honored to appear before you today as president obama's nominee to be the next director of the office of foreign missions. i'm grateful for the confidence the president and secretary kerry have demonstrated in nominating me for the unique and important position. my entire professional life has been dedicated to public service. beginning with my first career as a police officer in raleigh, north carolina, to my assignment at the embassy in tokyo and cairo. and my current role as deputy assistant security. i've strived to improve the conditions in which our colleagues live and work. i believe my dedication and commitment in this regard will serve me well if given the opportunity to lead the office of foreign missions and

organization primary goal is using reciprocity to ensure equitable treatment of the united states diplomatic consulate missions abroad and personnel. regulated activities of foreign missions in the united states to protect our foreign policy and national security interests, protecting the u.s. public from abuses and privileges of immunities by the members of the foreign missions, and the provision of service and the assistance to the commune any the united states on reciprocal basis. as you are aware, it was established in 1982 as a requirement under the foreign missions act. in passing, the act congress made it clear that the operations of foreign missions in the united states is a proper subject for the exercise of federal jurisdiction. for more than 30 years, the act has guided the department's management, extension to the foreign missions in the united states privileges, benefits and immunities associated with the acquisition and use of real

property, motor vehicles, driving services, tax exemptions, custom clearances, and domestic travel curtesies and redribs. in my estimation, the foreign missions act is a landmark piece of legislation which is positively influenced and conditioned the environment in which u.s. diplomatic and con late missions operate abroad. this committee is well aware that the department's ongoing efforts to ensure our personnel abroad, work in facilities that are safe, secure, and functional. i can authorityively attest that the relocation of the american embassy is a complex and costly task. the united states government and many countries have -- the support of the host country. and in countries where that support is lacking, the office of foreign mission plays a critical role in the resolution

of the impasses. we sometimes face during the reciprocity. and in those countries, where we're relocated our facilities. when a country has an interest in improving an relocating its own mission in the united states, the office of foreign missions using the ability to regulate the acquisition and use of real property of the missions as leverage to achieve the own property-related needs in that country. without them and authorities it has in the foreign missions act, we may not have been able to build a new embassy in beijing, china or new annex. it was achieved as a result of reciprocity and missions act. i'm honored to have the opportunity to address you and the esteemed members of the committee. if confirmed,ly do all i can to further these important objectives of congress to set out a foreign missions act. i look forward to working with

you to ensure the proper treatment of our foreign personnel abroad. and that foreign missions here are good neighbors. thank you for this opportunity and your consideration for my nomination. i respectfully respect that my entire statement be entered into the record. i will be happy to answer questions. >> thank you. let me start off, for me, the most pressing issue of the day as it relates to honduras which is in headlines and reminds us about the issue was of human rights and human dignity. it's the thousand of young people and increasingly younger people who forcefully lead their families and head for the u.s. border because the inability of the government to deal with crime and violation in a region that is home to the highist murder rate in the world.

i'm apalled of the staggering number of miners sometimes as young as 5 and 6 who are left, at least, i guess, by their personal circumstances who have no other choice than to try to cross the desert by themselves. as you approach this post, i would like to get a sense from you what discussion you've had with the administration, the state department. what is our strategy to try to address both the present challenge as well as the underlying causes that present a challenge that gives us the humanitarian tragedy. >> thank you very much, senator. i very much share your concerns about these children who are leaving central america including honduras and making a dangerous trip in an attempt to cross our borders.

if confirmed as ambassador to honduras, my piece would be an effort in honduras to try to get honduras to see their future in their own country and not try to make this dangerous trip. we all know what the push factors are. the push factors are the threat of violence and a lack of economic opportunity. senator, we currently have programs in honduras that are designed to address these issues. some are good programs. we have to ask ourselves if it's enough. we have programs that such as the great program which addressed at-risk youth and try to wean them away from the threat of joining gangs. we have programs that offer economic opportunity. we support outreach centers which try to create a culture where kids stay out of gangs. where they try to get job skills

so they can enter the labor force. it's extremely difficult, as you said, senator, it is one of the poorest countries in the hemisphere and perhaps the most violent. the challenge is staggering. >> let me just -- let me just say that here is part of our challenge. i hope that if confirmed the case within the administration last week the white house informed the congress it would need $2.28 billion -- billion dollars to address the issue of unaccompanied minors crossing into the united states. in 2015, the administration's request to congress was only $130 million for its five-country central american regional security initiative. which is a decrease of $30 million over 2014. given we need spend $2.2 billion to address the consequences of

the crisis here in the united states, it seems that $130 million is absolutely insufficient to address the root causes of the problems. this is one of the things that boggles my mind. we're spending $2.28 billion. it was $3.3 billion if we honor the president's request to deal with young people crossing the border. instead of spending that type of money to ultimately make sure they stay in their country and have thes a per ration that you aptly talked about. i know it's above your bay grade. you don't make the decision. since you're going to the job upon confirmation, i hope you're going to make the case $130 million for five countries, which is less than we've done with $2.2 billion to respond to the problem just doesn't make any sense. this is our problem as someone who was the western hemisphere

chair here before i became the full committee chair. getting the focus of the congress and the administration on the western hemisphere is a challenge. t our front yard. it's our own national interest. we seem to have a problem understanding that. we'll spend administer on a crisis than we will on meeting the challenge in the first place. can i get you to be an advocate for the proposition? >> senator, you can absolutely have me as an advocate for the proposition if confirmed. i'm obviously not in the position to assess how much additional money we night in hoas the problem. i know, u srsaid and the state department are assessing the programs we have. i would look forward to seeing results of that assessment so see if we can get a handle on how much additional money we night need. >> mr. smith, receilet me ask y what do you consider to be the

highest priority, and how do you perceive your role in achieving them? this is a mandate that has evolved and expanded since the creation of the office in 1982. as nominee here, what is your highest priorities would be and what your role would be in pursuing them. >> thank you for that question, senator. as we know, the office of foreign missions as it came into existence from the foreign mission act of the 1982 gives the secretary a broad responsibility for ensuring that foreign missions act as appropriate. my priority will be making sure that our citizens who work abroad are treated fairly and in a reciprocal manner and ensuring that the activities of foreign entities here are in support or do not conflict with our

national interests. and so there's new abuse by the emissions and personnel that are here. >> now i would like to hear from you. what is the role is the office of the director in interacting with diplomatic security with respect to security in our embarrasses and consulates abroad? >> the relationship between the office of foreign missions and bureau of security has existed for a long time. from the time before the office of foreign miss was officially in office within the bureau of diplomatic security to where it is now a separate entity. the diplomatic security has always played a supportive role in helping the office of foreign missions carry out some of the responsibilities. we have to protect the diplomats who are here in the united states.

so we have to protect the diplomats who reside here and we also offer protection who visit the diplomats who come here to visit the country in short periods of time of time through our protective details. in every location where there is an office, there is a field office for diplomatic security. one final question. this office is often referred to as the officer of tit for tat. meaning that for one of our main goals is to ensure reciprocity of treatment of our diplomats overseas. can you talk about that procer s reciproci reciprocity. there's one example argentina. the inspector general report suggested there was an array of reciprocity negatively effecting u.s. personnel.

in particular reports cites inequity regarding the importation and exportation sales and tran for procedures to private and government-owned vehicles and household effects. i'm understanding that the office sent a diplomatic note to the argue tine embassy in washington. at the time of the inspector general's report no response had been received. that's an example of one of the important roles you play so our people can have a decent standard of living as they are representing our country abroad. tell me about the reciprocity issue in general. do you know about the argentina issue in specific? >> thank you for that question, senator. yes reciprocity is one of our major tools that is we can use in ensuring that our diplomats overseas and our missions operating oversea are treated fairly. i have heard during my briefings for preparations it has been an

issue in argentina. as a matter of fact, i know that actually stated the issue was raised in february of 2013 report. the reason that the issue is still under discussion the fact there's still information that we have asked for the office of foreign missions asked for from our mission in boy us in aires. yes we have been in contact with the addressing teen mission here. there are additional details from the people we have -- >> something is wrong when 16 months later we're looking for information versus action. so if confirmed, will you commit to me you'll make it one of your highest priority? >>ly, indeed, senator, if confirmed. we would like that information because you're absolutely right. we are looking and willing to engage it on this issue to

ensure that person overseas are treated until the fairest manner possible. >> i know i'm needed on the floor. i'm going defer and let him go. i'm going ask my questions after senator cane. >> thank you. i appreciate that. thank you for your service to our country. i appreciate the ranking member's indulgence on this. first has to do -- the u.s. crew arrested in honduras during a river job. this is the salvage company aqua quest international. they had a contract to dredge the river and raise the valley and cedar logs on the bottom of the river bed. it's been there for more than a century. it was a valuable contract. mutually beneficial to honduras and the crew involved with it. it's standard operating procedure for crews in the mosquito coast to have firearm on board to defend themselves from pirates and drug traffickers in the reeblg. the group culled into the port that.

