this was going to be an issue. other people at the treasury department and staff lawyers of the office of general counsel and treasury. >> when you get outside of treasury, clearly as you were dealing with the department of energy about the concerns expressed on february 10th and you actually cited a number of statutes that i am sure your legal counsel had given the statute to cite but he specifically cited some statutes and then went further to discuss your concerns that a subordination putting the taxpayers in the back of the line didn't even muster that's when you said you should consult the department of justice. islamic we were not making a judgment on what they were doing because we didn't really know what they were doing. >> you were hearing this from omb they may be supporting the taxpayer and then use cited some statute that said you can't do basically you don't have the legal authority that's why you need to consult the department of justice and i think in your

e-mail reading from your february 10th e-mail unless other authorities exist, the statute rests with the doj and the authority to accept the compromise of a claim of the u.s. government in those instances where the principal balance of a debt exceeds $100,000 so you specifically said you can't support of the taxpayer unless you have approval from the diprete of justice. >> we were specific on the fact they should go to the department of justice. >> but going to the actual question the next e-mail you got back is could you call me, could you give me a call to discuss? thanks. that's from the department of energy's legal counsel so now we are going off the e-mails. who all were involved in those discussions, not e-mails the actual discussions? was a just the department of energy? was anyone from the white house involved? >> i have no calls from the white house, no. >> il's of the department of energy? >> there were four of us on the phone call that had the

discussion. speculators who were the other three? >> a member of my staff, the director of the portfolio management, and susan richardson >> and there was a gap from the february 11th e-mail and then the next e-mail we have is on august 12th, so there is a pretty substantive gap and then in those we have got the folks over at doe and other people at the department of treasury getting involved in this and we've got i guess your superior the department of treasury mary miller you said she is the assistant secretary? >> actually mr. grippo is my superior and reports -- >> mary miller is involved on an e-mail she says i may be on a phone call on dusty and restructuring. what is the statute say but putting in the support and opposition? we told them they need to consult with the departments of justice. again, this is mary miller above

you expressing concern. at any point -- she even refers to a leader e-mail july 2010 concern that the department of treasury raised with the department of energy. any step of the way was there a feeling they are not going to comply with the law because you see this in your e-mail they are not following what we are saying about getting justice involved why didn't you will get justice and of course we're talking 530 million here there's another 4.7 billion that went out the door just a few weeks ago. >> this refers to a variety of e-mails here and obviously that's an important question and important question for the committee. it is not our role to interpret the department of energy's statutes and authorities and in no case were we ever doing that. we were never rendering a legal judgment as to whether they were complying with the law. >> you're telling them they should consult with the department of justice. >> we were asking a question. we were not answering it or

drawing any legal conclusions and in fact that's what -- >> you're citing specific statutes. >> we are citing statutes but -- >> if you're concerned that -- please don't comply with the law and then you don't hear back from them at some point you. they are not going to comply don't you feel compelled to alert the department of justice you're telling them to alert but they are ignoring you? >> it's not the role of the department of the treasury to manage >> you're cutting the taxpayer checks. >> these are department of energy authorities and they would be highly unusual for us to inserting ourselves in that way in the management of the other agency program. >> i do have a point of information because i did ask and i got an answer from the head of the loan program at the last hearing under oath he said he would get this whole committee the names of all the people involved in the chain to

subordinate the taxpayer from the white house on down i asked him under oath and he said he would get that information under oath and i know he's resigned now but i have a question to the legal counsel or somebody on staff. are we still going to be able to get that information? that's critical information. >> would be added to the questions. >> the gentleman from colorado is recognized. >> thank you mr. chairman and as well to the witnesses for spending time with us today. a couple of questions come and to follow up with what mr. sculley said had said. you identify that your role of the treasury department are twofold, both as linder and consultant. as a lender, don't you have a responsibility to refer this to the doj? we actually do not. if you look at the statutes which govern the federal financing -- >> but you consider yourself a lender? >> is processing a loan but the

different of energy is making the credit decision. >> but as a lender you are the federal finance bank. don't you have an obligation, fiduciary obligation as a lender to the people of this country cracks >> we certainly in our commutative will have a responsibility to raise these issues and questions which is what we were trying to do. estimates and it includes going to the department of justice and saying we are afraid and i think at one point you made the statement you had said that on things that raise issues of compromising a claim of the federal government. >> in that instance our other vice was to refer the matter to the department of justice. >> why wouldn't you go to the department of justice? >> the treasury department? because it is not our statute. we didn't have all the facts, we didn't have the details. >> why didn't you have the facts? >> it's not our program. to be clear about our role in

the restructuring -- >> but you or the lender and you call yourself a lender. the federal financing did issue a loan but to be clear about the response of the the the id is the guarantor agencies in this case the the part of energy assuming 100% guarantee of the loan is deciding whether to make responsible for monitoring at, they are responsible for all of the financial aspects of that credit risk. it is not the church of the responsibility to monitor that and indeed we wouldn't have the information to do so. >> i guess when you call yourself a lender does the federal finance bank and in this particular instance because you gave 100% of the money there was no bank as an intermediary and i would like a list of all other loan guarantees you're actually not just guaranteeing the loan that you are paying 100% of the money cutting out the bank itself i would like to get the information on other instances where you've given the money just directly i would appreciate that for the record if we could

but if you are the lender i don't understand why you ask these i do have of your questions i want to get to. and i would refer to to have number three ander winder there's an e-mail dated july 26, 2010 between the treasury, omb and the dod staff and the e-mail references a conversation between the agencies on solyndra and the monitoring plan. did this -- why did this conversation happened in the first place? >> i was not a party to this e-mail. this took place in july of 2010, and the most complete answer i can give you is the various agencies predominantly omb and the department of energy were having weekly discussions on the status of the loan program and the efforts to monitor the portfolio. >> were you concerned about the monitoring of solyndra? >> we didn't have any specific

information from the department of energy and certainly didn't have any direct contract to the contact with solyndra >> you were not concerned but the monitoring of solyndra? >> as a general matter we felt that the portfolio should be properly monitored but we didn't have any specific information to respond to this e-mail exchange took place shortly after they pulled back. is that correct cracks >> yes i believe that is correct. >> three months after its of the terse doud solyndra's ability to continue as a growing concern? is that correct? >> that is correct. >> it appears the wendi and treasury both on this e-mail are asking for a number of pieces of information bill would indicate its financial health is that correct? financial statements and model, current market prices, data. why were you asking about this? >> our role is as a consultant to the department of energy as a

statute is to be helpful wherever we can we have with a federal policy and corporate finance of abuse and to the department of energy we've contributed to this because we felt we had something to add and can help. >> were you concerned with this loan or the monitoring? >> a lot of information here. the financial statements, the model, the report, the summer become actual performance numbers, various monthly reports and production, credit committee papers, it goes on and on and on >> this is from the office of management budget to the department of energy. we did contribute to it but we were not responsible for the sending of this or for the monitoring of the portfolio. estimates are you concerned that there are others out there?

>> notte ed don't have any information that would lead me to have additional concerns. >> i would ask if i could submit those for the record. >> you may submit those for the record. gentleman from virginia mr. griffith is now recognized. >> thank you mr. chairman. mr. burner, you send an e-mail to francis and susan and i believe that is susan richardson, and enzus i apologize i can't pronounce the last man is that correct? >> that's correct. >> to you pronounce the last name so i can get it right? if you can't it's okay or understand. >> i can try but i will apologize to her. >> you wrote to both of them on february 10th and you got a message back from francis on the same day that says this been a

gross misunderstanding, is that correct? >> that's correct. >> february 11th you got an omb circular, francis susan doesn't appear to be on this, is that correct? which says, and i don't know where we are, i can't keep track i don't have towns so i have to figure it out by counting. >> there is an excerpt that susan ascent. >> and that says -- you have a copy of that in front of you? that says does it not that workouts mean plans that options short of default as the first rate, does it not? >> yes, sir. >> then it goes on to explain that's not modification is that correct? >> at the time that you received that you were not aware of the legal memorandum but susan richardson was in draft form and

later on february 15th became a formal form to what we have today you were not aware of that legal memorandum is that correct? >> this correct. >> notwithstanding the fact you were getting data or the copy of a circular from francis that said and let me quote that again damian plans to offer options short of default and what she was basically saying is we don't think they are modifying the sloan or we are doing something that would create the necessity to consult with you all, isn't that correct? that was the purpose of these e-mails and conversations. we don't believe that we are making that change that puts the compromises the taxpayer position is that correct? >> as i recall that is what they

were saying. yet they are sending this on february 11th but the memo that we had the fight about today are dated january 19th, and as i pointed out in my comments earlier, the first line of the third paragraph and i know you don't know anything about this but i will point it out to you redefault related to a financial requirement has occurred under the loan guarantee agreement ended a relationship to solyndra is there any way in your mind frances licht of no legal opinion was already rendered that said that there had been in fact a default but now we are going to try to fix it when she's telling you that work out means plans that all the options are shorter default? >> i can't comment on that. >> and further, if you know who peter mr. bigger is an attorney is not? deck of the treasury department.

>> so she works with you all. >> yes. >> subsequent to that, are you aware that he stated in a memo the claim compromises include loan workouts. are you aware of that? >> , a 2011 memorandum of 40 to compromise the title claims owned to the government. >> it's the first time i've seen this memo but it does say that to reverse the megiddo say that it does it not? i would have to say to you based on the evidence that you now know there was a subordination of $75 million that it appears within the restructuring they may have agreed to forgo payments totaling 30,000,003 years wouldn't you agree those terms sound like a substantial change under the regulations

regarding this loan guarantee program? >> substantial change? >> was certainly a change whether it was substantial -- >> but it would be your opinion would and did not? it's really something the department of energy would have to answer being the statute and indeed their program. >> they wouldn't have offered in the e-mail any legal interpretation. it is citing the statute only. >> if the had agreed to for the entire loan it wouldn't matter they didn't discuss it with you if they decided wasn't a substantial change estimates of the treasury will to institute for the doe. >> what is the purpose having you in the loop if you have no authority? >> thank you. i ask unanimous consent to be able to ask questions since he is not a member of the

subcommittee. hearing none, you are recognized. >> thank you mr. chairman for granting unanimous consent and i would ask a couple questions and try to be brief i appreciate you being here today. this is a third time we have had folks come and we still can't get anybody to take responsibility. we had the official and now the former doe officials with the two senior solyndra executives who took the fifth and today we hear a lot of that's not my job that's not my role so i hope you can appreciate the frustration that we are having as we try to get folks to answer questions about these important matters. mr. grippo let me start with you. i want to go back to the beginning there was an e-mail on tab one, march 19th, and the treasury review board at this point approved a condition commitment on march 19th, march 17th and u all expressed concerns on march 19th. that seems backwards to me. so you talk about your role

consul to the fleet and you look at the town there was an e-mail expressing about 15 or 16 concerns the treasury department had. >> i'm looking at that, yes. >> because it meant by the federal review board happened today's earlier on march 17th. >> i am not aware when the condition -- >> if there was on march 17th would you find that odd that your comments would still work after the date that the conditional review had been made? >> i really can't say. >> now assuming the fact march 17th is the date the conditional review had been approved would you find it odd that you are still making comments after that? >> i don't know when the conditional commitment was offered. >> that's not what i asked. >> i understand. i don't know when it was offered. we had the opportunity to provide this input is mike understanding. >> very good. let me turn to you towards the end. tell me what your role is today now that the business in bankruptcy as a lender trying to

collect money on behalf of the taxpayer. >> we have no role in the collection of the tax payer. we have the guarantees of the are paying us, and it's my understanding that they are in the bankruptcy court at this point. >> have they paid you? >> they have and will according to the dod. >> when will that be? >> we receive regular payments and then at some point i assume the loan be extinguished by the full payment. >> when is the next payment due? >> i don't have that on the top of my head, sir. it is a semi annual loan. >> but they haven't missed a single payment to date? >> no search. >> they've made all those payments. thank you mr. churn and i yield back the balance of my time. >> the gentleman yields back and there is no other member wishing to ask questions so i want to

thank -- >> mr. chair, i ask unanimous consent the content of the document binder be introduced into the record and of rice the staff to make appropriate reductions. no objections. without objection will be entered into the record with any reductions the stuff team appropriate. at this time we think you and i think you for your patience, for your dedication and your testimony here today. the committee rules provide that members have ten days to submit additional questions for the record to the witnesses and one has suggested that there will be additional questions submitted to you so we do appreciate your time and we are adjourned.

