8045.038 [GRAPHIC] [TIFF OMITTED] T8045.039 [GRAPHIC] [TIFF OMITTED] T8045.040 [GRAPHIC] [TIFF OMITTED] T8045.041 [GRAPHIC] [TIFF OMITTED] T8045.042 [GRAPHIC] [TIFF OMITTED] T8045.043 [GRAPHIC] [TIFF OMITTED] T8045.044 [GRAPHIC] [TIFF OMITTED] T8045.045 [GRAPHIC] [TIFF OMITTED] T8045.046 [GRAPHIC] [TIFF OMITTED] T8045.047 [GRAPHIC] [TIFF OMITTED] T8045.048 [GRAPHIC] [TIFF OMITTED] T8045.049 [GRAPHIC] [TIFF OMITTED] T8045.050 [GRAPHIC] [TIFF OMITTED] T8045.051 [GRAPHIC] [TIFF OMITTED] T8045.052 [GRAPHIC] [TIFF OMITTED] T8045.053 [GRAPHIC] [TIFF OMITTED] T8045.054 [GRAPHIC] [TIFF OMITTED] T8045.055 [GRAPHIC] [TIFF OMITTED] T8045.056 [GRAPHIC] [TIFF OMITTED] T8045.057 [GRAPHIC] [TIFF OMITTED] T8045.058 [GRAPHIC] [TIFF OMITTED] T8045.059 [GRAPHIC] [TIFF OMITTED] T8045.060 [GRAPHIC] [TIFF OMITTED] T8045.061 [GRAPHIC] [TIFF OMITTED] T8045.062 [GRAPHIC] [TIFF OMITTED] T8045.063 [GRAPHIC] [TIFF OMITTED] T8045.064 [GRAPHIC] [TIFF OMITTED] T8045.065 [GRAPHIC] [TIFF OMITTED] T8045.066 [GRAPHIC] [TIFF OMITTED] T8045.067 [GRAPHIC] [TIFF OMITTED] T8045.068 [GRAPHIC] [TIFF OMITTED] T8045.069 [GRAPHIC] [TIFF OMITTED] T8045.070 [GRAPHIC] [TIFF OMITTED] T8045.071 [GRAPHIC] [TIFF OMITTED] T8045.072 [GRAPHIC] [TIFF OMITTED] T8045.073 [GRAPHIC] [TIFF OMITTED] T8045.074 [GRAPHIC] [TIFF OMITTED] T8045.075 [GRAPHIC] [TIFF OMITTED] T8045.076 [GRAPHIC] [TIFF OMITTED] T8045.077 [GRAPHIC] [TIFF OMITTED] T8045.078 [GRAPHIC] [TIFF OMITTED] T8045.079 [GRAPHIC] [TIFF OMITTED] T8045.080 [GRAPHIC] [TIFF OMITTED] T8045.081 [GRAPHIC] [TIFF OMITTED] T8045.082 [GRAPHIC] [TIFF OMITTED] T8045.083 [GRAPHIC] [TIFF OMITTED] T8045.084 [GRAPHIC] [TIFF OMITTED] T8045.085 [GRAPHIC] [TIFF OMITTED] T8045.086 [GRAPHIC] [TIFF OMITTED] T8045.087 [GRAPHIC] [TIFF OMITTED] T8045.088 [GRAPHIC] [TIFF OMITTED] T8045.089 [GRAPHIC] [TIFF OMITTED] T8045.090 [GRAPHIC] [TIFF OMITTED] T8045.091 [GRAPHIC] [TIFF OMITTED] T8045.092 [GRAPHIC] [TIFF OMITTED] T8045.093 [GRAPHIC] [TIFF OMITTED] T8045.094 [GRAPHIC] [TIFF OMITTED] T8045.095 [GRAPHIC] [TIFF OMITTED] T8045.096 [GRAPHIC] [TIFF OMITTED] T8045.097 [GRAPHIC] [TIFF OMITTED] T8045.098 [GRAPHIC] [TIFF OMITTED] T8045.099 [GRAPHIC] [TIFF OMITTED] T8045.100 [GRAPHIC] [TIFF OMITTED] T8045.101 [GRAPHIC] [TIFF OMITTED] T8045.102 [GRAPHIC] [TIFF OMITTED] T8045.103 [GRAPHIC] [TIFF OMITTED] T8045.104 [GRAPHIC] [TIFF OMITTED] T8045.105 [GRAPHIC] [TIFF OMITTED] T8045.106 [GRAPHIC] [TIFF OMITTED] T8045.107 [GRAPHIC] [TIFF OMITTED] T8045.108 [GRAPHIC] [TIFF OMITTED] T8045.109 [GRAPHIC] [TIFF OMITTED] T8045.110 [GRAPHIC] [TIFF OMITTED] T8045.111 [GRAPHIC] [TIFF OMITTED] T8045.112 [GRAPHIC] [TIFF OMITTED] T8045.113 [GRAPHIC] [TIFF OMITTED] T8045.114 [GRAPHIC] [TIFF OMITTED] T8045.115 [GRAPHIC] [TIFF OMITTED] T8045.116 [GRAPHIC] [TIFF OMITTED] T8045.117 [GRAPHIC] [TIFF OMITTED] T8045.118 [GRAPHIC] [TIFF OMITTED] T8045.119 [GRAPHIC] [TIFF OMITTED] T8045.120 [GRAPHIC] [TIFF OMITTED] T8045.121 [GRAPHIC] [TIFF OMITTED] T8045.122 [GRAPHIC] [TIFF OMITTED] T8045.123 [GRAPHIC] [TIFF OMITTED] T8045.124 [GRAPHIC] [TIFF OMITTED] T8045.125 [GRAPHIC] [TIFF OMITTED] T8045.126 [GRAPHIC] [TIFF OMITTED] T8045.127 [GRAPHIC] [TIFF OMITTED] T8045.128 [GRAPHIC] [TIFF OMITTED] T8045.129 [GRAPHIC] [TIFF OMITTED] T8045.130 [GRAPHIC] [TIFF OMITTED] T8045.131 [GRAPHIC] [TIFF OMITTED] T8045.132 [GRAPHIC] [TIFF OMITTED] T8045.133 [GRAPHIC] [TIFF OMITTED] T8045.134 [GRAPHIC] [TIFF OMITTED] T8045.135 [GRAPHIC] [TIFF OMITTED] T8045.136 [GRAPHIC] [TIFF OMITTED] T8045.137 [GRAPHIC] [TIFF OMITTED] T8045.138 [GRAPHIC] [TIFF OMITTED] T8045.139 [GRAPHIC] [TIFF OMITTED] T8045.140 [GRAPHIC] [TIFF OMITTED] T8045.141 [GRAPHIC] [TIFF OMITTED] T8045.142 [GRAPHIC] [TIFF OMITTED] T8045.143 [GRAPHIC] [TIFF OMITTED] T8045.144 [GRAPHIC] [TIFF OMITTED] T8045.145 [GRAPHIC] [TIFF OMITTED] T8045.146 [GRAPHIC] [TIFF OMITTED] T8045.147 [GRAPHIC] [TIFF OMITTED] T8045.148 [GRAPHIC] [TIFF OMITTED] T8045.149 [GRAPHIC] [TIFF OMITTED] T8045.150 [GRAPHIC] [TIFF OMITTED] T8045.151 [GRAPHIC] [TIFF OMITTED] T8045.152 [GRAPHIC] [TIFF OMITTED] T8045.153 [GRAPHIC] [TIFF OMITTED] T8045.154 [GRAPHIC] [TIFF OMITTED] T8045.155 [GRAPHIC] [TIFF OMITTED] T8045.156 [GRAPHIC] [TIFF OMITTED] T8045.157 [GRAPHIC] [TIFF OMITTED] T8045.158 [GRAPHIC] [TIFF OMITTED] T8045.159 [GRAPHIC] [TIFF OMITTED] T8045.160 [GRAPHIC] [TIFF OMITTED] T8045.161 [GRAPHIC] [TIFF OMITTED] T8045.162 [GRAPHIC] [TIFF OMITTED] T8045.163 [GRAPHIC] [TIFF OMITTED] T8045.164 [GRAPHIC] [TIFF OMITTED] T8045.165 [GRAPHIC] [TIFF OMITTED] T8045.166 [GRAPHIC] [TIFF OMITTED] T8045.167 [GRAPHIC] [TIFF OMITTED] T8045.168 [GRAPHIC] [TIFF