arrived and declared their two pistol and shot rifle. they declared it to the navy inspection post. they agreed to let them continue to the port. but when they arrived they were arrested for weapons charges. they remain in the custody of the government. i just was hoping to get your commitment today if confirmed hopefully by the time you get there it will have been cleared up. you will make it among the highest priority to address this outrage that occurred there. and these men should not be in jail. they have done nothing wrong. they followed maritime law. and i just want your commitment publicly we will address the issue if it hasn't been cleared up. we hope it will be by the time you get there. >> thank you very much, senator. i'm very much aware of the detention of the aqua quest on may 5th. you have my word that if confirmed as ambassador to honduras the safety and welfare of american citizens will be my

highest priority. i, too, hope this situation will be cleared up by the time i get there if confirmed. but i want you to know if i'm con firmted you'll be able to call me personally and hold me personally accountable for the actions of the embassy in any case involving american citizens or constituents. >> we appreciate that. thank you very much. i want to talk about a broader issue emerging in the press. the facts are staggering. five years ago there were 968 children who crossed the border from honduras. this year alone we haven't gone half way through the year. there's more than 13,000 unaccompanied minors that come across the border. it's almost twice as much as last year the entire year. we understand that violence and poverty are a driver of this. it's important to understand the desperation that a parent must have to put their kid in the hands of group that move them across the border.

that's how desperate people are. some of the unaccompanied miners are young children. we're talking young children. 6, 7, 8, 9 years of age. it's a serious humanitarian crisis we're all kind of struggling around here to figure out what to do about it in the short term to deal with the humanitarian aspect of it. i want to ask you what insight do you have beyond the motivation for doing this. why is this happening? in essence we have reports, i have in south florida amember members some in fact hon durran community. if children are able to get here they're going to get to stay. is that -- is in fact those rumors circulating and what can -- if they are, i believe there is some element of that. i don't know how much is quantified to that. but whatever percentage is, what can we do working with the hon durran government to make clear to parents in honduras that despite the desperation they face and helping the people overcome that in their own

country. it's not something they should be doing. they are putting their children in grave danger when they're crossing through mexico into the united states. they become prime targets for traffickers and all sorts of transnational criminal organizations. when they get to the united states, to be -- the laws of the united do not allow them to stay here if they arrived illegally. whatever it is they're hearing it's not accurate. what can we do to help make it clear so we can prevent this mass migration. i think it's a question to ask of our post in el salvador and quality maul will. what can we do to make sewerit it's not wise and puts their children in danger. >> thank you very much. i share your deep concern for the situation. i'm not sure i have any wisdom to add to what i already said to the chairman except i can say that the government is running

public service adds to counter thumo you've described. >> where do the rumors come from? what are the perception they ask stay if they arrive. where is it coming from? >> unfortunately i'm not in the position to answer that question. i simply don't know. but i can tell you if confirmed, this issue, which i think has gotten the attention rightly of all of us would be at the top of my list of priorities to address. i would look forward to working with you. i know, you have deep roots in the community in florida. i would look forward to working with you to see if we can come up with ideas to address the situation. >> thank you, thank you, mr. chairman. >> senator cane. >> thank you, mr. chairman, and thank you to the witnesses. ly apologize in advance. i have an obsession about hondur honduras. i'm not going grill you. i hope you don't mind. first, congratulations. in is a country of many, many wonderful people, and i think

being ambassador to honduras at this time, though a challenging one, is going to give you a great opportunity to continue what is really aer i foreign service. i congratulate you there. i lived in honduras in 1980 and '81. i worked there who are responsible for a lot of good work in the province and around the country. and i just kind of hate to say this, and every time i say it, you know, i kind of feel bad saying it. when i was there it was a military dictatorship and it was a brutal place. many i worked with were targeted because of the work they were doing. they are less safe than then. it's not a military dictatorship

anymore. we moved out of the military dictatorship era into a time of presidential elections. but my friend who are there, it's not they want to go back, but they're less safe than they were. in a country that was -- that has been a great ally of the united states. a country that is one of the original partners with us on initiatives like the peace corps.. it's one of the few countries in the world that can't have peace corps. volunteers there because the level of violation and danger. it's a tragic thing to think about. one element in particular that i'm concerned about is you might imagine is the people i worked with. there is a radio station that was run by the jez wits bombed and attacked. a prominent journalist who worked at the radio station worked for a think tank.

the speculation he was murdered because he was a journalist and doing what that radio station does. which is call attention to human rights problems. there's been virtually no progress or even interest it that i'm aware of in solving that case. he's one of 34 media representatives that have been kills in honduras since 2010. the fate of people i know and maybe it's unfair to focus on this just because i know the folks. these are people doing good work. and raising questions that have to be asked. they're being targeted as other journalists are as well. maybe if you could start off there. what can you do in your position as ambassador to demand accountability for the deaths of journalists. demand they take it seriously and hold up the virtues we proclaim here about the poimpor of the free press and the protections they're entitled to.

>> thank you very much, senator. i'm aware of your obsession with honduras and your work as lay missionary there in the '80s. confirmed i'm delighted to welcome you back. you raised a number of very important issues. but i think the most important is the issue that goes to imp n impuni impunity. as you probably know, senator, impunity is a long standing human rights issue in honduras. by some estimates, as many as 95 percent of crimes in honduras go unresolved. not just crimes against journalists or politicians or members of other such counties. but crimes against the population in general. so this is something that we simply have to address. i will say. if we get a chance to work together on this, i believe we

have seen early signs of positive steps that the government is willing to take important steps to begin to address these issues. and if with your patience i'll name a couple of first of all, last month honduras extradited carlos, a well-known trafficker. we understand more extra additions may be coming. i think it's a positive step. they have fired scores of corrupt police officers. they have indicted the entire board of directors of the social security institute 16 people for corruption. and the president has requested that the united nations open up an office of the u.n. high commissioner on human rights in honduras. i think that the congress, our congress has appropriated the million dollars toward that. i think it's a fantastic step. i believe we're seeing early signs of positive steps, but i completely agree with yoith u t the issue of impunity is

something we need to get out. >> i want to associate myself with comments that the chairman made about the importance of investments. trying to help them deal with the violence challenges is not just because we're good people. it's not just because if we do it it may slow down unaccompanied miners coming to the borders. the violence is driven by drug trade fuelled by american's demand of drugs. honduras isn't big drug users. they are not transitting through there because the mass appetite for illegal substanti -- substa. it's been a convenient staging place for drugs coming north intostates, and canada, so it is -- it is hard to look yourself in the mirror and you know, kind of just point the finger, what the hondurans need to do about their justice system, when you know that so

much of the violence that's causing parents to set their kids free, trying to find their way to the u.s. border, is driven by a drug trade that's largely fueled by u.s. dollars and the demand for drugs. so we have more than just a need to do something, you know, to help a partner. we have an obligation here because the violence that folks are suffering under, and honduras is something that is directly connected to domestic activities here in the united states. and it is my hope as well that we won't just -- now there's unaccompanied minors, now we have to do something about it because they're trying to come to our border. the country has one of the highest murder rates in the world because of a drug trade that at the end of the day is ending up in the united states. that ought to call us to do some things, too. the chairman said we ought to be proactive and not wait until the problem just gets to our door. it's a problem we have some responsibility for, we ought to be solving it even before it gets to our doorstep, and are associate myself, mr. chair,

with your comments on that, thank the witnesses and wish you the west, and i will visit. i will. >> i look forward to that, senator. thank you very much. >> thank you, senator, for his incites. particularly, i quo he has a real passionate interest in honduras. and as such throughout the central america region, which is a challenge for us. i have one final question. and you know, i was arguing earlier that we need to invest more so that we don't spend so much more multiples more as it relates to facing the problem versus meeting the core elements of why we have situations like young people crossing the border. the same token, as i advocate for increased resources to addressing the citizen security issue throughout central america, including obviously in honduras, we need a strong

shared approach with the governments in the region, in this case, with honduras. and in that sense, i want to get an understanding of your evaluation of the hernandez administration's ability and willingness, understanding you're not on the ground, but hopefully the briefings have given you some insight the address the challenges at hand. the human rights report on honduras raised concerns about corruption, unlawful and arbitrary killings by security forces. president hernandez has prioritized the creation of a military police officer over what should be strengthening and reforming a civilian police force. and finally, the u.s. government is limited intelligence sharing and radar information is a result of recent legislation providing honduran government with authorities to shoot down civilian planes believed to be involved in drug trafficking. while we certainly, you know,

can emapplaud any efforts to try to interdict drug trafficking, to go to the extreme point of shooting down, that creates all types of risks, especially if you've got the information wrong. so what do these developments imply for our relationship with the government of honduras as we try to meet this mutual challenge? >> thank you very much, senator. first of all, you raise the issue of the military police. these are actually members of the armed forces who have law enforcement authorities, who have been put on the streets by the honduran government to try to address the highest murder rate in the world and the other violent crime that's pervasive there. we do not support putting the military in the streets and law enforcement capacity. we believe that that distracts from the very important work that we do support with our progr programs of working with the

civilian police force because we believe that military police in the streets simplia lly a viabl permant solution. we have to work with incivilian police. you also mentioned, senator, the recent legislation in honduras, the air sovereignty law, which some people call a shoot-down law. that is very problematic for the united states. and that point has been made very clear to the honduran government. there were some immediate consequences of that law, for example, southern command general kelly had to turn off air feeds that we provided to the hondurans because there was some risk that those air feeds could be used to shoot down civilian aircraft, and there may be over consequences to that as well, moving forward. >> well, i hope this will be part of the work that you'll pursue upon confirmation in terms of trying to get us to a point that we can get the

honduran government to agree with us on the common methodology if we're going to fund it, one that we can be supportive of, because if not, it would be a further challenge to try to help them with citizen security. senator corker asked me to say he will submit his questions for the record for both of you, but he had a conflict in his schedule, so he couldn't stay any longer, so he will do that, and i would urge you not only to answer his questions but any other member's questions for the record as expeditiously as possible so we can therefore consider your nomination before a business meeting of the full committee. with the thanks of the committee for your willingness to serve, this panel is excused and this hearing is adjourned. >> chuck hagel testified before congress today about the decision to swap five taliban prisoners for the release of army sargeened bowe bergdahl.

