Copyright 2002 Federal News Service, Inc.  
Federal News Service
July 9, 2002 Tuesday
SECTION: CAPITOL HILL HEARING

LENGTH: 20536 words

HEADLINE: HEARING OF THE CRIME, TERRORISM AND HOMELAND SECURITY SUBCOMMITTEE OF THE HOUSE JUDICIARY COMMITTEE
 
SUBJECT: PROPOSAL TO CREATE A DEPARTMENT OF HOMELAND SECURITY
 
CHAIRED BY: REPRESENTATIVE LAMAR S. SMITH (R-TX)
 
LOCATION: RAYBURN HOUSE OFFICE BUILDING, WASHINGTON, D.C.

WITNESSES: JOHN MAGAW, UNDERSECRETARY FOR TRANSPORTATION SECURITY, DEPARTMENT OF TRANSPORTATION ROBERT BONNER, COMMISSIONER, U.S. CUSTOMS SERVICE ADMIRAL THOMAS COLLINS, COMMANDANT, U.S. COAST GUARD BRIAN STAFFORD, DIRECTOR, U.S. SECRET SERVICE
 


BODY:
REP. L. SMITH: The Subcommittee on Crime, Terrorism and Homeland Security will come to order. I just want to say at the outset that I'm pleased by the attendance we have by members of the subcommittee this morning. This is an early hour. There are many conflicts, and yet this is I think the best attendance we've had in a number of hearings.

The procedure this morning will be that I'll recognize members, including myself, for opening statements. And after that, we'll move very quickly to hearing testimony from our witnesses today.

On June 6th, 2002, the president addressed the nation to request support for the creation of a Homeland Security Department. He stated, quote, "We face an urgent need, and we must move quickly this year, before the end of the congressional session." This committee and Congress are responding to that request.

We understand the importance of H.R. 5005, the Homeland Security Act of 2002. This hearing focuses on the proposed transfer of the Coast Guard, Customs, Secret Service and Transportation Security Agency to the Department of Homeland Security.

The administration's goal for the creation of a Homeland Security Department is to improve the country's ability to prevent, prepare for, detect and disrupt terrorist attacks within the United States. As the Gilmore commission noted in 2000, quote, "The national strategy against terrorism should be geographically and functionally comprehensive. To be functionally comprehensive, the national strategy should address the full spectrum of the nation's threats against terrorism: intelligence, deterrence, prevention, preemption, crisis management and consequence management," end quote. This can only happen with the successful integration and coordination of officials involved.

This hearing will examine how each of the agencies' missions and functions fit within the proposed Department of Homeland Security. While the proposed department will have a strong law enforcement role, this role is distinct from that of the Federal Bureau of Investigation, which is the principal investigative arm of the United States. The law enforcement role of the Department of Homeland Security will focus on border security and the training of state and local officials to prepare for and respond to terrorist attacks. The mission of this new department cannot be accomplished without the successful coordination of various federal agencies and law enforcement units.

You will hear testimony today from four of five invited witnesses who will discuss H.R. 5005 and how each of their agencies improves the strategic framework and coordination of the Department of Homeland Security.

One witness, the Honorable Joe Allbaugh, director of the Federal Emergency Management Agency, was invited, but apparently decided that this hearing was not a priority. I am disappointed by the director's absence, as this was an opportunity for the director to explain how FEMA plans to provide training for law enforcement and other emergency responders in crisis and consequent management at the new Department of Homeland Security.

I assume we have representatives of FEMA in the audience. And if so, would they stand and identify themselves? (Pause.) How about raising your hand? Is anyone here from FEMA? (Pause.) Okay, that's a double disappointment, because we understand that it was possible for the director to attend; he chose not to. I don't consider that a personal affront against members of Congress. I do consider it a personal affront against the American people, who have every reason and need and desire to want to know how FEMA would respond to terrorist attacks. So I'm disappointed that Mr. Allbaugh did not attend, and if FEMA individuals are here, that they did not recognize themselves or attend at all.

That concludes my opening statement. The gentleman from Virginia, the ranking member of the subcommittee, Mr. Scott, is recognized for his.

REP. ROBERT C. SCOTT (D-VA): Thank you, Mr. Chairman. I'm pleased to join you in convening this hearing concerning law enforcement agencies and operations affected by H.R. 5005, the Homeland Security Act of 2002. There are a considerable number of unanswered questions and concerns regarding how these agencies will operate with the new setting of the Department of Homeland Security, especially the question of what problem are we solving and how will DHS solve it, and what money will be spent in transition and new responsibilities. I'd like to hear from the agencies we have invited for their understandings of what their roles will be with DHS. I'd also like to know any concerns or problems they foresee in providing greater security for our nation while preserving at least the current level of law enforcement services traditionally provided by their agencies. I'm particularly concerned to know how any impact they foresee from the proppsed changes on the ability of -- the effect on law enforcement entities to maintain their traditional law enforcement capabilities while doing their part to enhance overall security. And most localities are already hard hit by the cost of increased demands they've had to do by prudence as well as the federal government to increase their vigilance. Of course, any disaster is ultimately the local and first responders' responsibility. So I want to see how they'll be -- how the local responders will be incorporated into HHS (sic) responsibilities.

And in this regard I join the concerns of the chairman that we're not hearing from FEMA. As the chairman noted, the bill calls for the Office of Domestic Preparedness at Justice to go to FEMA -- this is a vital piece of law enforcement resource network because it provides for the trainers, equipment and other assistance they'll need in learning how to operate and cooperate under the new department. I'm also concerned that in our rush to establish the structure for Homeland Security, which the bill provides, we don't run the risk of trampling over well established civil rights and civil liberties, sunshine government and Civil Service protections and would like the witnesses to give us assurances in these areas as well.

So Mr. Chairman, I look forward to the hearings on the witnesses, and I appreciate your convening the hearing.

REP. SMITH: Thank you, Mr. Scott.

Are there other members who wish to make opening statements? The gentleman from Wisconsin, Mr. Green, is recognized for his opening statement.

REP. MARK GREEN (R-WI): Thank you, Mr. Chairman, very briefly.

First off, I want to express that I share your concerns and disappointment about FEMA not testifying, given that FEMA's role in the newly proposed agency is so very important. And I think one of the issues, or one of the sets of issues that we wanted to explore, I am also greatly disappointed that FEMA has chosen not to be present here today or be represented here today.

From the perspective of northeastern Wisconsin, I think one of the great concerns we have is with respect to the Coast Guard. And while I support the Coast Guard's inclusion in the new agency, Admiral Collins, I am hoping that you'll be able to address for us today specifically how the Coast Guard will be able to continue and maintain its current operations and its current mission, especially with maritime safety in mind, given this transfer. That, I think, is the great concern that I have.

Thank you, Mr. Chairman.

REP. SMITH: Thank you, Mr. Green.

Other members who wish to have opening statements? The gentle lady from Texas, Ms. Jackson-Lee, is recognized for an opening statement.

REP. SHEILA JACKSON-LEE (D-TX): Thank you very much, Mr. Chairman, for holding this very important hearing this morning.

I believe that as we celebrated our nation's Independence Day, the incident that occurred in LAX exposed additional vulnerabilities of this nation. Though we have not designated that particular act in any particular act, certainly it suggests that we need all of our agencies and all of our wits about us as we attempt to pursue and define what homeland security is.

I am very grateful for the presence of these witnesses and, Mr. Chairman, in order to keep our refrain on one page, let me also express the disappointment that I have in the lack of presence of FEMA. Let me also acknowledge, of course, coming from Texas, that certainly we are appreciative, as I believe all Americans are, in the response that FEMA already shows as it relates to the disasters. We are facing one in Texas again, and certainly FEMA will play a very large role. That may be why it is even more important to have an understanding of how they would match those very important responsibilities immediately responding to disasters. My 16-year-old asks, "How does FEMA get everywhere as it will relate to issues dealing with homeland security?"

I'd also like to acknowledge that we will have several questions on how the agencies will synergize under the new department. Surely there will be many conflicts up in Congress as to how this new department should work. I think that structurally, the offered Homeland Security Department will need much work. But many of the organizations included in the bill focus on the seminal principles of the Homeland Security Department. It is clear that their overall goals are not in sync with the department, itself.

One of our most central concerns, again, lies in the Federal Emergency Management Agency. This agency has played a pivotal role in assisting my fellow Texans -- deal with the terrible floods that have besieged Texas. According to information supplied by FEMA, approximately 75 percent to 95 percent of the agency's budget constituted disaster relief assistance. In the encounters that I've had with them, they've indicated that in many instances, there's not been enough. There's such a significant portion going to this effort. How will FEMA be recognized or reorganized within the Department of Homeland Security? And will this mean a decrease in the disaster- relief operation? Texans and Americans and others want to know this answer.

Another area that raises concern for me is the role of the Secret Service in the Department of Homeland Security. The mission of the U.S. Secret Service is twofold. First, it is charged with the protection of the president, vice president and their families and heads of state; second, the enforcement of laws relating to counterfeiting of obligations and securities. However, the Secret Service strive to prevent counterfeiters and presidential assassinations, not terrorists or other things. Though an assassination attempt could be construed as an act of terrorism, it is clearly the different flavor. The Secret Service does not appear to have a close (nexus ?) to the investigation of terrorist threats, nor does it appear that their primary mission is being given to another agency.

The Coast Guard, as well, I know played an enormous impact or had enormous impact as related to staffing up our various ports right after September 11th. And we thank you for that, as I might thank all of the agencies present. We realize Admiral Collins said that nearly 40 percent of the Coast Guard's current operating budget is directly related to the core missions of the proposed department. Well, what about the remaining 60 percent? And Admiral Collins claimed that the rest contributed indirectly. But I fail to see how, though I appreciate it coming from waterways that -- your help in (drunken ?) boaters. That's important work -- how we can ensure that we use you in the best an most effective way.

As I close, Mr. Chairman, let me mention several key issues that I think we should be concerned about. Our border and transportation security -- Mr. Magaw, you will note that I will be talking about whether or not we should have a distinct area for border security. I have a special interest in it and will be posing that question.

The real question is, how do we secure or to ensure the work of the Transportation Security Agency, and how do we secure the border and the Border Patrol responsibilities?

Lastly, we know that this plan has good intentions. We appreciate the president presenting this plan, and we know the importance of congressional oversight. We intend to participate and to seriously look at our work and to present to the American people what works.

But I want to put on the record my concern about Miranda rights, whistle-blower protection, utilization of employees, and as well are we talking about crime-fighting or something else?

With that, Mr. Chairman, I look forward to the testimony of the witnesses for the job that we have to do this morning. I yield back.

REP. L. SMITH: Thank you, Ms. Jackson-Lee.

To my right, the gentleman from North Carolina, Mr. Coble, is recognized for an opening statement.

REP. HOWARD COBLE (R-NC): Thank you, Mr. Chairman. I want to just think aloud for a moment or two and perhaps get the witnesses' response as we hear from them. I apologize for sounding like a broken record, but I want to echo what you said. I think FEMA's conspicuous absence is glaring indeed.

I see the glass half-filled, Mr. Chairman, always, so I believe this homeland security operation will work. I think elevating it to Cabinet status was the right idea. I can see the elimination of duplication, hopefully, by bringing these different agencies under one umbrella. Now maybe I'm too optimistic when I say this, Mr. Chairman, but it ought to be -- if properly implemented and executed, it ought to be close to revenue-neutral, it seems to me. Now I realize, in this town, revenue-neutral oftentimes doesn't play harmoniously, but I can see that merging these different agencies together, I think, is a sound proposal.

I'm concerned -- well, strike that. Mr. Chairman, I want to be sure that it is clearly defined, as we move along, as to what constitutes an emergency. And I'm not convinced that that has been clearly defined. Perhaps I'll hear from -- the witnesses will illuminate to that end. But I think that is essential, that that must be clearly laid out, not just for the benefit of the agencies involved but for the populace as well.