OMITTED] T8045.169 [GRAPHIC] [TIFF OMITTED] T8045.170 [GRAPHIC] [TIFF OMITTED] T8045.171 [GRAPHIC] [TIFF OMITTED] T8045.172 [GRAPHIC] [TIFF OMITTED] T8045.173 [GRAPHIC] [TIFF OMITTED] T8045.174 [GRAPHIC] [TIFF OMITTED] T8045.175 [GRAPHIC] [TIFF OMITTED] T8045.176 [GRAPHIC] [TIFF OMITTED] T8045.177 [GRAPHIC] [TIFF OMITTED] T8045.178 [GRAPHIC] [TIFF OMITTED] T8045.179 [GRAPHIC] [TIFF OMITTED] T8045.180 [GRAPHIC] [TIFF OMITTED] T8045.181 [GRAPHIC] [TIFF OMITTED] T8045.182 [GRAPHIC] [TIFF OMITTED] T8045.183 [GRAPHIC] [TIFF OMITTED] T8045.184 [GRAPHIC] [TIFF OMITTED] T8045.185 [GRAPHIC] [TIFF OMITTED] T8045.186 [GRAPHIC] [TIFF OMITTED] T8045.187 [GRAPHIC] [TIFF OMITTED] T8045.188 [GRAPHIC] [TIFF OMITTED] T8045.189 [GRAPHIC] [TIFF OMITTED] T8045.190 [GRAPHIC] [TIFF OMITTED] T8045.191 [GRAPHIC] [TIFF OMITTED] T8045.192 [GRAPHIC] [TIFF OMITTED] T8045.193 [GRAPHIC] [TIFF OMITTED] T8045.194 [GRAPHIC] [TIFF OMITTED] T8045.195 [GRAPHIC] [TIFF OMITTED] T8045.196 [GRAPHIC] [TIFF OMITTED] T8045.197 [GRAPHIC] [TIFF OMITTED] T8045.198 [GRAPHIC] [TIFF OMITTED] T8045.199 [GRAPHIC] [TIFF OMITTED] T8045.200 [GRAPHIC] [TIFF OMITTED] T8045.201 [GRAPHIC] [TIFF OMITTED] T8045.202 [GRAPHIC] [TIFF OMITTED] T8045.203 [GRAPHIC] [TIFF OMITTED] T8045.204 [GRAPHIC] [TIFF OMITTED] T8045.205 [GRAPHIC] [TIFF OMITTED] T8045.206 [GRAPHIC] [TIFF OMITTED] T8045.207 [GRAPHIC] [TIFF OMITTED] T8045.208 [GRAPHIC] [TIFF OMITTED] T8045.209 [GRAPHIC] [TIFF OMITTED] T8045.210 [GRAPHIC] [TIFF OMITTED] T8045.211 [GRAPHIC] [TIFF OMITTED] T8045.212 [GRAPHIC] [TIFF OMITTED] T8045.213 [GRAPHIC] [TIFF OMITTED] T8045.214 [GRAPHIC] [TIFF OMITTED] T8045.215 [GRAPHIC] [TIFF OMITTED] T8045.216 [GRAPHIC] [TIFF OMITTED] T8045.217 [GRAPHIC] [TIFF OMITTED] T8045.218 [GRAPHIC] [TIFF OMITTED] T8045.219 [GRAPHIC] [TIFF OMITTED] T8045.220 [GRAPHIC] [TIFF OMITTED] T8045.221 [GRAPHIC] [TIFF OMITTED] T8045.222 [GRAPHIC] [TIFF OMITTED] T8045.223 [GRAPHIC] [TIFF OMITTED] T8045.224 [GRAPHIC] [TIFF OMITTED] T8045.225 [GRAPHIC] [TIFF OMITTED] T8045.226 [GRAPHIC] [TIFF OMITTED] T8045.227 [GRAPHIC] [TIFF OMITTED] T8045.228 [GRAPHIC] [TIFF OMITTED] T8045.229 [GRAPHIC] [TIFF OMITTED] T8045.230 [GRAPHIC] [TIFF OMITTED] T8045.231 [GRAPHIC] [TIFF OMITTED] T8045.232 [GRAPHIC] [TIFF OMITTED] T8045.233 [GRAPHIC] [TIFF OMITTED] T8045.234