needs of their customers. others will do it and it will be appended. in terms of getting more responsiveness on a management of these large entities, i think that we do need to make some changes in the release of the game, most importantly what they call the poison pills which are infected by companies to make it difficult for outside shareholders to throw the management out. . staggered boofereds elections and things like that. those were put in the 1980's as a result of outsiders coming in against managements. i think a lot of that should be taken away, those poison pills, so management knows that it has to be responsive to the needs of shareholders or somebody's going to come after them, and they won't be able to put artificial barriers to stop them from doing so. host: hasn't the s.e.c. recently made moves to provide for more trance pearns a in the stockholders' position, more

trance parents siff management and bonuses and c.e.o. pay? guest: they have, but the challenge is not so much transparency on pay. if you will go in the innards of these filings about the s.e.c., you can pretty well figure out at least 9 % behalf these people are getting and these people are getting and what the prospect hey're getting if certain performance standards are met. but the problem is that -- and i think, bill, in the 1990's and early part of this decade, in reaction to what some call crony capitalism where the c.e.o. stacks the board with his friends and they give them a large pay increase and the like, outside of the financial industry, there was starting to be a reaction to that, and the s.e.c. has been sympathetic to it, and it's had it real effect. the problem were the egregious pay packages which took place in the financial industry, and that had its origins with the federal reserve printing so much money, and then the s.e.c.

allowing these companies, especial investment bankers to leverage up, that is borrow a lot, not as much as fannie and freddie did proportionately, but much more than was sound. and so temporarily it looks great, and then when you got a little bit of a down turn, by golly, that whole thing came crashing down. again, the government needs sound and stable money, and then you have to have transparency, and management knowing that they're answerable to share holders and they can't erect artificial barriers to stop it. host: about another half-hour with steve forbes and his new book, "how capitalism will save us." we go to john in savannah, georgia. good morning, john, on our republican line. caller: yeah, we've spent trillions in iraq and afghanistan, so i don't know what this three weeks is about, but i want to ask you about per knack eerk the "time" man of the year.

then i hear congressmen saying we don't need to de lve into what the feds are doing. isn't it time we did de l very into what they're doing? thank you. guest: on your point on the three weeks, if you -- again, this gets a little arcane, but if you take the size of the u.s. economy and see what it's spending in terms of iraq and afghanistan, it's thee qui lent in world war ii what we spent on that war, a global war, about three or every four weeks as a proposition of the commesm it's real money, but we've had bigger military financial burdens before. it is amazing this most powerful institution in washington hasçó virtweal no accountability which the u.s. congress which created it. and so a congressman from texas, ron paul, senator from south carolina jim demint and others, including also, i might say, the democrat social frist vermont, bernie saunders, all favor a bill that would have the government audit the

federal re, that is, what agreements have they made with other central banks, that ought to be made available. where the money goes, if they put in the market, what criteria they use. that isn't about independence, that's about accountability. and the fed has reacted leak a scald cat on the thing, saying it's the end of civilization. no, it is not. everyone in government has to be account able. the c.i.a.,s fed has less accountability to congress not that central intelligence agency does, which is ridiculous. so it's a benign bill that congressman paul and others have proposed, and i hope it gets through congress. host: steve forbes, i have a comment for you, one of our to witters users, a twitter from stockmarketscam is his handle, writes that your book title does not make any sense, steve. you should change it "how the rich stole from the poor q. i'll tie that into one your chapters, chapter they're, "aren't the rich getting richer at other people's expense"?

if up to the reply to that and tell us what that chapter, how that chapter would answer our twitter comment this morning. guest: well, it gets in, you say, the rap that the rich get rich expert poor get poorer. but the essence of free market is you don't succeed unless you provide something that other people want. and if you look at how the thing actually works when it's allowed to, you find you have great mobility out there. for example, the i.r.s. did a survey of tax returns from the mid 1990's to the mid part of this decade to see what actually happens to people's well-being, their incomes over that 10-year period. and what the survey found was that people in the bottom quinn tile, starting out with very little, the qu intile mean fifths, so the people on the bottom quintile starting off with very little going in the workforce, they went up. their incomes went up, and their relative standing went up. the majority went up at least

one quin active le, many went up two or three. in other words, as they got skills, their well-being improved. you also have people, though, moving down on the thing, so there is mobility in the economy. and in terms of people getting rich in a free economy, the only way they get rich, like a bill gates, again, is if they create something that is providing something people want or they take something and investigate the capital correctly in a way that it expands. so it's a flute situation, it's not like oligarchs you find in other countries, no chance for entrepreneur toss start independent businesses, and have a chance to succeed. you look at i.b.m. in the 1960's, the government filed an antitrust suit against the company because it seemed to be so powerful. the trust suit went nowhere, but what upended i.b.m. was the rise first of mini computers, and then personal computers so. by the early 1990's, i.b.m. was

virtually broke. they brought in new management, have turned it around. today the company is a thriving, vibrant company. but markets are allowed to work, competition will always bring these companies that get big, they won't stay big unless, again, they are providing things that people want. otherwise competitors will come in and upend them. host: you write a bit about the founder and owner of whole foods and his conversion, his view of capitalism. tell us about that briefly. >> john mackey began whole foods, as you know, originally based on organic foods. he started the business years ago. he looked around at these stores, saw that they weren't very attractive to people, and he figures that if he had an attractive store that brought people in, get customers who normally wouldn't consider organic foods, that the thing could grow. he started out as a very far on the left, but realized in terms of how he made his own business

work -- again, serving the needs and wants of others -- all the capital, sweat capital he had to put in, investing, risk taking he had to take to expand his business, he became a convert to entrepreneurial free market capitalism. he read friedman, he read others like adam smith, and he became a convert and is almost an evangelist on the subject because he's lived the idea of an entrepreneur, somebody starting out with an idea, having a chance to expand and all of the hard work that goes into it, and that's the thing about an entrepreneur, bill, is that the entrepreneur can only -- the entrepreneur is usually the last one to get something he -- he or she puts the money in, then you have to pay the workers, the suppliers, your backers, and then if there's something left over, you can get ahead, and that's why most new businesses don't succeed. but you have to have a system that allows people to keep trying so you get extraordinary

successes like whole foods, which introduced the idea of fine foods and organic foods to tens of millions of customers who normally wouldn't have considered buying those kind of foods. host: back to our phone calls. this is spencer, west virginia. jeff, good morning, independent caller. caller: yes, hello. host: good morning. caller: first of all, i want to say it's an honor to speak with mr. forbes t. the top five guys in history that i admire. he's right there, he's in the top five. guest: thank you. caller: i want to bring a little bit more to grass roots. we've been talking about big business and the economy. i'm a construction worker. i'm living paycheck to paycheck. what advice would you goif a guy like me that probably makes , say, 50% or maybe more of the population, what would you tell me would be a good way to invest in my future, retirement, you know, i got a 10-year-old son who, eight more yeerks he's going to go going

off to college. i mean, what would you tell me to do? i.r.a., treasury bonds? i bought a little bit of gold back in the days when gold was like at $320, and now it's almost tripled that, which i go investment for someone that does not own the market at all. i'm just wondering, someone at the grass roots level. host: jeff, thanks for your causm i'm sure a lot of other people want to ask the same thing. steve forbes? guest: very, very, very basic question, and apropos of gold. every portfolio should have a part of, it not a large part, but a part of it just as an insurance policy. you did well on, it but there are times when the dollar price of gold goes down, when the government gets its act together, which happens occasionally. but you always have it there as an anchor, as an insurance policy in case things do go wrong as manifestly has happened in recent years. now, in terms of long term on things like your youngster's

college education, you're probably familiar with a thing called a 529. every state now offers them. you put money in, it grows tax free for your kid's education. take advantage of that. in terms of other kinds of investing, yes, you should have an i.r.a., 401, you should contribute to that if you can do so. and on those, realize that they are retirement vehicles. you're not trying to hit grand slam home runs. and so on those, don't let your emotions be your enemy. put in a certain amount each month. if you can afford to do so, put in a certain fixed amount each month, make sure that these funds have low expenses. that's a public information, get from forbes and from others so that you don't lose a lot of money to all these expenses they have. look at their long-term record. put a certain amount in each month, and then when up get these down turns, in effect you're buying more shares. and so when the market comes

back, which it inevitably always does, you're even better off. it's called dollar-cost averaging. but the tendency is, even though people nod their heads about the need for discipline, investing, and being long term, when their emotions take over, so when the market goes up, they say, well, is it too late to get in? i want to put more in. or when the market takes a plunge, sickening plunge as we had happen in 2008 and the early part of this>x,eerk the tendency is, oh, my god, is it too late to get out? so if you have flexibility in terms of time, you're not about to retire, then do that monthly cost averaging, certain amount each month. take advantage as much as you can of a 401-t, if you can do a roth i.r.a., you put in tax money, but when you retire, it's tax free, do those things. do the 529 with your son, and you're doing as much as you can. then other thing do you, just to get in a plug on tax reform, the current tax code is really hostile to people trying to

accumulate real capital on a salary because of the huge tax rates and the like. that's one reason why i like a simple flat tax. it encourages people to generate real capital instead of being eaten up in the tax code we have today. host: good morning to jackson, mississippi. good morning, dee, on our independents line. caller: thank you, c-span. thank you for taking my causm i've been listening to mr. forbes as well as a lot of other republicans, and i have one question at this point before i go any further. where were you in the last eight yearsñr when george bush ran -- excuse me -- ran our country's tab up to over a trillion dollars? mr. obama has only been in office less than a year, but you want to accuse and hold him responsible for trillions of dollars, but your voice was not heard when mr. bush was in office. secondly, i have a problem with

the republicans who talk against medical reform when we are the ones who pay the insurance for their insurance. they won't allow us to have the public option, but they are the public option. they are on the public option. again, you speak about 50 years ago in terms of what the budget was in comparison, comparing it to what it is today. we're going back 50 years. there is no comparison. please do not continue to use that. another question i have, you guys talk about mr. reagan all the time, and the good times that we have under mr. reagan. those times were not as great as you want us to believe that they were, and we also must factor in the fact that mr. reagan was in the throes of alzheimer's -- host: dee, lots there.