here's secretary hagel's opening statement. >> in january of this year, we received that video, and it was disturbing. some of you may have seen the video. it showed a deterioration in his physical appearance and mental state compared to previous videos. our entire intelligence community carefully analyzed every part of it. and concluded that sergeant bergdahl's health was poor and possibly declining. this gave us growing urgency to act. in april of this year, after briefly suspending engagement with us, the taliban again signaled interest in indirect talks on an exchange. at that point, we intensified our discussions with the qatar government about security assistances and assurances. particularly security assurances. on may 12th, we signed a

memorandum of understanding with qatar detailing the specific security measures that would be undertaken and enforced, and enforced by them. if any talibandetainees were transferred to their custody. steve preston, who as i noted earlier signed that memorandum of understanding on behalf of the united states government, and was included in those negotiations. included in this mou were specific risk mitigation measures and commitments from the government of qatar like travel restrictions, monitoring, information sharing, and limitalimis tions on activities well as other significant measures which we will detail in the closed portion of this hearing. they were described as you know, mr. chairman, in the classified documentation and notification letter i sent to this committee last week. that memorandum of understanding has been sent to the congress,

to the leadership, to the committees, and every member of congress has an opportunity to review that memorandum of understanding in a closed setting. u.s. officials received a warni warning. we received a warning from the qatari intermediaries that as we proceeded, time was not on our side. and we'll go into a more detail in our classified hearing on those warnings. this indicated that the risk to the sergeant bergdahl's safety were growing. we moved forward with indirect negotiations on how to carry out that exchange. that exchange of five detainees. and agreed to the mechanics of the exchange on the morning of may 27th, following three days of intensive talks. that same day, president obama

received a personal commitment and a personal telephone call from the amir of qatar to uphold and enforce the security arrangements and the final decision was made to move forward with that exchange on that day. as the opportunity to obtain sergeant bergdahl's release became clear, we grew increasingly concerned that any delay or any leaks could derail the deal and further endanger sergeant bergdahl. we were told by the qataris that a laeak, any kind of leak, woul end the negotiation for bergdahl's release. we also knew that he would be extremely vulnerable during any movement, and our military personnel conducting the handoff would be exposed to the possible ambush or other deadly scenarios in very dangerous territory that we did not control. and we've been given no

information on where the handoff would occur. for all these reasons and more, the exchange needed to take place quickly. efficiently, and quietly. we believe this exchange was our last, best opportunity to free him. after the exchange was set in motion, only 96 hours passed before sergeant bergdahl was in our hands. throughout this period, there was great uncertainty, great uncertainty about whether the deal would go forward. we did not know the general area of the handoff until 24 hours before. we did not know the precise location until one hour before. and we did not know until the moment sergeant bergdahl was handed over safely to u.s. special operations forces that the taliban would hold up their end of the deal. it wasn't until we recovered

sargeened bergdahl on may 31st that we moved ahead with the transfer with the five guantanamo detainees. the president's decision to move forward with the transfer of these detainees was a tough call. i supported it. i stand by it. as secretary of defense, i have the authority and the responsibility, as has been noted here, to determine whether detainees, any detainees, but these specific detainees of guantanamo bay, can be transferred to the custody of another country. i take that responsibility in front of the members of the committee damn seriously, damn seriously, as i do any responsibility on this job. neither i nor any member of the president's security council were under any ilulgzs of these detainees. they were members of the taliban which controls much of

afghanistan prior, all of the territory to america's invasion and overthrow of that regime. they were enemybulidgeerants, detained in the law of war and taken to guantanamo in 2001 and 2002. they had been in u.s. custody in guantanamo since then, 12, 13 years. but they have not been implicated in any attacks against the united states, and we had no basis to prosecute them in a federal court or a military commission. it was appropriate to continue to consider them for an exchange as we had been over the last few years, as congress had been told that we were. and if any of these detainees ever try to rejoin the fight, they would be doing so at their own peril. there's also always, always some risk associated with the transfer of detainees from guantanamo. this is not a risk-free

business. we get that. the u.s. government has transferred 620 detainees. 620 detainees from guantanamo since may 2002. with 532 transfers occurring in the bush administration, and 88 transfers occurring during the obama administration. in the case of these five detainees, the security measures qatar put in place led me, as secretary of defense, to determine consistent with the national defense authorization act, that the risk they posed to the united states, our citizens and our interests were substantially mitigated. i consulted with all of the members of the president's national security team and asked them as they reviewed all the details, they reviewed the draft of my notification letter, the specific line by line, word by word details of that letter. i asked for their complete

reviews. the risks associated. and i asked either concur or object to the transfer. the secretary of state, the attorney general, secretary of homeland security, director of national intelligence, and the chairman of the joint chiefs of staff all supported this transfer. all put their names on it. there was complete unanimity on this decision, mr. chairman. the president and i would not have moved forward unless we had complete confidence that we were acting lawfully in the nation interest of the best traditions of our country. >> friday afternoon on our companion network c-span2, hillaryclipten on her book, hard choices, a memoir. she speaks at politics and prose bookstore in washington. you can see it live friday at 6:00 p.m. eastern on c-span2. and on saturday, the iowa

republican party convention in des moines. three potential republican candidates are speaking, louisiana governor bobby jindal, kentucky senator rand paul, and rick santorum. our coverage begins live saturday morning at 11:00 a.m. eastern on c-span. >> from the perspiective of the victims, i don't see any distinction. if you try to justify my program on the basis of the victims' loss, i can't convincingly explain why 9/11, yes, 93 world trade center, no. i think the only way you justify this program as a special carve-out is from the

perspective of the nation. a recognition that 9/11 was, along with the american civil war, pearl harbor, maybe the assassination of president kennedy, and 9/11, its impact on the american people was such that this was really a response from america to demonstrate the solidarity and cohesiveness of the american people towards these victims. >> read more of our conversation with kenneth feinberg and other featured interviews from our book notes and q & a programs in c-span's sundays at 8:00 from b public affairs books. in 2007, congress mandated that 100% of the approximately 32,000 cargo containers entering u.s. ports each day be screened. currently, about 85% of containers are scanned.

the senate homeland security committee recently held a hearing on port security and whether the 100% scanning goal is realistic. delaware senator tom carper chairs the two-hour long hearing. >> good morning, everyone. we're happy you to welcome you today and thank you for joining us. dr. coburn i've called this hearing, this is a hearing he has a whole lot of interest in, i have, too, but it's a shared interest. we want to take a look at the current state of port security, and these united states of america we want to find out if we are headed in the right direction. i hope we can also focus on the work that needs to be done over the next few years to try to ensure that our port security

efforts maintain the proper balance between security, safety, and trade facilitation. it's important because our focus as congress cannot solely be on security. but also on maintaining and enhancing our economic competitiveness. as we all know port security is no easy job. it involves maritime security provided by the united states coast guard, men and women patrol our coasts and our waterways. involves the physical security of port facilities like ferry terminal in lewis, delaware, or in energy refinery along the gulf of mexico, or delaware city, delaware, that is safeguarded by state and local authorities. it involves the causeway security provided by the u.s. customs and border protection which screens cargo to prevent dangerous goods from entering the united states while also facilitating the flow of trade and transportation. the last part is a particularly important piece. and even as we build and

maintain strong layers of port security we need to take care not to impede transportation or commerce. our ports and waterways are the life blood of our economy. i'm told that more than 95% of all u.s. trade is handled via sea ports, 95%. and these ports account for over 30% of u.s. gross domestic product, that's more than $5 trillion in trade each and every year. as the former governor of delaware and someone who is ultimately responsible for running a major port at the city of wilmington owned and ran that port for many years ran out of money and the state had some money and we took it over and when i was governor this is something i know a little bit about but care a whole lot about. the port of wilmington located along the delaware river in the northern part of my state is just south of philadelphia, number one sea port in north america for the importation of fresh fruit bananas, and juice, concentrate. if you had a banana this morning for breakfast it probably came through the port of wilmington.

