Hearing of the Homeland Security Subcommittee of the Senate Appropriations Committee

HEARING OF THE HOMELAND SECURITY SUBCOMMITTEE OF THE SENATE APPROPRIATIONS COMMITTEE
 
SUBJECT: THE FISCAL YEAR 2004 APPROPRIATIONS FOR THE BUREAU OF CUSTOMS AND BORDER SECURITY; TRANSPORTATION SECURITY ADMINISTRATION AND FEDERAL LAW ENFORCEMENT TRAINING CENTER
 
SEN. PATTY MURRAY (D-WA): Mr. Chairman, thank you. I just want to welcome all of our witnesses. And I'll submit my statement for the record.

Let me just say that this is a very important hearing because we all know the importance of security since September 11th, obviously, but we also know the economic impact of the decisions we make. And balancing that in my state is extremely important.

We're the number one trade state in the nation and we want to make sure that our borders are secure, that our ports are secure, but that we impact the flow of commerce as little as possible, because it is having a severe impact on our state as we struggle with the economy. So I do have a number of questions to ask both Mr. Bonner and Admiral Loy in that time period. Thank you.

SEN. MURRAY: Thank you very much, Mr. Chairman.

Commissioner Bonner, let me begin by just thanking you for all of your efforts on the 24-hour manifest rule for U.S. container cargo. You and I discussed this in my office, and I shared with you my concerns about the economic implications and the security implications of cargo being diverted to Vancouver. And I know you've worked hard with the Canadians, and I understand that they have agreed to implement a similar rule. And I really applaud that decision.

But I have to tell you, I have real concerns that Canada is going to continue to use the time before implementing a rule to divert cargo and business from U.S. ports in the Pacific Northwest. This is really an important issue to us in Seattle and Tacoma, and I wondered if you can give me an update on your discussions with the Canadians on this issue, and specifically any information about when Canada will finally implement its 24-hour rule.

MR. BONNER: Let me bring you up to date on that. First of all, the good news is that the Canadian government—and this was the Canadian customs and revenue agency that was very much involved in this—but have decided to adopt essentially the identical rule, 24- hour rule, and that is to move quickly to do that. And they need to get some regulations out, just like we would, for comment and the like.

But I will continue, as I did at the meeting I had with—this is the shared border accord meeting—with our Canadian counterparts in Halifax, Canada. And that was just about three weeks ago. And I don't know that you and I have had a chance to speak since I had that conference. But I am continuing to prod them to move more quickly in terms of getting those regulations out and implemented.

Secondly, I'm very concerned about the issue that we discussed with respect to the potential diversion of container traffic from any U.S. sea port, including the port of Seattle and Tacoma and so forth, to Vancouver.

I have made it very clear—I think you've seen some public statements I've made, and that is to say that if we believe that any shipping line is attempting to evade the U.S. 24-hour rule by diverting containers to, let's say, a Canadian port or any other port, we are going to increase our inspectional efforts with respect to those containers in two ways.

One, we have U.S. Customs and Border Protection personnel right now at Vancouver, at the Canadian ports. And so we will be increasing and asking the Canadians to work with us to increase the rate of inspections for anything that appears to be diverted, because by definition it's a higher-risk container; somebody is trying to evade our advanced manifest reporting requirements.

And secondly, we have a second layer, and that is, (if that?) container is moving to the United States, we have a chance to examine it again when it reaches the U.S. border, either on a truck or by rail. So I've made it very clear, if we see evidence of that—and I'd be happy to have further discussions with you on this—if we see evidence of that, we're going to take some action. And I've talked to, as you know, the head of the Port Authority there in Seattle, and I'll continue to monitor that situation.

The best answer, though, is the Canadians adopt and get their regulation implemented that is identical with ours so there is no advantage by virtue of the advanced manifest information requirement by shipping cargo containers destined for the U.S. to Vancouver or to Halifax.

SEN. MURRAY: Thank you. I really appreciate that and appreciate you staying on top of it, because it is both an economic concern but it's also a security concern. And we want to make sure that they don't just say they're implementing the rule; it takes forever and we have cargo coming in and moving through the U.S. and other ports. So I really appreciate your answer to that question.