The gentleman from Wisconsin mentioned a situation that I have heard discussed on the Hill, and that is that some fear, Admiral Collins, that the Coast Guard may be put in a position of compromising your other duties -- search and rescue, aid to navigation, drug interdiction, port security. Well, the U.S. Coast Guard has managed to juggle various assignments since 1790, and you've done it pretty well. I think you pulled a couple from a sister service out of the drink yesterday down in Virginia, in record time. So I think you can do it, but I do think that's a problem that needs to be on the screen, Mr. Chairman, and we don't want to put the Coast Guard or the other agencies either, for that matter, in a position of compromising duties that they now perform and at which they are indeed adept.

Thank you all for being with us. Mr. Chairman, thank you, sir.

REP. L. SMITH: Thank you, Mr. Coble. I want to note that Mr. Coble is the only member of the committee who is a veteran of the Coast Guard, which might have been clear from his comments as well.

I've also noticed the presence of the ranking member of the full Judiciary Committee, Mr. Conyers of Michigan. And Mr. Schiff, if it's all right, I'll recognize Mr. Conyers for an opening statement, if he has one.

REP. JOHN CONYERS (D-MI): Thank you, Mr. Chairman. I don't have an opening statement right now, but could I reserve my time?

I don't know how long this is going to be this morning.

REP. L. SMITH: Absolutely, Mr. Conyers. We'll be happy to recognize you whenever you want to be recognized.

REP. CONYERS: I appreciate that very much.

REP. L. SMITH: To my right, any other members who wished to be recognized? The gentleman from Ohio, Mr. Chabot, is recognized for an opening statement.

REP. STEVE CHABOT (R-OH): Thank you, Mr. Chairman. And I'll be brief because I know we want to get on with the witnesses here so we actually have an opportunity to hear from them and question.

My principal and particular concern would -- and I'll be able to question the undersecretary, Mr. Magaw, and I appreciate his presence here today -- and that's the recent undercover tests, particularly those at the Greater Cincinnati/Northern Kentucky airport, in which only in 42 percent of the cases were weapons able to be detected, which the reverse of that means 58 percent of the time, the weapons were not detected. And there was no great effort made to conceal these weapons. And I think it's safe to assume that terrorists would not be so accommodating, that they would make every effort to conceal, to hide weapons or bombs or other items which could do harm to the public.

And this does not instill a great deal of confidence in the traveling public. To be quite frank, it's absolutely miserable and should be an embarrassment, and something has to be done to make sure that the people who travel the skies of this nation are safe. And that's just totally unacceptable, and I'll be interested to hear some details relative to that.

And with that, I'll yield back the balance of my time.

REP. L. SMITH: Thank you, Mr. Chabot.

The gentleman from California, Mr. Schiff, is recognized for an opening statement.

REP. ADAM SCHIFF (D-CA): I thank the chairman for yielding. And I want to join the committee in welcoming the witnesses here today, and extend a special welcome to Commissioner Bonner, who not only was the former head of the DEA and a former federal judge, but was also a former U.S. attorney who had the ill judgment to hire me in 1987. And I'm very grateful you showed that poor judgment back then. (Laughter.)

But I did want to add, beyond that welcome, what a dramatic task that you all have before you, and just reinforce the idea that the job that we have to do won't end this year, won't end with the passage of this bill, won't end with the formation of a new department. It really will only begin then. And the challenge will be to have this new entity develop the capability of talking to each other, both over the phone and technologically, have the ability to integrate functions to the degree that they'll be efficient, to a degree that we have not been able to get our agencies to work together in the past.

We will have under one roof almost 75,000 armed agents, which is an extraordinary number. It is in some respects the size of a national police force, although it is not intended to act as such. But the challenge, I think, will be two-fold. It will be to have an entity that large at the same time be efficient and work together and root out the problem of terrorism as it's intended to do and secure the homeland. At the same time, it will have the equal challenge of not intruding on the rights of the American people in the process. And that challenge will be all the greater because of the size and the power of this new department.

So I know the committee will continue its job long after the passage of this bill, and look forward to continuing to hear from you over the months and years to come about how that responsibility is being undertaken.

And I yield back, Mr. Chairman.

REP. L. SMITH: Thank you, Mr. Schiff.

The gentleman from Georgia, Mr. Barr, is recognized for an opening statement.

REP. BOB BARR (R-GA): Thank you, Mr. Chairman. FEMA's absence notwithstanding, we have a very, very distinguished panel today. I look forward to hearing from them. And reviewing their written statements, I'm confident that what we'll hear are very substantive and appropriate responses, not bureaucratic responses. And I appreciate that very much, these gentlemen looking at these issues with the professionalism that has characterized their careers.

The threat that this nation faces, of course, is many faceted. Tomorrow, I believe, on the floor of the House, we'll be taking up the issue of arming airline pilots, or at least providing some authority. I know Mr. Magaw disagrees with us on that. For the life of me, I can't understand why we would not want to have an appropriate mechanism to protect passengers and airplanes and those on the ground by appropriately providing authority for arming pilots, but hopefully the Congress will do that.

But there are many, many aspects to this, but ultimately, Mr. Chairman, as you know, and as these gentlemen and others know, the mechanism itself is not as important as the people who are administering the system. And we can set in motion very, very sophisticated mechanisms; we can change bureaucracies and change legal authorities; we can appropriate billions of dollars, but if the people on the ground carrying out those missions and expending those dollars on the ground don't care about what they're doing or are not properly trained, are not properly motivated, and are not held accountable, then it's all for naught.

I would commend to each of the witnesses a study and a hearing that we held in Atlanta a couple of months ago pursuant to an undercover investigation by GAO to determine whether or not security at several federal facilities in Atlanta, which, as you gentlemen know, has one of the largest presences of federal offices outside of the Washington, DC, area, was adequate or not. What these undercover investigators found was absolutely startling in the lack of appropriate security and accountability and concern for even minimal standards of security.

Undercover agents were able to falsify with off-the-shelf technology a number of badges which were never appropriately or even cursorily scanned. They were never required to go through metal detectors. They were given security codes without authorization, enabling them to get into any federal building that they attempted to secure entrance to in the Atlanta area, including the federal judiciary, DEA -- the building that houses DEA, FBI, IRS, virtually any agency that they wanted.

And this is why I think that the new department has to have sufficient flexibility to address security lapses and security concerns like that. I know none of these gentlemen would tolerate such a security lapse within their agency, and we have to make sure that likewise we set up a mechanism so that they are not tolerated in the new department.

But I would commend that study and the hearing that we held in Atlanta a couple of months ago to the witnesses. I intend to refer to it not only in this hearing, but others considering different aspects of the homeland security.

I'd like to echo the statements of other members again thanking these very distinguished members of the executive branch for their presence here today, their careers and for caring enough about these issues, unlike FEMA, to be here today to share their thoughts and answer questions.

Thank you.

REP. L. SMITH: Thank you, Mr. Barr.

The gentleman from Florida, Mr. Keller, is recognized.

REP. RIC KELLER (R-FL): Thank you, Mr. Chairman.

Yesterday, the president of the United States gave an important speech, and he outlined three things he wants the Congress to do right away.

First, he wanted the emergency supplemental appropriation bill passed; second, the defense appropriation bill passed to help us win the war on terrorism and fund our troops; and third, establish this Department of Homeland Security.

The House has already acted to pass the first two of his request, and so this becomes our top priority now -- establishing this Department of Homeland Security.

And with that in mind, I am very appreciative of all of the witnesses who are here. I know sometimes it's human nature to complain about who's not here instead of appreciate those who are here. I can remember in my first campaign I had to have 20 volunteers show up to help me distribute signs, and 18 people showed up, and I spent the whole time complaining about the two guys who told me they'd be there, wasn't (sic) there, instead of thanking the 18 who are there. So thank you so much for being here, and I understand you recognize the importance of what President Bush said yesterday.

With that in mind, one of the things I would like to hear from the witnesses about, and particularly Mr. Magaw, is so much has been said about the efficiencies that will be created by eliminating overlap here and having one-stop shopping with respect to homeland security, which is certainly a critical element of establishing this department. And that's why I'm a co-sponsor of this legislation.

There hasn't been a lot of talk about once the left hand knows what the right hand is doing, in terms of the government agencies -- for example, INS and FBI and CIA and your agencies communicating -- then taking that information and distributing it to private transportation entities. And that certainly is a weak link in our system.

Just to give you one example, we have the two terrorists, al- Midhar and Alhamzi, who the CIA had information about, the FBI did, the INS did, at certain points, and all three collectively, even though these men were on a watch list, never shared this information with American Airlines. And so these two bad guys got on American Airlines in Flight 77, and the plane slammed into the Pentagon. That is certainly a weak link that needs to be fixed. And I'm curious as to what, if anything, this government reorganization will do to impact that weak link.

Again, thank you so much for the witnesses who are here, and we welcome your testimony. Mr. Chairman, I yield back.

REP. L. SMITH: Thank you, Mr. Keller.

Let me introduce the witnesses, and they are, in alphabetical order, the Honorable Robert C. Bonner, commissioner, United States Customs Service; Admiral Thomas H. Collins, commandant, United States Coast Guard; the Honorable John W. Magaw, undersecretary of Transportation for Security, Transportation Security Administration; and Mr. Brian L. Stafford, director, United States Secret Service.

Again, we welcome you all, and we will begin, Mr. Bonner, with your testimony.

MR. BONNER: (Off mike.)

REP. L. SMITH: Is your microphone on?

MR. BONNER: Yes. Now I have it on. I think I'm ready to go.

Good morning to all of you. I want to thank you for this opportunity to testify and appear this morning before the committee to discuss President Bush's proposal to create a new Department of Homeland Security. As you know, President Bush's proposal is to transfer the entire U.S. Customs Service to the new department.

I believe that the adoption of the president's proposal will result in a more effective, a more focused -- I believe it'll result in a better coordinated and linked and even a more efficient defense of America and the American people against the very real and continuing terrorist threat posed by international terrorist organizations such as the al Qaeda.

It will also, by the way, establish something that's very important in government and sometimes we don't see, and that is clear responsibility and accountability in one secretary, in one department.

Since September the 11th, I can tell this committee that the number-one priority of the United States Customs Service has been counterterrorism. It has been protecting the nation against the terrorist threat at all 301 ports of entry into the United States. These are ports of entry at our land borders, at our international airports and at our seaports. The Customs Service is and has been doing everything possible to keep both terrorists and terrorist weapons from entering our country. But we have been doing so, I might say, without choking off the flow of trade that's so vital to the economy of our country.

I'd like to just briefly describe to you a few key initiatives that the United States Customs Service has developed and implemented since September the 11th.

First of all, in October, within a few weeks of the attacks on our country, we formed at the U.S. Customs Service Operation Green Quest, which is a Customs-led but a multi-agency task force that targets terrorist financing. Operation Green Quest has already opened several hundred investigations into terrorist financing and has aggressively moved against terrorist funding sources. These efforts through Operation Green Quest have already led to the seizure of millions of dollars in suspected terrorist assets.

We've also established Project Shield America. And this is using Customs' unique investigative jurisdiction, where Customs agents are monitoring exports of strategic weapons and materials from the U.S. to prevent international terrorist organizations like al Qaeda from obtaining sensitive U.S. technology, weapons and equipment that could be used in a terrorist attack on our nation.

With another initiative, the Container Security Initiative, which we began implementing earlier this year, U.S. Customs is entering into partnerships with other governments, with foreign governments to identify high-risk cargo containers and pre-screen those containers, those cargo containers at foreign ports before they are shipped to the United States.

I recently returned from a very productive trip to Europe just the week before last, during which the governments of the Netherlands, Belgium and France signed agreement with the United States Customs to participate in the Container Security Initiative. Singapore, one of the largest ports in Asia, and also, actually, the largest port in the world in terms of the transshipment of cargo containers to the United States, principally to the West Coast, has also indicated that it will participate with U.S. Customs in the Container Security Initiative.