our nickname is top banana. the top banana port. port of wilmington isn't just important for the state of delaware, it serves as a key economic engine in new castle county, it's also a key port for the entire united states. so protecting our ports, safeguarding our economic opportunity is responsibility that we take very seriously. as the government accountability office and other experts have noted, u.s. port security has come a long way. shortly after 9/11, the maritime transportation security act of 2002 became law and empowered the coast guard with new authorities to ensure commercial vessels and port facility meet minimum security standards. a few years later the safe port act of 2006 authorized key cargo and supply chains security programs enforced by u.s. customs and border protection. since that time cargo security programs have taken root. not only that many of our international trading partners and international trade and

security organizations have created similar security programs and emulating the department of homeland security's good work. but we shouldn't and we can't stop here. i want to use this hearing we want to use this hearing as an opportunity to explore how the threat to ports has evolved, and what the next steps for dhs should be. i also don't want to imply that there's no room for improvement, as i frequently say. everything i do i know i can do better. i think that's true for all of us. and i think that's true for the way we handle port security. in a recent letter to the congress, new secretary jay johnson i indicated we believe the 100% scanning mandate for inbound cargo shipping containers was impractical. not the best use of taxpayer resources. if that's the case, we must look for a better way to address security risks while preserving the necessary speed of moving containers through our ports. so i welcome the secretary's pledge to make good faith effort to improve the department's capabilities. without getting in the way of legitimate flow of trade.

i look forward to discussing this issue with some of our witnesses today. i also look forward to hearing how the department of homeland security plans to address emerging threats, how it can make programs more effective and efficient and how the agencies represented here today can work with international organizations and our foreign partners to raise the global standard for port security. as you can see from our lineup of witnesses, there's quite a lineup. port security is a key support. it's a perfect example of why bringing all these agencies together into the department of homeland security was the right thing to do. components present here today work seamlessly with one another to develop and implement the department's layered risk based strategy for port security. from the coast guard to customs and border protection, transportation security administration, federal emergency management administration, and dhs's office of policy, each of you play a critical role and you've got to work to the. so do we.

we're always happy to have you with us. you've done a whole lot of work in this area, we're grateful for that and be looking to you for further help. again thanks to everyone for coming. as dr. coburn knows we're going to start voting in a little bit. and we're going to do one of those deals that we perfected where voting starts, maybe he'll go vote the first time, and when he's voted he'll come back and i'll go vote and then we'll just swap back and forth. hopefully we'll be able to keep going and make it all work and be done in a punctual way. but it's important, we're happy that you here. let me just now turn to dr. coburn just to thank him for insisting that we have this hearing and make this a priority. >> thank you, mr. chairman. first of all, welcome to all of you. this is an interesting area for us to be talking about. sitting on the intelligence committee, our threats are greater, not less, in terms of risk. and getting it right is important. one of the commitments i made to congresswoman janice hahn from l.a., she has the l.a. port,

which is our busiest and biggest and probably greatest vulnerability in terms of port that we would have this hearing and do the oversight that's necessary to try to improve what we're doing. so, mr. chairman, i'd like unanimous consent to put her testimony in the record she -- the house is out this week, and we wouldn't have scheduled that this hearing at this time had we known that. but we did. and i'm happy that we're having the hearing so i'd ask unanimous consent to have her testimony included in the record. i'd also note that the house has passed the legislation that the senate hadn't even taken up or considered the gaps act, and what we need to do is address today to find out where our weaknesses are. what we need to improve and as senator carper mentioned the 100% scanning obviously isn't viable, or may not be viable, but we need to have a better approach than 2% to 4% scanning

that we're seeing today. we know that a successful attack on one of our ports would be devastating. rand corporation gave an example it could have a trillion dollar effect on our economy. that is a high possibility. we cannot stop every attack that's going to come to this country. but we can certainly make it much more difficult, and markedly decrease the likelihood. everybody knows the history. of how we came together after 9/11. we created port security grant program. we mandated 100% cargo screening. and 9/11 commission recommended that, as well. we also created the card which has had some significant difficulties, and is still not implemented. so my goal for this hearing is to review all the initiatives that were initially set out,

assess how well they're working. and whether or not they're working. and determine if our ports are as secure from the potential terrorist attack as we can make them feasibly and economically. i would say we spent $4.9 million on the port security program with no metrics to measure or not whether we have improved our security. there's no metrics, so we don't know. we've spent $2.1 billion on cpp cargo programs on a scanning mandate that we are told will never be met. there's $5 billion we spent we have no assessment of what we've gotten for that money. the program was intended to create an i.d. card for transportation workers to enter secure areas including ports we'll talk about and some of my questions will relate to some of the problems associated with that.

in general i think it's unclear and hopefully this hearing will help us, to know how much improvement we've actually made in securing our ports. so i number one want to thank each of you for being here, preparing the testimony which i've read, and being available and i apologize that we're going to have votes but we will be -- we'll keep this moving as fast as we can. we have four votes starting at 11:00 and with that mr. chairman, thank you, as well. mr. top banana. >> i've been called worse things. we'll make this work. we appreciate. let me briefly introduce our witnesses. ellen mclean, deputy transportation secretary. also served as dhs assistant general council for enforcement she began here career with u.s. customs service where she served i believe as deputy associate chief council is that right?

rear admiral paul thomas joins us from the coast guard where he's assistant commandant for prevention policies, a specialest in marine safety security and environmental protection. graduate of the coast guard academy, and of the massachusetts institute of technology. where i'm proud to say that one of our boys attended. when i went to ohio state i could barely spell m.i.t. the idea of ever having a kid that goes there i could not imagine. congratulations on that. thanks for your service. i want to ask kevin to pronounce your last name for me, kevin. i just want to make sure sure i get it right. >> mcaleenan. >> with the emphasis on the leen? >> you put an "a" in front of the "c" it works better. >> there you go. mcaleenan. and acting deputy commissioner at the u.s. customs and border protection. served as acting assistant

commissioner of the cdp office of field operations leading the agency's port security and trade facilitation operations. brian kamoie, appointed as the assistant administrator for grant programs at fema in april of 2013. before that he served as senior director for preparedness policy on the white house national security staff, from 2009 to 2013. stephen sadler has been the assistant administrator for intelligence and analysis at the transportation security administration since october 2011. he's joined tsa in 2003 and held several leadership positions. prior to that he spent 25 years in the commercial maritime industry. and finally last but not least, stephen caldwell, nice to see you. joins us from gao where he is the direct -- director of issues issues on the homeland and security justice team. mr. caldwell has over 30 years

of experience at gao and has worked on numerous reports on port and supply chain security. thank you all your entire statements will be made a part of the record and feel free to summarize as you go. try to stay within about what did we say five minutes? five minutes if you could, go way over that we'll have to rein you in. thank you for joining us. ellen why don't you go ahead. >> good morning, chairman carper, ranking member coburn. i am a career civil servant and testifying before congress for the first time. as this has long been on my career bucket list, i appreciate this opportunity along with my colleagues to testify on a matter of singular importance to the department. port security. since 2007 and the passage of the safe port act we now have several key strategic documents that shape and guide our efforts on port security. the national strategy on global supply chain security. the global nuclear detection architecture. and the soon to be released 2014

dhs quadrennial homeland security review. dhs is focused on enhancing port security through prevention, protection, and resilience. pursuant to a risk based approach. while strengthening the global supply chain system, including the maritime transportation network, we are ever mindful that it is critical to do so by promoting the efficient and secure movement of legitimate goods. guided by the principles in these overarching documents, dhs's approach embraces five elements for a layered system of maritime port and cargo security. one, understanding the risk to better defend and protect against radiological and nuclear risks. two, obtaining advanced information and using advanced targeting techniques. three, increased collaboration with other federal agencies, foreign governments, and private stakeholders. four, implementing strong, domestic security regimes.

and five, promoting preparedness by sustaining grant programs. within this strategic context, dhs can point to several key developments in the past seven years. risk assessments to aid us in understanding the threat environment and prioritization of resources. significant progress with international and private partners to incorporate risk management principles, and leverage trusted trader programs. the assessment of more than 1500 foreign ports, 200 alone in 2013, under the international port security program. establishment of 360 comprehensive port security plans by port operators. and grant awards to achieve interoperable communications, installation of surveillance cameras, at port facilities, and funding for other similar fiscal security equipment and projects. looking forward we face challenges of increased trade from the expansion of the panama

canal, and increased activity in the arctic. with increasing trade, and shifting trade patterns, we must also confront aging infrastructure for a broad range of dhs assets. from coast guard cutters to x-ray and radiation and nuclear detection inspection systems. in forging the path for progress, dhs will concentrate on improving information collection, targeting and dissemination, expanding global capacity to secure the supply chain, and addressing risk across all modes of transportation. with a continued focus on enhancing the capabilities of our components, and our partners to address current and future challenges to securing our ports, dhs will continue to dedicate substantial attention and resources to implementing a layered risk management approach to security across all transportation pathways in an efficient and cost effective

way. and building essential partnerships at home and abroad. thank you again for the opportunity to testify about dhs's progress on enhancements to port security. i will be happy to entertain any questions. >> good. thanks and we're going to have some. so thank you. thanks for your testimony. admiral thomas, please proceed. >> thank you, chairman carper, dr. coburn, and thank you both for your continued support of our coast guard and the opportunity to discuss this really important topic with you this morning. the coast guard in coordination with the other department of homeland security components, interagency and the industry implements a layered maritime security system. our goal is simple, we want to detect, interdict and mitigate threats as far from our shores as possible. we accomplish this through the layered system that's depicted on the slide before you and displayed to the left -- to my left. as you can see on the slide, maritime security of u.s. ports does not start and finish in the u.s. rather, the opposite is true.