Admiral Loy, I wanted to talk to you about container security. TSA received $28 million for Operation Safe Commerce back in 2002, and another $30 million for that in 2003. So far, not a penny of that money has been spent. This is an initiative that I authored to enable TSA to ensure the security of the six million containers that come into our ports every year by monitoring their movement from the time they are loaded to the time that they are unloaded.

Now, TSA promised me that the 2002 funds for this initiative would be spent by February of this year. It wasn't done. Now they're telling me it's going to be spent by June. I asked Secretary Ridge about this last week and he promised to get back to me but I haven't heard from him yet on this. So, can you explain to this subcommittee why TSA has not moved forward on Operation Safe Commerce that's now been funded in two separate fiscal years to address terrorist threats to global container traffic?

ADM. LOY: Yes, ma'am, I—yes ma'am, I will. You're absolutely right, the 28 million was an '02 appropriation. For '03 there was an amount of $30 million, and for '04 we're asking for another couple of million dollars to sort of tidy up the program. As you know, we have made a broadcast announcement with respect to applications from the three major load centers that are associated with safe commerce. You and I had spoken about the notion of point of origin to point of destination in-transit, supply chain transparency for the obvious value that that represents. We've worked with Coast Guard, with Customs, now with BCBP, and with MARAD on a variety of these challenges associated with safe commerce.

At the moment, there are implications in the spend plan that we would get to the Congress, I would hope within days, associated with safe commerce. I can say that the application package that solicited from the three major load ports, almost a billion dollars worth of applications for how best to use those funds are in hand, are being evaluated, and are staged for as soon as that spend plan is blessed, they will go out the door, such that the appropriated dollars not only for the 30 million that we have in '03, we want to make sure those dollars potentially can become appropriated against that same application package.

SEN. MURRAY: So, can you assure me that all $58 million will be spent on this and that it won't be diverted to some other program under TSA?

ADM. LOY: I cannot assure you of that as we speak here this morning, Senator Murray. I think the potential for fixing, as Senator Byrd was inferring, the structural shortfall in the TSA budget for '03 offers us, unfortunately, the challenge of looking for funds in places that have the potential for reprogramming or have the potential for being (found ?).

SEN. MURRAY: Well, I just have to say that's really disconcerting. We appropriated those funds properly through Congress specifically for Operation Safe Commerce. The three ports that are involved—Seattle-Tacoma, Los Angeles, New York—have been working diligently now for almost two years to put together their requests. And we now have six million containers coming into this country that we don't know—and we haven't tracked them, we don't know what's in them—this is a vital issue for all of us who have states that are close to these, and it should be a vital interest for every state in this country because of the economic impact. I do not want to see any of that money diverted. This is what Congress said it was to be spent for.

ADM. LOY: I understand.

SEN. MURRAY: Well, we will continue to follow that throughout the process. In fact, Commissioner Bonner, if you could respond—you were a member of the steering committee to implement Operation Safe Commerce—can you tell me why, from your point of view, none of this funding has been spent yet?

SEN. MURRAY: Well, let me just say that the ports all have their requests in. And if the delay is so that we can divert funds, that is not acceptable. We need to get this money out there. And Admiral Loy, you said in your opening statement that you care about security in all modes of transportation. If we cut container security initiatives, we are not paying attention to all modes of transportation, so this is something that I am going to continue to follow and want to have follow-up conversations with you on this. I want to make sure this money goes to container security. We have ports in this nation that are extremely vulnerable right now with all of these containers coming in and we don't know what's in them. And I just simply think we cannot ignore this, and we cannot divert the funds that are supposed to go for that important initiative. So, I will continue to have this discussion with you.

MR. BONNER: We do have the information, though, Senator, in terms of what's in containers and that sort of thing. We are required that by regulation now, before those containers are even loaded on the foreign ports. So, we do have information about what's in there. We are evaluating that information. We are making risk-management decisions as to which containers pose a high risk for security, need to be screened, and we are now, under CSI, doing that at foreign ports in Singapore and --

SEN. MURRAY: I understand that, but there's a difference between doing that at the port, and doing it and tracking that container, knowing where it is, and where it comes in. And not just at the port, but in the Port of Seattle it's loaded onto a truck or a train and ends up being unloaded in Chicago or somewhere else. So, knowing what's in that container and keeping track of that container is an important initiative in terms of security.