[inaudible conversations] with a writer from roll call. >> amana welcome to the washington journal. >> good morning. >> tell us why have these companies been rushing to hire lobbyists in the wake of the solyndra scandal? >> solyndra this kind of turning out to be a make or break moment for the industry here in d.c..

they were excited about the obama administration commitment to their jobs and renewable energy sources. when solyndra declared bankruptcy and raised a lot of questions about the loan guarantee program and if that had gotten the loan guarantee from the government the question is how much people in the administration do. it's created a crisis situation for the industry in washington the loan program had expired this another program that remains to be seen to what extent that will be funded when congress does the next appropriations bill and there's also a treasury program that's just expiring they need to get funds through as well so it's kind of been used as a way to go after the agreement jobs agenda overall and companies are worried about that. >> how many companies are actually on a case street right now looking for the lobbying and what can they really expect from these lobbyists as far as getting through to the white

house and members of congress cracks >> we know that since august i believe it was as the date i chose that is when all of the solyndra stuff started happening at least 40 companies have hired lobbyists lobbying firms and groups because there are a lot of trade associations and they don't know too many of the specifics about what they've asked the lobbyists to do and people on the energy and commerce committee people and the department of energy and also people of the treasury department and both of those of the minister's programs that are relevant to the renewable energy. >> how was the government funding for the initiatives been affected since the solyndra scandal broke the program was expiring the one that solyndra got their loans through case about $16 billion worth of the

loan guarantees and the loan guarantees have the right to encourage private investors to take a risk on unknown companies and the unknown technologies by guaranteeing they would get their money back. the government is essentially insuring the loan. when all of this solyndra business started to come there was a sense that perhaps the of the ministry should have kind of rushed of these loan guarantees through without looking at the financial health of the companies and congress started asking for more paperwork and documentation there were some loans and loan guarantees that didn't happen by the deadline because of that. i talked to one company in california earlier this week i asked for a loan and had the conditional approval but because of the heightened disclosure requirements of the finances of the company it wasn't improved in times of there was a lot at stake cities companies there's still another pre-existing loan guarantee program that remains

the next budget bill and what happens next year. >> one more thing we want to talk to you about and that is being reported by "the washington post" and others solyndra's ceo brian harrison resigned as ceo of the california solar energy company solyndra incorporated which bankruptcy protection after receiving 528 million-dollar loan guarantee from the obama administration solyndra said in the papers filed in delaware bankruptcy court on wednesday brian harrison resigned last friday the company said harrison's resignation was contemplated even for the company sought bankruptcy protection. so in the long run is this going to make the job of any lobbyist dealing on behalf of the renewable energy companies make their job that much more difficult seeing the ceo has the effect quote in the middle of this scandal?

>> that can certainly be read as a sign that something was long and i do think that these companies have an uphill battle right now in washington and it's the opposite of what they were expecting going into this administration. it's been clear just from the kind of tenor of discussions and what's going on on the hill there's at least two committees right now looking into the energy program steers the energy and commerce committee looking at solyndra. also the investigations committee is kind of looking at all of the guarantees that were approved towards the end of the program. so there's the sense that perhaps even those loan guarantees could be the subject of the future investigations and inquiries and a lot of work for the lobbyists and other advisers on the whole representing these companies it could be an uphill battle. >> amana of local, you can find her articles regarding solyndra and other things happening on capitol hill at rollcall.com thank you very much for being on

the program. the response to the allegations that china manipulates its currency to promote exports. on the washington journal we discussed the issue with a wall street journal reporter. this is 40 minutes.

>> business and trade reporter with "the wall street journal" is here with us this morning to talk about the senate bill that was passed earlier this week regarding china and currency. tell us what did the senate bill actually say about china's currency and what are some of the other provisions? >> guest: sure. what is interesting about this bill is importantly it doesn't name china in the legislation itself. it talks about in the nation whose currency is misaligned, and there would be found by treasury to have a missile wind currency would be subject to tariff. it is a lower more than currently right now in the nation like china obviously they have to conduct willful manipulation of their currency, so it is a lower standard and a strict punishment. >> host: in all fairness to china are there other countries

that want to leave their currency the way this bill wants to go after? >> guest: there are some other countries you can make the case have manipulated their currency, asian nations as well. but china is obviously because the size of the economy and because of its importance and of the exports from china how they compete with the united states they are the obvious target. >> host: and now the bill is on the better side of the capitol, what are its prospects for the passage in the house? >> guest: well this is interesting because this legislation -- we were comparing it in the bureau yesterday to the ethics legislation once it reaches the floor it will absolutely pass but the trick is getting it to the floor and the republicans have said they don't want to do this. john boehner the speaker of the house said he doesn't want to introduce this legislation. eric cantor says he fears a trade war and both of them are trying to call out the white house and see where they stand and the white house isn't saying a word.

>> host: why does he feared the trade war from this? what does he see on the horizon as a result of the passage of the bill? >> host: >> guest: if this were to take effect it would levy the tariffs. it would lead to living the tariff on china and the would mean china would levy tariffs on our goods. so you have the making of that is a classic trade war. tariffs on one side escalating on the other, and this is what they fear. .. >> guest: nobody's arguing here, by the way, whether china

does or doesn't manipulate its currently. it's accepted that they do. they are gradually letting it rise, 6% or 7% a year, but they keep it artificially low. that makes their goods cheaper in the market place. the estimates range from 25%-40% their currency is devalued by that rate. that means our goods by that percentage are more expensive in the market place, not just in china, but around the world where china competes with us. >> host: talking with elizabeth williamson from the "wall street journal" on a senate bill that passed earlier this week and now on the way to the house side. you can also reach us by e-mail and twitter before we get to the

phone carls, we want to see what speaker boehner had to say at washington's trade forum. this is what the speaker said to the folks there. >> well, there's been concern on my part and frankly from a lot of corners here in america about how the chinese have manipulated their currency. there's then every effort that you can imagine out of our trash ri department over -- treasury department over the last seven years addressing this with the chinese. there's been a significant improvement in the evaluation of china's currency as a result of those conversations, but for the congress of the united states to pass legislation, to force the chinese to do what is arguably very difficult to do, i think it

wrong, it's dangerous, you can start a trade war, and a trade war given the economic uncertainty here and all around the world is -- it's just very dangerous, and we should not be engaged in this. >> host: e liz beth williamson of the "wall street journal" your opinion on what the house speaker had to say? >> lays out the classic argue of how do we get china to appreciate so our goods are for competitive and their goods are less so and they focus on domestic consumption. the administration and the republicans are actually aligned in this in that they favor di ploam diplomacy. commie that -- china says this is working not to let the currency rise. it goes up a half a percent every month. it's a question of how much is, you know, what would be the

inflation rate people would like, and what's the way to achieve that? >> host: first call for elizabeth williamson coming from baltimore, maryland. darn on the line for independentings. you're on the "washington journal." >> caller: hi, good morning. >> host: go ahead, daren. >> caller: great. i had a comment and a question. china -- a communist country, they don't really appreciate democracy. i still don't understand how we have such friendly relations with china and they suppress their people and manipulate their currency. i mean, it's just a recipe for failure. i'm trying to think of the term. [inaudible] i just wonder here at the lady's

thought. thank you for having me. >> guest: it's important to look at the broad picture here. what you have is a bigger geopolitical picture, and this is what the administration always points out, that the chinese are an important ally in the region. we worked with them on things like north korea. we've also tried to cement relations with korea, most, you know, obviously this week with the free trade agreement that was concluded with them yesterday, but it's important to see the broader geopolitical scheme of things and not just view this in terms of exports and trade. >> host: next up, kevin, independents, go ahead. >> caller: hello, good morning. god bless you for c-span. my view of it all is we are already at a trade war, and it seems like we're losing. we have been losing, like the speaker said, it's only gotten better over the last seven or

eight years. what we do in the future or future congresses is not going to make it better. i can't see it getting better because they have an advantage, and they're going to keep it. >> host: the chinese have an advantage? >> caller: yes. the evaluation of their dollar is causing our goods to be paid more for there and we -- our goods are paid more there, and their goods are cheaper here. we're at a war, and they have the advantage, and they will not give it up. i wont give it up if i had that advantage. >> host: we can go back and forth between the house and senate and the white house, but what is truly the incentive for the chinese to raise the value of their currency? expwhrg -- >> guest: well, it's important to remember the chinese not only

sell goods here, but buy from us and around the world. os trail la comes to mind. they have a trade surplus with china because they sell them so many raw materials. they have an enormous appetite for raw materials, and we're a seller of those. it's a complicated relationship. it's not just about cheap manufactured goods like most people think about when they think about china. >> host: we have a tweet from count 210 who writes is china under valuing currency to avoid paying fees or increase profit on exported goods? >> guest: simply to sell more: i mean, if you think about it, our trade surplus with china 20 # years ago -- 20 years ago was $200 million. now it's $200 billion. we're one of the wealthiest market, and we consume a lot of goods. for cheap? yes, but even if they were not

as cheap as they are, we would still consume them. >> host: james on the lin for republicans, you're on the "washington journal". >> caller: yes, good morning. i'm calling because, see, a lots of people fail to realize the nation of china, 1.4 billion people, you have to feed all these people. you have to educate all of these people. they try pretty much everything from family planning to military intervention and maybe even, you know, stealing secrets from other nations. they are taking it and inventing it from another part of the world to make it cheaper and better, which is good business, however, they are under valuing their currency, i believe, is another effort to avoid a long term vision that they have because they, themselves, realize they are on a road to

closing. i don't see with them growing and stuff and them having an advantage on the country. i people they have the disadvantage. they are at that disadvantage, they resort to, you know, other means in order to further, you know, the development of the currency and their goods and this trade war everybody talks about, i think it's just -- [inaudible] it's on their part to survive. recently in the news, they were complaining that -- [inaudible] it was going up in price, and they were having a hard time keeping it up because that's a staple of their diet, and they can't even feed themselves. >> guest: the caller points out the fact that this is a whole basket of issues that the united states has with china, and china has its own pressures. 1.4 billion people, the need to provide constant employment for those people, the state is under

pressure to try to deliver its own forms of innovation and make the goods competitive. we have a lot of issues with china. i.t. comes to mind, intellectual property theft is another issue we're negotiating with china on, and, you know, our government considers it progress that of the software used by the chinese government, 92% of it is pirated from u.s. companies, that's done from 100%. that's seen as progress. obviously, currency is just the tip of the iceberg with when it comes to issues with china. >> host: another tweet from susan who writes, china is doing the same thing every country with a central bank does, devaluing its currency controlling its market. is that true? >> guest: well, china has many more means for doing this as a command economy, so they are able to pull all the levers in a way a free market economy is not. >> host: back to the phones,

texas on our line for democrats. you're on the "washington journal," robert? >> caller: okay. >> host: good. >> caller: can you hear me? good morning. >> host: robert, are you there? >> caller: yes, i am. >> host: do you have a question or comment for elizabeth williamson of the "wall street journal". >> caller: yes, i'd like to speak to the young lady. >> host: go right ahead, she's with me. >> caller: i don't think americans have to be afraid -- can you hear me? >> host: moving on to flrs. robert is having some problems. next up is line for republicans, go ahead. >> caller: hello, and good morning. i just got back from china, and what i saw is absolutely mind boggling.

the building and construction is going on in that country all paid for by our deficit, the build up of their 3.5 million individuals under armed forces compared to our 1.5. the development of their aircraft carrier, which is an absolute -- it's beautiful. it's a cat ma ran, and their anti-aircraft carrier submarines and the foremost problem, it's absolutely scary. i'm a retired marine pilot, and i don't want to go over there and have to shoot down their aircraft or new carry your. >> host: were you there an business? >> caller: no, just as a tourist, and what i saw was just -- it was mind boggling.