So, very soon, for shipments of cargo containers from these countries, and specifically from the ports of Rotterdam, Antwerp, Le Havre, Singapore -- four of, by the way, the top 20 ports in terms of shipments of containers, cargo containers to the United States by container vessel -- very soon U.S. Customs and host governments will be pre-screening those containers headed to the United States. And I can also tell you that I'm very optimistic that agreements with other governments, covering more of the major ports of the world, will be entered into very soon.

I believe that -- let me say I believe that any effort to improve our border security must include the direct involvement and input from the trade community. And in that connection, last April Governor Ridge, Secretary O'Neill and I stood with many CEOs of major U.S. importers and announced the Customs-Trade Partnership Against Terrorism. We did that in Detroit. The Customs-Trade Partnership Against Terrorism is a unique partnership, with U.S. importers, with carriers, customs brokers and others in the trade community to substantially improve security along the entire supply chain while expediting the flow of legitimate commerce into the United States. To date I'm pleased to advise this subcommittee that we have over 250 companies participating in the Customs-Trade Partnership Against Terrorism.

The success of programs like CSI, the Container Security Initiative, and the Partnership Against Terrorism demonstrate how Customs balances its dual role, its dual missions, if you will, between security, on the one hand, security and enforcement on the one hand, and trade facilitation, on the other.

We have to maintain that balance.

REP. L. SMITH: Mr. Bonner, if you could bring your testimony to a conclusion, we'd like to be able to fit everybody in the five-minute time.

MR. BONNER: I'll do that, Mr. Chairman. Thank you.

Just to make the final point that the trade functions of Customs and the functions of security and enforcement are interlinked in many ways, and we're -- let me just say to the subcommittee that I am very, very proud of the men and women of the Customs Service for the role they played since 9/11 in protecting our nation and the role that they'll continue to play in defending our homeland.

Thank you, Mr. Chairman.

REP. L. SMITH: Thank you, Commissioner Bonner.

Admiral Collins.

MR. COLLINS: Good morning, Mr. Chairman, distinguished members of the subcommittee. It's an honor to join you today to discuss the particulars of the presidential proposal to establish a Department of Homeland Security. And the events of September 11th changed everyone's (world of work ?), changed our perspective on how we look at security issues. And the threat remains today and into the future. Our maritime transportation system, in particular, remains both critical to our economic prosperity --

REP. : Mr. Chairman? Mr. Chairman, would you ask the witness to pull the mike a little closer so that everyone can hear? Thank you.

REP. L. SMITH: I don't think I need to ask him; I think he heard you.

MR. COLLINS: How about that? Is that plenty --

REP. : Much better, thank you.

MR. COLLINS: Our maritime transportation system in particular is both very valuable to our economic prosperity and remains very vulnerable to the acts of the terrorism. Under the leadership of President Bush, I think we've all leaned forward to increase our vigilance, and we've stiffened our resolve and allocated our resources to the greatest risk areas. And I think much has been accomplished as summed up particularly by Commissioner Bonner. And the same type of activities have been pursued throughout each one of our organizations.

From the Coast Guard's perspective, the president is taking the next logical step and the next necessary change. And we think the time has come to put the reorganization issues on the table, in addition to resource and authority issues and policy issues. Clearly, from our perspective, the reorganization will bring unity of effort, unity of command to homeland security efforts, clear lines of authority to get the job done. It will enhance the awareness of threats and vulnerabilities so -- for -- effective preventive actions can be instituted. It'll minimize the impact of a terrorist attack, should a response be required. And I think the key word is "alignment." It will ensure alignment of personnel, strategy, policy and resources to the very highest-priority areas in the area of homeland security.

As the lead agency for maritime homeland security, as both a military and law enforcement service, the Coast Guard is both a logical and a necessary component of the proposed department.

Nearly 15 -- almost 15 percent of our current operating budget is directly related to the core missions of the department -- proposed department. The bulk of the remaining missions contribute indirectly to the overall security interests of the nation. And as I have detailed in my written statement, we also have a unique set of competencies, capabilities and authorities that will add considerable value to the department.

I think the time is now. I think there are some critical stipulations from the Coast Guard perspective that have to be met as to define success here, as we reorganize. One is that we remain intact as an organization, that we retain our essential attributes as a maritime military and multi-mission service, and that all the range of our missions are supported robustly, actively in the new department.

I think that last stipulation may need a few explanatory notes. I know it's of interest to many of the subcommittee members. From a systems' perspective, the threats to our security of our homeland extend well beyond overt terrorism. Countering illegal drug smuggling and other contraband in the transit zones and in the source countries, preventing illegal migration through maritime routes, preserving living marine resources in -- from encroachment. These are all included in critical elements of homeland security from our perspective. They are responsibilities of the United States Coast Guard. And this mission set was recognized and validated by a recent interagency task force on Coast Guard roles and missions in 1999.

I think our full range of missions, all critical to the nation, will continue to be supported under the president's proposal in a very robust way. Now, again, I'm aware that, as stated in some quarters here in the committee and on other areas on the Hill, there's concern over our ability to attend to all the missions if we are moved to the new department, that we will not be attentive to our efforts against drug smuggling or fisheries' violators as we were before September 11th. And others even worry about our not being responsive in our search-and-rescue missions in future years as we've been in the past. I understand those concerns, and let me attempt to put at ease some of those that are skeptical.

First of all, I can assure that we will continue to save lives every single day. We saved two yesterday off of Virginia Beach as a F-14 plane went down and pilots ditched. In fact, we have increased our efforts with regard to protecting life and property at sea. This year, we are adding a hundred billets to our -- new positions to our small boats stations. And these new people will also have new boats and new equipment to use very soon. SAR is and will remain a priority for us.

Second, we have seized more cocaine on the high seas already this year than we did last year at this time, despite the events of last fall. We are using new technology, tactics and intelligence in very creative ways to increase the effectiveness and efficiency of our patrols. And that goes for fisheries' enforcement, as well.

Third, and most importantly, I believe with absolute confidence that the improvements that we make or are about to make to our inventory of ships, boats, aircraft, command-and-control systems will strengthen, not weaken, our capabilities in every mission. In the final analysis, we will emerge as a more capable and more responsive service than ever before.

At the heart of the matter, maritime home security is about preventing harm to the American public. Primarily, it is done best by firmly and diligently enforcing the laws of the United States. That is what we began to do in 1790, and that is what we will continue to do as long as the Coast Guard flies its ensign.

I'll be glad to answer any questions at the appropriate time, Mr. Chairman.

REP. L. SMITH: Thank you, Admiral Collins.

Secretary Magaw.

MR. MAGAW: Thank you. Mr. Chairman and members of the subcommittee, I am pleased to appear before you today on a matter of critical importance to our nation.

The logical consolidation of government resources by the way of the president's proposed Department of Homeland Security is the proper way to go, I believe.

Due to time restraints, I have submitted a more detailed written statement for the record.

I acknowledge that I am in good company as a member of this panel -- indeed, highly professional company that I have bee privileged to work with on a continuing basis for over 33 years as a team, with the Coast Guard, Customs Service and the Secret Service, all working together to protect our great nation from harm in so very many different ways that this new proposal, the proposal by the president, as already stated by Commissioner Bonner, is clear accountability for the entire effort. I fully support the president's proposal to create a Department of Homeland Security and to include the Transportation Security Administration within this new department. I see the president's plan as an effective and efficient fusion of resources and allies with a mission to ensure the freedom of movement for our people and commerce in all modes of transportation. TSA is a logical and critical component of the proposed department.

TSA's mission involves security in depth, a balance of regulatory compliance, intelligence, law enforcement and security operations. Every TSA dollar and every TSA employee directly supports the core missions of the new Department of Homeland Security. We are a sure fit in this new organization.

To ensure TSA continues to meet its date-specific congressional mandates and continues to serve its customers with excellence, TSA must be transferred to the new department in its entirety with all its parts and functions. I am convinced that it will happen just that way and with very little disruption in meeting our specific goals in the next few months. May I clearly emphasize, though, that the personnel of the Department of Transportation, and in particular Secretary Norman Mineta, have continually embraced the TSA challenges, provided us outstanding leadership, and supported our needs every step of the way.

In addition to hiring and deploying thousands of security screeners nationwide, who are also in the midst of an ambitious program to hire and train uniformed federal law enforcement officers and federal air marshals, this team will enhance aviation security laws and the regulations through detection, deterrence, arrest, civil enforcement and prosecution. We will continue to work closely with state and local law enforcement agencies as well as the Department of Justice, the United States attorneys, and all federal law enforcement and intelligence agencies.

The horrific events of September 11th and the use of commercial airplanes as deadly weapons set the high priority that we must give to protecting our airways, but also our waterways, our railways, our transit systems, and our pipelines. Although TSA is aggressively addressing the aviation-related mandates of the Aviation Transportation Security Act, we are also pressing forward on our statutory responsibility to secure all modes of transportation. We are working closely with our partners in Homeland Security and the executives represented on this panel.

Some terrorist threats originate overseas and cross our borders using the transportation systems that connect our cities and communities. With the united efforts of the proposed new department's complementary agencies, we can build a seamless transportation security infrastructure to protect people and commerce -- from their point of origin, prior to entry into the United States, all their travel throughout the United States and to their exit points and everything in between.

Linking TSA with all agencies involved in both securing our borders and gathering intelligence information enhances our ability to dismantle terrorism plots in their planning stage. And that's really what we're all working towards -- rather than react and respond to a terrorist attack. And I say protection through prevention.

One area where TSA need (sic) immediate assistance is funding. I realize that this committee does not appropriate funds, but as we all know, you vote on the appropriations. And I urge the distinguished members of the United States House of Representatives to support President Bush's full request for emergency funding. In order to carry out our statutory obligations, the success of which is based on our ability to continue to fund operations already in high gear, I echo the president's words of yesterday: Any further delay from us becomes intolerable.

I cannot close without mentioning of the tragic shooting at Los Angeles International Airport on Independence Day. This incident clearly demonstrates that TSA's scope goes beyond the checkpoint and the aircraft. We are responsible for securing throughout the airport. We intend to work with local and state law enforcement to coordinate the best security for each airport. TSA will retain the flexibility, the capability and the vision to adapt to new threats. We will continue to raise the security bar as we federalize airport security in 429 airports nationwide.

I also would like to pay my respects to our TSA personnel. They have come out of the woodwork since this House passed the bill and the president signed it. They've come from retired ranks. They've come from other agencies. They've come from the private sector. They've come from every entity of transportation which we're dealing with, so that we have experts who have grown up in those areas. And I congratulate all of them and thank them for their patriotic duty.

Mr. Chairman, that concludes my statements, my personal remarks. And I'm happy to join the panel for answers as you deem appropriate.

REP. L. SMITH: Thank you, Secretary Magaw.

Director Stafford.

MR. STAFFORD: Good morning, Mr. Chairman. I'd like to thank you and the ranking member, Mr. Scott and other members -

REP. L. SMITH: Turn your mike up a little bit, if you would and make sure it's on. Great.

MR. STAFFORD: Okay now? How about that?

REP. L. SMITH: Much better.

MR. STAFFORD: Good morning. I'd like to thank you, Mr. Chairman, Ranking Member Mr. Scott and other members of the subcommittee for giving me this opportunity to discuss the administration's reorganization proposal, including the future of the Secret Service.

The Secret Service is proud of its 137-year legacy as a bureau of the Department of Treasury. We strongly support the administration's plan to transfer our agency to the new Department of Homeland Security. The proposal envisions a prominent role for the Secret Service in fortifying both our nation's homeland and economic security. For over a century, the Secret Service has maintained investigative and protective missions. They are the cornerstones of our agency. Since 1901, our mandate to protect the president has expanded to include the vice president, other government and foreign officials and in recent years, national events, such as the Winter Olympics and the Super Bowl.