the security of our ports begins in foreign ports at foreign facilities and terminals. this is the first layer of our integrated system. the coast guard's international port security program conducts assessments of foreign ports, to ensure they meet international security standards, and to build the capacity of our trading partners. just as you cannot enter u.s. air space unless it entered from u.s. security standards, you cannot enter sea ports unless it originated from a foreign port that meets the security standards as certified by the coast guard. additionally, they bring together information from the law enforcement to factor in other factors that may help us determine what threats emanate from the ports. and finally, overseas activity from our colleagues from the customs and border protection and other dhs components help to insure the safety and security

of cargo and people before they depart foreign ports. if you look alt the next several layers on the slides, i'll call these the off shore layer, our regulations require that each ship en route to a u.s. port provide the coast guard at least 96 hours advance arrival. this notice includes information about the vessel, the cargo, the crew and passengers, customs and border protection also requires advanced notice with information about the cargo, the shipper, the consolidator, the receiving agent among other information. other federal agencies like the center for disease control may also require advanced notice of arrival under certain circumstances. all of this information is collected and shared at both the national and port level. it's screened and assessed so prior to arrival of any vessel, the coast guard report has a consolidated comp hentsive assessment of all risks associated with that risk. when i say all risks, all risks.

everything related to safety, security, and environment. bells, water, cargo, crew members on a watch list, passengers exhibiting signs of illness, or damage to the ship that might compromise safety or the environment. the captain of port is able to coordinate a state and local risk mitigation plan for each ship that arrives. for the vast majority of the ships, local coordination is needed to plan control inspection or enforcement interactions. in some cases, the threat rises to the level that interagency coordination at the national level is required. and we activate the maritime operational threat response protocols. in some cases the risk will be mitigated by interdicting the ship in the offshore zone. in other cases the ship is allowed to enter theport but is subjected to oversight prior to passenger operations. these boardings are most often led by the coast guard but may include personnel from other homeland security components or

the interagency who can bring their special capabilities to bear on a given threat. in all cases, the vessel arrives at a port facility that complies with the requirements of maritime transportation safety act and the safe port act. these facilities by law have security staff trained to specific standards. they have an access control system that includes credentials for each employee. they have approved plans in place to prevent and respond to security incidents and they execute a declaration of security with the foreign ships when appropriate to ensure the security and communications protocol at that ship port interface are clear. beyond the individual port facilities, the port community as a whole is prepared and resilient. capable of port wide prevention, preparedness, response and recovery activities. due in large part to the combined impact through investment in our grant program, establishment of the area maritime security plans. and development of the mare time security plans. in summary, mr. chairman, we

have used the authorities in the maritime transportation security act and the safe port act to implement a security system that begins in foreign ports, continues in the offshore area as a vessel transits to our waters and remains ever vigilant in our ports that have robust, interagency, local, state and federal coordination to mitigate threats, facilitate commerce and respond to all incidents. thank you. i look forward to your questions. >> you took one second too long. you're off your game today, huh? >> yes, sir. >> actually that's pretty good. that's very good. thanks for that testimony. kevin, you're up. please proceed. >> good morning, chairman carper, ranking member coburn. it's a privilege to appear before you again today. thanks to your continued support along with effective collaboration with federal, international and private sector partners, dhs and u.s. customs and border protection have made significant advancements in maritime cargo security. cbp has secured security partnerships, enhanced targeting and risk assessment programs and

invested in advance technology, all essential elements of the multilayered approach to protecting the nation from the entry of potengsomy dangerous or volatile shipments while expediting legitimate and economically viable commerce. i'd like to highlight the progress of a few of these efforts for you today. in the first few years after 9/11, cbp created several key programs to enhance our ability to assess maritime cargo for risk, examine shipments at the earliest possible point and increase the security of the supply chain. the customs trade partnership against terrorism or ct-pat was established in 2001 in the wake of the 9/11 attacks. it provides facilitation benefits to members who adopt tighter security measures throughout their entire supply chain. it has grown from seven initial members to over 10,000 members today. the national targeting center also started in 2001 has developed world-leading capabilities to assess cargo shipments, crew and travelers for risk before they are laden

or board vessels destined for the united states. at the ntc, they utilize the automated targeting system, intelligence, commercial information and traveler data to identify and mitigate potential threats. dhs and cbp have strengthened detection capabilities at domestic sea ports. since 2001, cbp has acquired 1387 radiation portal monitors and increased its inspection systems from 64 to 314. these valuable systems help officers detect radiological materials, weapons and a list of substances. the support of congress, specifically through the safe port act, has been a key catalyst in advancing trade security and facilitation capabilities beyond these signature efforts. the act codified and made filings mandatory, building on the 24-hour rule. this program provides additional advanced insight into the supply chain allowing us to identify potential risks earlier and more accurately. the act also codified the

container security initiative. cbp works with foreign authorities to identify and examine high-risk u.s.-bound maritime containers before they are laden on vessels. their 58 ports prescreen over 80% of all maritime cargo imported into the united states. cbp will continue to build on our progress by exploring and expanding new rules, such as trusted trade or mutual recognition agreements. we will confine our targeting to better identify high-risk cargo and work to increase the percentage of containers scanned abroad. we'll continue to help lead the effort in developing increasingly effective and sophisticated global standards for cargo security. by utilizing risk-based strategies and applying a multi-layered approach, we can focus our resources on the very small percentage of goods or shipments that are potentially high risk. our use of advance information, technology and partnerships improves goal supply chain integrity and reduces transaction costs for u.s. businesses. thank you for the opportunity to

testify today. i'm happy to answer your questions. >> thank you for that testimony. brian. brian kamoie, welcome. >> thank you, chairman carper, ranking member coburn. i appreciate the opportunity to be with you and to join my colleagues from the department to talk about the port security grant program which we believe is a critical part of the department's efforts to enhance the security and resilience of our nation's ports. senator coburn, as you mentioned, we invested $2.9 billion since 2002. while i agree with you that we certainly can continue to improve our measurement of both the effectiveness of those investments and our administrative management of the programs, we have clear evidence of the value of these investments across the program's priorities, which include maritime domain awareness. we've invested in over 600 portwide projects that include

portwide coordination and collaboration, interoperable communications, surveillance systems that assist in domain awareness. we've invested $161 million just in interoperable communications. we've also invested in improvised explosive device capabilities and chemical, biological, radiological and nuclear capabilities. cyber security capabilities, as that threat continues to evolve. planning at the port level, training and exercises and of course the implementation of the transportation worker identification card program. and so in addition to these programatic achievements and, for example, just in vessels that patrol our waterways, we've invested in over 500 vessels. in new york city, for example, the port of new york used over 30 vessels the day hurricane

sandy made landfall and rescued over 1,000 people. so we know these dollars are making a difference. and these investments also facilitate increased partnerships, not just at the federal level with my colleagues here, but at the state and local level and with port owners and operators. we've seen in a variety of instances, you can assure congresswoman hahn that we continue to make investments in the port of los angeles for information sharing and collaboration and, chairman carper, in the port of wilmington, the investments there not just in interoperable communications but in information sharing between the port and the fusion center in delaware that has allowed the building of relationships with state and local law enforcement and the port. i thought i'd also tell you where we are in the fiscal year

'14 grant cycle. $100 million was appropriated for the program this year. applications came in on may 23rd. the field reviews, as the admiral mentioned, we work very closely with the coast guard. we have a two-tiered review process. captains of the port work with the port area and the local and state government through area maritime security committees to prioritize projects. those applications are under that field review right now and will be referred for a national panel review here at the headquarters level later this month and then we expect to announce awards by the end of july. and so i'll close by saying that we look forward to the continuing dialogue about how we can continue to make these investments in the most effective and efficient way possible. we think they have made a real difference and i look forward to answering any questions you may have.