everywhere you look, there is construction of major, major construction. one person told me, i don't know how he got the information, he may be wrong, but said that half the construction cranes in the world are in shanghai. >> host: we'll leave it there. we'll moving things along. you're response to what he said about the trip to china? >> guest: well, the construction market is huge. we touched on this with the needs for the large amounts of raw materials. on the fact that china is our bankers, that really touches on what's the sensitivity here. i mean, with the administration, they know, and the chinese government makes this point when they speak with our government, and that's that if we go over there and start preaching to them about their currency, this will not fly with their own public anymore than if they were to come to us and say, look,

we're your bankers. you got to fix this and this and this about your economy, and you need to adjust the way you sell your products, ect.. you can imagine the human cry in the united states if they were to come here and do that, so there is this quiet dans that goes on to try to get what the united states wants and needs from them, and vice versa. >> host: earlier this week, senator harry reid, the majority leader, said was talking about unfair currency manipulation by china and impact on jobs here in the united states. this is what he had to say. >> it's clear by now china under values its currency to give their exports the advantage in the global market place. this costs american jobs, lots of jobs, but adjusting the playing field against american manufacturers. the trade deficit bloomed from $10 billion in 1990 to $273

billion today. too many of those lost jobs came from the manufacturing sector. american businesses don't need special advantages to compete. they just need an even playing field. >> host: and does this legislation even out the playing field? >> guest: hard to say because the jobs argument is really a infrastructurey -- tricky one. i thought harry reid was doing well talking about lots and lots of jobs being lost, undoubtedly, lots of jobs lost particularly in the manufacturing sector due to the devaluing of the currency, but to put a number on that is really hard because there are so many factors that have cricketed -- contributed to the ce -- decline of the manufacturing sector. >> host: if a "wall street journal" article by your colleagues, it hit a record in august likely seized upon those in congress who want to punish the asian nation for its

currency policies. the u.s. deficit in international trade of goods and services with china, with is not adjusted for seasonal swings woes to 28.96 billion up from $26.96 billion even as the overall trade gap barely budged. globally, the trade deficit seasonally adjusted narrowed to $45.6 billion from a revised $45.63 billion. break those numbers down. is the gap larger or smaller or how is this working? >> >> guest. well, what you're seeing as consumer spending increases, you'll see the gap widen. this just makes good cheaper. as americans start to spend more and feel optimistic about the future, and we know this is a

slow process, they will buy for from china, and consequently that deficit and the surplus will grow. >> host: if the chinese inflate or adjust the value of their currency and it starts to go up, it's going to benefit us here in the united states. what does it do for countries, their neighboring countries in the pacific rim, and is there something that the president can say, our president, can say to the south korean president for when he goes back to south korea that may help the overall situation? >> guest: well, i think concluding the trade agreement with south korea was an important step. one dimension is knocking down tariffs making our goods cheaper in korea and their goods cheaper here. there's a geopolitical element to in which they are a counterweight to china and the

region not only for trade, but geopolitically. >> host: david, independence line from wisconsin, you're on the line. go ahead. >> caller: hi, can you tell us what the top three sectors of our economy that are impacted exporting to china, and have they increased their lobbying efforts against the legislation as measured by the amount of money spending, or is that information not readily available? thanks. >> host: elizabeth williamson? >> guest: off the top of my head here a little bit, but obviously manufactured goods, steel, and then electronics will be the industries most heard. they divide. the steel industry supports this kind of legislation. they feel china is hurting them by undervaluing the currency. in raw materials because you don't have value added, you see

it in a very stark way, but in some of the other industry, they have other fish to fry. the electronics industry is concerned about intellectual property. they want to go after that. if we engage in a trade war with china, what you might ultimately get is nothing on the ip front and then you just fight on tariffs and currency and not address the issue of intelligent comiewl property theft. >> host: our president and agreement under the obama administration were favorable provisions for u.s. auto makers over there. whether that results in more

sales or a surge in popularity remains to be seen because korean consumers really do prefer korean cars and they see them as more innovative than our own. >> host: an e-mail from whiting, new jersey writing if i were to travel to china today, would i be able to find as many made in the usa labels there as we have made in china products here. in your opinion, do you think the new trade agreements will help substantially lower the unemployment numbers? >> guest: the first question, would you see as many made in usa goods over there? no. their goods are more expensive in that marketplace. that's what this is all about. they are up to 40% more expensive than their goods are here, and that's a direct result of the currency manipulation. on the other, trade agreements tend to move jobs around. again, it's really hard to quantify the impact of these

moves in terms of raw numbers of jobs. >> host: back to the phones in ohio, dan on the line for democrats. you're on the washington journal. >> caller: hey, how are you doing this morning? hey, what i was calling about is wages around the world. china and india, middle class is $5,000-7,000. at $9,000, yo u can buy a car. vietnam, how will they buy our product? they can't afford it. second thing, trade adjustment. your government knows you're going to lose the job, so they throw money to retrain people. they know you're going to lose the job. another thing, we had a trade deal with colombia, panama, and south korea. okay, colombia leads the world in cocaine, marijuana, drugs. they got a farq that runs around in the jungle. has been for years, a terrorist organization. people, i don't know, i guess i

want to say it's stupid, but they don't care, but it's all about money. how in the world are them people going to buy our products when they don't make any money? >> host: elizabeth williamson of the "wall street journal"? >> guest: it's important to note that wages, cheap labor in china is why their goods are cheaper here, so currency, tackling currency issues, that's not a pen see ya for cheaper goods coming in from china. >> host: in the "washington times" this week the measure to hit china on evaluation, dangerous legislation. towards the bottom of the article, it says the bill presents a thorny problem for president obama. many in the political base want to punish china for its economic policies, but president's also try to keep as free a hand as possible in the conduct of foreign relations and have a policy dictated from capitol

hill could be problematic. the white house has implied mr. obama would not sign the bill if it passes both chai beers as -- chambers as written. what's in the bills right now what the white house wants to see changed in order for the president to sign off on this? >> guest: the white house is not very specific about this, and this has also happened in the senate. it was interesting when they were considering this in the senate, republicans were saying, let's add some amendments. let's -- why don't we go ahead and just do this if we can add amendments? harry reid said, no, you can't amend the bill to make it a little more favorable for certain manufacturers, ect., so then what was mcconnell proposed, the republican leader in the senate, was saying, all right, let's just vote against it. within an election year coming up, nobody, but nobodiments to vote -- nobody wants to vote against legislation like this. if it doesn't get there, they don't have to vote against it.

>> host: back to the phones, and our conversation with elizabeth williamson of the "wall street journal, next call from palestine, texas, anne on our line for republicans, go ahead. >> caller: yes, i would like to just have a few things to say. >> host: go ahead. >> guest: okay. he's still talking. >> host: ma'am, turn down your television. you're getting feedback. >> caller: okay. a few things. first of all, the president, he's a great person, don't get me wrong. hold on. he is a good person, don't get me wrong. there's so many jobs he's trying to create for people, and he's just forgetting about the small towns. you know, we had places here that you can put factories in for the small towns. the large towns have plenty. just think about the small towns, and some of the people running for president, one of them can't even run texas, what

makes y'all think he can run the world? i'm not being rude. as far as the children are concerned, please think about them. they are trying to graduate, and they have to have two years of college, two years of spanish to graduate. why can't the spanish people, why can't we have them to two yearings of english to graduate? >> host: getting off the rails there, anne. we talked a little bit about the effect on larger manufacturing like automotive, but for the smaller business people, what effect might this have on them if this bill were to pass and get signed by the president in any form? >> guest: well, it obviously would make goods more competitive if they create finished goods, but what's interesting with smaller manufacturers is a lot of them make component parts for electronics and machinery, and business is booming for them because the assembly it what's done in china, but the component parts are still made here, and what those individuals are

complaining about is that they can't find enough skilled workers to work in those factories. it's a bright spot, but it's a need. they would be more insulated i think. >> host: one of the op-eds in this morning's post is written by former massachusetts governor, mitt romney, talking about how he'd deal with china's cheating saying i would work to fundment tally at -- fundamentally alter our relationship with china. how much of this comes up in the campaign or is it dealt with now in washington? >> guest: if you look back at the 2010 congressional election, bashing china was a popular thing to do. china, india outsources, moving jobs overseas. i mean, the other thing on the jobs front is the fact that american companies do move operations to china, not only because they are closer to serve the market, but because they have cheaper labor there.

that's another piece of the puzzle. this will be enormous in 2012. bashing china is popular which is one of the reasons none of the folks running for reelection in 2012 want to go on the record as having voted against this measure. >> host: elizabeth williamson of the "wall street journal" has been covering the obama's administration business and trade policy covering areas for the paper since 2008. back to the phones. coral springs florida, jack on the line for independents. you're on the "washington journal". >> host: go ahead. >> caller: how are you doing today? >> host: go ahead. >> caller: how are you doing today? >> host: jack, do you have a question? >> caller: the biggest problem we have is 99% of the goods are made overseas. okay. the quality is not as great and the goods made here is they jack up the price so high that the

people can't afford to buy them, and there's absolutely no reason to jack them up. what they are doing -- i know this because other people tell me this -- what they doing is tax rebates and everything else that they get, the credits they get that people say, well, when we sell it to you, instead of selling it for $10, we'll sell it for $30. bithe time you get -- by the time you get credits, tax rebates, and government credit, you make the money back. that's wrong. you're ripping off people, and we don't do that. we believe in a low profit and high volume, and it makes business sense. i was a victim of the 70s with foreign competition. i hate buying from overseas. most of the leds are made here in the united states and shipped overseas to be shipped back here, assembled over there. that's crazy. we had contacted head of energy commission in the united states, contacted washington, we had contacted the governor of

florida back two years ago, never got a response. >> host: jack, leaving it there. elizabeth williamson? >> guest: two things. first of all, jack underscores the point that we made earlier that assembly's what's done in china on the manufacturing side. it's not necessarily manufacturing of component parts, and the labor costs increase and there are many in the business community who argue regular laces, u.s. regulations governing things jack up the cost of producing the items. >> host: back to the phone for democrats, louisville, kentucky this morning, danny, good morning. >> caller: i can hear you fine. i don't know what the problem is with the other people. kind of expanding on the last caller, we have most powerful weapon that we can use which is our free market, and we are such

a huge market that the united states consumer, people in the united states can force these companies to come back, and, you know, not so much just union label, buy american or something like that, but take the tv market. we're what? 11% of the population, but we buy 24% of the tvs. we don't make tvs. there's a proud organization that could get together and get the people behind them and say, okay, we're not going to buy a tv until one's made in america. then these manufacturers think, oh, if i'm the first one to get a factory in america, i'm going to make bank, and then, you know, this is just one example. well, then, whoever moves it over, sony or whoever, and can't let them have the market, i have to come back, so as long as we keep buying all this, you know, china, put in your own explicit

here, yeah, this is going to continue. the businessmen make more money, china makes more money. the only people getting killed is us. >> host: danny in louisville. >> guest: he makes an important point. the reason these goods are selling well here is because people are buying them. you know, they are cheaper. you know, many argue that the quality's not as good. i think that depends on the sector and item and also the supplier over there, but there is some manufacturing interestingly moving back here because just the distribution, if you've got an american product that you distribute in the united states to try to get it back from china, obviously, adds to your cost, so there is some manufacturing moving back, but many would argue the key here is innovation. it's -- we're in the going to make textiles here or socks here and have them be competitive with asia. it's not going to happen anymore, but what might happen is we make another type of textile good, maybe from an

innovative fiber. there's manufacturers working on that. the difference is to make a mouse trap and a better one. >> host: a tweet from american hero, could the guest explain to us how we can benefit if things we can get cheaply now become more expensive? >> guest: well, the incentive, the idea of this -- it's a good question. the incentive here is to buy american products, and to make the cost differential not so much, so it's a balancing. >> host: back to the phones, washington on the line for republicans, reid, you're on the washington journal. >> caller: good morning. i'd like to say to the guest, i agree with most everything she's mentioning other than the last point about things not coming back. i think there's some propaganda. i'm not accusing you of saying propaganda, but i think collectively when we hear phrases like "jobs aren't coming back" or "we don't want to start