several questions we'll let steve forbes address. thank you. guest: on the past eight years, in terms of mr. bush's economic policies, and i many other republicans were aghast at his spending policies and spoke out against them. they were minor compared to what we see coming out of washington today. but we did speak out against it, and i believe the biggest domestic mistake of the bush administration, which sadly has been continued by this administration, is its weak dollar policy. weak dollar means weak recovery. you cannot trash the u.s. dollar, let it get weak, and at the present to have a strong economy. that shouldn't be a partisan issue. john kennedy, democrat, said the dollar should be as good as gold. ronald reagan killed the great inflation of the 1970's, and bill clinton had a strong dollar policy. so that was a huge mistake of the bush administration and the federal reserve, which i did speak out against. in terms of healthcare alternatives, there are positive alternatives out there

than just simply having more and more government role and having it do to healthcare what it's done to the housing market, and that is simple things like nationwide shopping for health insurance. right now, each state restricts the companies that can compete. why not have nationwide? i live in the state of new jersey. because of our crazy regulations in healthcare, family policy, if you buy it as an individual, will cost youed sad,000 to $20,000. in pennsylvania, i can get the equivalent policy, virtually the equivalent for $7,000 or $8,000 a year, yet it's illegal for me to buy it in pennsylvania. i can buy a car in pen pernings open a bank account in pennsylvania, but i can't buy health insurance offered to the citizens of pennsylvania. so let's have nationwide shopping. tax treatment, if a business buys health insurance, it gets a tax deduction. why not allow individuals get a tax deduction? unless you're self-employed, you don't.

so a lot of people have credit and tax deductions for insurance. tort reform would be huge savings of money. why not allow small businesses to pool together through trade associations to buy affordable health insurance? so if you open up the market to true competition and get rid of some of these artificial barriers, you'll see an healthcare which you see everywhere else in this economy, and that is entrepreneurs figuring out how to supply more of it at more, affordable cost. just to give one example, the cell phone. 20 years of cell phone, if you look at those old pictures, was as big as a shoe box, clunky, expense simbings not working very well. today, small, you can do anything on them, they're cheap. poor people around the world can all have cell phones. you see it in haiti, you see it in india. four billion of them out there today. why can't we do the same thing on healthcare? government can't do it, entrepreneurs can. in terms of ronald reagan, his performance was very real. what he inherited after the 1970's, high inflation, 18%

mortgage rates, 21% somewhere rates, higher unemployment than what we have today. as a result of his policies, inflation plummeted, interest rates came down, the u.s. became a font of innovation, and they created more jobs under his watch and subsequent watches of more jobs in western europe and japan put together. so overall, not a bad record and one that i think any president today would love to grab on to. host: to our republican line next. steve is from parksville, mfment you're on. caller: yes, good morning, mr. forbes. i've been following up for many, many years. guest: good morning. caller: one of the questions i'd like to you play somewhat of an economic north radio come as for just a minute. the -- an economic north dam us for just a minute. we have situations in iraq and afghanistan, and all the global situations that exist. we also have a congress that is

spending more and more money that we don't have and we're borrowing from china, are who at one time was one of our biggest enemies. to the point, with the situation concerning moody's, a.a.a. credit rate where we are in jeopardy of losing that, what do you foresee in the next two, three, or five years down the road as to what our economic status is going to be? do you foresee some type of economic collapse, a global economic collapse? guest: to answer your question, i don't see a global economic collapse. one of the things you're starting to see emerge now is that countries in asia, even in central and eastern europe, are starting to have more sustained recovery, stronger recoveries, than what we're having here in the united states. to be blunt about it, we and great britain are making the same economic mistakes, weak occurrence success, binge spending, raising taxes, and that's going to hurt the

performance we're going to have in 2010, as i compared it to a baseball player who's going to hit about .200 instead of .400. but those kind of things do generate proposals, counterproposals. we saw that in the 1970's, dreadful decade, new ideas came up, which ronald reagan adopted, got our country back on track. i think we're going see the see the same phenomenon, you saw it in new jersey, candidates who ran on the platform of restraint in spending and cut ago way taxes instead of increasing taxes. i live in new jersey, very blue state, but a republican there even though he's outspent 5-1, won a major victory. but you touched on something else that we have to keep our eye on. you're right, economies which are people are affected by events around the world, and the big one to watch for this year, again, is iran. i think the israelis are going to make a decision in 2010.

they know the window of opportunity of delaying that program, nuclear program. they see it as an existential threat, and they're going to make a fundamental decision where they take military action against iran, and if they feel they have to do so, that's going to have huge repercussions, certainly short term, on oil markets and the politics of the world. so yes, those things do play a role. you can't foresee what exactly they are, but we have to be prepared. sometimes do you get a huge crisis like that, and i think we will have one with iran in 2010. host: steve forbes, you brought up politics in 2010. a moment ago, a question here from one of our twitter users. steve forbes for president, how soon can you start? are you interested at all? guest: no, i'm an agitator now. i tried twice. so i'm trying to get out and get reforms like simplifying the tax code moving, help out

candidates who are pro-growth, pro-opportunity. and by the way, that's what people should do in 2010, get involved not just in the general election, bill, but in the primaries where parties pick their candidates, get involved with thosmse it's going to be very interesting. host: and you got involved in the new york 23 special election. it's the seat that billow wins won. steve forbes endorsing doug hoffman, who was not a republican canned date, but he was the conservative party candidate. why did you make that choice? guest: i thought he best represented the principle it is of opportunity, it low taxation, great, giving people a chance to get ahead, better than nominal republican candidate, and that's why he got most of the support and came close to winning. the republican party, to be blunt, gave no help up there when the republican candidate with drew. they sat on their hands. so the democrat won a narrow victory, but i think this year

in 2010, when you have the regular election, i think there's a very good chance mr. hoffman or somebody of a like view can win the seat back. host: does that endorsement in that race mean that we'll be seeing more of those types of endorsements, including into the presidential race in 2010? are you leaning toward anybody in particular? guest:, no i'm look over the field like others are. but this, again, what happened in the 23rd, the republican candidate was not chosen by a primary. it was chosen by party leaders because it was a special election. if they had a primary, i don't think you'd have seen this situation crop up. but in 2012, i'm looking at all the candidates, looking for somebody with those optimistic, pro-growth policies and a strong defense for the united states, and who know how to navigate washington. reagan, by the way, and i'll mention him again, even though a caller implied that i was doing it too much, but i will mention him one more time,

reagan was one of the few individuals, bill, who could be both a movement leader, which i was in the 1960's and 1970 anticipates, and then become an effective political leader. in politics, you can't just go in a straightline. the world doesn't work where you snap your fingers and congress snaps to. you have to learn to detour and make compromises, but reagan did those that and never lost sight of his basic goals, which is why even liberals in the historian profession rate him as one of the our most important and he fective presidents. host: atlanta, good morning to will on our independents line. hi there. caller: hi. thanks for c-span. appreciate you taking any call, sir. i agree with your title, capitalism can save us, but the adam smith capitalism the founders had in mind when they created us in covenant with the creator, god, and that has the bearing on truth, justice,

freedom, honesty. when we get away from that, when we have crimes committed by what thomas jefferson referred to as the pseudo era -- which your grandfather's work creating the federal reserve, we were not -- we've become fascist, ruled by the rich and serving what thomas jemp son called the anti-crivements i would recommend everyone read the actual writings of thomas jefferson, who was an obvious prophet of god to know why we have these draft dodgers supporting other war dodgers like reagan, whose line has been cut o. if he was up a good man, why didn't god give him any children? if you're such a good man, why did you not bring justice to people who sent us to vietnam after you dodged it? this is unrighteous. this is a spirit of the age. this is what thomas jefferson called the anti-christ, and you live cross the river and saw the world, done nothing about bringing bush and cheney to justice for doing it. host: will, we'll get a response. guest: well, i don't believe that bush and cheney created the world trade center. i think that's preposterous.

as for my grandfather, he did not create the federal reserve. he was an immigrant to this country, came here a little over 100 years ago, was one of 10 children, grade school education, virtually no money. but like millions who came to merks he had an opportunity, had a chance to get ahead and realized the american dream. i'm glad he did so. but he had nothing to do with the fed. and in terms of the fed, we've talked earlier about congressman ron paul's bill to have an audit of the fed to bring about more disclosure so that people can see what it's doing and what it's not doing. i believe, my own view is in terms of the federal reserve, they should only v only two tasks, one is a strong and stable dollar, tied to gold, as others have ads very indicated, and have the deal with panics that rise up if a crises rises up. but bank regulation, check clearing, the like, i think those are tasks that should be put in another agency. as for in terms of values, yes, free markets must have basic

values, which adam smith talked about. and that's why you do have sensible rules of the road. you have james madison, the father of our constitution, pointed out if we were angels, we would not need government. we are not angels, so we do need government, but there's positive government and negative government, and i think we need more positive government where it creates an environment where free people have a chance to realize their dreams instead of having to dance to the dictates of regulations from washington. host: next up is cocoa beach, florida. jeff, democratic caller. good morning, go ahead. caller: how are you? i just wanted to say, i have no family money and i retired when i was 45, and i considered myself an entrepreneur. but on the same question, i know for a fact if i'm making $1 hundred,000 a day, i can live real comfortable on 5% of that, and most people can. there's a lot of people who cannot afford -- who don't have the ability to become

entrepreneurs. and the fellow who sweeps the floor has the right to live as well as far as free time and putting their kids through school having healthcare, as well as any entrepreneur and wealthy fellow. so my point is pre-round reagan, the tax structure was a hell of a lot better, even though no one realized then. since ronald reagan, energy prices dropped. energy prices is the key for our economy. it's the multiplier for our labor. as far as i've asked myself this question, how can all these people in this world owe out this much money? where is this money that everybody owes out? there can't be this much money that people owe out so. therefore, moan is nothing but debt on poorer people. host: jeff, thanks for the input. last call. steve forbes, your thoughts. guest: well, the call serp right about the debt that we're piling up.