>> good, thanks. nice job. steve, please proceed. thank you, welcome. >> good morning, chairman carper, ranking member coburn, distinguished members of the committee. thank you for the opportunity to testify about the twic program. it provides a industry wide biometric credential to eligible maritime workers requiring unescorted access to port facilities and vessels under the maritime security act of 2002. tsa administers the program jointly with the united states coast guard, tsa is responsible for enrollment, security threat assessments and technical systems. the coast guard is responsible for enforcement of card use. since the program was launched in october of 2007 in wilmington, delaware, we've conducted security threat assessments and issued cards to more than 2.9 million workers including longshoremen, truckers, and rail and vessel

crews. and merchant mariners. the twic program is the first and largest federal program to issue a biometric credential. working closely with industry and our dhs partners, the program has evolved over the years to address concerns over the applicability of federal smart card best practices to a working maritime environment, such as the requirement for two trips to an enrollment center for card enrollment and activation. tsa reformed the program by launching one visit in june of 2003 in alaska and michigan. this provides workers the option to receive their twic through the mail rather than requiring in-person pickup and activation. last month tsa moved from the pilot phase of the program to a phased implementation for all applicants. we have added call center capacity for applicants checking on their enrollment status. we've enabled web-based ordering for replacement cards. we've increased quality assurance at our enrollment centers. we've opened multi-program enrollment centers across the country to allow individuals to

apply for the twic, that has the hazardous material endorsement and tsa precheck. we will expand a number of enrollment centers to over 300 this year, adding to the convenience of workers. tsa continues to evolve and modernize their credentialing programs through these initiatives, strong collaboration at the department, partnership with industry and the support of this committee. thank you for the opportunity to testify today and i look forward to answering your questions. >> thank you, mr. sadler. and now stephen caldwell, please proceed. >> thank you for asking us to testify on port security. we've issued almost 100 reports on port security since 9/11. our most recent comprehensive report on port security was issued in the fall of 2012 to note the ten-year anniversary of the maritime transportation security act. let's start with planning. there is a national strategy for maritime security issued in 2005. we reviewed that strategy and its eight supporting plans and

found much of the criteria that gao has laid out for a good national strategy. we also looked at some of the more detailed functional strategies and in some cases we have found those to be wanting, but at the port level we found that some of the plans specific to the ports have included the safe port act's requirement that they also cover recovery issues. again, going back to some of the functional plans, we found some deficiencies in those. for example, dhs after putting out the small vessel security strategy and laying out an implementation plan for that has not been tracking the progress of the components and actually meeting that, which leaves some opportunities, lack of disseminating any potential lessons learned or even being able to track their overall progress on that strategy. in terms of maritime domain awareness, there have been a number of improvements. the coast guard through its common operating picture program has allowed additional data

sources into the use of the users, allowed blue force tracking, which is the ability to track our own vessels, and also increased access across the coast guard to other users. however, many of the original systems used to increase maritime domain awareness have fallen short of the capabilities that were originally planned for those and mainly these are due to some of the acquisition problems that our reports have noted, such as not developing complete requirements at the beginning, not updating costs or schedule base lines and not monitoring their initial performance. regarding the security of our domestic ports, dhs components, especially the coast guard, have gone quite a ways in terms of implementing the maritime transportation security act. key provisions of that act call for security planning at the port facility and vessel level and it also calls for the coast guard to then inspect those facilities to make sure that those security activities are indeed in place.

gao has audited those programs. we found progress and most of our recommendations in those areas have been implemented, but some areas remain problematic. as noted, we have concerns about the port security grant program and the extent that they are monitoring the effectiveness of the actual projects. going back to 2005, gao found that the program lacked an adequate risk assessment process and lacked a mean to measure the effectiveness of the projects in the grants. more recent work did find that the grants are based on risk and it goes back to the process that was started to be described at both the port and national level. after more than a decade after the program's start there's really no performance measures in place to determine whether the program at the port or facility level has improved port security. and it even lacks project level visibility to know whether the projects were indeed implemented

as described. regarding the global supply chain security, there's also been a lot of progress, especially by cbp. we've reviewed these programs and noted their management and operations have matured over time. we concur with cbp that implementing 100% scanning as defined in the safe port act and 9/11 act is extremely challenging. however, we are less convinced that existing risk-based program does not have room for improvement. a recent report has found cbp has not been timely in terms of measuring the effectiveness of its targeting system or evaluating supply chain risks in foreign ports. including csi ports. we did see the may 5th letter from the secretary to you, mr. chairman, and note that both of those issues are discussed as potential improvements. in closing, gao will continue to review port security programs for congress, this committee and others. for example, we have ongoing work on port cyber security as

well as the disposition of high-risk containers. that concludes my remarks and i'm happy to answer any questions. thank you. >> thanks so much for that testimony. senator ayotte, nice to see you. why don't you lead us off. >> thank you, mr. chairman, appreciate it. i just wanted to get a follow-up, administrator sadler and certainly mr. caldwell about the twic program. so you testified about the one visit pilot and now it's going to a nationwide mailing system. so how do you assess it's going and are you able to do this without concerns about fraud? so just can you give us a quick update. you know, obviously i appreciate the steps you've taken on this but just in terms of substance. then i would like to hear from mr. caldwell about how effective you think overall the twic program is in helping protect port security and what other -- gao has been quite critical in

past reports about what we need to do to improve this program and its effectiveness. so that's really the issue i was hoping to get a little more insight on. >> we started the pilot for twic one visit last year, 2012-2013, in alaska and michigan. as we transitioned to our new technical system, we started the implementation nationwide, so we started implementing the one visit in may of this year, may 12th. so we planned to have a phased schedule to implement it across the nation and we should have it done by this summer. so we think it's going fairly well. we do mail the cards out. i believe we've got about 3,000 cards for twic 1 visit that have been mailed out of about 5,000 enrollments.

what we do is send the card out separately and then we send the pin in a different letter. so we try to send them out in two different letters. >> so you haven't seen fraud yet on that program? >> on the mailing itself? >> yeah. >> not yet, senator, but we're still in the early stages. of the implementation. >> thank you. and mr. caldwell, i know we're sort of in the middle of a vote so i just wanted to get a quick thought on one of the things i think we've worried on overall about the twic program, is it making us more secure. are we improving this system so that we can have some reliability with it? >> well, two things. i'll talk about twic 1 and that's trade opportunity, security and convenience. definitely it's more convenient but you're losing one of your steps of internal controls of identifying the person's identity by having them come in. i think congress pretty much directed and took to going that direction. >> they did. >> so it is what it is. >> but it's also good to follow up and make sure that we didn't -- that the choice we

made there, that i was obviously a supporter of, that we made sure we're following up on it as well. >> yes. i do think it's a good idea to follow up on that to see if there is fraud and whether that happens. >> what i'm worried about overall is are we really doing anything with twic? i'm not trying to be funny about this. i get the goal of it, it makes sense, but we obviously -- the concern has been how are we enhancing port security overall? >> we have those concerns as well. we've had concerns with the program pretty much from day one in a lot of ways it was implemented. for example, the reader pilot that was done recently, we thought the valuation of that was done quite poorly and left out a lot of things that would be able to evaluate really what were the problems coming up. was it the card itself, was it the reader, was it the person that was manning the security gate when they did their test at the reader pilot. they did not include the kind of

detailed data you'd need to know to get that. obviously you know there's some concerns in terms of the shooting down in norfolk. >> yes, that was raised in the commerce committee. >> and the navy now is not accepting twic, at least by itself, as a card accepting to get on that base so obviously they have some concerns with it. there's been an assertion that twic has improved security and we've seen that in the latest report to congress but we haven't seen strong evidence supporting it. >> so you want better metrics. and you want -- >> gao always wants better metrics, but yes. i suspect we'll be asked to look at it again. >> are we doing better? that's a good question, are we doing better? >> well, compared to nothing, having a pass that is used in multiple places with the background check is useful. you can have felons and things have things waived so they still have those cards, but you don't have people getting the cards

that have either espionage against the u.s. or terrorism crimes. those kinds of things. that's a pretty high bar, but in one other way to look at it -- >> yes, that would be important. >> twic was put in as part of mtsa, which really the bar for mtsa is will they prevent a major transportation security incident and that's where this kind of a judgment call about whether someone getting and committing a crime, committing murder, would that rise to the level of a transportation security incident. not likely. >> if there's anything else you want to add, i know we've got to run to vote. >> just quickly. the first thing i want to say for twic 1 visit you have to go in and confirm your identity -- >> the first time, absolutely. >> you've got to do that.ot to . the other thing i'd say is that this is the first time that the maritime population has been defined. prior to twic, there was no definition as far as i know and i spent 20 years going in and out of ports, so i'm not sure

who knew nationally -- >> who was going in and out of the ports. >> we now know that example. >> we now have a population of 3 million people. i vetted people before twic with information that was submitted by ports. we vetted 900,000 people. we did that prior to the implementation of twic as a mitigation strategy. now we're up to 3 million people. the first thing is define the population, we recurrently vet them every single day. we have one common standard, put the biometric aside, one common standard, one common credential, one common background check n some places you had to buy a multiple credential within the same state so if you went to one port, you had to buy a credential and you went to another port, you had to buy another credential. and i can't tell you what the background check was. so we think there is improvement in security just by virtue of the fact of those things that i just mentioned. >> thank you. thank you, mr. chairman. >> i'm going to slip out, run

and vote and then come back and so dr. coburn can go back and forth. i want to telegraph my pitch, when i come back, i'll be interested in asking so you can be thinking about them are how do we measure success. i want to see if there's consensus on how we measure success. and if there's some consensus around common metrics, then how are we doing. what are we doing especially well, what are we not doing so well. and finally i always like to ask what can we do to help, all right? dr. coburn, thank you, all. >> thank you. have fun voting. let's keep talking about twic for a minute. we hit -- i'd just like your assessment on somebody with a twic card that gets into a port and shoots people. how's that happen? no system is perfect and i'm not laying blame. i'm just saying how did we miss that? >> at the time that individual

was vetted, senator, the standard for manslaughter included all manslaughter, voluntary and involuntary. so when the individual came through, the crime had been committed in 2005. the conviction occurred in 2008. i believe he served about 800 days on his conviction. so he served about two and a half years. he was released from incarceration in 2011. we encountered him in december of 2013. and based on the standards that we were using at the time, that voluntary manslaughter charge was not a disqualifier. so he got his card in january of 2014. as far as him using the card at the base, i would defer to d.o.d., but one point i have to make is the twic in and of itself does not give you access to a port. you have to have the twic and you have to have a business need. so we've gone back, we're

scrubbing all the cases we had for disqualifications that involve involuntary manslaughter and voluntary manslaughter and we've changed our policy now that if you come in with a voluntary manslaughter charge, that's an interim disqualifier. interim meaning that you are still eligible to appeal, you're still eligible to request a waiver, you're still eligible to request an administrative law judge review and you're eligible to go to court if you don't agree with the finding that we make. >> right. that's the kind of answer i was wanting. talk to me about twic readers. >> i'll defer to my colleague in the coast guard, but to senator carper's point about what we can do to increase security and how we can be more successful, that's one way to be more successful is by implementing the twic readers because we have a biometric credential. we believe that it works. right now it's being used as a visual identification card.