But our investigative mission to protect our financial payment systems and critical infrastructure predates our protective responsibilities by nearly four decades. Today these dual missions are inseparable and complementary, and each has a multitude of connections to the objectives of homeland security.

The bedrock principle of the Secret Service's dual missions is our focus on prevention. The theme of prevention is ingrained in our culture and is infused into the minds of our employees from the day they enter our training facility.

When the Secret Service was created by Abraham Lincoln, our charter was to prevent the production of counterfeit currency before it could be circulated and create economic chaos in our country. Today our methods detect incidents before they occur, through intelligence analysis, meticulous advance work and countersurveillance tactics. Our electronic crimes task forces provide training to hundreds of local law enforcement and private-sector partners, aiding them in efforts to shield critical systems from cyber-criminals and cyber-terrorists. These capabilities are accomplished through our 135 domestic field offices and additional 19 offices overseas.

We believe that the core philosophy of the Secret Service, prevention, mirrors that of the new department. Our common goal is to anticipate and prepare, through clear threat assessments and analysis of the intelligence information that is consumed by our intelligence division and our field offices.

Since 1965, the Secret Service has developed a unique capacity to build strong and trusted partnerships with local, county and state law enforcement in furtherance of our dual missions. These partnerships involve information sharing, open communication and, perhaps most critical, mutual trust.

It is clear the Department of Homeland Security will be built on the pillars of prevention and protection. These are the very words found throughout our strategic plan. They define the mission and culture of the United States Secret Service.

On behalf of the men and women of the Secret Service, we stand ready to continue our mission of protecting our leaders, our critical infrastructure and the American people. Our personnel have dedicated their careers and their lives to making a safer America.

Mr. Chairman, thank you for this opportunity. And I also -- I'll be happy to answer any of your questions.

SEN. L. SMITH: Thank you, Director Stafford.

Commissioner Bonner, let me address my first question to you. And this is really a question that could be asked in similar form to all witnesses today, and it is this: That in may instances when we are talking about transferring a service or an agency or department to the new Department of Homeland Security, not all functions of that service or agency or department are necessarily directly connected to homeland security. For example, in the case of Customs, you have both responsibility for border security but you also have responsibility for trade. So my question really is, I can understand the need for enforcement to be transferred to the new department, but what is the need for trade to be transferred to the new department?

MR. BONNER: Thank you, Mr. Chairman, for that question. I think it would be a serious mistake if the trade function, so to speak, of the U.S. Customs Service were split out or there was an attempt to split them out or carve them out of the rest of the Customs Service.

First of all, we're not organized in a way that easily lends itself to doing that. And the reality is that particularly in the field, it's the same personnel that are involved in doing inspections for enforcement purposes and security purposes that do the trade function, that review goods to determine whether they're admissible and dutiable and the like. So it's the same people.

But more fundamentally, it seems to me that it would be very unwise to try to separate out these two functions, because the security function and the trade function, what they call the trade facilitation function of the U.S. Customs Service, are not only interlinked, but I think it would be a terribly bad idea to, let's say, send over to a new Department of Homeland Security a Customs Service that no longer had a trade function. It's the fact that we have a trade function and a function to look at trade and trade facilitation that requires the U.S. Customs Service to balance security with trade facilitation. If you remove the trade function from Customs, you simply now have a security agency whose only responsibility is border security. That would be a mistake, because of this:

It's really pretty easy, in a way, to provide security at all our ports of entry. If you want absolute security, you just shut them down. But we don't want that. We want an agency -- the U.S. Customs Service is such an agency because it has these dual roles and missions -- that will be mindful of and balance the need to make sure that we provide the security that's necessary against a terrorist threat, but we do so without choking off the flow of trade. And we've done that through the Partnership Against Terrorism, with the trade and other programs we've initiated. So for that reason, it would -- it seems to me it would be terribly unwise to split out or carve up the Customs Service.

REP. L. SMITH: Okay. Thank you, Commissioner.

Admiral Collins, in your written testimony, you make the point that the threats to the security of our homeland extend to countering illegal drug and contraband smuggling, preventing illegal immigration via maritime routes, and so on.

My question is this: Are those very important missions of the Coast Guard going to be in any way diminished or reduced as a result of your emphasis on homeland security?

ADM. COLLINS: Let me answer it this way, Mr. Chairman. Clearly it -- in the immediate aftermath of 9/11, we did in fact allocate resources, multi-mission resources, multi-task resources, the capability to do the wide range of our missions, away from fisheries, away from counter-drugs in the Caribbean, into our ports and waterways and coastal areas to deal with what at that time was an unknown magnitude of threat.

We have since reallocated those longer-range resources, our larger ships and aircraft, back into those missions. And we're within about 5 percent or so of the pre-9/11 resource allocation, in terms of fisheries and counter-drugs.

I think that our unsteady state -- we will, thanks to Congress's support, the president's support, Secretary Mineta's support, our '03 budget is the largest increase -- now under consideration on the Hill, is the largest increase in recent history for the Coast Guard, recognizing this wide range of missions.

REP. L. SMITH: So, in other words, your resources that are dedicated, say, to stopping drug smuggling are actually going to increase as far as personnel, as far as funding goes?

ADM. COLLINS: We're within -- we're not at the same level right now as pre-9/11. We're probably within 5 to 10 percent of the resources allocated to the counter-drug mission --

REP. L. SMITH: Do you anticipate getting back to at least where you were, if not increasing --

ADM. COLLINS: That will be done over a multi-year basis, Mr. Chairman. And the first installation, of course, is within the '03 budget. It represents a 2,000 --

REP. L. SMITH: So, in that case, you're really saying that there is a reduction in the number of personnel and the amount of funds dedicated to some of these other missions like stopping drug smuggling?

ADM. COLLINS: Sir, there is definitely a capacity issue here. And it --

REP. L. SMITH: I know. My concern is that there's a reduction in the resources that you're dedicating to these other missions. That's a real concern that that is occurring, that you're not going to be spending as much, not assigning as many personnel to, say, drug smuggling as you had been. Doesn't that concern you?

ADM. COLLINS: I think in terms of the missions that had to be reduced, it was our fisheries' mission and our counter-drug mission. And now that's around 5 to 8 percent of pre-9/11 levels. The search- and-rescue mission, in our waterways -- ports, waterways and coastal areas remains a priority. And, in fact, the investments that we're making through the '02 supplemental and the '03 budget actually puts a greater presence in those areas than before.

REP. L. SMITH: Okay.

ADM. COLLINS: That growth by 2,000 people, the vast preponderance of that increase goes to our ports and the coastal areas just where the greatest degree of search-and-rescue demand is. So, I think when you invest in security through what we're doing through our initiatives in our '03 budget and our supplemental, you're investing in safety at the same time.

REP. L. SMITH: Thank you, Admiral Collins.END OF TODAY'S COVERAGE COVERAGE WILL RESUME TOMORROW

The gentleman from Virginia, Mr. Scott, is recognized for his questions. REP. ROBERT SCOTT (D-VA): Thank you, Mr. Chairman. I wanted to follow-up.You said five to eight percent of pre-9/11 levels? ADM. COLLINS : That's correct. REP. SCOTT: I mean, are you talking about a 95 percent drop? ADM. COLLINS: No, we're within -- within five percent to eight percent of the allocation of resources in aircraft dollars and ship dollars that we allocatedprior to 9/11. REP. SCOTT: When Mr. Ridge was here, I asked several questions, submittedseveral questions in writing. I'm not aware that we've gotten a response yet. Let me just ask if anyone has -- can express any need for sabotaging civil service provisions, undermining whistleblower protections, significant changesin freedom of information, or Federal Advisory Committee Act legislation, orsignificant changes in the way the inspector generals generally work. Is thereany reason that we need to change the law in those areas? Can anybody articulate a reason? MR. BONNER: I know that there -- I think it is very important, Mr. Scott,that the new secretary have a significant amount of management flexibility interms of organizing this. But I can't really address the specific issues thatyou're raising. REP. SCOTT: Well, I mean, every manager needs some flexibility, but we've had civil service protection for, I don't know, it's at least decades if notcenturies, and I just wanted to know whether or not -- whether we are going to

The gentleman from Virginia, Mr. Scott, is recognized for his questions.

REP. ROBERT SCOTT (D-VA): Thank you, Mr. Chairman. I wanted to follow-up. You said five to eight percent of pre-9/11 levels?

ADM. COLLINS : That's correct.

REP. SCOTT: I mean, are you talking about a 95 percent drop?

ADM. COLLINS: No, we're within -- within five percent to eight percent of the allocation of resources in aircraft dollars and ship dollars that we allocated prior to 9/11.

REP. SCOTT: When Mr. Ridge was here, I asked several questions, submitted several questions in writing. I'm not aware that we've gotten a response yet. Let me just ask if anyone has -- can express any need for sabotaging civil service provisions, undermining whistleblower protections, significant changes in freedom of information, or Federal Advisory Committee Act legislation, or significant changes in the way the inspector generals generally work. Is there any reason that we need to change the law in those areas? Can anybody articulate a reason?

MR. BONNER: I know that there -- I think it is very important, Mr. Scott, that the new secretary have a significant amount of management flexibility in terms of organizing this. But I can't really address the specific issues that you're raising.

REP. SCOTT: Well, I mean, every manager needs some flexibility, but we've had civil service protection for, I don't know, it's at least decades if not centuries, and I just wanted to know whether or not -- whether we are going to use this as an excuse to make fundamental changes in that law, and I don't hear any articulated reason why we need that, or undermining the whistleblower protection that's so important.

Let me ask -- let me ask another question, pretty much the same lines as the chairman, because after all is said and done, you're going to have the same people doing the same job, just doing it under another secretary.

Mr. Magaw, where is your office now, physically?

MR. MAGAW: TSA's offices -- mine is in the Transportation building.

REP. SCOTT: And how far are you from Secretary Mineta?

MR. MAGAW: Fifty yards. We're on the same floor.

REP. SCOTT: Okay.

MR. MAGAW: My other personnel are -- just about 50 yards from the secretary part of -- part of that area. But the rest of my personnel, or most of the rest of them, are in a three or four buildings close by, and that -- that is something we're struggling with now in terms of space.

REP. SCOTT: Okay. Now, after the reorganization, are you going to have to pick up your office and move it somewhere?

MR. MAGAW: Well, I'm going to have to pick it up and move it before then, because we have -- we have -- sometimes are supposed to house two people, have six in it. And so I am just busting at the seams, and I can't find anymore building space close by. So, I'm going -- have been conferring with the secretary, and also will confer with --

REP. SCOTT: Okay, well, what --

MR. MAGAW: -- homeland security --

REP. SCOTT: -- after this reorganization, you will be reporting to a different secretary?

MR. MAGAW: That's correct.

REP. SCOTT: What will that do to things like airport screening? What secretary will be doing that?

MR. MAGAW: We would still be doing airport screening. TSA --

REP. SCOTT: And you're going to be doing that in another secretariat?

MR. MAGAW: That's correct. All of TSA's responsibilities today would move in total, as a block, nothing left behind at transportation, as I understand it now.

REP. SCOTT: Well, yeah, but I mean, there's a lot -- airport security, a lot of that is going to be airport management -- that's going to be the management of the airport is going to be in one secretariat, security of the airport is going to be in another secretariat?

MR. MAGAW: Management of the airports are independent. That's not under --but we will be coordinating with FAA, as we have been from the very beginning, to make sure we're working --

REP. SCOTT: Now where is FAA going to be after all this is done?

MR. MAGAW: FAA is -- has one -- one building of its own, and is refurbishing another one, and so they're side-by-side within a block of the Transportation building.

REP. SCOTT: And then they'll still be in transportation --

MR. MAGAW: They'll still be in transportation. The only part --

REP. SCOTT: The FAA would be in transportation and you're going to be in another secretariat?