ADM. LOY: Across the entire supply chain --

SEN. MURRAY: That's correct --

ADM. LOY: -- as you described.

SEN. MURRAY: Admiral Loy, I am also very concerned with the delays in funding the extraordinary costs of installing the explosive detection systems, EDS systems, at the new South Terminal expansion at SeaTac Airport in my state. Over the last couple of years—I have worked with, to provide your agency almost $500 million more for those airport modifications than your administration requested of Congress. Both the 2002 supplemental appropriations and the 2003 omnibus specifically cited the needs of the projects at SeaTac. And just a few days ago you announced, I believe, your intention to sign letters of intent to fund these airport projects and said that Seattle would be one of them. But it's my understanding these letters haven't been signed. Can you tell me when you expect to finally sign a letter of intent with SeaTac Airport on that?

ADM. LOY: Senator Murray, I hope we are able to do that within a week or two. The whole—our whole capacity to fund what this organization is responsible for is bound up in this spend plan challenge that we have had for '03. You know how difficult that has been from the very beginning. In the aftermath of the original request, which, of course, developed four or five months worth of CR challenges for those of us who had to live within that, including in the TSA's part, that the first quarter, which was enormously capital intensive for us, because that's when we had hoped to purchase all the rest of the EDS equipment and pay an enormous amount of contractor support in the first quarter of fiscal '03, living under the CR there was an enormously difficult financial challenge for us. When it led to the omnibus bill, where the Congress then chose to allocate within the president's request over a billion dollars worth of allocations, that has prompted this structural shortfall in terms of very important things the Congress wants to do, very important things the administration wants to do, and literally trying to get $6 billion worth of work in a $5 billion kind of a framework.

The war supplemental offered the Congress an opportunity to fix about half of that problem, which they did, and over these last weeks we have been working diligently with DHS and OMB to find the rest of that structural challenge.

The LOI instrument that has now been blessed by the Office of Management and Budget as well as the Congress, offers us a chance to break through with respect to these EDS installations and literally leverage a billion or more dollars worth of private sector monies to do these security projects and then reimburse those airports over multiple budget cycles to come. I believe that's the right way to do this work, and we have those literally poised negotiated settlements with a number of the airport directors, including SeaTac, ready to go as soon as this spend plan is provided to the Hill.

SEN. MURRAY: Okay. I appreciate that. And just one other question, is your letter of—will your letter of intent commit some 2002-3 -- or 2003 funds to this project, or are you going to be requiring SeaTac to get—do future --

ADM. LOY: I'll have to call you on the specifics in the SeaTac piece. There are a number of these negotiated settlements with the airport directors where they preferred to gain the letter of intent but with a zero funding line for '03 to be then paid over '04, '05, '06, '07 as appropriate. I will call you with the specifics of the SeaTac LOI.

SEN. MURRAY: Thank you. I know my time is up, Mr. Chairman. Just—I would remind all of us that the president vetoed $480 million for this agency in the last request, and I am deeply concerned that we are—that we don't have the funds available today for many of these projects. And just on Operation Safe Commerce, let me just go back to that, if you are delaying the release of this money simply so that you can divert it to other causes, that is unacceptable. These ports have been working diligently to do this. It is extremely important that we get this done, and I will follow up on this with you later.

ADM. LOY: I'll look forward to that follow-up, Senator Murray. And we are not delaying it for the sake of diverting the money. The challenge associated with this organization is to have a legitimate spend plan for the rest of the year. Where that involves DHS authorities and the use of them, and where that involves the potential for reprogramming is to be notified to the Congress very shortly. That's the package that is keeping us from pressing on. We are staged to press on with all of this work as soon as this spend plan comes clear.

SEN. MURRAY: Thank you, Mr. Chairman.

SEN. COCHRAN: Thank you, Senator Murray.