go that i don't think many many n washington fully grasp yet is that the average maturity of the national debt now, bill, is 49 weeks, which means when short-term rates go up, as inevitably they're going to go up, that's going blow another big hole in the budget. so we're facing the same kind of situation we did in the late 1970's and early 1980's, and that's why we need pro-growth economic policies, start wag strong and stable dollar, a low tax rate so that people can get ahead, and allow more entrepreneurship in areas like healthcare and do there what we've done elsewhere where you can supply more at a more affordable cost and better and better. we've done it in high-tech and elsewhere. why can't we do it in healthcare? so yes, we do need to make fundamental reforms, or else the debt will kill us. we need to groat asset side of america. we've done it before, and i believe we will do it again, even though we're going through a rough patch right now, are going through a rough time. host: steve forbes, whose new

book is "how capitalism will save us," written with elizabeth ames. is it on the bookshelves now, steve forbes? guest: it is, and also you can get it onlnle from >> early this morning, a democratic changes to the senate health care bill passed the procedural vote, a 60-40, and debate continues today. more procedural votes expected to bar about 7:15 in the morning and wednesday at 1:00 in the afternoon, while bachus currently scheduled -- final passage of the crow is scheduled for christmas eve. key democratic senators are holding a news conference on the bill today. majority leader harry reid, max

baucus, chris dodd, and tom harkin all expected to be there. we will have that for you live on c-span. why now, a conversation about corporate spending on political activities. the system today's "washington journal." -- this is from today's "washington journal." for political accountability, here to talk about his efforts to get corporations to release and unveil their political spending. why is it important to know about how a corporate entity, a corporation spends money politically? guest: it's very important to know, because shareholders need to be able to assess risk. the public really needs to know how companies are using their money. right now, many companies do not disclose their political spending with corporate funds. our focus is on the political spending with corporate funds. p.a.c. contributions are disclosed through the federal election commission, but when a company gives money to groups

such as 527's, it you know, that's only disclosed by the recipient, not by the contributor. you have companies that make payments, trade associations, dues, contributions, those payments are not disclosed. so you don't know how much they're giving. you don't know how the trade associations are using them. that means that a great deal of political spending is hidden, and that has tremendous consequences. host: why are those two pieces different? the political spending, donations tie candidate, and this other type of spending, why is it treated differently under law? guest: this is the way it has been handled historically. you know, the disclosure of political spending has really been relatively recent. you know, you have hazard disclosure up unt) about the 1974 campaign finance law, and then they've been sort of broadening it slightly. you know, you've had the groups such as 527's where you have disclosure by the resilient.

but you have this whole area of trade soirks payments, which is undisclosed and which remains undisclosed, and that -- i think that presents a very serious problem, because companies hide behind the trade associations to do a great deal of political spending today. host: scommow why are corporations treated -- as allowed to have individual rights under the constitution, things like free speech, etc.? aren't these personal libber advertise and not counter liberties? guest: well, that goes back to the 1800's when corporation were gin the rights of personhood. you know, what that does is it presents issues today in terms of regulating political spending because corporations are given the first amendment protections, and that has created, i think, serious problems in terms of disclosure and regulating that type of

spending. host: bruce freed to talk about corporate money in politics. 202-737-0001 for republicans. democrats, 202-737-0002. independents,&others, it's 202-628-0205. the senate passed in the wee hours. morning, or at least voted to move forward this healthcare legislation. what can you tell us about the money that's being spent in the lobbying efforts, etc., on this healthcare bill? guest: "usa today" did a very, very good article last monday that addressed that. the center announced that four new companies had adopted political disclosure, microsoft, time warner, campbell's soup and wisconsin energy. "usa today" use that had to address this whole issue of what do we know about payments through trade associations? what they did is they focused on payments to groups such as pharma and were looking at companies like bristol miers squib and merck, and you found

that there are millions of dollars that companies are spending or giving to their trade associations that are then being spent to lobby and to both doing regular lobbying and grass roots lobbying, which is a form of political spending on this issue. one of the things that was interesting is that, you know, it the disclosure, the figures that were used in the "usa today" arg were drawn from disclosures that companies have made as a result of their agreements with the center. one of the things that's interesting is we have been working with companies for the past six years to ask them to disclose their political spending with corporate funds and to adopt board oversight. this is a matter of both disclosure and accountability. and today, you have 70 companies in the s&p 500 that have agreed to political disclosure, and nearly half of the companies in the s&p 100, those are the trend-setting companies. and so what the "usa today"

article did is drew on what we know with some of the park companies. merk is given $6.8 million to eight trade associations in 2008. you had pharma spending about $19.9 million on lobbying. i think this is -- host: that he wants the trade association? guest: that's the pharmaceutical manufacturers of america. you have bristol-myers squibb, which reported $128 million of its money that's being used for political purposes by its trade associations. this is the first time that we know share holders know and the public p what these companies are giving to their trade associations and what the trade associations are using for political spending. host: before we get to calls, you know, a lot of money being spent for lobbying. when they say that term lobbying, what does that entail? guest: that's quite broad. when companies make a payment to trade association, it's really divided into two parts. there's one part that's deductible, that's used for a variety of purposes, services

provided by the association, but lobbying and political spending by the trade association, that portion of a company's payment is nondeductible, so we're talking about that type of spending. that could be lobbying that you have on capitol hill right now, where you have lobbyists going door-to-door, meeting with their members and meeting with their staffs, but there's a great deal of what is known as grass roots lobbying, political spending. for instance, when a group such as the chamber of commerce runs an ad, you know, thanking members of congress for taking a certain position or asking to you call your member of congress to, you know, to tell them not to do something, that's grass roots lobbying. that's political spending, that's not disclosed. host: here we go to rochester, new hampshire. this is an crew on our republican line for bruce freed. hi there. caller: good morning. host: you're on the air. go ahead. caller: good morning. guest: good morning. caller: what do you think -- does anybody know how much rheaume emanuel is worth?

-- rahm emanuel is worth and how much he's involved in running our country and taking all this money? i hear people complaining. i've been watching c-span a lot lately, the senate especially, and once in a while people really -- especial until that pharmaceutical debate -- campaign about how rahm emanuel is really the puppeteer back there. what do you think, mr. freed? guest: i don't know what he's worth. i know he spent some time as an investment banker, so he probably made, you know, a nice amount of money, probably several million dollars, which he has then been using or living on since he's been in public life, but i don't know what his real worth is. host: washington, alex, democratic caller. good morning. caller: good morning, c-span. i've lately become a complete c-span junkie since i'm unemployed at the moment i've got plenty of time to watch you. host: glad you have to, sorry you're unemployed.

guest: yes, i agree. caller: well, unfortunately while i was on hold, you answered a lot of my questions. i guess i'm wondering what you would suggest in the wade of campaign finance reform to deal with some of these problems that you've mentioned. i'm especially concerned with seeing senators like leiberman, who apparently are heavily backed by pharmaceuticals and the insurance industry corporations and how they, you know, kind of get poisoned by the money and what you would suggest as a remedy to that. guest: i think you have an interesting challenge in the citizens united case, which is a very important campaign finance case that's awaiting a does by the supreme court. this case was brought daverbs heard by the court last february, and then there was a rehearing back in early

september. and this case provides an opportunity to the five of the justices, those on the conservative side, to address the issue of disclosure and the restrictions on political spending that date back to 1907, a piece of legislation known as the tillman act that prohibited companies from giving contributions to federal candidates. you know, i think there's grave concern that the court could, you know, severely restrict disclosure and remove the restrictions on companies making contributions to candidates, and i think that that would make campaign finance reform much more difficult. you may get a broad decision. if you don't get a broad decision by the court, it could be a narrower decision that would open up a salami type approach to whittling these away. i think that the work that the center for political accountability is doing, using the corporate governance route to persuade companies to

voluntarily disclose their political spending with corporate funds, that includes the trade association payments, and to have board oversight, is a very important way to address these issues, because it gets the disclosure by using board oversight, you begin to achieve the accountability that would have companies pay much more attention to the consequences of their spending host: was the center for political ict ability involved in that case? guest: we twoit super briefs. we submitted a brief for the february hearing, and then when they had the re-hearing, the center submitted a second brief. the second brief had an impact, because the justice department cited it twice in its reply grief in the case. so we've been, you know, through our briefs, also helping to shape the dog use. host: any sense on when the court is going to rule? guest: the expectation had been that they would rule by last week, and they didn't. and then i think the feeling is it could be in early january.

i mean, there have been newspaper reports indicating that the court may be quite divided on this. host: next subpoena long island. good morning to brad on our independents line, hi. caller: yes, hi, good morning. host: good morning. caller: yerks i'm a third-generation physician, a second-generation ophthalmologist, and a first-generation single father, but first-year law student who i still love anyway, and healthcare, this healthcare issue is emblematic of the overt quid pro quo racketeering of our government. and as a physician, i can tell you it's illegal, grossly illegal, for c.e.o.'s of healthcare companies to determine whether a doctor's

diagnosis or orders are legitimate. and when they refuse to treat somebody, that's more than racketeering. that's overt murder. and if they're held accountable, like everybody else, because on my and all the other physicians and healthcare workers' backs, c.e.o.'s are making $57,000 an hour, and they don't do anything. they don't provide anything. and all their surrogates who are selling policies are, in fact, have no idea what they're selling. they don't know, for example, what the indications are for cataract surgery. andly, all the middle men and paperwork is going to them. and when they provide healthcare -- host: brad, we appreciate your call.