MR. MAGAW: That's correct. The only part of FAA that would not continue tobe in FAA is the security group, which is 1,400 that are stationed virtually all over the country, some here in Washington -- they move to transportation.

REP. SCOTT: Let me ask another question. Mr. Bonner, following up the hairman -- part of the problem with Customs is that you are dealing with trade, and the better job you do in security the more problems occur in trade. After ll is said and done, how is that balance going to work out?

MR. BONNER: Well, first of all, it's very important that we maintain that balance. And the legislation that's before the Congress that the president roposed is, I think you know, Mr. Scott, includes a specific provision that rovides that not only is the border security function to maintain security at the border, but that it will also have a responsibility, a priority of the new department will be that we move legitimate commerce and trade efficiently. So, that's a role that I've had to balance since September the 11th.

I can tell you on September 12th, and 13th, and 14th, I had this exact problem, and the problem was that we had gone to level one alert at U.S. Customs, at all the border ports of entry into the United States, which is a much higher level of security. And within about a day or two, we had 10 or 12-hour wait times for commercial trucks trying to get across the border into the U.S., but principally our northern border. So, one of the things that I've had to grapple with is how do we maintain a very high level of security, which we are and we will, but to do that in a way that doesn't choke off trade, that allows the commerce to flow smoothly or relatively smoothly into the U.S. And we did -- we achieved that in about a week. But the reason I was able to do that is that I had both roles. I had a role of security, but I also had a role of trade facilitation.

And my point is, the worse thing we could do, the trade's worst nightmare is that you would take out the trade functions from Customs and leave them behind someplace, and now you have somebody that's in charge of securing our borders that is only interested in securing. So we have to maintain this balance, and the president's own proposed bill, by the way, suggests that these are both priorities that need to be -- they need to be balanced. They need to be harmonized. And we've done a pretty good job of that so far at U.S. Customs, I would submit to you.

REP. L. SMITH: Thank you, Mr. Scott. The gentleman from Wisconsin, Mr. Green, is recognized for his questions.

REP. MARK GREEN (R-WI): Thank you, Mr. Chairman. Admiral Collins, in your written testimony you state that the Coast Guard remains the recognized leader in the world with a maritime safety, security ability and environmental protection issues. I agree with you. Your office is probably aware, I have some concern and some suggestions on the search and rescue mission portion of your responsibility. What I'd like to do is if you would be willing to contact my office directly in the next day or so, I won't distract the committee with some of those questions -- so if you'd be willing to do that, I would appreciate it very much.

ADM. COLLINS: Glad to do that.

REP. GREEN: Thank you. A couple of questions that I have. I agree with what you have stated as to the importance of the Coast Guard remaining flexible and multi-tasked. Will that cause you to consider new design types in your vessel requests and your vessel programs going forward into the future?

ADM. COLLINS: We have already initiated this -- procurement is underway right now to purchase additional small boats for our search and rescue stations. And a new unit that we are just creating, a maritime safety and security team, the first one was commissioned in Seattle on the third of July. And it's a 70-person team. We have six of those funded through the '03 budget. They will be dispersed around the country, and they are to provide search capability in our ports and coastal areas. That is another plus for safety, by the way, and search and rescue, because there's additional presence. It takes the heat off, or the pressure off, some of our station -- stations and their assets.

In terms of the larger -- the larger assets that we're requiring, our integrated deepwater systems project is just been awarded. It was awarded on the 25th of June. It's going to recapitalize our major cutters, our major fixed-wing and helicopters, and most of the capability gap that we envisioned in the post-9/11 that we envisioned in the pre-9/11, quite frankly, and that was C4-ISR -- it was sensors, communications, secure communications, interoperability and connectivity, which is the absolute centerpiece of the deepwater project. That will give us much, much needed capability to have the awareness in the maritime environment we need to ferret out threats and push our borders out so that we -- so we don't -- we're not caught in this linear -- linear view of border security where we're only inspecting at a port of entry or a linear type concept of a border. Pushing the borders out, having a layered and depth strategy is a fundamental ingredient, I think of the future of our homeland security, and these acquisitions give us that.

REP. GREEN: How about having to go back and re-tool some of your existing vessels? Will you have to do that -- bolster their equipment and capabilities?

ADM. COLLINS: A part of the integrated deepwater systems project is, again, a recapitalization over a number of years, and that contract, as an acquisition strategy, calls for the contracting team, which is Lockheed Martin and Northrop Grumman in this case in a joint venture, to not only manage the acquisition of new assets in this system, but also develop a migration plans from the legacy assets to the new and invest in the legacy systems, as appropriate, as part of this migration plan. So that will be an inherent part of the contract strategy that unfolds -- unfolds as we speak.

REP. GREEN: In your written testimony, you state that the Coast Guard is a formal member of the national foreign intelligence community. Can you help me understand that, and that relationship, and how you work with other --

ADM. COLLINS: Well, that's a fairly recent -- recent development. It was a -- it was a piece of legislation that was enacted last fall. It puts us at the seat of the formal intel community at the table, in terms of collection requirements, and priorities and the like. So, we're a member along with the CIA, the FBI, NSA, Department of Defense intelligence apparatus. And it -- and it builds off the prior relationships with -- particularly with the Office of Naval Intelligence and the United States Navy, and sharing information, and setting priorities. It -- we're -- we are in many places far flung from our coasts as well as on our coasts. We do have collection capability and so forth to add value to that community, and it provides us the interplay and exchange of information interplay and the setting of priorities that is so very, very important to us to function across the wide range of our mission. I think that's a very a distinct -- this is one of those value propositions that we bring to the new department that we are in fact a member of the intel community.

REP. GREEN: Thank you, Mr. Chairman.

REP. L. SMITH: Thank you, Mr. Green. The gentle woman from Texas, Ms. Jackson Lee, is recognized for her questions.

REP. SHEILA JACKSON-LEE (D-TX): Thank you very much. Let me again, for the record, acknowledge both my appreciation for the presence of the witnesses but also my appreciation for the service. Mr. Magaw, your services and previous responsibilities, but it is to be or ongoing at this point, and I thank you for taking on the challenge. And certainly Mr. Stafford knows we've worked together in the past, and appreciate very much the work of the Secret Service, and the Coast Guard and, of course, the U.S. Customs.

And might I just say as well that my interest in FEMA's presence is because it does have such a vital role, and I do want to say for the record that I know Joe Allbaugh and I know that he is a good man, and that he has done good work, and I hope that he will accept the chairman's invitation to come before us, even though our time is short, maybe in the near future. But I do respect the fact that we in the state of Texas have had our share in our needs as it's related to FEMA, and they've always been very prompt and appropriate in serving us, and I do want to state that for the record.

Let me try to pose my questions in the frame of the dilemma that I foresee -- foresee us trying to attempt to respond to, and that is that the group that are before us today have both civilian -- or civil and criminal responsibilities, if you will, or security and civil responsibilities that you have had previously and now you're being put under a department called homeland security, and I think that is a dilemma that we will face even with the president's proposal, or as we make our way through trying to formulate a department that will work.

Let me raise some initial questions, that if you'll take some notes and I'll want to respond to -- want to have a response to. First of all, Mr. Bonner, let me just say that in traveling during the summer, you are doing an able job, but there are lines that are lengthy as relates to the intake or the points of entrance that you have to check on individuals coming into this country. And we've heard, I'm sure, from airports around the country, long lines. The other point that I want you to be able to comment on is, of course, we've had some concerns previously with U.S. Customs regarding allegations of racial profiling and issues that have been either resolved or litigated, and those are not diminished by putting them under the U.S. homeland security department, and how will you comport those issues as we move forward. And that's the conflict between this new, heightened security and law enforcement.

The Coast Guard, I will not make light of the fact that we who are in states with waterways are certainly very cognizant of the excellent work that you do as it relates to protecting those ports and making sure that they're not drunken boaters. How do we comport or mix that responsibility with the enormous responsibility that you're going to have, or that we'll be looking to you enhance with the security issues? I think they're extremely important.

And then, Mr. Magaw, I would hope that you would look at -- being a new department, I hope that you would look at a proposal that I have that takes from the border and transportation security some of these what I consider straight immigration services, and have a new division called Immigration Security and Services that talks about immigration security and includes immigration security and immigration services. One of my concerns, as it relates to immigration, that I constantly include, is that immigration does not equate to terrorism, and we should be very cognizant that there are people coming here, accessing, attempting to access legalization, contributing taxes, trying to work, and be part of the American process. So, I think that there should be a fifth division, and I'd like your consideration of that.

And as well, I'd like your consideration of making sure that your TSA department is enormously deverse. These front line individuals -- and let me compliment the staff for the security people that we've had preceeding you at Houston Intercontinental Airport. These are fine people. I hope that they will be able to be able to hired, or have the opportunity to be hired. And I hope you'll be concerned about diversity in the hiring of them.

And finally, Mr. Stafford, I am confused as to how you will stretch your responsibilities to deal with the new instructions that you'll be getting in the homeland security, and hope that you'll be able to answer these questions. It's been a mouthful of course, but I think this is so important as to how American will see these departments move into each other and balance civil and criminal responsibilities. Would you be kind enough to answer those questionsfor me?

Customs.

MR. BONNER: Yes. And let me just start very quickly by telling you that, first of all, I am concerned about wait times on actually very -- on the 13th or 14th of September for the first time I asked the U.S. Customs Service to post the wait times at all ports of entry into the United States at our land border ports of entry, and we've been doing so.

The good news is that -- and this is a generalization -- but I think we've been able to provide a high level of security without significantly increasing wait times as our land border ports of entry. And we've been able to do that by doing things like partnering with the trade and by push -- as Admiral Collins said, pushing the border or our zone of security outward so that our physical border is the last line of defense, not the -- not the first line of defense.

On the other hand, there are not only going to be some -- some wait times that will be encountered because of security requirements, and I think that the -- we have to understand that. But we're trying to do everything possible to manage that issue.

The second thing you asked me about was the racial profiling issue. And I think you know that I can't claim credit for it -- it was my predecessor thatinstituted I think a very good policy with respect to personal searches that addressed this issue head on. And I fully expect that the personal search policy that was instituted at the U.S. Customs Service is going to continue whether we're in the Department of the Treasury or we're moved to the Department -- a new department of homeland security.

ADM. COLLINS: The question was posed about the safety and security mix of missions in the Coast Guard. I might submit that mixing safety is security is not like mixing oil and water. They are very synergistic. I see them as flip side of the same coin. And you invest in security, you invest in safety; when you invest in safety, you invest in security. Security is not a new mission for the United States Coast Guard. We were formed for that very reason in 1790, and we have been doing it for 212 years, both as a military organization and as a civil law enforcement organization, and it makes us unique in the federal government. It's very synergistic.

When we invest in our search and rescue -- these are -- they're called search and rescue stations, but they are multi-mission stations. Every member of those stations have law enforcement authority, every petty officer and officer in those stations. So, when we invest in, under homeland security urgency, when we invest in new boats for our coastal ports and waterways for security purpose, we're also providing increased presence for safety at the very same time.

As I mentioned earlier, we created -- we're creating maritime safety and security teams, 70-people strong, active duty, 30 -- augmented by 30 reserve personnel, and we have 8,500 selected reserve in the United States Coast Guard -- and provide increased presence in our ports and waterways for the very purpose, and it is a -- safety as well as security. And it is very consciously done in their name. They're called maritime safety and security teams. They have the competencies and the skill sets to do both safety and security, as do all our platforms. All our ships, all our aircraft are multi-mission since 1790, and they have the competencies and the skill sets to do both.

So, I think all our missions are going to be enhanced by the attention on security in our waterways. I think it's going to be a positive across all our missions.

REP. L. SMITH: Secretary Magaw and Director Stafford, if you would respond very briefly to the questions.

MR. MAGAW: In terms of the question on immigration services, I know that the Office of Homeland Security is very concerned that the -- in setting this homeland security up that the good people are not delayed from getting their due process.