but it needs to be used as a biometric credential and on a risk-based basis as well. so we believe that it's critically important to install readers in ports. >> admiral? >> thank you, doctor. i really appreciate the opportunity to answer that question because as the agency responsible for implementing security at our port facilities and as a previous captain at port myself, i think it's important to recognize that twic and the twic reader are part of a greater access control system for a facility which has its own security system, which is in itself part of a greater system to secure our ports than the entire chain that i discussed. so when you're going to put an access control system in a facility, you're going to include fences, gates, guards, lights, cameras, a credential of some sort and in some cases a biometric reader for that credential so it's just a matter of layering the security. as the chairman noted in his opening comments, if this was

security at all costs, we'd have readers everywhere. because we are trying to balance, as we should, the risk with the benefit and facilitate commerce, we've done an exhaustive analysis, which i'm happy to explain to you, that has ensured that the readers go at the highest-risk facilities. and i think that the coast guard's proposed rule puts those readers where the cost benefit is currently the best. i think as we expand the use of twic and twic-like credentials beyond the maritime domain, because that's the only place we have transportation credentials, reader costs will come down, card costs will come down and the cost benefit will change in a way that it just makes sense to put readers at more facilities. >> do you have a proposed date for your first round will be completed and then an assessment made? -- of twic readers?

>> we are currently working on the rule we put out a notice proposed rule making. we received about 2600 comments. we are working through the comments. we are going to make some adjustments to the rules and go through the process and hopefully sometime next year. then a two-year implementation date before the readers have to be in place. >> we're 2 1/2 years from the present plan of the coast guard? >> we're 2 1/2 years where readers will be required at certain port facilities. >> thank you. let me go back for a minute. miss mcclain, one of your statements in your opening statement was spending money in a cost effective way. if y'all don't have metrics on the effectiveness of grant money spent, how do you know it's

cost ekt -- effective? >> senator, i think that the -- i appreciate the question. i think it's a little outside my lane. i would prefer to take the question back and get you an answer working with my colleague from fema on where we are in developing metrics or answering that particular question. >> i don't think anybody will dispute we've done some good with the money we've spent. i'm not saying that. i'm just saying. anybody can answer this. we have a port system where we tier risks, and the vast majority of money have gone tier one ports. and under the system you're utilizing today without any recognition of the money that is already spent, we continue to spend the same money on the same risk. there's no risk reduction recognized in your tiering. if you don't have metrics, associated with the money being

spent, the port security program, grant program when do we stop spending money at tier one ports. in other words, how much is enough? and how do we know when we've got the best cost-benefit analysis. the most cost effective program in based on the risk and mitigation and the other goal that we have. how do we know that? if we don't have a metric-based system? in other words, here is why we're spending the $2.9 billion. here is what we're hoping to get. here is how we're going to measure if we've got it. there's all sorts of -- i won't in the hearing, i will privately, give you the list of money that you spent on stuff that a common-sense person would say it doesn't have anything to do with port security. we have two ports in oklahoma, and we have two 27-foot boats on

the river for the oklahoma highway patrol. and in terms of the risk associated with those ports, those are low priority compared to what the higher priority things are on the port. those two ports. so my question is, if we don't have metrics to measure, when we look at this in total. i think we have done a wonderful job in laying it out. how do we know? how do we know when to quit spending money that gives us a diminishing return on the port security grant program? >> senator, i'm happy to field that question. improved measurement is absolutely an area where we see a lot of opportunity. >> let me interrupt you. what is your measurement now? >> in fy13, we -- for the first time, instituted measures related to sustainment of existing capabilities versus building new ones. we took the gao and mr.

caldwell's reports and recommendations quite seriously and are looking closely at what ports are doing with the funding. we -- for the first time in the fy14 application cycle are requesting project level data going in. you are probably aware of the history of the program, and the flexibility that had been given at the local level against area of maritime security plans. there remains a lot of flexibility, but we are increasing the oversight to request project level data upfront so we can start to get that information to form even more effective measures of outcomes. on the grants management side, senator, we certainly have measures now, and even over fy 12 measures of our monitoring. mr. caldwell mentioned the level

of monitoring. 100% of our port security grants undergo some level of monitoring. we have a tiered monitoring system where our program staff on our routine basis look at every award, look at the history of the grantee, the history of the outcomes achieved, their financial measures from draw down, rate of expenditure, rate of deobligation. that, then, is reviewed. we do prioritize based on the risk we see in their management of the grants all the way up to desk reviews where we request a lot of information from grantees and site visits. what i would tell you, senator, i look forward to continue working with you and continue to get the data we need to form more effective measures. i agree with you that everybody can point to the examples, and

they really are some stunning examples of how useful and effective it is. we will continue to refine our measures to get that data. >> yeah. as i noted, i think it's improved. i think we still, you know, my underlying concern somebody is going to be sitting up here ten years from now and the amount of money spent on the type of program isn't going to be there. so how we spend the money today is really important. because there's going to come a time, i mean, you know, i'll repeat for you. social security, disability runs out of money at the end of next year. medicare runs out of money in '26. social security runs out of money in '32. by 2030, the entire budget will be consumed to medicare, medicaid, social security, and the interest on the federal debt. my question, based on the future, and if we spend money

really well now, we won't spend -- we won't need to be spending money in the future. that's the basis of the question. it's not a criticism. it's just that we need the best cost-benefit value for every dollar you send out in a port security grant. >> we agree with you, and we are working with our partners on the vulnerable index, which is one of the things you mentioned. how do we understand what risk we have bought down, and we'll continue to look at that to make sure we're spending the money as effectively as possible. >> thank you. admiral, one of my concerns, and i can't go into detail, but let me give you a hypothetical. you give me the answer. let say somebody leaves one of our certified ports overseas, and arrives here. in between there and now,

something was added to that cargo. do we have the capability to know that? >> well, doctor, i'm not exactly sure. if they leave a foreign port -- >> one of our certified ports. meeting all the requirements that you all have. and someplace between when they left and when they arrive at the port of los angeles somebody has added a package. if that occurred -- >> in another foreign port. >> not in the port. just in transit. >> in transit. the only way we could be able to determine -- a couple of things would have to happen. probably the entire crew would have to be complacent with the individual carrying this out. it's difficult to access particularly a container in transit without a significant amount of effort, and that would require probably more than one person. >> let's don't worry about the details of that. let's say it happens. >> if it happens the only way we

would know, really, it's a better question for my colleague from customs and border protection would be because the container has been opened and we would be able to determine that. maybe you can -- >> sure. senator, we have two elements i think would be germane here. one the import security filing gives us the stow plan for the vessel. we know where each container is on the vessel. whether it's assessable during a voyage or not. we see drug smugglers attempt to break the custom seal, put a load inside the door of the container and lock it up. it's only doable around the deck area. we know which containers could be accessed and we do routine seal checks upon arrival to see whether those doors have been opened. there are different steps in our -- >> somebody counterfeit your

seal? can somebody counterfeit your seal? >> they can try to, yes. we have detected dozens of attempts to do that pretty effectively. >> so they not have been able to do that as of yet? >> i won't say, senator -- >> that you're aware of. >> we do train our personnel to detect what our seals are supposed to look like, whether they've been tampered with. there's a number of sequences and other kind of safeguards in this process. >> i'll just -- this is a long time ago, but i'll share an experience with you. i bought a company in puerto rico, put it into four containers, all the equipment. everything that was there. all four container arrived at one of my plants here. all the seals were there. when we opened the containers, everything of significant value that could have been marketed was gone. but the seals were still there. so the fact is, and that was way

before 9/11. that was in the '70s. but the fact is, that people will try to do it. so my question is, is -- i guess my question is really this, do we have the capability to track ships from the time they leave a port until the time arrive here and know whether or not they've been boarded or accessed between this embarkment and the embark here? >> that's the question that i probably can't answer. >> got you. all right. thank you. >> senator, did you want me to touch upon the metrics issue? >> yes please. >> i think we've seen a weakness