a trade war," look, i agree with callers, we have been in a trade war for a long time. i'm sick of the politicians, pundits or anybody standing up to the microphone and saying that if we cut back on this ratio and stop the trade deficit, that is going to cost american jobs. i think it is just the upper echelon of wall street, goldman sachs is the serial job exporter. they have been for 25 years. they are at the top of the food chain. i don't understand why the federal reserve has to buy the treasury bonds through goldman sachs. i say that just to give americans the idea of how corrupt our government is. >> guest: the caller is obviously really tapped into the anger out there. the reason the measures come down the pipe particularly in advance of election year is that politicians are aware of how angry people are with the economy and loss of jobs and people look for a reason, and

some argue for a scapegoat. >> host: remind us where in the process are we with the house's version of this bill? >> guest: well, it would be -- it's supported from half of the house of representatives, members of both parties. if it comes to the floor, it would pass. it's the senate version of the bill, but chances are, the leadership is pretty, z we saw earlier, certain this is not going to come to the floor. >> host: not any time soon. >> guest: no. >> host: back to the phones, virginia, steve on the line for independents. you're on the washington journal. >> caller: good morning. this has to do with nafta. >> host: steve, turn down your television. you'll get confused by the voice coming out of the box. >> caller: sorry, man. any hour, president bush had plans to combine canada and the united states, and mexico, and he calls the prosperity

partnership in 2005, and it was claimed he did this because nafta was not taking off. the corporations went to mexico, and then they realized when china was more feasible because of the hourly rates. the ssp working through groups in the department of commerce decided that, you know, we're going to be turned into a north american union after the european union where we're borderless and where there's roads going through from -- >> host: steve, we're running out of time. do you have a question? >> caller: it has to do with china. china wants to go down into mexico, and instead of us having our ships go to long beach and los angeles, they would go

through lozaro -- >> host: steve, leaving it there. with the current situation, with the chinese currency valued the way it is, does it make it easier for them to do business with smaller countries like mexico? are they even concerned with that? is it mostly manipulating things to get more money from the united states? >> guest: i think because we are so globally connected, there's an effect on anything we do with china or they do with us, so this is something that opponents of this legislation point out. we don't know about unintended consequences. one thing i'd like to point out which is if this legislation were to enter force, what happens is china would first off lodge a complaint with the wto, a case that would drag on for years. one thing to the credit they have done is try to clear that backlog of cases. that's why we've seen actions

against china for importing unfairly cheap tires for their efforts to protect their green energy business at the expense of american companies over there, so the obama administration is trying to tackle these issues and trying to crack down on china on trade res in ways other than the currency. when they argue against the bill, they would point that out. >> host: thank you for being on the program this morning. >> guest: it's been a pleasure.

>> former drug czar testified on capitol hill about a report he produced on mexican drug cartels and the state of u.s. border security. the report, produced with retired major army general robert scales, and released last month documents an increase in narco-terrorism in northern

mexico. they portray areas in texas like elizabeth williamson -- elizabethel paso as, quote, "a war zone". this is an hour and 20 minutes. >> we have votes scheduled in about 15 minutes, so i need to begin the proceeding and we will give our opening statements and see how much time we have before the votes. i want to thank the witnesses for traveling, coming up here to washington and my a.q. commissioner, todd staples, coming all the way from austin, texas. i appreciate y'all showing up here today. the purpose of the hearing is to examine the threat to the southern border due to narco-terrorism. before i begin the opening statement, i see mr. reyes, mr. greene are here, and i think also -- i ask unanimous concept they are allowed to sit on the

dyess for the hearing. with no ob jecs, so -- objection, so ordered. we'll have a spirited important debate. today, we meet to examine the threat on the southwest border from a basic mill taser perspective. from the testimony of two of the nation's finest generals and a commissioner from texas whose farmer and ranchers live with daily threats of drug cartels. a plot was foiled in which a u.s. informant posing as a member of the mexican drug cartel was approached by terrorists plotting to assassinate the saudi ambassador not united states. although the attack was foiled, this incident implies the existence of ties between terrorists and the drug cartels. it is unlikely that this sensitive iranian mission would have been this terrorist groups first attempted encounter with

the drug cartels. up deed, it underscores the need to examine the decreasing relation in mexico and our border security initiatives. this hearing also comes on the heals of an eye-opening report by general robert scales entitled the strategic military assessment. this is a copy of the report i know you are submitting to the hearing today, and i intend to submit the report to ms. napolitano. this underscores the need for a comprehensive review of the federal government's role in protecting the border. violence in mexico is spreading in ways that show characteristics of terrorism. the discovery of 32 bodies in vera cruz, the dumping of bodies on the expressway, there were

slides that demonstrate the visuals, and the placement of severed heads at the entrance of a primary school in an effort to extort money from teachers are examples of the disturbing actions of the mexican base drug cartels. i introduced legislation that would designate cartels as foreign terrorist organizations. the bill states foreign drug cartels use brutal tactics of violence and the threat of violence against the united states citizens in order to expand and protect their drug trades and areas of operation. law enforcement from both sides of the border underscore the violent extremes. according to the texas department of public safety, a review of information for multiple sources shows 224 decapitations have been reported in mexico since 2009 including 64 from january to june 2011. at least eight instances since

2009, bullets fired from mexico crossed into texas. from 2009, there's at least 64 border related shootings at u.s. law enforcement offers in texas. since 2008, smugglers in texas have deployed spikes to disable u.s. patrol vehicles in 77 incidents. since 2004, there's been at least 224 drug related and alien related kidnappings reported in texas. the report lays out in detail the threat, the cartels pose to the united states and steps to take to combat the hostility. the report concludes the cartels exploit creases within the ranks of american authorities in order to penetrate the border. this leads to channeling of drugs and violence into the united states. this report reveals that the cartels' intention to influence all levels of government throughout the americas, that the cartels' intention is to

establish sanctuary zones in the united states, one county deep, that the u.s. tactical efforts to stop cartel incursions are poorly resourced and vulnerable to corruption. the increasing likelihood that competition to control distribution territories and korean corridors results in greater violation in teaks as the -- texas as the military gains more control in mexico. the drug threat assessment conducted by the department of justice, draws conclusions of the scales report. it notes that transnational criminal organizations are now operating in more than 1,000 cities in the united states the city's now span all nine organized drug enforcement task force regions and enable cartels to operate and work for extensively in the united states. the problem has manifested itself into a national network of criminal activity driven and organized by the drug cartels.

the report outlines the innovative resources by texas authorities to fight back on the een crochement -- encroachment. by unified commands and joint operations and intelligence centers, texas officials have provided an effective model for other states dealing with the narco-criminal threat. as the report notes, the campaign is proven the value of a control scheme that involves state, local, and federal partnerships without sacrificing the agency. texas has taken the bold and necessary steps to protect its citizens in that the federal government has failed to implement. we are here today to learn more about these efforts, and how they are helpful as a model going forward for the nation. i'm honored to have the esteemed public service before the committee today, and i look forward to your testimony, look

forward to the spirited debate that we'll have at the committee, and the dialogue on this threat to our nation that is constantly growing stronger and consistently evolving. with that, i recognize the ranking member, the gentleman from massachusetts, i call it the boston-austin connection, still alive and well, mr. keating for five minutes. >> thank you, mr. chairman, and thank you for the hearing. i also want to thank ranking member, mr. thompson, who is extraordinary with his time i've found in this committee, and it's appreciated. without a doubt, the violence in mexico reached as stro no , -- big proportions and it's important to take a view from 30,000 feet up and gain a perspective on progress we made on our side of the border. according to the federal bureau,

the murder rate in texas border communities remain at an all-time low. in fact, according 20 fbi data, the rate at the southwestern border is actually decreased by 14% over the last three years. on the other side of the border in the mexican city of la rez, more than 207 murders occurred in 2010. while there's only four murders in el paso in the same time frame, as a former district attorney, one murder is too many. likewise, there's 29 murders on the other side of the border in san diego. they give perspective to the fact violence spilling into the united states from mexico while extremely important to prevent has been declineing further more

kidnappings in the united states not included in the crime report are also on the decline. what is a concern, however, is the great strides in which the department of homeland security and justice have taken through the fbi and eta risk set backs due to cuts made to the agencies and budget cuts by this congress, plans to cut funds for border security by more than 350 million and reduce approximately 1,000 border security agents. that's not going to lead us in the right direction in terms of enforcement. the presence of custom and border protection agents, immigration agents, enforcement agents along with state and local enforcement detours them from crossing into the border communities, and i therefore thank the brave men and women involved in this for their service. i'm concerned that living in the border communities adjacent to the country where violence has

taken a stronghold must, indeed, have challenges as we saw with the chairman's opening statement. i therefore respect our witness' who have traveled a long way to tell their story, and i look forward to not only hearing their testimony, but following up with real action and also to continue to do my part and all of our parts on this committee, to keep our nation safe and our borders secure. we also need to address the flood of guns from the united states into mexico that feeds narco-terrorism. until then, we'll fight, overall, a losing battle. i'm pleased that deputy aguilar testifies with boots on the crime, a true depiction of crime and law enforcement effort being on the border and i look forward to hearing her view on narco-terrorism impact on u.s.

businesses like the american agriculture business. i want to welcome general mccaffrey, general scales, and dr. staple the, you traveled a great deal to be here, and i look forward to hearing from you. i yield back my time. >> the chair recognizes the ranking member of the full committee, mr. thompson. >> thank you very much, mr. chairman, for conducting today's hearing. i'd like to thank our witnesses for traveling here to testify before this committee. the purpose of today's hearing is to examine the threat of mexico's drug trade on our southwestern border. over the past few years, this committee has conducted numerous hearings on violence incurring on the mexican side of the southwest border. we have also examined e numerous efforts undertaken by our government to assist our mexican

allies in disrupting and dismounting mexican drug trafficking organizations known as dtos. these hearings also explored the ongoing question of how much crime actually spills over from mexico into united states. on one hand, criminal statistics indicate that broader communities are among the safest in the united states. in fact, there's less crime in some texas cities on the border than what occurs right here in the nation's capitol. as we know, crime all over the country stems from a variety of sources. being able to pip point where the -- pinpoint where crime occurs in texas that would have occurred regardless of proximity to new mexico and crimes that occur because it is spill over from drug related activities is not an easy task. i command both generals for taking on this challenge.

however, if what is contained in their report is deemed to be true, that would mean that i would have to disregard the most widely cited and concrete evidence of crime in the united states. the fbi uniform crime report, according to the fbi, the homicide rate along the u.s. side of the southwestern border has actual decreased by as much as 14% over the last three years. these numbers show a clear distinction between political rhetoric and proven facts. according to the report, fbi criminal statistics do nonet accurate -- not accurately reflect crime in the border communities because violence goes under reported because witnesses to crimes are often afraid to testify out of fear of mexican drug dtos. however, the report does not provide any concrete evidence of

proof to support this bold claim. i will readily admit that in recent years, violence in mexico has reached an all-time high, however, despite the predictions, statistics, and con ceil evidence -- concrete evidence shows violence has not spilled over into the united states. in fact, the violence occurring in mexico is highly concentrated, and in many instances limited to drug trafficking corridor, some of which are hundreds of miles away from the united states border. there's a need to bring awareness to this unique situation faced by texas border citizens, however, we must also assure people living outside of texas that border towns are safe for travel, trade, and commerce, and that violent crimes have always remained flat or decreased in border communities in the southwest. i would be remiss if i did not

mention that despite crimes made to increase personnel on the border, republican sponsored budget cuts threaten to take us backwards. this congress, the majority, introduced hr1 that cuts $350 million from the department of homeland security budget for border security, fencing, and technology. just yesterday, on an authorizing bill, we voted down, this committee, republicans on this committee, an effort to add 1,000 border patrol agents to the patrol. you can talk talk, but when it's time to put your money where the tough talk is, somehow it's not there. the hope of department of homeland security must have all the resources and authorities it needs to protect our borders. as members of congress, we must align our budget priorities with

where we claim help is needed. i look forward to hearing from our witnesses. >> i thank the ranking member. i would like to just state for the record that yesterday, i was very proud to introduce several border security measures that my good friend supported, and i think most significantly, doubling the size of the best teams down on the border which can con -- track the funds going westbound. that will go a long ways 234 this effort. -- in this effort. with that said, members are advised we have votes, two minutes left on the clock to vote. we have to run quickly. we have two votes. we'll be back in 30 minute, and i'll introduce the witness, and i look forward to the testimony, thank you.