any thoughts? guest: i just think the whole issue of accountability is extremely important. you know, one of the things that we have learned in working with companies is that there are companies that haven't changed some of their policies and procedures relating to their political spending because of the work that we're doing. host: what prompted merk and eli lilly, you mentioned they were one of the four companies to -- i think it's merk and eli lily -- to agree to reveal their political? guest: merck is really interesting, because they're really a leader. there are several other companies that have been leaders in this, but merck, really about three or four years ago, recognized that they face certain problems with their political spending. they had made a contribution to a state supreme court candidate in mississippi back in 2004, and there was -- that candidate had not been thoroughly vetted. the jackson clarion ledger reported that he had run a racist campaign. and i think that when that was

disclosed, merck, instead of sort of retreating into itself, said, you know what, there was a problem, we need to do more thorough vetting, we really need greater transparency and overseist our political spending, so i think they recognized that it really served the company better to be more open and adopt the policies and procedures to achieve that. so they've been a real leader. microsoft has been a leader. yo' host: from today's "usa today," as we go to san antonio and the republican line. caller: it seems hypocritical to me that the corporations want the same status of joe public,

but if i give a $200 or $3 to a candidate, -- $300 to a candidate -- as far as the money we give to corporations with the tarp and all that, can that be used for political campaigns, or was that specifically supposed to be used -- to we have accountability on how much of that money was used as far as campaigning for the health care program that just was passed? at just was passed? guest: i think we were asking about the tarp program. the tarp program involved funds that were provided to the banks to help them, you know, get through the very severe financial crisis. that's a very good question that you asked. back in the spring, the center and about 20 or some odd of our shareholder advocate partners wrote to 19 banks that received a million -- a billion dollars or more in funds from tarp

asking them to adopt political disclosure. what was very interesting is that we heard from one bank that said that it had adopted political disclosure, u.s. ban corp, and then there was another bank that got in touch with us and said, you know what, this is the right thing to do, we've been working with them on adopting political disclosure. there were several other we entered into dialogue with, but there's been quite a bit of resistance on the part of banks in disclosing their money. money is fungible, so if you give a company money for one purpose, that can free up money that's used for other areas. and i think that, you know, with the funds that were given to the financial institutions to help them, that there is an obligation to be transparent in their political spending and to have the accountability to assure that it's not being used

in ways that can pose a real risk to the company. host: when you as president of the center for political accountability approached the corporations or trade associations to sort of work with them on reveeg their political spending, who do you deal with, the c.e.o.? guest: you tend to deal with the general counsel, with the corporate secretary, with some of the folks in the legal department. it really varies from company to company. but we deal with company executives at a high level, because these are marriage decisions, these are decisions that would have to be approved by the board of directors. so we're dealing with decision makers in the company. scommoip how is your group funded guest: we're funded by foundations. no labor union money, it's just foundation money, because we're nonpartisan, nonprofit advocacy organization. host: here's raleigh, north carolina. charles, digit caller, good morning and go ahead. caller: good morning. i just got a few things i want to say.

i believe that as long as we have the lobbyist money in politics, we'll never have a fair country. you know, if you take the money out, maybe they can govern better. as long as they keep taking this money, these corporations, we'll never have a good system. you know, the healthcare system, the insurance company giving all this money to these candidates, making them change their mind about certain things, should be a law against them giving money. we take the money out, have all these problems. we have a democratic president one time making things better. then you haveñi another candida turn around and become president, change things, make it work for certain people. you will never have a great government who continue to take this money. host: has the lobbying situation in washington changed at all in the last year under the new president? guest: well, clearly with the type of issues that they're

dealing with, the administration is dealing with and congress is dealing with, you've had probably much more money that's being spent on lobbying because of how companies will be affected by this. but i think the thank we've had has really been developing over the past several years, perhaps going back to the 1990's or even earlier where you have much more money flowing into politics. there was a major change after the passage of mccain-feingold finance law back in 2002 that restricted soft money contributions to groups known as 527's. members of congress used to have, or elected officials could take soft money for their leadership p.a.c.'s. but, you know, after that was prohibited, you've had a much greater flow of money to trade associations. that's something that we tracked in our report that we entitled hidden rivers. and so what that did is it drove the money underground, it drive millions, i would say hundreds of millions of dollars underground, so you have had a

major difference that you really know much more about political spending since then, because so much of that spending is being done through third parties, through conduit groups. host: question for you from aaron at twitter.com. mr. freed, how do you feel about the current pay to play structure, and how will you feel about publicly financed campaigns? pipe pay to play presents real problems, because pay to play really gets close to bribery. host: what's it mean specificly? guest: pay to play is when you have to pay, make contributions, donations to be able to heard, to be -- to have an influence in the political process. you know, the problem with pay to play has been, i think, with many of the municipal bonds. i mean, that's been a serious problem for some of the big financial institutions that have, you know, that will be floating bonds. state treasury you are, state controllers, you know, they would be giving money to them to be able to get investments and be involved in that business. public financing, it faces

tremendous resistance on capitol hill and elsewhere. host: here's at amount springs, florida. bill, good morning, independent. caller: if you want corporate money and lobbyists out of washington, you have to stop taxes corporations. that way they have absolutely no stand to get involved in the political process for this country. question i have is, mr. freed, why is it necessary for us to have someone like yourself who inserts himself and tries to use the force of government between to interfere in the relationship between an investor and their company and will you, when you succeed in getting this done, publish charitable donations next to the political contributions of the corporation that is you're able to get to comply? guest: first of all, there's no

agreement with companies where agreements with reached. these are discussions, dialogues between shareholders and their companies. companies reach an agreement on their own through the disclosure, so there's no intervention by government. this is using the corporate governance process. that's what makes this unique, because companies themselves are recognizing that transparency and accountability are in their best interests and in their shareholders interest. host: let's say the hypothetical, if there were no corporate tax, would that greatly reduce lobbying on capitol hill? guest: oh, god, no. you have regulation all over the place. you have corporations interacting on a whole slew of areas. you have contracts and many other things. so, you know, you're always going to have corporations or business dealing with government. host: next subpoena mesa, arizona, william on our republican line. good morning. caller: good morning, and thank you for taking my call. i would like to know what

regulations are being put forth for foreign financial interests coming into the political spectrum. host: can you be a little more specific on that, william? caller: well, i'm sure that there has been talk about, during the campaign, foreign oil money was coming in to help our illustrious president, and i was wondering what kind of regulations are being attempted to disclose what kind of finances those funds, where they originated and how they are influencing our decision making people in our government. host: thanks for the call this morning. any thoughts? guest: foreign companies are

not allowed to contribute in the american political process. foreign nationals can't do that. if you have a foreign company that has a u.s. subsidiary, then that u.s. subsidiary can make contributions, but the money involved in american politics must be domestic money. host: we have one more call. clinton, maryland, good morning to ted on our democrats line. caller: good morning. can you hear me ok? host: we sure can. caller: with the stronghold that is corporation have on our economy and political process, it içó reflect back to the 1960 when approximately 18% to 20% of the population was african-americans, had to go to the streets and protest, and the civil disobedience in order to break the stronghold of these people who would deny people equal rights in this country, a way to be heard in this nation. i think what we have to do, american people have to stop paying their insurance premiums, we're going to have to get together as groups and get out here like the tea

parties and say no more, we're not going give 30% of $2.5 trillion to insurance companies for absolutely nothing. and we have to do that, and we have to get together in groups and become vocal. i thank you very much. guest: i think we're being very successful using the corporate governance process where shareholders are engaging companies. companies are responding. you don't necessarily need to go into the streets to achieve  this type of change. it can be done in many other ways structurively. host: your political, centerer for political accountability, new companies bring political disclosure to half of trend-setting s&p 100, and a look at some of the leaders and political disclosure. this lis

>> democratic changes to the senate health care bill passed the procedural vote. debate resumes today. more boats are expected tomorrow at about 7 >> 15 eastern. live senate coverage right now on our companion network c- span2. key democratic senators are holding a news conference on health care bill today. we will have that live for you today at 1:15. tonight, on the communicators, head of the motion picture association of america. on efforts to improve copyright protection and produce movies piracy. tonight, on c-span2.

>> c-span, christmas day, a look ahead at 2010 politics. a discussion on the role of muslims in america and the world. later, a former c.i.a. intelligence officer on u.s. strategy against al qaeda in afghanistan. starting at 8:00, remember read -- remembering the life of f. buckley jr.. >> still on time for the holidays, american icons on dvd. the special three disk collection is only 2495 + shipping and handling. for this and other gift-giving ideas, this is c-span that work -- c.span.org/store. >> will have live coverage when

that starts. first, a conversation about the attitudes of young americans toward politics. this is from this morning's "washington journal." "washington journal" continues. host: john della volpe is the leader of the harvard institute for politics, joining us from cambridge to talk about the newly released poll from the institute looking at the attitudes of young americans towards politics and public service. we want to let our viewers know that we are going to set up our phone lines differently this half hour. for those under 30 -- john della volpe, thank you for joining us. this is an update from one you did earlier this year or around the campaign, correct? guest: this was conducted number

16, 2009 -- november 16, 2009. i]host: let us look at some of e early data you have in the poll and it turns up the approval rating of president obama's handling of issues -- in terms of the approval rating of president obama's handling of issues. guest: 18-to-29-year-olds for the last decade have been an ally in american politics -- outlined in american politics. if not for young people, it is unlikely that president obama would have won the iowa caucus. the lesson here is in 2008, young people were critically important to obama's victory, and were an out liar relative to the rest of america. -- outlier relative to the rest of america. young people are still supportive of president obama,

but far less optimistic as they were one year ago. they still support him, though, 54, 55% job approval rating. host: did you try to reach deeper beyond the numbers and find out why that is happening? w3guest: yes, we did. we reached a very, very deeply. all of our reporting is available at iop.harvard.edu. their support of the president's overall, the concern overç the job performance at a couple of key areasç, most said thickly s it relates to the economy and afghanistan. -- most specifically as relates to the economy and afghanistan. çhost: use it is critical to understanding the future of politics in america. why is that? guest: absolutely. 18-to-29-year-olds is actually

the largest demographic in the history of united states. also known as the millenial generation, most of these people off, of age. but we still have another for five years -- most of these people have come of age. but we have a number -- another four or five years. we found over the last 10 years that they are more concerned about community service, public service, and voting than most any other generation in history. host: we will show our viewers the bar graph on the pull of the issues of most concern. what did you find out? guest: again, the economy was by far the issue of great concern among young people. there's a discrepancy based on how 18-to-29-year-old democrat's view the economy versus 18-to-