And the TSA diverse workforce, this is the first opportunity that I've had in almost 40 years now of public service to start an organization, and I guarantee you, it's going to be diverse. If you look at my top staff, if they walked in here today, you would be pleased. There's Asians, there's African-Americans, there's Hispanics. I could go through the whole thing. But we will do that throughout the ranks, throughout the whole organization, and I guarantee you that. And the good people of Hobby and Bush International Airport, every airport in the country, those people who are performing well and can pass the screening and the testing and the training will be hired into the new organization.

REP. JACKSON-LEE: Thank you.

MR. STAFFORD: We've -- we've always been too small to do our job alone. That's why we form partnerships every day the president leaves the White House, we're too small to do that, and we form partnerships with local, state, and county police departments. Should this department materialize, that's 170,000 strong, so I would envision not only imparting our methods and our methodology within the department of prevention, but also looking to the rest of the department for human resource needs and also for their -- any other needs that the Secret Service might have.

REP. JACKSON-LEE: Thank you. And I thank the chairman.

REP. L. SMITH: Thank you, Ms. Jackson-Lee. The gentleman from North Carolina, Mr. Coble, is recognized for his questions.

REP. HOWARD COBLE (R-NC): Thank you, Mr. Chairman. Let me try to get my questions in before that red light illuminates.

I know the bill before us has deemed the Coast Guard as a distinct entity, with the commandant reporting directly to the secretary, yet the legislation also provides for the transfer of Coast Guard functions to the undersecretary of border and transportation security. Now, how will this play out logistically?

ADM. COLLINS: Clearly, the devil's in the details there. The details -- and one of the reasons for putting together agencies that have a common purpose as we do is to drive through some of issues and resolve those issues. So, it would be really preliminary at this point to be able to have a crystal ball on that.

REP. COBLE: I was going to say my question may be premature right now.

ADM. COLLINS: I think that currently we, as the wiring diagram has us now, we are part of the transportation border part, division of the new department, reporting through the undersecretary. That's -- that's the proposal on the table. And again, exactly how the mechanics of the interrelationships and all that is going to play is, I think will play out and that's one of the roles of the new secretary to figure all that out. Clearly, the intent of the proposal going forward is to move the Coast Guard intact, as a separate entity -- those words are used -- a distinct entity -- those words are used -- and that implies that our functions, our current authorities, our current responsibilities, and our current structure will remain intact as an entity, distinct entity within -- within the new department.

REP. COBLE: And you could probably answer that better, Admiral, five or six weeks down the road, and I'll talk to you again subsequently.

Mr. Bonner, in my opening statement you recall I indicated the desire to eliminate duplication. With that in mind, what are the distinction and similarities between Customs and INS, and are there any areas where you would consider them identical or nearly identical within the two agencies?

MR. BONNER: Well, that's sort of a big question, but let me just start of by saying that there -- the distinctions are that the U.S. Customs Service is responsible for enforcing many different laws, not only Customs laws and trade laws, but actually about 400 different statutes on behalf of 40 federal agencies. So, we have our -- we have a huge responsibility in terms of people, goods, commerce, vehicles crossing the border.

The immigration service obviously has some very significant responsibilities that are quite distinct, and that is the determination as to who can legally enter, I mean the admissibility issue, particularly if you're a non-citizen. So, the actual responsibilities, I would say, of the two agencies are distinct in many ways. What -- where they overlap is not the responsibilities or the functions per se. I think where you see -- you do see two agencies clearly -- every American knows this -- you see two agencies that are at every -- generally at every border port of entry into the United States, whether that's an international airport where you go through immigration and then Customs, or whether that's at our land borders, where you're going through, in many instance, U.S. Customs, or you may be -- you may be going through immigration.

So, I think the -- I think they're distinct in terms of the laws they're enforcing. Immigration obviously is enforcing Title 8 of the United States Code, which is the Immigration Code. Customs is enforcing Title 19 and a lot of other provisions and a lot of other laws that Customs has responsibility for enforcing.

REP. COBLE: I got you. Mr. Magaw, the same question could apply with the Coast Guard and TSA. Do you want to insert your oars into these waters on whether there may be identical duties or distinctions?

MR. MAGAW: Well, it's -- it's clear in my discussions with the Office of Homeland Security that as these units are brought together and working in one secretariat, that any duplication will be -- will be worked out. So I'm -- I'm one that wants to be very careful in duplication, and will continue to be very observant as I go along so that TSA is not doing things that are duplicative.

REP. COBLE: Thank you, sir. Mr. Chairman, I'm told that you may have another question, and I will yield the balance of my time to you.

REP. L. SMITH: How nice, Mr. Coble. I didn't know you were going to do that. Thank you for yielding.

Mr. Magaw, I'm going to squeeze a question in here just to follow-up on what you've been talking about. You mentioned in your testimony that your intend to place more of the federal air marshals on flights, and you say we are on target with our goals of hiring, training and deploying FAMs. I'm not sure that lightning is going to strike twice, and I'm not sure terrorists are going to use commercial airlines again. However, what are the goals that you're talking about as far as deployment the federal air marshals? What percentage of commercial flights do you expect or intend to have the air marshals on?

MR. MAGAW: If I could answer that question for you --

REP. L. SMITH: Just real quickly, if you could.

MR. MAGAW: -- in a classified --

REP. L. SMITH: It's classified?

MR. MAGAW: -- if I talk the number, I'm playing right into the hands of those terrorists. So, Mr. Chairman, I'd like to discuss that with you, but do it in a private session with any member.

REP. L. SMITH: Okay. Fair enough. And I'll comment on another subject in passing that strikes me as worthy of note, that I noticed that you say you have 50 employees as of last January, and you expect to have 60- to 65,000 employees by the end of the year. I think that's a new record for growth in the federal agency or department, and by my reckoning, that's a 400,000 percent increase. I think it's justified because you're talking about the baggage screeners, but even people who want to increase the size of the government might be impressed with that magnitude of increase. You don't need comment. That was just an aside because I hadn't seen those figures before.

Again, Mr. Coble, thank you for yielding. And the gentleman from California, Mr. Schiff, is recognized for his questions.

REP. ADAM SCHIFF (D-CA): Thank you, Mr. Chairman.

It seems to me that the challenge of this new department is going to be to provide seamless security for the country in the sense that if you had a terrorist plot involving the conveyance of weapons material -- whether chemical, biological, radiological, or God forbid, nuclear -- in a cargo ship of a cargo container of a ship, and you had a timing mechanism conveyed in a pleasure craft, and you had some of the terrorists applying for a visa to come to the country, you would want a seamless web where each of your respective agencies can play its part, can communicate with each other, can identify the threats, and prevent or deter the threats. This, I think, will require a very strong level of authority for the new secretary to have the ability to allocate resources among your various agencies to reallocate them.

And that raises two questions for me. One is whether you anticipate and are prepared to have a secretary that can tell you that -- here's where the weak link is. We need greater staffing at Customs, and we're going to move people from the Coast Guard to Customs. Or we need greater assistance in the INS, and we're going to have to cut the budget in one of the agencies to raise the budget of INS. Do you anticipate that the secretary will have that authority and use it, notwithstanding the fact that some of your agencies are being moved into this department in their current form, in their current structure?

And a further question is, what will the budgetary impact be? Now, the administration is proposing, I think at least for the short- term, that this proposition, this new department be budget neutral. I think that while that is theoretically possible in this calendar year, in future calendar years that is highly, highly unlikely, and the costs could be enormous. How would it be even possible for this new department to function in a budget neutral way? How would your agencies be able to talk with each other? Won't this necessitate the development of completely new information systems so that your computers can talk with each other and your personnel can as well? Is this -- where are the likely additional new costs going to be for your respective agencies?

MR. MAGAW: In answer --

MR. BONNER: That's a huge question, and I'm going to let Mr. -- Director Magaw answer it. I just wanted to say though for the record that Congressman Schiff actually was one of my best hires as a U.S. Attorney -- (laughter) -- and I wanted the record to reflect that. Now -- now I'll defer to Under secretary Magaw.

MR. MAGAW: I believe it's clearly the intention to make sure that this secretary does in fact have that authority. And I would support that. You have to -- you cannot have a national homeland security if he can't take -- he or she -- can't take assets from me and give them to somebody else as situations arise. So, I see that as a very important position, and I am under the full understanding without specifically asking that question, that that person would have that authority, because that's the -- that's the bottom line of this. If they -- if they don't have the full authority to do that, and that's why you sometimes haven't had the cooperation that we've wanted in the past, they have to have that authority. And I suspect that this secretary would be given that authority. In terms of information systems, in terms of those kinds of things, for TSA, we are -- we are right in the process of trying to find space and communication equipment. So we are going to be, without getting ahead of Congress, we're going to work very closely with homeland security, not only in the -- and with Secretary Mineta, in terms of these assets as we move froward so that we don't have a bunch of new systems that won't be compatible.

MR. BONNER: And if I could just join in that and say that it is absolutely necessary for the secretary to have this authority. It will give him the authority to rationalize the process by which budget requests are made, and the secretary ought to make decisions. If that means moving resources out of Customs to Coast Guard or TSA, that's -- that's what should be done if that's where the resources are necessary to protect American and protect the American people. And that's true of even IT systems which are enormously expensive systems, but this will give an opportunity a secretary to look and make sure that we have the right information technology platforms so that we can link up or databases. And I would suggest to you this, that if this is done right -- and I'm not saying this is easy -- but if this is done right, I think we will produce efficiencies, and I think we will produce efficiencies that lead to cost savings that can be plowed back into homeland security, I hope, or some other area. But I think we actually can do this in a revenue neutral way if the secretary has the appropriate powers and authorities, because you'll have -- you eliminate some duplicative overhead and that sort of thing as you -- as you consolidate agencies and move them under one department of homeland security.

ADM. COLLINS: I have just a -- just a few comments to add to that. Clearly, the '03 budget that is now before Congress reflects the Office of Homeland Security imprint and review, and that was part of the process. I would suspect that the '04 budget particularly will be viewed through the lens of an integrated department, and those are all good things. And we mentioned one of the real advantages of this new department was unity of purpose, and I -- I think unity of purpose goes to policy, strategy, resources, and structure, and we'll get that, I think, with the new -- with the new department.

As far as IT concerns, as Governor Ridge articulated last fall, he had four major first things he wanted to focus on, and it was bioterrorism, and first responders, and so forth, and one of them IT. And clearly that is an -- has been an imperative within the policy committees within the Office of Homeland Security. I think it will be carried forth in a very robust way into the new department to consider how IT is used effectively in an integrated way. And I might submit that we are partnering very, very closely with Customs on sharing information and developing and contributing to, you know, what data elements do we need as your develop your system in Customs, and done in a very collaborative, cooperative way and making a great deal of progress. And I see that just carrying on twofold, threefold, fourfold as we get into the new integrated department.

MR. MAGAW: Well, just a few quick things. We currently have IT projects underway with Customs and with TSA, even before this announcement, so if it does materialize, I think those projects will transfer very well.

REP. L. SMITH: Thank you, Mr. Schiff. The gentleman from Ohio, Mr. Chabot, is recognized for his questions.

REP. STEVE CHABOT (R-OH): Thank you, Mr. Chairman. As I mentioned before in my opening statement, I would like to direct my questions to Undersecretary Magaw.

Mr. Magaw, as you may know, three weeks ago, security screeners at the Greater Cincinnati-Northern Kentucky Airport failed to detect fake guns or real handguns enclosed in plastic four out of six times in undercover tests performed by the Transportation Security Agency -- Administration, rather. I -- I've been secured about security at the Cincinnati airport even prior to September 11th, and have previously written to the Department of Transportation expressing my concerns.