[inaudible conversations] [inaudible conversations] >> the committee will come back to order. i appreciate the witness' patience. that's the last series until two o'clock. this should be uninterrupted. i'll introduce the witness pes and hear the testimony. first is mr. todd staples, from the state of texas, 11th state commissioner of agriculture and reelected to serve a second four year term in the statewide office. as the ag commissioner, he's uniquely positioned to address the security of our border through the eyes of experience through the texas ranchers and farmers. earlier this year, the texas legislature passed house bill four directing the texas department of agriculture to conduct an assessment of the conducts of the illegal activity along the u.s.-mexico border

working in conjunction with other appropriate entities to develop recommendations to enhance security. the legislative requirement developed the report we're examining at this hearing here today. next, we have distinguished general barry mccaffrey who served in the united states army for 32 years and retired as a four star general. he currently is the president of mccaffrey associates. he was the cabinet officer in charge of u.s. drug policy. after leaving government service, he served at the bradley distinguished professor of international security studies and then a professor of international security studies at the united states military academy at west point. next we have major general robert scales. here's currently the president of colgen. he serve over 30 years in the army retiring as a major general and ended his military career as

a come daunt of the united states army war college. in 1995, he created the army after next program, the army's first attempt to build a strategic game in operational con cement for future land warfare. he's a frequent consultant with the senior leadership of every service in the department of defense as well as many allied militaries. general, it's great to have you here. next is mrs. silva aguilar. she's been an el paso police officer for 22 years, in command of several units including the office of operations and northeast regional command. thank you so much for being here as well. finally, dr. michael vickers, a veterinarian and rancher from texas frustrated by the amount of vandalism and trespassing

takes place in his property, he started the texas volunteers to help law enforcement gain control over the smuggling of drugs and people through private property. dr. vickers has been featured on numerous media outlets to discuss border security including greta and national geographics "border wars," and now the chair recognizes mr. staples for his testimony. >> thank you, mr. chairman, ranking members, thank you for your service to our country. i'm todd staples, commissioner of agriculture. i wish we were here today celebrating the productivity of american agriculture and the fact that because of the hard work of our nation's farmers and ranchers, americans enjoy the safest, most affordable and reliable food supply in the world. unfortunately, we're not. we're here today because farmers and ranchers throughout the texas border area have been

intimidated, chased from their own property, assaulted by violent criminal organizations that is running drugs and people across their farms and ranches of texas. it is because of their concerns that i raised, and their concerns were brought to the attention of the administration, and so i ask in cooperation with the texas legislature and commissioned a strategic assessment of our texas border from two senior military officials who has experience securing borders all across the globe and asked for an independent nonpartisan assessment so that we can know the circumstances and facts that we live with. ..

dhaka this quote and i will say our local sheriffs are doing a tremendous job and police are working valiantly. our federal agents that are there in the state law enforcement along the border are doing an admirable job, but in texas across the 1241 while

border it is porous, and we are having our farmers and ranchers chased off their property and firsthand testimony of that. national leader for the heinous crimes and motives of these organizations but when we say the border is safer than ever it signals the feet and we are going to accept the status quo and no americans should be satisfied that we don't have the right to use and enjoy our property and we need greater federal resources in order to defend what is a porous border. statistics have been cited, and i know that there are statistics that we can go back and forth across but it is undeniable that the drugs swayed by the time are

flowing to urban cities across america and it is also undeniable that dollars counted into billions are flowing south. they didn't just appear in those communities. they can across our borders on how and i am here today asking for common ground so that we can have the federal resources and i've heard from some of the testimony that that is a common issue we do agree their needs to be a greater enforcement of and a greater number of border patrol officials. this document i submit it is a part of my testimony and clearly demonstrates that california, arizona and mexico have 14 border agents per border michael and i agree for that. texas averages barely over six based on the latest numbers provided to us. we need greater federal resources. we are asking for your help and thank you for your attention today.

>> thank you, commissioner for your passion on this issue and this report that you generated. the chair now recognizes general mccaffrey for his testimony thank you mr. chairman and ranking members of the committee for the opportunity to come here today to talk about the report which you already entered into the record and my opening statement i would enter that into the record as well. let me begin with to assertions. one is my personal enormous pride of the president calderon and his senior officials, garcia, the head of the federal police effort, the mexican army, the mexican navy and the marine corps who are struggling for the rule of law in mexico. i don't think it needs any discussion. 43,000 murdered, the most appalling internal struggle. this is not about drugs this is about the future of mexico and i

might add as well there is no question in any of our minds the most important countries on the face of the earth in the united states or mexico and canada. whether it is importing energy or commerce or cultural affinity so we have great respect and sympathy for with the mexicans are undergoing and along with that i would assert the u.s. support for a strategy of cooperation and support of mexico has been anemic. it's $1.3 billion over the years and helicopters compared to a $10 billion a month burn rate in afghanistan, so i argue in our support to this a vital ally has been inadequate. turning to the study of can't i was honored to be part of the effort working with commissioner staples. i also don't think there are

[inaudible] ecstasy and content as a general statement think of for the resources congress has provided over the last several years. i've been working of that border problem in mexico's internal struggle since 1996. i've been in every one of those border cities and almost every year since then, and it's clear that were it not for the fbi, thank god for the fbi and their ability to do counter corruption law enforcement [inaudible]

, the center of the universe, the mayor is a friend of mine. when you look between el paso and juarez being the most dangerous city that i know what i am in and out of kabul and baghdad and i am here to assure you it is more dangerous in juarez than either one of those cities but thank the u.s. law enforcement the border community is doing pretty good, plus we put in the fencing and allow the border patrol cbp to match their assets. having said that, as we listened to the texas border communities, as we listen to the law enforcement officials throughout the united states there is no question that there are spillover effects if it is a board that is more acceptable to the debate along the frontier.

i would ask that you draw your attention to the states men october big headline johnny and gags use dow's base. it's impossible for me to believe that witnesses like the doctor and others we've talked to along the frontier are imagining the violence and intimidation they face on a daily basis. the bottom line from my perspective is to support the mexican authorities in a more robust manner to increase the assets to federal u.s. border security and make sure we understand that the border sheriffs up and down the frontier simply must receive more assistance. technical assistance, resources, manpower etc. so again mr. chairman and ranking member, thank you for the opportunity to appear here this morning. >> thank you, general.

i know you have reference to the american states monarchal noting how the violent and drug gang uses austin as the base and there were over 50 arrests in my home town. without objection i would like to enter this news article in the record. >> could i ask you a question? austin, texas. is that of the border because i think the focus is on the border >> the focus on the border states, that's what we need to be focused on what we can argue it would be the safest city or not i would argue it is one of the safer cities. when the you are talking about i think is a general mention of the spillover effects and it is noted that there are thousands of drug cartels at thousands of cities that are inhabited by the

drug cartels according to the fbi's report. that is all across the nation. >> since you're introducing something for the record i am not going to object to that but i want to put on the record austin is not the border because i think the focus for everybody i have no objection to the introduction but i want for the record austin is 233 miles away just for the record. >> it's not that far from the border but i will say that the focus here is not just the border towns. the focus is the border states and frankly the infiltration in in the entire nation and. >> the basis of this report is one instance they say doing business in a border county is like doing business in a war sell so the focus of this report is based on the counties and i agree we need to look at everything but the basis of the

report is one sentence, the conclusion is doing business on the border county for the record austin texas since you lived there and i will be at your house on monday launches not on the border that is all i want to -- just for the record. >> your points are well taken with that i recognize the general for his testimony. >> thank you mr. chairman and ranking member. my testimony will be principally focused on the study that we wrote. five years ago the subcommittee offered back of the report a mine in the sand confronting the threat of the southwest border and in that report you predicted a war on the southern border. you anticipated the prospect of the spillover violence and critical importance of increasing the resources of the border patrol and sheriff's we in our report essentially support the court's conclusion

that america's borders are the nation's last line of defense in the nation and they have to be secure. the 2006 report underscored the evidence that the terrorists want to exploit the borders to gain entry into the u.s. and we agree with that. the white house and the dhs agree with that and indeed the secretary said, quote, the border security measures we have taken constitute the most innovative and effective approach our country has ever deployed. our reports suggested that this simply not true. as i direct your attention to the department of justice recent report on the national drug threat assessment for 2011, and in that report and the state the mexican drug trafficking organizations are operating in every region of the country they've increased their drug control for the u.s. street and prison gangs to distribute drugs and in many areas they are using their alliance with mexican

cartels to facilitate an expansion edemea deily commit level operation and to the more rural and suburban areas. in 2009 the net level distribution in the united states was dominated by over 900,000 criminally active gang members representing approximately 20,000 street gangs and 2500 cities. the dhs labels as a myth that the border is out of control the government accounting office concludes differently. the stated several reports that both south to north the trafficking of drugs and humans and cash is virtually unimpeded in large stretches of the border. cartels are increasingly financing more drug consumption and other collective battista the nation and amassing a vast amount of cash from collectivities in the united states. the federal government knows this well.

criminal drug trafficking as the seizures of the multi town roads of illegal drugs in the u.s. and mexico. we are convinced that the government is doing a very poor job of stopping the convicted foreign criminals from entering the country and removing foreign criminals who remain in the country after multiple convictions. our evidence proves the government has failed to protect americans and their communities from foreign criminals particularly in the border areas. in 2010, i.c.e. removed over 195 convicted criminal aliens and a majority of them were arrested by state and local law enforcement agencies. i'm sorry, 195,000. the report concludes on hundred million or more aliens responsible for creating fellow crimes continue to pass back and forth through texas. cartels were driven by not just

religious or ideology but by the motivation of shipment, human smuggling, cash and weapons trafficking, and they have expanded criminal enterprises in mexico and the u.s. and also internationally. we stand emphatically that most residents in the report and documented in the extensive bibliography is derived not by us but by congressional testimony in federal documents our role was to add military experience and perspective to the day that that already exists. the findings and conclusions in the report are not secrets. most of the data is in the public records and accessible by anyone with an internet connection. our report provides close to 200 web links in that report and in our opinion the three issues documented to follows. number one the dutch will

situation on the southwestern border is well known that public had not denied. this is not about workers in large urban areas. it's about the flow of drugs driven by mirko terrorism. number two much of the crime is traveled through the porous texas border with an impact on every state in the nation. number three, hundreds of thousands of mexican criminal aliens are deployed to a newly only to return as troops for the cartel's better equipped to engage in profitable commercial enterprises in the activities through the united states. thank you petraeus too thank you. the chair now recognizes the chief deputy aguilar for her testimony. >> thank you. a german government a members of the subcommittee, it is a privilege and honor to appear before you the close to 30 years i've served in law enforcement, the 25 years with the police department and to deputy chief.

since 2000 might become the chief deputy for the all paso county sheriff's office. we have a population of approximately 650,000. it's the sixth largest city in texas and the 19th largest in the united states. it covers an area of more than 100 square miles and has a total population of approximately 800,000. a pacifist and crossed the border. the two cities for a combined international power, metropolitan area of 3.3 million. approximately greater threat to the and texas tech university center. at el paso as well as the largest military complex in the united states the 2010 elbe pass taha was awarded the strategic award as the recognition

program. the brookings institute monitor has the top metropolitan area and an independent housing market forecaster predictor.com forecasts el paso to meet the nation in the home price increase for the year. as i will show the members of this committee toughest drug violence the last two years. since 2008 the of the named 8,900 homicide's but that has since been to control the nuclear drug and street crime. el paso on the other hand is a city of law-abiding citizens who work hard every day to support their families and make their community a better place to live, work and play. citizens trust and respect the law enforcement agencies.