29-year-old republicans and independents. democrats believe that the economy is greatest concern, and are supportive of for washington -- of what washington is doing about the suppression. young -- about the situation. young republicans and independents believe that the policies out of the sea are hurting, not helping, there -- out of d.c. are hurting, not helping, their financial situation. most of the issues today are viewed through the prism of the economy for this 18-to-29-year- old group. host: our first call. good morning. caller: what you expect from young voters in the midterm election next year? do you expect them to turn at the same way they did during the presidential election in 2008, or do you expect them to stay away from the polls?

guest: well, thanks, jeff, for the question. we need to dial down expectations quite a bit. 2008 was a presidential election with the highest turnout in a generation or so. the previous election, 2006 midterms, did see a significant spike in youth participation as well. the highest since the ronald reagan era in 1982. the overall impact of young voters will continue to rise as they vote in even the midterm elections, but certainly not at the proportion they voted in the presidential election one year ago. host: good morning to herald the over-30 line. -- harold on the over-the line. caller: i have been disappointed in the system for so long. i'm a veteran of the vietnam war. there is not only a problem with the two-party system, but the way the media is covering what

is going on in politics today. i don't and there is enough access -- don't think there is enough local access for people to get the information out and to receive this information. i don't think they are getting involved enough with the way politics is being paid for by the health insurance industry. there is just so much that should be talked about that is not being covered in the media. i'm just disappointed in the media. also, i think something should be done -- the public ought to have more access to the facts, and there should be some type of watchdog media to cover this and to get the truth out. and to see where both parties -- i am a democrat, but i'm just disappointed in both parties. i just wish that the media should follow the money and find out -- show the public who was

receiving funds from special- interest groups and make that more visible h. host: john della volpe, your thoughts. guest: i think that is a good point, and young people are taking these issues into their own hands. young people are native to new media and are finding ways, whether it is through blogs, traditional and non-traditional news web sites, to find information that is reluctant -- that is relevant to them and passed on to other members of the generation. the ways that young people communicate and contextualize and pass on information is different from other igeneratios and will keep the media on their toes. host: jack in florida. caller: i'm not going to plug

anything, but i'm president of the local young democrats in florida and i run a progressive talk show. i just want to say the 2008 fire has turned into a member -- into ember. i notice this especially on social networking sites. in 2008, i was a field organizer for the obama campaign for change. but what happened was the fee for just died, and it seems that the youth don't understand -- fever just died and it seems that the youth to understand that there are these things called midterms. the fire has died. the presidential election definitely bring up the -- out the youth more in the midterms seems to favor the gop, or least they have for me. where is the passion? that is my question.

i still have it, but when i go on the internet and talk with my friends, young democrats, and we need for social gatherings, it is not there anymore. we don't know who to choose. host: thanks for the call. guest: i think that is a very, very great point. but it is important to remember that 2008 was a special, special election. we had both the obama campaign, which made young people the focus of the campaign, not just as one demographic group, but the entire focus of the campaign. what you saw was a movement both from the ground up, but also from the top-down. the obama campaign spent literally millions of dollars and thousands of people targeting young people on a daily basis. çif you are young voters in the election of 2008, you were contacted by representatives of the obama or clinton or mccain campaign's a couple times a

month. i believe that young people still care deeply about america, they are volunteering and voting, and it is up to other institutions, political parties, and candidates at the local level to reach out and make this election relevant to them in a way that they can understand. host: he talked about the drop in passion among those voters that he had on the ground, hands-on experience with, but the numbers must favor that group. they continue to grow, obviously. 2010 comes up, and they will be larger still as 2012 comes up. guest: absolutely. in the presidential election of last year, there were more votes cast by people under 30 than by americans over the age of 55. incredibly important segment of the electorate. again, it is something that we have seen where they are able to be mobilized, again, if there is an effort by the local campaign

to reach out to them. in the 1980's and 1990's, that was much more expensive and çdifficult. with the new kinds of technology and social networks, mobile phones and other activity, it makes it much less expensive and much more profitable to target those young voters. host: i want to ask you about the result of weather folks favor or oppose sending more troops to afghanistan. were you surprised by this? tell us the numbers for folks watching or listening on radio. guest: again, bill, just to set the context, the survey was president's decision to increase the number of troops in afghanistan, and was released a day after the president's speech at west point. however, 56% -- of% people 66% of young people oppose the additional troop buildup in afghanistan. anybody who is just a casual

viewer anne dicker of about american politics should not is about -- viewer and a thinker about american politics should not be surprised that the people oppose additional efforts for war. not too surprising. host: dallas, texas, over 30, you are on the air. caller: hello. i have been censored by twitter for being a dissenter -- host: let's go to cleveland, alabama, and jeremy and under- the deadline. --w3 under-30 line. caller: i want to bring up that i'm opposed to health care, and i switched from democrat to republican because of ron paul, and backing the constitution. i just feel that the constitution has been put on the back burner during this

administration. i would like to have some comment on what the young americans can do to spread the word of the constitution and thus bring that back. -- and thus bringing that back to i will get off the line and let you answer. guest: thanks. again, woulwe talked about earlr is that if nothing else, young people are fiercely independent. in 2003, young people were actually more supportive of president bush in the early days of the iraq campaign than many other americans at that point. we're seeing over the last 10 years, or seven years since then, that they have faded away from the republican party towards democrats, but remained a key independent voting bloc. what i would encourage anybody to do was concerned about politics from the right or the left is begin to get involved

in online or offline communities and spread the message that way. host: you got a chance to ask people to spread their thoughts on the intervention government efforts on the economy, with the stimulus and tarp spending. what did you find out? guest: we found out that there were specific differences based on political party affiliation. overall, democrats favor the last couple of your -- the last year's worth of economic stimulus, believed it helps them personally. but if you consider yourself a republican or independent, you are very likely to believe that those sorts of programs her to you, not help you. young americans, 18-29, are very concerned about these

issues, very concerned about long-term economic process. host: johnv: della volpe, with e harvard institute for politics harvard institute for politics and the survey on the people >>ç here is st. louis. what are your thoughts? caller: i have been dying to ask this question. i have been concentrating on this for months. when they show that people are against health care, you do not know if it is people who are on the republican side that are just against health care or if itu! is democrats, progressives who are againstçw3i]xd and it. interpreting the information it to bend it to their viewpoint.

how do we find out? t(çççhow can you tell which e people are on? guest: that is a great question. ççall of our data -- you can e all of those charts on the web site. let's talk about health care for a moment. as we mentioned earlier, 49% currently supports a major reform to the health-care system. it is essentially a 50/50. however, when young americans were asked about the specific element of health care reform,

whether it is a public option or whether it is malpractice or any of the other elements, the overwhelming majority supported health care reform. in theory, young americans are very supportive of reform. it is the current packaging and that makes people less shore. jim on twitter sends us a tweet -- guest: that is a great question. we have guest: that is a great question. guest: the campaigns that have targeted people have been more successful over theç last coupe of election cycles. an interesting story, if you take a look at the out of pocket in january of 2008, the obama campaign made that caucus a

focal point of their campaign. the americans play a critical role. frankly, he won that election over edwards and hillary clinton by a margin of about 57%. he lost everybody else over the age of 30. we target young people and we have a message that resonates -- resonates with them. it certainly happened for obama in the primary and general election campaign. host: here is a call from cleveland. caller: good morning. if you have these other polls and they oppose health care. how would you guys focus on particular demographic that they have for young people our age?

guest: there are two things. we target all of our survey questions to 18 to 29 year olds. it is not atypical pull in that older people are writing the questions. our polling is a partnership between myself and other staff members andç about a dozen or o undergraduate here at the harvard campus. what we do is over theçq course of research and focus groups and other kinds of work, we collectively think about and right questions in that our study group fix is irrelevant to ask to the population of young

people in america. one of the reasons our findings have resonated in a particular way over the last several years is that it is a true partnership between young people as wellç s professionals. host: that cleveland call mentioned other polls that are out there. there are a lot of political polls. under thirties are not using a home phone, they are using a cell phone. how much of the challenge is that for your group to get reliable data? xdguest: it is an incredible challenge. our polling has evolved tremendously over the lastç several years. we started this project during the winter of 2000 market was relatively easy to contact young people. ç

to be honest, over half of young people do not have access. it is very difficult toç condut in-depth research over somebody's cell phone in a way which we believe is predictable to the demographic. it is a challenge, but something we continue to focus on to improve every semester. host: we go to missouri next. caller: good morning. çpolls are great, but the polls that really count are the ones the action put our votes in. if we do not like the politics is beingç run, get rid of them.

that is what it all boils down to. we're too busy arguing about this. they're arguing about their pet projects rather than getting on with the job of governing. guest: it is certainly an important point that polls are not as important as a voting. what our polls have tried to do over the last decade or so is to show government institutions and candidates that young people are tuned into politics. they actually vote. they volunteer at record numbers. over 60% volunteer in their communities. they are engaged. they will vote if passed by political parties. host: you have one question on there that is a temperature taking question asking how

respondents were going. what can you tell us about that? guest: like the older generation, young people are concerned about the current direction of the country. relative to where it was one year ago, we have significant higher number at this point. we have about >> the senate is in session debating health care. they're holding a briefing on the issue right now. this is live on c-span. >> these and closer to ever to making it possible for every american to afford to live a healthy life. never have we been so close to reforming the americans --

america's broken help system. we are not over the finish line. we would never have gotten this far without the support of doctors, nurses, medical professionals who know we need action. excuses are not going to work. this legislation is not about politics or partisanship or some poll that appears in a newspaper around the country. the legislation is really about people. our guest today is the president elect of the american medical association knows this as well as anyone. he sees patients. patients come to himok

we appreciate his support, not only as a doctor of medicine, but his contributions to the military when he was a flight surgeonç. for us to get the support of the american medical association is a really important and really makes the work on this have a little bit of humility. in fact, a lot of humility. in the last several days, we received plucks from other organizations -- plugsççw3 frm other organizations. american hospital association, federline -- federation of american hospitals, american cancer society, aarp.