With passage of the Aviation and Transportation Security Act, there's a greater responsibility and accountability on the part of the government. I'd like to know why the Cincinnati airport faired so much worse than other areas around the country? And what steps does the Transportation Security Administration plan on taking to improve security at the airport? And how long do you anticipate that this process will take? And finally, if the security problems are not resolved, what specific actions will be taken, and what assurances can you give to the people flying into and out of the Cincinnati airport that they are safe?

MR. MAGAW: The -- the concern that I had a number of months ago in first coming on board to undertake this task was what is getting through the airports and why. Why is it getting through these checkpoints? What does it look like? Can you position a weapon in a certain place, in a certain way that's very difficult to be picked up? And if so, we need to make sure that in our training we teach them to look for those kinds of things. So, in terms of finding the weaknesses throughout the country, it's now provided the basis for the training that we're giving the federal force as we're bringing them on board.

The concern that I have is that I want to continue -- as soon as that federal force is in, or even while these other units are in, we're calling their attention to the shortfall. We have people on board there now from TSA who are giving them extra training if necessary, discharging them if necessary, doing the discipline that you're -- you're referring to here. But my concern is -- was early on, what is the problem out there? And we've identified them.

I'm sorry that that report got out, because it also identifies them to the terrorists. But by identifying, we're going to eliminate them. We're going to stay ahead of trying to -- in Europe last week, the week before last, discussion with the authorities over there about how to position weapons, how to position knives, how to position explosives in baggage. All of that is a huge concern to me, and I want to know where the problems are. I want to know what is being done so that we can circumvent it in our training.

We have people now in Cincinnati. We are recruiting in Cincinnati. We are looking at the checkpoints in Cincinnati, as we are in virtually all of the airports in the country now -- I think over 300 of them we're in by next week, and 429 by a few weeks after that. And the federal force is going to start arriving in these airports and so that we are going to meet that November deadline. But in the meantime, this federal force coming in, I want them trained. And we're not going to stop there. We have not only our inspector general, which I have had discussions with, but also an inspection team that I have set up since arriving there, that is going to do continuous screening throughout the country to see how we're doing.

REP. CHABOT: Thank you. It just seem to me that the -- the performance of the security at the airport, according to these tests, it's just -- it's just pitiful, that with only a 42 percent success rate, I mean, you ought to do at least that well by accident.

MR. MAGAW: Well, and almost by accident, sometimes they only have eight or 10 hours of training before they're put on that line. Now, we have changed that, and we have caused them -- even though some of them are still contractors, we have caused them to upgrade their training and we're doing observation at these checkpoints every day. But within a few weeks now, and certainly within those couple of months, we are going to have a federal force at virtually every airport.

REP. CHABOT: And I can see my time is running out here, but again, it just seems to me, and I appreciate your responses, but your agency just has to do a better job. And -- and when you consider that I've often heard it said that in the war against international terrorism, we have to be successful every time.

MR. MAGAW: Every time.

REP. CHABOT: The terrorists, particularly when you could be dealing with weapons of mass destruction or God only knows what could be used against this country, they only have to be right once. So we have to do a lot better job than we have thus far.

Thank you.

REP. L. SMITH: Thank you, Mr. Chabot. The gentleman from Georgia, Mr. Barr, is recognized for his questions.

REP. ROBERT BARR (R-GA): Thank you. Undersecretary Magaw, with regard to the incident, I believe it was on July 4th at Los Angeles International, that perpetrator, terrorist very likely, was taken out by an El Al security agent who was on, is that correct?

MR. MAGAW: Yes, that is correct.

REP. BARR: The last line of defense at a ticket counter for somebody coming are the people behind that ticket counter, is that correct?

MR. MAGAW: And some local law enforcement is there in some cases, but no TSA personnel.

REP. BARR: You certainly don't have any problem with the last line of defense being appropriately protected by trained, armed personnel, do you?

MR. MAGAW: Well, the responsibility of TSA is to secure that entire airport -- (inaudible) --

REP. BARR: He was taken -- he was -- he was killed and stop from killing or harming additional people, which he apparently would have done, very clearly would have done, had that El Al agent not been armed and shot him to death, is that correct?

MR. MAGAW: That's correct, yes sir.

REP. BARR: So, given the fact that that last line of defense, the person behind the point to which the terrorist is attempting to go, or from which he is operating, in this case the ticket counter, there's nothing wrong with having people there that are armed, is there?

MR. MAGAW: There's nothing wrong with having people there that are armed, and that's what we're going to do with the airport family, at every airport. It is the general manager of the airport, the security people, is do a complete survey. Where are the weaknesses? Is it in the --

REP. BARR: But what I'm trying to do is -- and I think you know where I'm going -- I'm trying to draw an analogy to the cockpit of an airplane. Why are you so adamantly opposed to providing that pilots, who operate in essentially the same way as that agent there, that security agent, in a position where they have an opportunity, a unique opportunity to stop somebody from continuing to kill people -- why don't you want that person to be armed? Why are you so adamantly opposed to that?

MR. MAGAW: Well, sir, that to me is an altogether different circumstance. I spent an awful lot of time looking at the pros and the cons of arming the pilots in the cockpit, and I came to the conclusion that they need to maintain control of the aircraft, regardless of what happens in the back. So, in order to do that, I'm -- I'm moving forward to secure that cockpit with -- with the doors and making it secure, give them review-view mirrors, so to speak, by placing --

REP. BARR: Well, if the pilot -- if there are two people in that cockpit, if they're faced with the following scenario, either they allow the terrorists to take over the plane and crash it into a building or the ground, or to divert their attention from crashing the plane for a few minutes to shoot that terrorist, why wouldn't you want them to shoot the terrorist?

MR. MAGAW: Well, I propose that won't happen, because if your cockpit is secure, and we put cameras back in the aircraft so that that pilot has a rearview mirror, they very quickly need to control the aircraft and get it on the ground. And what also was told to me by very many pilots, that safely, as they're moving, they can see what's going on back there, as safely as --

REP. BARR: Doesn't that take away their attention from flying the plane?

MR. MAGAW: As they're flying that plane with control, the can tip a wing to the right or to the left very safely, stick the nose up or down, and the person who -- the person or persons who are trying to do harm back there, or try to get in the cockpit, they won't be able to find -- excuse my expression -- their bottom with both hands, let alone get a handle -- get a handle of that and open that door.

So -- and then -- and then the air marshals, sort of screening outside the aircraft, making the cockpit safe, giving them rearview mirrors, and -- but I am looking very hard now and trying to consider all the possibilities in terms of giving them less than lethal -- a less than lethal weapon. And I hope that --

REP. BARR: So, we hunt the terrorist while he's taking over the aircraft.

MR. MAGAW: Well, he's not going --

REP. BARR: All I'm -- all I'm saying is, and I know you obviously have absolute faith that there will never be a situation like September 11th. I don't think that we can make -- tell the American people that we can absolutely guarantee that there will never be a situation where the terrorist makes his or her way to the cockpit. Obviously, you know, we have a difference of opinion on this. I would -- I think there is a very clear analogy to what happened on July 4th in terms of that final perimeter and having the people behind that final perimeter armed and ready to take these people out.

MR. MAGAW: You see, the airlines -- the airlines' procedure, and the procedures before 9/11, were to cooperate with the terrorists because they're only going to take the plane someplace, they only want to make a statement, even allow them in the cockpit if necessary. That whole philosophy now has changed.

REP. BARR: Well, let me -- the time has expired. Could I just ask one final question, Mr. Smith?

REP. L. SMITH: Please proceed, Mr. Barr.

REP. BARR: Thank you very much.

REP. L. SMITH: If it's a brief question and a brief answer, I should say.

REP. BARR: Thank you. I'd like to give you an opportunity to clear up something for the American people, and something that I hear on a regular basis, and it has to do with checking people before they get on the planes. They may have a lot to fear from members of Congress, but hijacking an airplane I don't think is one of them, yet you see members of Congress, you see airline pilots searched, you see military uniforms, military officers in uniforms searched and so forth, yet, you know, you see other people that get on that seem to fit a profile, a legitimate criminal profile perhaps, not. Is -- is the -- is your agency, and are the airport security personnel refusing or not taking proper steps to identify that people that really do potentially pose a threat -- not an airline pilot, not a military four-star general, I've seen that, not a member of Congress, but somebody that might seem to fit a profile.

MR. MAGAW: Well, profiling is a subject that we're working with the Department of Justice now. But let me just mention to you, if you're a memberof the United Airlines that was coming back from South America before we got the doors totally reinforced that stuck his head through there -- the, you know, that person would have -- would have been able to qualify for a frequent flyer pass. The pilots the other day, if they had had a quick pass and that person hadn't have stopped and talked to them, they never would have smelled the alcohol. Over -- I'd have to be exactly sure, but it's somewhere between five and seven pilots have been stopped and had weapons loaded on them as they went on that plane to fly it. As I have talked to people around the country all through Europe and Asia who have worked through these issues, you have to search everyone. Otherwise, you're going -- you have to treat everyone as equal as they go through, otherwise the terrorists are going to watch this incident, and they're going to place things in handbags as people sit them down, they're going to find all kinds of ways to circumvent your system. So I'm trying to do the best job I can in that area. And I'm sorry it's so long.

REP. BARR: That's fine.

REP. L. SMITH: Thank you, Mr. Barr. The gentleman from Florida, Mr. Keller, is recognized.

REP. RIC KELLER: Thank you, Mr. Chairman.

And Mr. Magaw, let me ask you a question relating to the sharing of intelligence information that a person is on a federal terrorist watch list with the airlines. And my concern is, as I mentioned in my opening statement, we had these to guys, Almihdhar and Alhazmi who were on the federal watch list, known by the FBI, CIA and INS, as of at least August 23, right before September 11th, and this information is not shared by American Airlines. So you have two guys who are on the federal terrorist watch list with known links to Osama Bin Laden who go up to the ticket counter and use their real names, real I.D.s -- the guy had their names in the phone books -- and they said "Welcome aboard," and then a plane slams into the Pentagon and kills 190 people. So much of what we talked about is sharing information among the government agencies. I'm concerned about sharing the information that people who are on the federal terrorist watch list with the airlines.

And so when we passed the Patriot Act, the anti-terrorism bill in October, we required that the FBI report back to us within 120 days on the feasibility of allowing airlines to do some sort of computer check to see if they're on a terrorist watch list. El Al does that using information from Israeli intelligence sources already, so we know it's feasible. The time period expired in February. We haven't heard back from them. And when I asked Justice and FBI why, they say, "Well, we're working with TSA to gather the information and we're just not ready yet for your report."

So, can you tell me now, as we sit here, are we checking for people on the federal terrorist watch lists before they get on the airplanes?

MR. MAGAW: The -- what the Justice said is that they're still working on the -- on the watch list. There are two lists. There is a no-fly list -- what we call a no-fly list. That's a list of people that for one reason or another we -- this country, either the FBI or one of the other agencies, or they are a terrorist threat -- if they're on that list, then that list is -- when there name is punched in at an airline now, that will show up. And they then are given numbers to call and information. We have to do a better job, though, of getting the information to the airline personnel themselves. Part of it is in the past there's been clearance problems. Part of it has been communications problems. That's the biggest one: being able to communicate to them in a quickly and a timely manner.

Homeland security as it is proposed, and in the structure, you will see a section there that does just that in terms of intelligence. It collects it from everywhere. It then has the responsibility to get it to the people who need to know it, to include a small general aviation. So that is a huge problem. Clearly you have identified it. We are working on it. I expect to get that corrected, sir.

REP. KELLER: All right, well, let's take the example you gave, the federal no-fly watch list. Evidently that wasn't being done before September 11th, because these guys' names presumably would have come up when you punched in their names.

MR. MAGAW: To my knowledge. Again, that's before my time. But my knowledge -- to my knowledge, they were not on the no-fly list.

REP. KELLER: Okay. When you say put their names into a system, are you talking about the CAPS (ph) system at the airlines?