local, state and federal which all work together to keep our communities safe. bill casseaux is so safe and was recognized as the largest, safest largest city with a population of 500,000 by the press which produces the annual safest city work. prior to this recognition, el paso has been named the second or third safest city the last 12 years even in light of the situation. the skill reports that conducting business in the texas border county is tantamount to living in a war zone in which civil authorities, law enforcement agencies as well as citizens are under attack around the clock. this is an extreme exaggeration. maybe not conducting business in el paso is harmonious and writing. el paso and like other communities in the country was not hit as hard by the economic

woes. we contribute to that to ever military base and the individuals that operate legitimate businesses and keep our economy flourishing. the report also states, quote, texas is a tactical close combat zone and fresh line in the conflict but we are not a combat zone. they are in mexico. el paso county is not a war zone. it is one of the safest communities and best performing metropolitan area in the country. i urge you to visit and see for yourself what a great city and police el paso is. finally, although we don't get involved in operations, no drugs are coming through the northbound lanes and the money is being sent south to mexico through the ports. we see the backups on both sides of the border with traffic waiting to go through, traffic and pedestrians. we need resources to in the integrate the custom border patrol officers petraeus we can

assure the drugs, guns and money that fuel the cartel are not getting through the pores and the legitimate trade is. again, thank you for allowing me to testify today. >> thank you. the chair now recognizes mr. vickers for his testimony. >> thank you, chairman, ranking member keating and members of the committee for inviting me here today. i'm dr. like a veterinarian from the city in barracks county texas. brooks county contains a border patrol checkpoint that is approximately 65 miles from the mexican border in mexico. i've come here today to testify on the violence, crime and lawlessness that is overwhelming brooks county and its surrounding counties. most counties in texas that of border patrol checkpoints are rural counties with small sheriff's departments. the men drug-smuggling by gangs and organized crime has overwhelmed our department. brooks county sheriff's department has six deputies to patrol 943 square miles of ranch

country. many ranchers are left to fend for themselves. ranchers are being threatened if they call border patrol law enforcement to report smuggling activities on the ranch and i'd be glad to expand on that during the questioning. some have left their ranches and have moved to the cities of san antonio, mike allen and corpus christi. there are hundreds of smuggling routes throughout the counties that are used by criminals to skirt the border patrol checkpoint. this year the sheriff's department bus to a large german ring affiliated with the mexican cartel. for over seven years they've shipped over 200 pounds of narcotics a week for the ranch's. and on sealed indictment presented the two that have become and were shown where the sheriff's deputy live so they could come back, a kid not to them and find out who the informant was. this is still an ongoing concern. property damage is staggering.

a cut senses, destroyed water sources, vandalized homes, stealing vehicles are everyday occurrences, a large range fires set, a recent fire killed with least three required and required many more to be airlifted to safety. this a picture of a ranch fire this year started by a vehicle with plates that left the road fleeing the border patrol and the texas department of public safety that carried 21 illegal immigrants who was clocked at 112 miles per hour by the dps. border patrol was able to save four of the trapped passengers moments before the truck exploded and started the ranch on fire. truck passengers were undocumented and illegal immigrants delete come bridesmaids' from they have occurred this year with another 31 reported still missing and nearly 500 deaths since october of 2004.

some are murdered, but of leased all our criminal homicides. one day when my wife came home she noticed the dog is pleading with they don't object in the yard. it was a woman's skull. her body was found about 150 yards from our back door. she had a broken tibia, she didn't walk out there with a broken leg. we suspect reeve and murder. other dead women were found on mize south fence and same period. dealing with the bodies is exhausted. i have a real toters of our surest apartment compound containing hundreds of vehicles confiscated from drug and human smugglers. seven years ago myself and others started a group called the texas border volunteers to help in law enforcement control the smuggling through private property. we are concerned about the thousands of people kind to the state and nation without knowing who they are or where they come from. we have monthly operations and report criminal activity to the

law enforcement the u.s. border patrol. ibm must camera systems to monitor the smuggling pathways. we have reported hundreds of illegal aliens and the smugglers during our operations, hundreds of illegal aliens have been rescued by our volunteers. these are people that have been cheated of their money and left alone in the wilderness. we are in the second week of operations and we have been busy. we see many other than mexicans. the real grande valley mcallen sector leads the nation and rollcall.com with to under 84 individuals as of september 19th, 2011. this is for this fiscal year. if the border patrol catches eight or ten then we have an astronomical number of lowercase them is slipping into the country every year. we've seen groups carrying guns and i will answer questions on that. people from special-interest countries show concern for all

of us. our other countries represented in ot and apprehensions include the dominican republic. sudan, eritrea, somalia, sri lanka, nigeria, ethiopia, venezuela, vietnam and more. a dangerous encounters. i found a rancher on the highway after dark who was robbed tied to a tree, shot twice and had his truck stolen by to illegal aliens crossed to the hospital and survived. i have five illegal aliens with sticks and cedar post attempt to take my truck from me when i was leading a ranch gate. counters with smugglers and illegal aliens are daily occurrences and most and their families are not leaving the house without being armed. in many parts of the country many ranchers cannot keep employees for the fear that it's constantly circulating. our lives have been severely compromised to say the least. the border patrol budget in south texas has been dramatically cut.

local and state law enforcement and border patrol need help and we need it now. we all as americans need them to have adequate resources to win the war on our southern border. again i thank the members of the committee for having me here today. i look forward to answering any questions. >> thank you, doctor, for your very vivid testimony. let me just say from the outset i think we are going to have a very lively discussion, a good dialogue but let me say from the outset i don't view this as a republican and democrat issue i don't see it as a partisan issue i see this as a bipartisan issue when it comes to national security and securing the borders, this should be a bipartisan issue. i think if anything yesterday's authorization we sponsored several bills together, one to double the size of the teams, another one to provide border

area security initiatives grants from local law enforcement and sheriff's and that is as it should be so i'm not going to try to spin this into a political sea every event. what i'm interested in are the two generals who taken a lot of time out of their -- they are busy but they took a lot of time to write what i thought was a very good report. we talked about maybe coming up with a 5. plan if you will or ten-point plan in terms of how we can better secure the nation from this threat so i would like to hear from the generals in terms if you had to prioritize the top five or top ten points in terms of what we need to do as a nation how would you respond to that? >> welcome mr. chairman, let me start by thanking the chief deputy aguilar for the testimony.

i don't have a debt agreement with el pais so as a city or county, although i might add that i had a meeting personally in a closed room with 100 people both from juarez and el paso within the last 18 months on that entire room both sides of the border said they feel intimidated and a senior police official in the city of el paso in response to a question from the mexican national said these people come across the border on will not be able to protect you if i was astonished to the the texas eps was in the room when we had this seminar to educate me on what was going on. so why do think that we should accept as a reality, non-partisan, i'm not running for office and i'm not associated with a party i've been working the border from a long time. the rural areas are the absolute the threatened and dr. victor's testimony should be given great

credence. now having said that, number one, if we took the border from one end to the other 24 southwest border county and made a state of them you would say a couple things. number one, 51st in the per capita income, 51st in health care. you go on. they are the poorest counties in the united states, but their number one and documented federal crime. so i would argue this is not the responsibility of border share drops. 12 deputies, 5,000 square miles on and to amend the did population, cartel presence in the county. we can't protect america unless the border patrol and the other parts of the system -- you can't just increase manpower in a border patrol. the federal marshals service, the fbi, the court system has been enhanced also. we've got to get resources adequate to counter this challenge. i think the second aspect of it not the subject of this hearing

we can't protect america unless we reform immigration law we in the united states. we've got 10 million people running our culture system, meatpacking, day care centers etc.. these humble hard-working spiritual people are here making america's economy work. they can't go to the local police and ask for protection because they are here illegally. they can apply your money home to their mother. we simply must reform and have a guest worker status where these people are protected by the safety standards, minimum wage etc.. without which we are not going to affect the border and finally we have to get real assets to the mexican government. i think we have given them 11 helicopters and three years. thankfully during the clinton administration we got over 250 aircraft to the colombians who have turned the situation around in a ten year struggle those would be my top three

recommendations. >> let me say in response to that as well we meant president calderon seven times, and i have tremendous admiration and respect for what he's doing and i agree it is jeneane beck the mayor of the initiative has had some success but we need to look at post mer but and what are we going to do? we've been working on a plan to get the columbia and special forces trained by our prices to work with the mexican military to crack on the mexico criminals. i think that president calderon is interested in that idea and i think we're going to make some progress on that. my time is limited, but i have to touch on it touched about the other than mexicans. i know that number -- the seasonal work is not the threat. it's the of the mexican coming in. if the defense of this week demonstrating that an pyrenean operative was reaching out to what he thought was a german

cartel number to arrange a team of assassins to bring explosive devices across the mexican border to the united states to take up the saudi ambassador, highlights this threat be faced. when you look at hezbollah freeflight da silva engaging in drug production and trafficking, explicitly stating making these for satan, america and the issues if we cannot tell them with guns we will kill them from drugs and gindin in 2008 the universal reported that the mexican drug cartel was sending billy assassins to trade on the weapons of explosives with this islamic radical in iran. this eighth report. is this happening? what is the islamic has been a connection to latin america? we know that there is a to iran caracas connection to venezuela. we know that has a lot there's a presence in hezbollah and the

western hemisphere and the fight can refer to this here we have the iranian offer if pune thinks he's contracting with these drug cartels picture on the right with these assault weapons, these ak-47s. this is a threat and this is one we've been juan andrade for years and that is my concern as a former countertenor for some officials and a member of this committee looking at border security issues. this makes the border that much more imperative that we have to get it secure. >> would you yield on that point? >> i want to hear from witnesses if that's okay and i would be happy to have a further discussion. but to the two generals, you are giving a military strategic assessment of this threat. how do you view this connection? it highlights more so we need to be paying attention and most of

this is playing in mexico. 40,000 people killed in war as 6,000 killed and head of the same security i had going into afghanistan. so what needs to be done? >> i will be brief. i wrote this letcher or we've wrote, from the standpoint of the military, but what i would like to do is cut through the politics for a minute and give you four or five things that need to be done in addition to more funding. money is important but other things we've discovered are equally important that don't necessarily do with finances. first of all we believe texas is a template. for many reasons we talk of in their report particularly the aggressive action of the texas rangers many ways that texans system has proven to be one of the best we've seen. second, we need to improve coordination, communications,

intelligence gathering between state, local and federal and we need to focus right here the tactical side of the battle where as we know all of the war, iraq, afghanistan, texas was to reduce the tactical level of the war we don't put the resources of the tactical level so it's not just the money but it's the way you put it. i think we need to do a better job of cross border to use my phrase tried operations with the mexican military. dalia understand all of the political problems with the mexican war mcginn 19th century. in those few instances where the rangers and the fed and the locals and the mexicans lubber read it together on both sides of the border they effectively shut down the drug-trafficking for days that needs to be a template for how to do it. we need to use cost-effective cheap off-the-shelf technology to run just build a fence but

that this strategic in nature and can be observed. there's a saying in the military in the obstacle that's not covered by observation or fire is useless and it's the same here. in the state of texas they have taken cameras and gps and sells loans and put them together in the cheap antiintrusion systems that have worked extraordinarily well. the final point i will make his schooling. one time we learned in the military is a military institution and information sharing, teaching and learning the and all three levels, state, local and federal but particularly local it's important for us to stay ahead of the enemy intellectually not just physically because the cartel's or a smart addictive and flexible heartless and cruel organization and if the outthink us as well as outfight of the federal money in the world won't make a difference.