each of these organizations know the cost of inaction is too high. millions of americans a break up every day without health insurance, waking up every day afraid they will lose their health insurance. like those in the medical field, our responsibility is to care for all people, not just those who are fortunate. that is what this historic reformw3 fixes. it starts to break down the wall between the class of americans can afford to stay healthyçó and others who cannot. americans are dying from diseases we know how to treat, living in pain because it is too expensive to ease. you hear us talk about this a lot, but every day doctors see

it and they do not talk about it. he sees it. they know the bill will soon be sent to theç president and it will save lives, save money, save medicare. >> thank you, senator reid and thank you for joining us. i'm dr. wilson. t(i'm the president elect of the american medical association. i flew into washington's snowstorm of the century because the message i have to communicate with you today is of critical importance to the nation's physicians and to the patients we dedicate our lives to caring for.

after a close and careful review, the ama is pleased his announce its support for the help system reform bill. the senate bill includes a number of key benefits for meaningful reform. it will include improvements in choice and access to affordable health insurance coverage and eliminate denials' based on pre- existing conditions. it will improve -- get rid of lifetime limits on health care coverage as well as higher premiums based on medical conditions or agenda. these are important benefit for those who have insurance now and for those who want it but have been unable to get it. america has the best health care in the world if you can get it.

for far too many people, access to care is out of reach because they lacked insurance and this is notç acceptable to physicias to provide high quality care in a fragmented system that does not work for them or their patients. this bill will increase coverage for preventive and wellness care that can lead to better disease management and prevention. it will further the development of research that can help payment -- patients and physicians and make better informed medical decisions. it authorizes grants to test alternative medical liability reform that show promise in benefiting patients and reducing the impact of defensive medicine. over the past few weeks, we've communicated closely with members of the senate with items support and items of concern in the senate bill. we are pleased that the manager's amendment addresses several issues.

the bill increases payments to primary care physicians and general surgeons and underserved areas are no longer cutting payments to other physicians. it eliminates the tax on physician services for cosmetic surgery and drops the proposed physician enrollment fee for medicare. passage of the patient protection act by the senate will bring us close to the finish line in health system reform. okthere is still work toi] do ad the ama will continue to stay actively engaged throughout the conference process to further improve the final bill for patients and physicians. we will work to resolve issues of concerns to physicians such payment board, quality improvement, and medicare data released initiatives. in addition, physhsians and advocates for baby boomers,

seniors, and military families have also been engaged in efforts to fix the broken medicare physician payment formula that threatens access to care. weç commend the senators for keeping the focus on a permanent solution to this problem early next year and we will continue to work closely with them to get that solution. the ama is committedçó to health system reform that improves the sy[tdm for patience and the physicians that take care of them and we are pleased to be able to support the passage of the health system reform bill. thank you. çw3>> thank you. this is an historic moment not only because of the legislation that is about to be passed, but also because of the statement we just heard. there are many organizations who

are endorsing this legislation because they know it is the right thing to do for america. hospitals know that. pharmaceutical industry, they all know that this is good for our country. there is also -- is also historic because another endorsement, this by the american medical association. that is very important to me. the ama is not opposing this legislation, rather it supports it. it has supported it in a way that it wants to keep working with the senate in issues that concern them. payment, vision for doctors,i] medicareç commission, it is tht attitudew3 of saying yes, this s good. this is good for the country. ççyes, we want to keep working with you. itw3 isçç that attitude of wog together in trying to b'd a

commonç solution which means so much to me and it has not been found regrettably in the senate in the last several weeks. here are groups that are not part of the senate that want to do the right thing. qit is especially important to hear from doctors. dr. spend more time with patients than any other group. çthey note thexd problemsçw3 f insurance companies denying payment. they know it is wrong that a person cannot get insurance coverage because it pre-existing condition. it is wrong for insurance companies to rescind a policy based on some minor for less dr. wilson also mentioned the importance of eliminating annual limits, lifetime limits on benefits. doctors know.

the work with patients. his statement included all the reasons why health care reform is so vitally important. it is historic because the american medical association is taking a very positive statement. i find that comforting. tit is honest and that attitude of wanting to work with us, i find it encouraging. i thank you, dr. wilson. >> thank you. let me underscore the point made. i suspect that if you could only have one organization or group of people to support this bill,

the choice we would make is the one you are hearing today. it is important to have other organizations be supportive, there is nothing more fundamental when you get right down to this than the relationship between a patient and doctor. that is that the most fundamental level. whether or not you have access to that doctor, whether you have the resources to compensate that doctor. of all the organizations and groups that have supported this bill, i read this one as the most important because it speaks to that relationship between patients and doctors. there are a number -- one provision that senator tom harkin and i worked on was making it possible for young men and women who desire to become physicians to be able to do so by reducing the tremendous costs. the scholarships, grants in this bill make it possible for us to increase the work force.

as we expand the numbers of people who will have that kind of coverage, the demand on the providers will grow. the ability of young men and women who have the strong ambition to be a health care provider needs to be more accessible and less costly. one of the major provisions was designed to do just that. on behalf of my colleagues on the committee, this is a very important moment. we're very grateful to the ama for your support of the effort. this will make a huge difference in our country. >> dr. wilson, thank you very much. some of you may know that i was

a naval aviator back in the '60s. we always had naval flight surgeons that took care of this. i found out that dr. wilson is a former naval flight surgeon. we served in the same area of operations. we did not know each other, but we served in the same area. no one knows america's health care system better than doctors. they know the predicament of tens of millions of people without health insurance isçe. then the predicament of people who have coverage. the canceled the policy after theyç get sick. the novel lives and money that could tn saved ifç we invested more generously in wellness and disease prevention. i welcome the support of the american medical association. çamerica'sç doctors have sizep our broken health care system and their prescription for a

cure is to pass the patient protection and affordable care act. specifically with regard to doctors, i want to emphasize that this bill will enhance the doctor patient relationship in many ways. for example, by cracking down on health insurance company abuses, we're goingç to reduce -- reduce the opportunities for corporate bureaucrats to come between the doctors and the doctor's patient. this bill will reduce administrative requirements and paperwork, freeing up doctors to practice medicine and toç focus on their patients rather than on paper work. this bill will significantly increase the number of primary care doctors, especially in underserved communities. we do this by greatly expanding the presence of community health centers and increasing investments in the national health service corps. we also createño a rural health professional pipeline.

i cannot emphasize enough how revolutionary it is going toç e mto trat system to to help care system. one that focuses on preventing chronic disease and keeping people out of the hospital in the first place. that is what doctors want to do. help people stayç healthy. these preventive services will be paid for. i welcome the ama support. america's doctors have made the right diagnosis and they have offered the right prescription cannot pass the health care reform bill. >> republicans say you do not have the support of the public. michael still accused democrats of -- do you worry about political fallout?

>> i am more worried about an example being set by a party leader by something so obscene. if you look at the morning polls today, there are some polls that show the support of this bill is up about 10% overnight. the american people, once they have the information, will be totally supportive of this bill. think of the example i gave on the floor last night. there is a doctor -- he is just five years old. the insurance companies would not give him prosthetics. that is what this is all about. it is about physicians like dr. wilson being able to take care of people like callebeb. i am disappointed that someone would be so crass and said such

aid terrible example. >> could you address concerns that the bill is chock full of pet projects that were designed to benefit your states and perhaps to secure the votes of wavering democrats? >> i am happy to respond to this. we just completed a bill 600 billy -- $600 billion to the defense of this country. you know how difficult that was to pass. one way we were able to do that piece of legislationç is that e had to do a number of different compromises. as you know, that dealt with extending the safety net, food stamps. to return not able to put the

child tax credit in there because senators did not want that. that is what legislation is all about, the art of compromise. nevada has many different problemsç, as does new hampshi. michigan has many different problems than does georgia. we have wide ranges of different needs throughout regions of this country. are basic health care delivery problems. others are because of the unemployment situation. this legislation is no different than the defense bill we dispense $600 billion on. it is no different than other there are hundred senators here. i do not know if there is a senator that does noti] have someone -- something in this bill that was important to them. it they do not have something that was important to them, it

does not speak well of them. that is what this legislation is all about. >> their roughly 14 states to qualify for the grant program. connecticut is one. there are 13 other states. it is a grant to be determined by the secretary of health and human services. if they decide to compete for those grants, they will get them. it does not just involve my state, although my state is really interested. i craftedzv the red -- the language of it and wrote it in such a way that includes far more than just my state, to make sure it was competitive, to be determined by the secretary. >> one more question. >> can you talk about the situation heading into conference with the house now

that this does seem likely for passage? >> we have to pass this bill in the senate first. that is our guiding light. we s at a later time. we will finish this bill before christmas. we're committed to doing that. we will worry about the next steps at a later time. right now, we are focused on what we will do this week. >> let me follow up on a previous question. can you explain why is it fair for nebraska to get the expanded coverage and medicaid costs paid for by federal funds? >> let me just say this. medicaid is a difficult issue. you will see in this bill different treatment of medicaid. why? same reason i said earlier.