MR. MAGAW: No, it's a -- it's a no-fly list, and it's in -- it's available as soon as a name comes in there that is on that list. It will alert both the airline and FAA. And we had that happen just a few weeks ago, and that is why the individual was arrested in Chicago when he arrived. And so still much work to be done, but it's clear that it has to be -- all the loopholes have to be closed. And homeland security does that with that fifth part of the organization. 4 REP. KELLER: Okay. Mr. Stafford, let me ask you a question. Today President Bush is in New York announcing, appropriately, how our country is going to get tough on cracking down on white-collar financial crimes. Many people think of the Secret Service as the folks who protect the president and vice president, and of course they do that, and it's the most important thing, I think. But they do a lot more, such as investigating counterfeiting and other white-collar financial crimes. How will putting the Secret Service under the umbrella of the Department of Homeland Security change the role that the Secret Service has in investigating counterfeiting and other white-collar financial crimes?

MR. STAFFORD: Well, I hope it doesn't change the rule at all. As you know, we were created in 1865 specifically for investigative reasons, and at that time in our history a third to a half of all the money in circulation was counterfeit, and there was financial chaos in our country. That's why the Secret Service was created. We've done a tremendous job throughout the 137 years. In 1990, when we recognized that technology was driving -- technology-based crime was driving just about everything that we did, whether it be counterfeiting or identity fraud or credit card fraud, telecommunications fraud, cyber crime, we developed a program called electronic crimes special agents program, and we have specially trained forensic agents in every one of our field offices. That's an effort that we are very proud of. It's one that served us well not only in the investigative side but on the protective side. We now not only have to safeguard the president from physically setting up barriers and human resources, but we also have to safeguard him from a cyberattack. Any hotel, as you know, is driven by electronics, whether it be the ventilation system, the elevators, the escalators or the rooms. So that's a huge component for us and it's cross-cutting for us.

REP. KELLER: Thank you, Mr. Chairman. I yield back.

REP. SMITH: Thank you, Mr. Keller. Mr. Stafford, I just want to thank you for addressing the subject of cybercrime in your testimony -- and you just alluded to it right here. I think that's an important subject. We have had more hearings on that subject than any other as a subcommittee, and I appreciate your mentioning that in your testimony.

The gentleman from Virginia, Mr. Goodlatte, is recognized for his questions.

REP. GOODLATTE: Thank you, Mr. Chairman. Director Stafford, recently one of the major national news magazines did an investigative report on the Secret Service that skewered the agency pretty severely. It cited literally dozens of various types of problems in the agency, everything from security lapses to embezzlement or theft, sex scandals, barroom brawls, morale problems. I don't want to turn the hearing into a review of all the allegations that are made in that story. I do want to give you the opportunity to tell us how the agency is responding to that, whether you are addressing any of the concerns raised in that article; and, most importantly, you think this transfer of the Secret Service from the Treasury Department to the Department of Homeland Security will affect any efforts that you are undertaking to reform the agency.

MR. STAFFORD: That article was yellow journalism. I think any time you go back in any agency's history over 30 years, is what they did -- it wasn't an investigative report. It was taken directly from --

REP. : (Off mike.)

MR. STAFFORD: It wasn't an investigative report on the part of that magazine. It was taken directly from a 28-page document -- that was submitted anonymously I might add -- by people who may have been fired by the Secret Service, by people who may be suing the Secret Service, by people who are sinister, and have motives of revenge. The Secret Service today is stronger than it's ever been. It's an outstanding organization. We have tremendous people. Our people are there for the right reasons. They work extremely hard. They have character, they have integrity. That article -- they took some truths -- again going back over 30 years -- mixed that with some distortions and a number of untruths. I can't explain to you why they did that. You'd have to ask that media outlet. But I can tell you that they came to us three months ago saying that they wanted to do a very positive article about the Secret Service, all along having that document and all along going a very different direction.

REP. GOODLATTE: Let me ask you this: One of the things that has been alleged is that there has been a significant loss of personnel to other government agencies, particularly to the agency represented by the gentleman sitting next to you, the Transportation Security Administration, and there had been problems with maintaining the staffing levels that you need to maintain as a result of Secret Service agents leaving to do work for TSA. Now, I certainly respect the need of TSA to have good qualified people. I would argue that what the Secret Service agency does is at some respects and at some points a higher level requiring in many instances very sophisticated and talented people. And I would like to know what effect this has had. And, again, I would like to know what effect having you both within the same department will have on it. Will it be a positive influence, if you are not in two different Cabinet departments, the raiding that has been going on?

MR. STAFFORD: I'll look to Mr. Magaw to draw on those former Secret Service employees whenever we can, but again, if you are referring to that article it's untrue. They didn't do their homework. Our attrition rate is about 2.5 percent for the agents, and again any companies in America would like a 2.5 attrition rate. If you add the retirements in it about doubles to a little over four percent for the agents. The retirements we had planned for -- the demographics really spoke to those numbers retiring in the last year to 18 months. We have lost a number -- in fact, we've lost about 131 of our 1,100 new foreign division officers to TSA. Those uniform --

REP. GOODLATTE: That's substantially higher than 2.5 percent.

MR. STAFFORD: Well, I was speaking to the agent ranks, which I thought you were referring to initially.

REP. GOODLATTE: I was.

MR. STAFFORD: That was 2.5 percent. Uniformed division officers are up around 13 percent right now attrition rate, and it's going to go higher. Many of them find the TSA federal air marshal position attractive, and many of them are moving in that direction.

REP. GOODLATTE: Are there things that need to be done to make you more competitive and able to retain officers, as opposed to losing them to other government agencies or the private sector?

MR. STAFFORD: In uniformed division ranks there is. We can't compete pay-wise right now with the federal air marshals. I think that may change in the near future and slow down that migration in that direction.

REP. GOODLATTE: Thank you. Mr. Magaw, would you like to say anything with regard to that?

MR. MAGAW: Well, thank you for asking. I spent 26 years in this organization and I -- in the Secret Service, and I sat in the same position that Brian is today. Not only do I know him to have great integrity -- the whole organization has great integrity. And I would agree and not repeat what he has just said about the article, about the way they went about it. It's not an investigative report. You see it's had no legs. And I am personally offended by it. And while I hope I am not stepping on ground that I am not welcome, I support the director in every comment that he has made.

REP. GOODLATTE: I thank you, Mr. Magaw. Thank you, Mr. Chairman.

REP. SMITH: Thank you, Mr. Goodlatte. The gentleman from Indiana, Mr. Pence, is recognized for his questions.

REP. PENCE: Thank you, Mr. Chairman, and thank you for holding this very informative hearing on issues that we will all be wrestling with this month.

I want to address a question to Mr. Magaw, largely based on your testimony a few moments ago to the gentleman from -- in response to the gentleman from Georgia. You said that in the aftermath of the July 4th incident at LAX that there was -- and I don't want to put words in your mouth, Mr. Magaw, but you said that there was a review underway right now that the charge of the TSA is to secure the entire airport. I came in from having done a series of parades on a very hot day in Indiana, and like every other American coming in from a picnic was deeply concerned about what we saw on television that day. But to the extent that this -- at least the evidence now continues to support a conclusion that this was not a coordinated attack. This may well have been an isolated incident, perhaps first motivated by terrorist intent, but not coordinated by terrorist resources. My question to you is: What should the public -- what should the Congress anticipate in the way of changes to airport security in the wake of the LAX event?

MR. MAGAW: Well, it is true that TSA, by the authority this body has given us, has the responsibility for the entire -- the security of the entire airport. We intend to work with the entire airport family in that we look at our key responsibility as the checkpoints in terms of the federal force and also the baggage examination. Having said that, with the assets that are there at the airport, coordinating with the local law enforcement, with the airport manager, we want to do a survey of every airport -- in fact, some of them have started -- to include the sewer system, to include every possible way that security can be -- that there is a loophole in security -- and with all of those entities figure out at each airport -- you've seen one airport, you've seen one airport -- they're all different. And so we want to figure out at each airport and that federal security director along with the airport manager, along with local law enforcement -- we will go through that entire survey and together they will figure out how to close these loopholes. We don't intend to put a federal force throughout the airport. You know, we do have -- we do expect to have a few of our law enforcement personnel assisting the state and locals in observation, in maybe some interviews of people who don't appear to be acting correctly -- those kinds of things. But it's going to be a team effort. It is not a case though where we are going to put a federal force at these ticket counters.

REP. PENCE: And a question for Director Stafford. I am a great admirer of the Secret Service, and of your work in particular, and appreciate your comments about that magazine article. My question has to do more with structure. I am a limited government conservative. I frankly think it's a good thing when police agencies and investigative agencies of the federal government are not particularly coordinated in some instances in terms of the survival of our liberties. Does it make any sense to you or anyone at Secret Service -- does it make more sense for the Secret Service to move into the Justice Department as opposed to moving into the Department of Homeland Security? Is the Justice Department perhaps a better fit than either Treasury was or Homeland Security would be in your judgment? And, if not, why not?

MR. STAFFORD: The Justice Department move really hasn't -- has never been proposed. As you know, we have been in Treasury since 1865. I think it made sense in 1865 for the reasons I mentioned earlier, for counterfeiting, and we were the only game in town in federal law enforcement, investigative law enforcement agency in 1865. Now it does make sense to make some moves.

Homeland security for us, our mantra, what we teach our agents, prevention. We can tactically respond to just about anything. Our people are well trained. But that's not a place we want to be. We want to prevent things from happening, whether that's an attack on the president, whether that's an attack on the vice president, whether that's an attack at the Super Bowl or the Olympics, both of which in the first two athletic events that the president assigned the Secret Service to safeguard this past year. So we focus on prevention. We do a tremendous job, our intelligence division, in concerning intelligence information. Our analysts do a tremendous job analyzing it and putting together threat assessments that are clear and threat assessments that we can respond to, and we can put countermeasures in place to safeguard those we are charged with safeguarding.

You can take that same methodology that we have and do the same thing on any level. Right now we are traveling around the country with Secretary Paige, the secretary of education, and imparting our research and our knowledge through our National Threat Assessment Center that we studied in school violence. And we are the only ones that have ever done an operational study on school violence and how to prevent shootings at schools. And we found some very interesting things that have already helped schools prevent violence and shooting at schools. We think we can do that same thing for the nation in the Department of Homeland Security.

REP. PENCE: Thank you, Mr. Chairman.

REP. SMITH: Thank you, Mr. Pence. The gentleman from Virginia, Mr. Scott, is recognized for a quick question to Mr. Magaw.

REP. SCOTT: Thank you, Mr. Chairman. Mr. Magaw, in response to the question on arming pilots, has your office done an analysis of the pros and cons of arming pilots that we could have the benefit of?

MR. MAGAW: We'll put the pros and cons together for you, yes, sir.

REP. SCOTT: Thank you.

REP. SMITH: Thank you, Mr. Scott. That concludes our hearing --

REP. JACKSON LEE: Mr. Chairman?

REP. SMITH: The gentleman from Texas.

REP. JACKSON LEE: May I ask a question to get back in writing?

REP. SMITH: If you would submit your question in writing, as I have questions and as other members have questions, we would appreciate the witnesses esponding to us within a week, if at all possible.

REP. JACKSON LEE: Thank you.

REP. SMITH: Let me say to members that we do not have another round of questions because this room needs to be vacated so another subcommittee can have a markup that actually begins in six minutes. We were supposed to have vacated the room about 10 minutes ago. But that does conclude our hearing. And I want to thank our witnesses for their testimony, which has been very, very helpful. I also want to say again that I regret that Mr. Allbaugh, the director of FEMA, did not find the time to testify today, because I think the American people would have greatly benefited from hearing what FEMA would do to both respond to a terrorist attack or anticipate a terrorist attack. But, gentlemen, we certainly appreciated your testimony which was very informative and benefited us and those who are watching as well. So thank you very much, and the subcommittee stands adjourned.

END

LOAD-DATE: July 10, 2002