>> i see my time is expired but let me end by saying things you again for the report. i think it is very valuable. commissioner stables, thank you for yours as well to dividing texas has done a lot of things right and has provided a model for the other border states. and i think,, you and i talked about coming up with maybe a five-point plan or ten-point plan that sylvester reyes. i think the two generals just came up with some pretty good lady is we could perhaps work together on going forward. so with that i recognize the ranking member mr. keating. >> thank you mr. sherman. i'm struck by her listening to all of you and i think it's an amazing consistency here people come to this hearing and think there isn't i want to hear about it and this is the amazing consistency i have heard. on was a dea before and the reports from year to year say that in my county to we had one

of the lowest homicide rates so the press would call me up and say what do you think about that? and i would say i'm not happy because people are getting killed. doesn't matter about numbers people are getting killed and that is what i say here. i see here presented a picture of al casseaux safe compared to other large areas. i see that it's thriving. i see a good community and see the economy doing well. yet i listen to dr. of vickers and i get it. within that broad view there are terrible things going on that have to be addressed. to say statistically everything is safe begs the issue that there's still a huge problems to deal with. first comment i make is one in perspective that will get the big picture, then look at the important telescopic view of

what is going on to the ranchers and people and what's going on there. i do say this and i think we are not going to make progress of the hearing unless i get this out and you get your chance and i know that i don't run out of time and to discredit this. understand the generals are asked for a military strategic plan but i must say this. i think looking at the big picture to sit there and use the language that said conducting business in the texas border is tantamount to letting the war zone. i don't think that helps because i don't think it presents the real picture. is there a war like tactic on the ranchers? yes but don't give the impression because that's not what i'm hearing. the opposing this and i'd like your positions and i am pleased with what the general said because this is what i believe,

too. i believe number-one the resources are inadequate and we made the analogy between afghanistan and mexico and how much is spent there and how little is spent on the very real issue that threatens our safety and security in this country not just in the borders or not to stevan in austin but i think looking at it in the big picture it affects many major cities and this is the general talking about how these cartels are pipelines and these are the people bringing death and danger to the rest of the country as well so this is a big issue and it extends beyond the border so i agree with the general mccaffrey in that respect to the comments about the comprehensive immigration. if you want people to speak up, if you want people not to be turned into soldiers for the cartel's crossing the border back and forth, the people that

are coming over and working to and or obey into law rather than being here illegally, they can't come forward and do anything of they are threatened with of the law themselves. if you want them to have a stake in the action and be part of the solution then stand up and fight these cartels. we have to do something to let those people that are coming here be here legally so they are not afraid to speak up and not afraid to be used or intimidated and that's an important point and use it was tangential i think it's the central and also if we are talking about resources consistently with all of you those are necessary so i want to tell you as one person i support the comprehensive immigration reform so we can fight and people have a stake in the action. people won't win unless they can fight and i am going to fight for more money and i'm not

alone. the ranking member and members of this committee i think they can speak for themselves but a lot of people want to spend that money and i'm not trying to be political but factional the majority voted to cut, and we need money if we are going to do the job and that's a fact i see. as i look forward you've got my commitment on funding this come you got my commitment on dealing with immigration and to go forward and realize this is more than a border problem and affects every citizen of the united states and you have to wake up and understand that. we'll all the resources we can to you folks who are inordinately and sometimes beyond comprehension being attacked unearthed -- the good

job i think the the local police are doing to combat this. if someone wants to contradict anything i said, go to it. i just want to know if i have the picture from what you said and >> let me also agree on the one point you thought would be in contention. this is a kernel thread. it's not war. assertions are not military. the last thing we ever want is one u.s. soldier across the border even if invited by the mexicans. based on the support of the patrol we have a federal law enforcement institutions that are adequate to do the job. having said that, i've been watching this at a close range since 1996 as a friend of the border communities and we are out of control on that border in

the rural areas, and those people need protection. about to be federal law enforcement resources devoted to the sheriff's department's who simply can't keep up not just the sheriff's department to the prosecutor called the coroner they can't even do autopsies these are homicides, people murdered on the u.s. territory and we are not protecting them. >> thank you i just want to throw something out to get an answer other members of the committee have questions as it goes along if you can fit it in good to be the general skills brought another point about how mexican law enforcement officials have to work hand-in-hand with american law enforcement and federal officials. if you get the chance and your questions, you don't have to answer it now, tell us how we can better do that.

>> with that i yield back. >> thank you for your usual softness and suggestions i would note the sooner we draw down its my hope we can channel those resources to this threat and we have right now in our own backyard and it's my hope we have the best teams as we double the resources that the money that they seized as a cash flow going southbound we can direct the back to the border and the best teams so with that i recognize the gentleman from south carolina, mr. duncan. estimates before the panelists for being here. this is a very timely discussion today don't think that anyone that's followed the southern border and hezbollah and the mexican drug cartel i don't think it caught us by surprise that the quds force would utilize the mexican drug cartel as a conduit to him for wanting to bring god knows what into

this country and canada heinous crime and in the united states of america. we were lucky and there's a saying i would rather be lucky than good in the day but american needs to realize we were extremely lucky that the person that they contacted was the dea undercover agent posing as a member of the track cartel as an assassin the contacted about helping them across the southern border. let me just remind the committee and others that iran is a growing influence of western hemisphere. they've opened six embassies in the last five years in this hemisphere. we know the venezuelan connection. but keep in mind that if this plan hadn't gone forward or a backup plan or additional plan was to commit another attack in the venice windows aires keep in mind part of 9/11 of the attack

on the sovereign united states of america the single largest attack happened in buenos aires argentina with an attack on the israeli embassy and cultural site. those their secondary attack this week. of forever in june the was just announced this week. i want to urge my colleagues to get behind a house resolution 429 wi-fi on tuesday that merges the administration and western hemisphere in this area focus in the next counterterrorism strategy. i think that's important. i think it's going to be singled out today and as we go forward and investigating what went on this week. and so, gentlemen, i just want to ask -- i guess i will ask general mccaffrey first of all i want to thank you and john oral for your service to the great nation. the of the panelists for what you are doing in texas. for the sovereign state. but also for america. i south carolina. we are a long way from the

border but we are impacted. as you saw on the screen earlier the flow of troops and crime and to this country comes through my steve as well so we are concerned about what crosses the border, who crosses the border and the sovereignty of the nation so i want to thank you as well. in general, and i will ask you, can you elaborate whether or not as possible for hezbollah to exploit the drug in human smuggling rights and we use that to attack the homeland and if you could tie any knowledge you may have with a mexican drug cartels tunneling under our border and any relation it may have to our similarity to the tunnels that may be found in southern lebanon. >> always caution people. if you ask me to questions i forget the first one but let me if i may say that it's clear to me that our primary threat across the border is drugs and

it essentially sees a thousand cities in the united states have on the criminal activity out of metric tons of mass, cocaine, heroin, ecstasy etc. that's happening in by the etds to the colombian criminals, nigerians, russians, low iq green goes and now primarily it is mexicans. some of that i might add is because the cartel activity the have been beaten by the colombian national police and the courage of the leadership so they've ceded the ground and the mexicans can. we do have to be concerned about that as overwhelmingly what americans have first-aid new york and south carolina care about. in addition, however, i think your points are good. it's hard to imagine as protecting america from a counterterrorism threat. if we don't of a unified federal strategy to protect america's borders, and we don't, the

border patrol has got a decent internal strategy. there is the most complex byzantine mixed up mass of federal authorities who trying to coordinate activities. if you're a share of 50 border county trying to sue the hell you go to it is almost impossible. and what would pass for a strategy that if funded would result in further improving safety. so i don't think we've done our job at the federal level level. i don't mean that as an attack on the dhs. think what we put to get through the department of land as security 180,000 people putting 4 billion a year on to the resources we would have a disaster but it is inadequate, it's not coordinated command as the general skills mentioned it's not adequately coordinate across the border. the dea is doing an incredibly good job of coordinating in mexico but not federal law enforcement on our side of the

border. >> congressman, let me answer your question very briefly. as we get better detecting and tracking terrorists from these named countries, the terrorists get more committed to coming to america for the unprotected borders. the days of going to jfk, thanks to the terrific work that the dhs has done we have a record of one gentleman who tried come m i iranian, i think, who tried six different countries to include indonesia, cuba, russia and others to break into the united states if you will, and he finally managed to do it when he linked up with the cartels. the cartels are a political about this. they want to make money. if a guy from iran shows up in

this case 1.5 million to smuggle him across the border more than happy to do it, our great concern is how many have we missed, how many who have sought political asylum and have to be with kevin texas and join a terrorist group, we don't know because we lose track of them unfortunately when they go through an unsecured a border. >> let me just in my remaining time reference document we've reported and that's the constitution of the united states are to meet critical for section 4 every state including texas freely join this union as an independent country to be reminded, but we will guarantee every state in the reunion show protect each of them against invasion. it's not my words, that's the words here against invasion. look up the word of an destination it takes many different forms. i believe we are seeing a form of the on the southwest border. i yield back. >> the share recognizes the full

committee mr. thompson. >> thank you very much mr. chairman. let me at the outset thank the witnesses for their thoughtful comments today. it clearly reflects that you've given the subject matter significant study and i appreciate it. doctor, let me say to you that your concern for your county and the people who live and it is duly noted. one of the things we are trying to do is to push resources to the sheriff who as well as other localities will. general mccaffrey, your comments about a coordinated federal law enforcement effort is some of the things we are concerned about because right now the

proposed dhs budget is to be cut and that doesn't push more resistance to the border it takes away. whatever you want to say a cut is a cut. we have tried to ed person power to customers in the border protection. as i say, that is at this late as yesterday in our appropriations and authorizing markup. we were not successful, but we are not going to give up. we have talked to the men and women on the ground just like profit onerous. you are absolutely have to have resources. now, those resources go beyond just individuals. it's that coordinated strategy that we don't have. so it's a combination of fencing, air support whether it

is unmanned drones or whatever it was along with the local individuals so we hear you will. one of the things we are beginning to hear also is that as the drugs, north, the money and the guns go south. so now to the general swa, how do you suggest we deal with the guns and money going south as part of this deterrent to deal with this issue? >> thank you for the comments. i fully agree with you to read by the way one of the political problems i think you face, not me, if you are trying to get resources of congress but simultaneously saying the problem isn't jury important the murder rate is tiny, elbe tasatto is like switzerland, and you are simply not going to be able to get the resources of the customs and border protection

required so there is attention on one side diminishing the threat will you are a trillion to enhance the resources. we also owe it to the mexicans to not see the problem to us but to recognize is a mutual responsibility and every time i looked at seizure rates for seizure raids on the cash flowing south are nonsensical. we don't get at a bit of it. we take pride in seizing 120 million or 40 million that is a drop in the bucket. to do that, i might add is a problem. i stood there on the verge of the americas in el paso and you look at the car is going into mexico at night you don't see any taillights. they are not slowing down their driving right by the mexican law enforcement going into the country so we would have to establish on our side of the frontier -- by the way the most important issue day today is

economics. mexico is the third biggest trading partner were probably number 21 energy, a tremendously important to the country. we can't stop traffic at the border. so to do that we have to establish new forms of control. how do you look for money going south? finally the problem of guns. my son and i are gone nuts. we are shooters, hunters, but somehow we have got to in those border states find a way to ensure that individuals cannot by dozens of automatic weapons were semi-automatic weapons that can be easily fixed, and allow them to go south and mortar delete comer mexican police and agents. i don't mean to divert by the way this boneheaded operation. i'm talking about the larger issue how do we protect measures. >> i appreciate it, and i was a top gun for the democrats at the last boarding place so we

understand guns too. but i use them in the sporting context and not others. doctor, you talked about the resources. what kind of resources do you envision as being helpful to a county like yours? >> we need to start at local level. this is where it needs to start and like the rural counties like i mentioned in my testimony that had these border patrol checkpoint, most of them in texas have small sheriff's departments and small populated counties. our county has about 6,000 people. kennedy county on highway 77 that as a checkpoint only has 400 people. so the share of departments are on the front line. a lot of times they are the first person that somebody calls when the incident or if she were life-threatening situation on ranchers and they call 911.

a lot of times the border patrol can't respond because they are tied at the checkpoint with maybe a drug bust or some other activity. so it is critical that we give the adequate funding to the share of departments one or two counties in that have these checkpoints. it's critical. our share of department right now has an application for a grant for 410 or $12,000 for a lot of equipment that would help us in that county. an adjacent counties that have similar problems need the same things of this is where we need to start, then we need to help the state. we need more helicopters. ..

new back >> and save the taxpayers' money as well.