nevada, we probably have lost -- we have some leads that other places do not have. we have problems with the primary care physicians. we have problems with medicated -- medicaid. we could go through this bill and talk about individual things for individual senators. we have a bill. we're happy with the bill. >> medicaid is up to states to design their own program. different states have different designations. different states cover some populations that other states do not cover. some states have gone a lot farther than the federal minimums. each state is a lot different. in the interest of fairness and balance, it does make sense that

this legislation will even out the inequities that have occurred over time. >> senate democratic lawmakers updating on the senate health care debate. this is the 18th day of deliberations in the senate. you can watch it live on c- span2. >> tonight, on the communicators, head of the motion picture association of america on efforts to improve copyright protection and reduce movie piracy. tonight on c-span2. >> c-span, christmas day, a look ahead at 2010 politics, including republican congressman and nbc's david gregory. buzz aldrin and fellow astronauts on the legacy of

apollo 11, a discussion of the role of muslims in america. later, a former c.i.a. intelligence officer on u.s. strategy against al qaeda in afghanistan. remembering the lives of william f. buckley jr. and senator ted kennedy. >> now available, c-span2 book abraham lincoln, great american historians. a perfect gift for the history buff in your life. it is a unique contemporary perspective on lincoln from 56 scholars and writers. from lincoln's early years to his life in the white house and its relevance today. it is in digital audio to listen to any time. learn more -- clucks a house hearing on the government program known as the secure border initiative.

this is about two hours and 15 minutes. >>ç thank you to our witnesses for

being here today. many of you have been before us before. thank you for your continued frank and honest assessment of what is happening out there on this initiative. the witness's testimony and responses to our questions are critical part of the oversight this subcommittee continues to conduct on the secure border initiative and fbi net. many of the members of this committee have had an opportunity to go over and take a look at the physical fence and also at the virtual fence and what is going on. çgiven that the contract is expiring soon, this is a good opportunity for us to catch a breath. i'm concerned by the program's

ongoing struggle with transparency and what i see is a pattern of delayed planned development. in may of 2008, i have the opportunity to travel to the sector and to review the project and to hear about the beginning stages. it the chief accompanied us on that. i was assured that these new projects would be fully operational in able toq be accepted byçó the homelandñr -- the end of 2008. i am extremely disappointed that the new deadline estimate that tucson one will beu! december 2009. çbased on my past experience wh the missing of dead plants on this project, i have a real hesitancyñr these new deadlines

çwill even be met. in the last series of hearings, the subcommittee was given hard dates and assurances thatxd 3pçdeadlines would be met by bog and yet weeksç later, they were pushed back. the full deployment along the southwest border now estimated by going will be seven years after the original contract in date of 2009. this situation is incredibly troubling. our border patrol agents continue to use less capable technology. we have maintenance issues. there are is more danger to our border patrol as time moves on. çówe're concerned about fiscal responsibility and it is hard for me to believe the contract would be awarded without a

viable resolved. moving to the other half of the secure border initiative, it has also risen in cost. what used to cost usçç 31 $5 million is now at $6.5 million a mile. that is unbelievable considering that construction costs -- how we could really justified that the cost of fencing is going up so much. according to program date, there has been about 3300 breaches in the fence and it costs us about $1,300 every time that we have to repair that. we have yet to see whether or not this fencing has increased border security and has justified its cost. i am still waiting to really see

that and i know that about a year or two ago, we had a discussion about what it is really going to take to do this. cleared trying to figure out what the metrics would be. i am interested to think what -- to see what you think the metrics are. i look forward to your testimony and to the responses to many questions that i have. we all have so many questions. i will now let my ranking member for his opening statement. >> thank you. securing our borders and gain operational control, this is what the promise to congress -- it is hard to be optimistic and we sit here today and have partial technology in a few northern border pilot sites set to begin in the next month or

two. it seems that very little progress has been made. it has been very slow. it is important to note that in the last three years, we have beenç asking for a time lineçd life cycle costs, but they have yet to be provided. there is no picture of the performance metrics and parameters used to judge the successç of this program. it's hard to have congress accurately review and conduct oversight over this initiative without these two pieces of data. do notç take this criticism asa lack of my support for the project. iç think it needs to be a top priority. now was not the time to waver in this commitment. çto that end, i need to raise a concern that i have. as of october 2008, there are 625 miles of the southwest border considered to be under effective control. according to the budget

justification, by the end of 2009, there should be 815 miles under effective control. it these estimates are control, we will have gained 190 miles in a year. this is good news. the budget justification goes on to say that zero additional miles outside of the 815 are expected to be under effective control in 2010. how is it possible that the border patrol can come to this conclusion? are more personnel or fencing necessary? we need to address these concerns at today's hearing. u.s. law enforcement conducted an anti-terrorist initiative in new york city. all indications point to a need to intervene. while few details are known at this time, the investigation is

ongoing. we're still a country at risk. we must remain vigilant and aggressive in securing our country from the tax. securing our borders are essential for the security of our nation. the program should be a cornerstone building block for this effort. i was down on the southwest border and going from -- i visited the tucson one area again. i saw the towers working. different people were being intercepted. the physical fencing, we have a breach she's -- we have breaches in the old fencing. we do not have breaches in the new fencing.

they're continuing to adjust even in the areas where we have had the breaches. one of the debates is a barbed wire. it has been in the news media. it can be addressed by blocking them from getting to the fence which is now what they are experimenting in. the physical fence does not secure the border. it stops the vehicles, larger groups, it slows people down so that as we move the technology behind it, we can move people in behind. if it is in a flat area, the rate of speed is slowed down. it is the combination with an f. agents with which to go get the different groups and get them to different places. we have to see how we are going to increase this. quite frankly, i doubt if the

immigration bill is going to move through this congress. any kind of major immigration reform will lead to additional pressures on the border unless we have a higher percent under effective control. >> i think the ranking member. -- i think -- i thank the ranking member. >> today's hearing on the secure border initiative comes at a very important time. next week marks an anniversary of sorts for the department of homeland security. on september 21, 2006, we awarded a contract to boeing to help secure our nation's borders. at that time, we were told that boeing would be integrating

existing off-the-shelf technology to create a virtual fence along the border. it was supposed to be a relatively easy project. instead, the governmental accounting -- accountability office has repeatedly raised concerns, including poor planning, insufficient testing, inadequate government oversight. today after spending nearly $1 billion on the program, we are still waiting for an effective technological tool to secure america's borders. boeing has had three years to show that they can secure the borders with technology. it is my understanding that they have at least one more year to do so. it the department reviews the contract for an additional year as expected, which i understand has already been executed, it is

time to deliver some tangible results to american people and to congress. i would like to know how to teach us is going to ensure that when boeing delivers the next phase of the program to the government early next year, taxpayers get their money's worth. clearly, this administration has inherited a serious challenge and has some difficult choices ahead. they either need to get it right or find alternative technology solution that will do the job. along with technology, and they have committed significant resources in recent years to constructing a physical fencing along the southwest border. there currently over 600 miles of fence and barriers, the department has not systematically evaluate the effectiveness of these barriers. at a price tag of roughly $2.4 billion and a potential life cycle cost of $6.5 billion, the

finding is extremely troubling. looking ahead, we have considerable ground to cover when it comes to deploying effective border security, technology, and infrastructure. i'm hopeful that this administration will address many of the problems that has plagued thisç program and prevent bordr security technology efforts. . .

>> i would like to welcome our panel of witnesses. our first witness will be chief david aguilar. as the nation's highest-ranking border patrol agent, he directs the enforcement efforts of more than 16,500 border patrol agents nationwide. i commend you for that because i know we approach our border patrol -- grow our border patrol quite quickly. you have the expertise gained from 30 years of service and we look forward to your testimony and welcome.

before joining cbp, he was the program director for the robotic own exploration system. at nasa headquarters. welcome. our third witness is mr. timothy peters, vice-president of global security systems, a division of boeing integrated systems. he is responsible for the implementation of sbi-net and other programs. he has held a number of key engineering and leadership positions on surveillance and command and control programs. we welcome you this morning. our final witness is mr. richard stanna the director of homeland security is at .

he has directed reviews and complex military and domestic issues. he most recently has directed the gi 0 wee -- g a zero work. he has been frequently before us and we welcome you back. without objection, the witnesses false statements will be entered into the record and i will ask the witnesses to summarize their statements in five minutes or less and we will begin with chief aguilar. >> good morning. i want to begin by expressing my appreciation for this subcommittee's and the full committee's interest not -- in not only our mission but the interest and well-being, safety of our men and women. it is good to be here this morning and it is absolutely a

privilege and honor to appear before this morning to testify and discussed the secure border initiative. i am accompanied by my executive director for the secure border initiative produce primary goal of our strategy is to gain effective control of our nations borders. effective control is achieved when a chief patrol agent in the field determines that in a given area of operation, the border patrol has the ability to consistently detect, identify, classified, respond to any illegal incursions that occurs between the ports of entry and has the ability to bring that illegal incurs into inappropriate law enforcement resolution. in our view control our borders between the ports of entry comes from an appropriate combination of personal, technology, and tactical infrastructure which includes border fences. we also refer to this requirement as a three legged stool. these components are interdependent and provide for maximum effectiveness when appropriately applied. the mix of these three elements

will vary depending on the challenges posed by the area in which we're focused. within the constructs, beacon -- the sbi plaza important role party is one part of our integrated approach. the current focus of the secure quarter edged is to support border control efforts by providing technical infrastructure and technology. the -- before discussing the details, it might be useful to provide a shark update on our progress with respect to construction of technical infrastructure along the southwest border. as of the end of august, we have approximately 16 32 miles of fence constructed part of that, 334 miles of pedestrians and remaining 298 miles are vehicle offense. our target has been approximately 670 miles throughout the southwest border. the exact total mileage is the precise at this point because it will depend on the actual measurement of completed fence

as opposed to reconstructionist a desperate we are actually in the process of modifying this figure as we speak. the plant provides persistent impedance which contributes -- the fence provides persistent impedance. as we have testified before, the fence alone will not secure the border. however, we believe some areas must have persistent impedance in order to establish control it is in those areas where we have emphasized the construction of plants. -- fence. the technology of sbi and the focus of this hearing, the gdñprogram wants to provide situational 0 rareness over stretches of the corporate project 28 was our initial effort to protect the system. project 28 suffered from a deficiency, it has actually evolves to the point where it is

no operational and provides effective support to our operations. for example, it has been instrumental in enabling the apprehension over -- of 05 thousand illegal immigrants and a lot of narcotics. there were lessons learned from profit 28 to design the first generation of the operational sbi-net system. we call this first generation sbi net block one. we have completed much of the engineering design and have performed an extensive engineering testing. we are in the process of installing our first deployment into an operational area known as tucson one. that will replace project 20 prototype system with a new block one first-generation production system to cover 23 miles of border around arizona. the border patrol will receive the system and early january to conduct a formal process known as the operational test and evaluation. , ot &e.