in the strategic level. whether it's the national strategy or more detailed functional plans, we have not seen metrics laid out early as to what the end state is and how we're going to measure that. but we have seen problems particularly at the program level, most often, those are easier to look for and find. i think we have found an improvement of the metrics of how the programs are run. one of the first things we do when we look at the program, do you know how the program is being run and have those metrics. a lot of times we'll find weaknesses in the internal controls. i think those are improved across the board. when i see some of the programs that have matured, a lot is better management of the program. where we have not seen large improvements is in the area of actually measuring results of the program and what they're trying to achieve. i would also agree with you the importance of cost-benefit analysis. a lot of times we'll get a discussion from the agency that could be expensive and we don't have enough money to do it. in the end if you spend $3

billion on grants, it's an outstanding record for nine years they come up with performance measures on the port security grant. so maybe a couple of extra million dollars to do some analysis to develop those grants. in hindsight it might be money well spent. one example of cost-benefit analysis that was done rigorously involves the advanced portals d.o.d. put in. the first ones they put in was very light -- it was not very rigorous in terms of the testing. we pointed that out. when they did the rigorous testing, and then they looked at how much they would cost marginally compared to the additional they get, they cancelled the program after spending $280 million. eventually they were planning to spend, like, $3 billion. it was the case where whatever the testing or analysis cost, i

think in the end, lead to a good result. >> okay. let me ask mr. kamoie. you all plans to reinsert the fiduciary agents to -- >> we do not, senator. >> why is that? >> when the fiduciary agent model was used, it was at time when the appropriations levels for the program were much higher. after rounds of stimulus funding, the agent model was

absolutely necessary to assist the agency in distributing and monitoring the funds. over time, however, as the appropriations level has gone down, and our internal capability with staffing has increased to manage the program, the fiduciary agent model has become less necessary. and in terms of monitoring performance, there was a varying level of performance by fiduciary agents and monitoring. given our increased staffing, our increased capabilities, we think it's more appropriate that we monitor an oversight and grant funding and how it's spent. the other thing i'll say is that the allow ability of management and administrative costs from the grant program to fiduciary agents of 3 to 5%, would result, for example, just this year in 3

to $5 million in overhead costs that we think are better invested in actual port security projects. >> do you have the flexibility to use some of the grant money for grant management? >> senator, i'll have to check the language and get back with you. >> but would that help you? in other words, rather than spending 3 to $5 million, if we spend it on managing grants, especially cost effectiveness of grants. and looking at that, i'm pleased with the progress that is being made. i don't think we're there yet. i would love know what we need to do to help you to be able to get to the point. my model for grants, at the federal government is a vision of library and museum sciences. if you get a grant from them, you can guarantee they're going to check on you. they're going do a metric, they're going to know whether you followed your plan and the grant. if you're not, they pull it. you don't ever get another one

again. so everybody has a different expectation. the fact that some grant money is going to things that aren't really for security, you know, if you had the reputation, i guarantee everybody would be put down the way you put down. even though you have flexibility. >> absolutely i'll take a look at that. we're willing to learn lessons. >> it's the best-run grant program in the federal government. >> i appreciate that. >> the other thing is the spinout. we're still, in terms of, we granted but we still a lot ways to go on spin down. where are we on that? is it because these are long-term programs? >> sir, that's getting better, as well. early on in the program when ports were doing larger capital project infrastructure building with multiphase complicated projects, it took a long time to spend down a lot of projects have been completed.

we've taken a number of steps to assist grantees in the spend down. one, we remind them quarterly. we're in touch. we've shortened the period of performance for grants to two years. but your question was where are we? in august of '12, for -- and we follow up in writing with these numbers, but for the program years, '08 to '11, 80% of the available funds were not yet drawn down. a year later, for fy 8-12. of course every year one goes off the books. we move the needle down to 44% of funds not being drawn down, and we did a check at the end of april. right now we're at 39.3%. not yet drawn down from '08 to '13. 39.3% not yet drawn down from '08 to '13. >> i'm going to have to recess this and go vote. senator carper will be back in a

moment. >> thank you, senator. >> i'm glad you waited. let's see if we can see if there's any consensus on the metrics that we're using. how do we measure success. let start with you, miss mcclain. what are the metrics we are using and ought to be using. how are we doing?

>> mr. chairman -- i think there is several -- there are several indicators that evidence success and progress in securing the ports. i would note in the last seven years, our relationships are programs internationally, those global partnerships, the capacity building, the agreements, everything that is necessary to supply the whole global supply chain. i think there's been significant advancements in that area. i also think that our improvements in the advanced data and targeting area make us more secure. coast guards, port assessments 1500 ports. i think there are a lot of indicators that there's a global recognition of the need to tackle this issue on a broader basis. >> all right.

same question to admiral paul thomas. >> thank you, mr. chairman. i was in port in galveston, texas on september 11, 2001, and then the three years following that as we scrambled to figure out what it meant to secure our ports. from my perspective, it's clear we've achieved a lot. i think one the first things we did, mr. caldwell mentioned the strategies. we recognized in order to build a secure port we had to build regi regimes, we had to do it locally, nationally and internationally. we had to build awareness so we could figure out what was going on and pick anomalies. we need the capability to respond to the anomalies. if you look at the three building blocks and compare them to where they were in september 11, 2001 to where we are today, it's clear there are progresses. there are clear metrics with each of those. with regard to the regimes, thank you to the congress for the maritime transportation security act and the safe port act. it was the impetus for the

international regime, as well as regimes that have now been implemented as far down as individual port authorities. i'm not just talking about regimes required by the law. i'm talking about they understand a security is part of the business product. i think in that regard there's clear measures. really an intangible probably from here to sea. i can tell you there was no awareness or recognition that security really was part of the product in the port. we got the message across with safety and environment. they get it as part of the business as well. i think there's a metric there. certainly with regard to awareness and capability. we have built the capabilities federally, locally, internationally. all of which, i think, are clear evidence that we've been effective in terms of enhancing it. i'm with you. i think we need to do more. i think we can never rest on our laurels. i'm concerned about emerging threats like cyber. we need to develop some metrics there. >> we'll come back and finish.

how are we doing, what are we doing well, what metrics are we using, how do we demonstrate to what we're doing better. i want to come back and say what is on the to-do list, first. kevin? >> mr. chairman, i'll touch on five areas. broadly, our ability to identify and mitigate risk is the metric we seek to measure ourselves on. first, on the data front, as was alluded to. we're getting advanced information on cargo shipments. manifest information, entry information, and import security filing. which is another 12 data elements that are critical. in terms of targeting and assessing that risk, category two, we're analyzing it with the automated targeting system, we think it's a sophisticated capability is constantly approved and currently working on responding to the ideas on identifying the effectiveness of those targets with more granularity. three, examining the earliest possible point in the cycle. currently 85% of the shipments

we identify as high risk are examined before they leave for the u.s. our examination in the 58 ports are accepted 99 percent of the time. we think those are very solid metrics. 100% of the containers identified as potentially high risk are examined before they are let into the u.s. stream of commerce. 85% prior of leading and the rest of the 15% before allowed to enter the u.s. on arrival. securing the supply chain, category four. over 50% of all cargo containers are part of the partnership with our 10,750 partners. we've increased the security supply chain through the partnership. we're recognizing other country systems including the european union and six other agreements to ensure broader visibility globally as ellen alluded to, the international partnership. and five, our efforts to address

the highest consequence threats. we're scanning 99.8% of all arriving containerized cargo. >> say that again. what percent? >> 99.8%. so just about everything in arriving in sea port is scanned through a radiation port monitor. the other part of this coin, sir, the facilitation piece you have referenced. vast majority of cargo arriving in the u.s. is released before it touches the dock. our ct partners are getting fewer exams because they secure the supply chain. we establish mobile technology for agricultural to clear shipments on the dock instead of waiting hours and having the bananas sit in wilmington. the u.s. chamber of commerce and 71 others wrote to the secretary this week in an open letter saying the regime is working well and that the facilitation piece in particular, we've achieved through the layered risk approach.

those are the metrics we look at and will be happy to elaborate on any specifics. >> mr. chairman, i think while you were out we agreed in the port security grant programs we have measures and made progress. we agree we can continue to make progress. on the programatic side of the effectiveness measures, we look very carefully at the six priorities of the grant program. enhancing maritime marine awareness, explosive device detection, chemical explosive prevention, protection, response and recovery capabilities, enhancing cyber security capabilities. maritime security risk, mitigation projects, planning training exercises and the transportation worker identification credential implementation. right now we have a measure we're looking at building new capabilities across those six areas, and sustaining existing capabilities. but, again, that measure can be better. on the administrative management

side, we've made progress in measuring our ability to effectively, efficiently release the funding, monitor programmatic use of the funds, monitor grantee financial management of the funds, monitor the closing of the awards and grantee draw down. we're making progress, mr. chairman, we've got an opportunity to make even more. >> thanks. >> yes, sir. for us, i think it's about getting good, quality information and data for us to make the right decisions on when we issue a card. it's about continuing to get that information after we issue the cards so we can monitor the individual to ensure they haven't done something as to disqualify them. whether it's on a terrorism watch list or something through a criminal issue. i think the other thing that is going to make us better is installing readers. we believe that the coast guard, whom we're close partners with,