with that i like to recognize the gentleman from florida. >> they do mr. chairman and for your testimony. , why are the iranians open baying embassy use throughout latin america including countries where there are no significant commercial relationships? is it possible to give platforms to the terrorist proxy's with the relationship between these services and terrorist groups and drug cartels? i have one more question after that days after that. >> very briefly i don't think there's any question that terrorist exporting countries like iran i don't think there's any question they have a grand plan and that they have allies south as central american governments that are willing

to take those ideologies to give them the launch point* where a landing pad for entry into the united states. what is important to understand if not for the cartel and their involvement coming from mexico number it is like the soprano type of organization you're standing on the streetcorner that is the with the cartels are not political or ideological but there to expedite illegal activity. my concern is by evidence what happened the other day that the working relationship and familiarity with governments like venezuela and cartel organizations like those who were military organizations to begin with become ever

more intermixed and more profitable. year you have petro dollars supporting a lily pad in venezuela push forward by the arco dollars. it is a very, very dangerous situation for the country and until next week was not something that was not viewed very highly on our screen but all we need is for something like this to succeed where it gained the way through a southern border god forbid it should ever happen. >> would you like to call as well? >> the dominant concern we in the united states have is criminal activity distributing hundreds of metric tons of drugs and

pick a study that is chronically addicted and i was a new tie yesterday with the statewide rorer nationwide but the problem affecting the united states is a high content and alcohol abuse by youngsters. that criminal activity is what we have to focus on but your point* is correct how can we pretend to protect ihop america if we strategy's lack the resources to control the front here? they do not control the front year. they do a terrific -- terrific job of the el paso and san diego and laredo part that is then saying strategically placed but the rest of the border as others will tell you is free movement of heavily armed people on the other side of the border you can look across the river.

company's size firefights with grenade machine dad's a anti-aircraft come in the use are not the mafia shake down. hall is their organizations that have decided to not go after law-enforcement generally on our side of the frontier. the situation is getting worse. >> is it true some of the car bombs used by the cartel in mexico are very similar to car bombs designed or used in the terrace proxy? would you indicate that is true it would have possible collusion or trading between the cartel's or terrorist

groups? >> i think you have to go to the relevant authorities in general petraeus but dealing with chavez and venezuela and i have great empathy budget he has acted as a platform facilitating some of the goofiest terror organizations on the face of the year threatening his own neighbors to facilitate threats to the united states for broke we should expect this will happen part of it is facilitated by the venezuelan intelligence services. >> just to add to that, the cartel does not need a lot of help to be frank. i was talking to a texas ranger who described the operation as world-class communications in scripted and automatic weapons that were superior to those of

the texas rangers. a scowl system using night-vision devices, a third-generation in. and operations plan, i have even seen a manual for execution and ambush taken directly from one of pro-military manuals. if the iranians are involved. if somebody would describe the characteristics of the cartel small unit based on equipment, training, technol ogy, i would frankly have been very impressed. >> i yield back. >> the chair recognizes the gentlelady from new york. >> thank you very much mr. chairman and ranking member. as a resident and representative of the northern border out like to provide my time to someone who has expertise from texas, the gentlemen from laredo.

>> without objection. >> just for procedure i get her five minutes then my additional five minutes? >> within my discretion. that is my understanding. >> since i have lunch after this mob at your discretion and. [laughter] i went to think the witness is for being here and we have the same goal to protect our country. arocrit we go back since the state legislature for the work you have done and i went to make sure my friend michael understands that i do not some questions that we are all the same page but i do have questions notice regard to our military but

as being from the border i have three brothers of our police officers one is narcotics officer and two other officers my family live there and my two kids all my life. secretary of state under governor perry the use to be chairman of budget with the texas rangers. i understand all of that. i want to give you this as background but if i could have slide in #1 to ask you one question. the crux of the report is this. i don't have a problem is happening in mexico and a stand it is a violent situation before the record i think we have the best working a relationship we have had with the republican -- republic of mexico in the last 75 years there has been a shift of the paradigm to work with

them. we need to continue working with them but there are two things that you said in the report that upset a lot of us. you make it sound like there is no nice people. in the border canny the citizens on the border under constant attack, the 2.12 mention. if you look at the chart over there and to see the border areas their murder rate at 100,000, it has the highest and highest of the

nation are gary indiana and new orleans almost 51 murders per fourth 100,000. by the way washington d.c. is at 23. would you call washington d.c. a war zone? yes or no. >> the questions are never answered yes or no. >> i am asking you. >> i will not answer that way. >> thank you. >> the murder rate to an el paso does not take into account the 50 murdered mexican nationals in that county that mr. vickers takes into account if you use the word wars and you have to go to the community but el paso is a beautiful and vibrant place for the hospital is so fearful that they want their own police force to guard against mexican criminals to come in to get the cartel members.

>> is washington d.c. a war zone? >> no. >> but looking at those numbers you all came with the conclusion that laredo, el paso, and those areas are a were some? correct? >> no. >> look at your report. you were paid $80,000 as a former military taxpayer dollars to make this report. is that correct? >> we had five people work for months on this report and i assure you. >> i am sorry. generals, with all due respect. >> with the gentleman yield. i do think these are respected general's we can show respect to allow them to answer the questions. >> let me ask again. for you paid $80,000, yes or

no? >> use adjusting this report had political or monetary motivation? if you are that is a shame my dedication to this country was based on 32 years of state -- service. >> statement was made let's cut through the politics. >> with nine to an ad hominem attack for the motivation for this study. >> i am just asking a simple question. were you paid 80,000? >> you are asking your provocative question that i will not accept. >> for my record they were paid 80,000 for the report for you are making a profit. nothing wrong. >> know we lost a considerable amount of money. >> $80,000.

in general, i am a ph.d. and an attorney. i looked at your report. all i found was anecdotal evidence. i think if i would have done my dissertation or report i would have gotten an f with no citations come a bibliography, and no footnotes, don't you think anybody as the phd would get the latter half on their report? >> i have also done six bookspan 300 scholarly articles. i know how to write. >> that is not how we did it. i suggest you have your staffers go into the bibliography over 200 citations are online.

the issue is not what is happening now but what i am concerned about is the future. what is happening on the texas border is the canary in the coal mine. >> but our concern if it is neglected they will pay a high price. >> >> what validity did you use or was it anecdotal. >> no. if you go through the report to see the bibliography you will see that. >> let me ask you this question. your report i am trying to find evidence but it may use since the information to

show the violence on the border is that correct? >> by a agree with the department of justice statistics on which real-life the misinformation and bed gao and other federal agencies. and if you have that much trust in federal statistics statistics, so be it. >> we added this section because we thought the concerns expressed by managers and farmers verso poignant that some type of anecdotal reinforcement was probably pretty useful because it talks about the human side. not the statistical side and you seem to be missing that point*. >> let me see what you missed. how many people did you interview? for your report?

>> how many people did you talk to? >> first of all, it seems to me in this report is based primarily on federal reports that are published. second may come a based on my personal 15 years of dealing with the border and mexico. finally, has correctly stated we tried to listen to the voice of texas law enforcement and the tech since of the rural people that is a qualitative basis behind the report. >> how many individuals did you personally interview to come up with this report? >> i don't know. i interviewed several people i cannot give you a number. >> i have interviewed the

ball over 15 years. i did not count them adding texas border security people, local people, i would say here is a number. 30. >> the gentleman's time is expired. >> the 10 minutes? >> i am not sure about the lunch after this. >> let me close. and i do have all due respect but my only point* is that i feel if you attack the border to call it dba in a war zone what is your information? i was not getting personal. >> look at the bibliography and go on the web site go to the department of justice compared with fbi information that should

answer question. >> i think you were getting personal. >> mr. chairman may i be recognized? biv of the gentleman's time is expired. >> thank you. i would make a couple of points. to further ask unanimous consent that the allowed in turn to testify but to be very clear as it was before, i want to thank the generals that are here for all of their service, representing your country so well comment that you have our gratitude and i would never question any of their motives when it comes to our nation's safety and security. >> thank you for your comments and also let me add my respect for these do generals as well for the work you have done it also when we talk about the data

data, to some extent in terms of not taking into account trafficking it does not take into account at home invasion threats extortion and kidnapping crimes associated with drug trafficking in the congressional resource service reported the trends of drug trafficking crime is currently unknown because federal law enforcement agencies too not systematically track and report drug trafficking crimes. with that i will recognize the gentlelady who serves on the homeland security committee. >> i think the members who were here would ordinarily yield but i am being called to the floor with an amendment. but let me think the committee for their questioning samples to say to the witnesses that are

here that information is valuable i have worked with mr. mccaffrey when he was the drug czar here and i have worked with the members who are at this table that's also weave their way into confusion that is what i consider on the mexican inside of the border with respect to the drug cartel that impose a serious terrorist threat coming through. i don't think anyone denies the existence of the potential for violent spillover clearly with the incident of this week making this hearing timely on the interaction of the iranian assassination plot, a drug cartel seeking to pay an activist, a terrorist to be

engaged in the assassination plot. we are not blinded by the champion of the region to say that does not happen. the angst is when their region is blanketed come i know the state agricultural department had good intentions but here are my questions that i will tuberose that we should be very clear comity 15, and i view the commitment of the present administration as a serious commitment to the needs of the border. it is an overwhelming crisis that we're facing. first of all, i want to have on the record, is this day pointed report at the obama administration for their lack of engagement? >> let me respond to that. absolutely not.

secretary napolitano and her two predecessors chertoff and tom ridge started with nothing and had the 180,000 apartment and 83 agencies enhance the security enormously and when i started working the issue with your support and guidance and district come a we had 40,000 patrolman. >> we barely had a marked. so over time we have done a magnificent improved job and i have a great respect for them. >> my time is short. this is a systemic problem what i call way beyond 4,000 and the submissions we have had but let me get to the point* of the violence and the just of this report. it was important to

delineate because what has happened is the impact of the report to focus our resources that it is a bloodbath walking through the streets and even the law enforcement are overwhelmed. what i would like to hear from view is one that you distinguish there are strong law enforcement and local jurisdictions -- jurisdictio ns to take no prisoners to the terms to have that not occur but from a federal perspective were going forward, we have fe persistent continuing crisis that has a potential impact but no doubt that those cities at the border are fighting but maintaining a climate to do business. could that be legitimate statement? >> you stated that perfectly

>> i would ask just as someone who has been invited to do the border and being on this committee, i am not ignoring you i have an amendment. i would ask the we have the opportunity. i am a -- against in the area but i eight appreciate the opportunity for further discussions so of the report that the chairman has allowed me to purchase the plate that they aren't directly go to the resources that we need to have been asking this final question is it the appropriate time to cut homeland security funding or to enhance it for the very point* that you may be in your report? >> you have summarized although it is not just resources. >> i understand. >> a chord needed federal strategy is. >> absolutely. >> resources should not be

cut the we should have a federal strategy but also with knowledge the work done by the local cities. thank you, mr. chairman. >> the chair recognize is a good friend former chief of border patrol el paso sector mr. re as. >> thank you for your testimony. i want to thank especially the generals for their service to our country to take the first cut at putting together a report that i think is the first cut i would recommend we continue to develop this. did you visit or consult with the el paso intelligence center? >> no. the one i visited was in austin. >> that was the state.

>> i went to their three times in if i could just give a plug, fattest is one of the best to three level tactical operations strategic accord nations centers i have never seen it ranks with some of the best. >> that is austin the intelligence center is on the border why would you not have gone to visit the el paso center? >> good question because my partner went down. i was scheduled but i am under treatment for cancer. >> i have been in in out of the el paso center 100 times. i am a part of the steady and well aware of their work >> mr. mccaffrey is some of the conclusions in the report are contrary to what the el paso center says and would have said to you.

but whether we like it or not it is a political environment. those of us that live on the border the specially made that worked that border, i have to take umbrage at you saying general that there is no strategy your comprehensive, that case rate there you were pointing to the iranian case, that is one great example of coordination and great intelligence and law-enforcement work. i would recommend mr. chairman york committee get a classified briefing on exactly how that went down because some of the statements that were made here are erroneous but i don't think you have the information. >> i have been briefed. >> you have the flashlight briefing? >> okay.