this will be operational assessments and real world environment to determine whether the sbi-net lockland system is suitable for use. based on these assessments, the border patrol will effectively deliver a report card to sbi indicating whether it has met our operational requirements. we expect to begin with the deployment of our secondary of operations known as aplleapfel . through a structured review process, the department, to carry has authorized initial deployment but not full deployment. after the initial deployment, the results of the test,cbp will be in a better position to decide on the magnitude of future deployments for the last three years of sbi-net have been frustrating and at times very discouraging. we believe we are a reasonable

improvement path. we understand that the congress and this committee are less interested in hearing about our plans and are more interested in results. we share the interest to commit our best efforts to produce those results in a prudent and effective manner. we appreciate this committee's continued support of our efforts. better secure our borders and we look forward to any questions you may have. >> thank you, chief. i will now recognize mr. peters for five minutes or less >> good morning. i appreciate the opportunity to discuss sbi-net progress with you today. i will update you on development and deployment status of the sbi-net block one system. this is a substantially improved version of the prototype. i will also say a few words about our deployment on the northern border. p-28 which has been operational for 80 months as a valuable

enforcement tool. it also serves as a valuable engineering tool for the development of block one and future sbi-net systems. many important lessons have been learned from the p-28 type and incorporated. the first deployment, known as to someone has been constructed in the p area in-28 and covers 23 miles of the border. the second deployment has been initiated to the west and will cover 30 miles of border. tucson one consists of towers and a control facility per the block on system includes a fixed tower design and upgraded center package, and improve communications system, and a new common operational picture or cop. boeing engineers worked side-by- side with agents in design of a look, feel, and function.

during this development, we encountered technological challenges, to the integration of commercial off-the-shelf components "recent issues were problematic. first, control of the radar asthmus scanning. after correction effort, we have implemented solutions that address these problems. i have undergone several weeks of successful testing with a recurrence. the block when system is scheduled to complete system qualification tests in the next month at facilities in new mexico. then the system will undergo system acceptance testing during the fourth quarter of this year. when completed, we will deliver the system to the government for evaluation which will -- which will be overseen by the border patrol. this will determine future employment and system enhancements. the other diplomas' also progressing for the system

design is complete and construction of the border control facility has been initiated. we are waiting environmental approval from the part of the interior. the sbi-net block when system -- block one system will be ready for deployment across the southwest border. bolling has been working on the northern border deployment in the detroit and buffalo sectors. boeing is installing the remote video surveillance system to enhance capabilities. the rvss are comprised of cameras mounted on top of existing structures or poles. this relates back information. installation began in the buffalo sector in early may of this year and in detroit sector in early september. both the plan will be delivered to the government by 2010. i would like to say that sbi-net has been an important and challenging program.

the p-28 represents half of the government-funded effort that boeing has received to date. boeing has rmade significant advances per the block and system remains the core of our effort. i believe we have a system that is robust and soon will be ready for widespread deployment for in our goal remains to provide the back technology and tools to support enhanced border security and age and safety of the best value of the taxpayer. sbi-net now has a solid foundation for future deployment. thank you for the opportunity to testify this morning and i look forward to your questions. >> thank you, mr. peters and thank you for coming in. >> thank you. shortly after the launch of the secure border-bit, this committee asked to review the

sbi program and to provide periodic updates on the status of our efforts an interim findings. my testimony and our report provide our fourth formal update. sbi is a multi-year, multi- billion dollar program aimed at stemming illegal entry into the country. since fiscal year 2005, sbi has received funding amounting to $3.7 billion and dhs has requested over 770 some $9 million for the next fiscal year. i would like to highlight our observations on program status and challenges. the sbi-net program continues to experience delays. when the contract was let in september, 2006, the initial deployment for the entire southwest border was planned to be completed by early fiscal year 2009. by february, 2009, the completion date had slipped to 2016. in february, 2008, the program

office reported that the two programs would be complete by the end of 2008. to someone is now scheduled for final acceptance by january, 2010 and the other in june, 2010 because of the sbi-net projects from fiscal year 2007- 2014 was estimated at $16.4 billion but the cost could change. a life cycle costs has not been estimated. along with environmental issues and funding, the results of testing contributed to these delays. the sbi program officials emphasize and we agree that testing is a necessary step of deployment. it insures the technology capabilities perform as required by february, 2009, testing results revealed problems including the instability of cameras under adverse weather conditions and mechanicalñi problems with the radar and issues with the sensitivity of the radar.

ñrthe program office is still working with boeing to address these issues. in a user evaluation last spring that was not part of formal testing, border patrol agents had an opportunity to address the suitability and effectiveness of block one technology compared to project 28 in mobile surveillance technology for the border patrol found that on windy days, the block one radar had issues that resulted in an excessive number of false detections and the capability was not adequate for optimal operational effectiveness. they also found that the features of the block one camera were insufficient in comparison to features of the project 20 on an end mss . the border patrol will perform a complete operational testing. if there are no additional schedule changes, this testing will begin in january. until sbi-net is deployed, cbp cannot determine what changes it

will need to take full advantage of the new technology. in the meantime, the border patrol relies on existing equipment such as cameras mounted on towers that have been intermittent problems including signal loss. during our site visit to tucson last march, border patrol agents told us that project 28 system had improved their operational capability but they must continue to work around ongoing problem such as fine a good signal strength for the wireless network, remote-control cameras and modifying greater sensitivity. the sbi program office delivered 40 mss units but sometimes these youths are not operational because of the need for repairs. delays persisted due to property acquisition issues for about 633 miles have been completed and cbp was scheduled to complete

the remaining miles by september. yesterday, bay provided an update on the miles are many and these totals decreased slightly. about $2.4 billion has been allocated from fiscal year 2006- 2009 to complete fencing projects. cbp estimates the life cycle cost for the fencing and related roads and so on to be about $6.5 billion. as of may, 2009, there had been 3363 bridges in the fence with each breach caused an average of about $1,300 to repair. despite the $2.4 billion investment in technical infrastructure, cbp has not systematically evaluated the infrastructure on gains or losses and the level of effective border control. this is important to demonstrate the contribution to effective control of the border and to help cbp to determine whether more technical infrastructure

would be appropriate given other alternatives. we recommend that dhs and evaluate the impact of the infrastructure on an effective control and dhs concurred with our recommendation and describe actions recently under way or completed to address it. the sbi-net program continues to face uncertainties and the expectation gaps. three years ago, dhs was to have sbi-net capabilities across the northern and southern borders as of today. while this was likely an overambitious goal adolescents have since been learned, schedules have continued to slip. in the meantime, the border control continues to rely mostly on legacy technology and we remain uncertain about whether the new system will meet the border patrol made and expectations. these uncertainties _ the congress need to stay closely attuned to the dhs progress to make sure that sbi-net the deployment is working as planned, the schedule is stabilizing, and the investments

made in the program to build an efficient and effective system that addresses our nations borders security needs. i would be happy to answer any questions that members may have. >> thank you. i think the witnesses for all of their testimony. i will remind each of the members that he or she will have five minutes to question the witnesses. i will now recognize myself for some questions. mr. peters, i think you said that project 28 has provided valuable enforcement for the last 18 months. was that part of your testimony? >> yes, ma'am. >> i'm a real problem -- i am having a real problem to understand. i originally, a majority of us thought that project when it was going to be an operational system that was going to be able to be used by cbp. later, we learned that now you thought it would be a prototype

review test different things and that is at the point last time we were at when i went out to tucson. to someone and ahha one actually overlapped project 28, am i correct? we spent some money to do project 28 and thought it would be operational and it was only a prototype to test different things and now you're telling me that it is operational and that it has been useful but at the same time, we are turning that some equipment out and we are putting in new equipment across ahha 1 and to sell one -- and to someone. -- and tucson one. if that is the case, why are you telling me that we have less capability or worse equipment on their, cameras or radar, it

seems to me that not only are we falling behind in time but we are falling behind and spending much more money and we have technology that is worse. somebody -- >> i think what we're referring to is the pre-sbi technology. these are technologies that have been in place before 2000. the way i understand the report , those are the technologies that the border patrol is laboring with, awaiting sbi. i think that was the point of his testimony. against that backdrop, sbi-net project 28 is an improvement compared to the old systems but it is not the production system.

i think that is the context in which we are talking about the old technology. >> mr. stana, can you clarify that for me? >> just for clarification -- broderick 28 was supposed to have a leave behind capability. your observation about what are we overlaying block one stuff on par to 20 and is valid. project 28 is useful but not really what the border patrol needs most. they appreciate the help and i appreciate the 5000 apprehensions and the drug seizures but is not the end game. in the meantime, until a better capability comes on board, the border patrol will need to use project 28 assets and will have to use the rbss on the polls and other technologies that may not be tied to any kind of cop.

but until block one comes on and its predecessor and the final design of sbi-net is settled on, they are stuck with what they have. >> let me ask you -- your report says that as of september, 2006, sbi-net technology development of the southwest border was planned to be complete in fiscal year 2009. when last reported in february, the completion date had slipped to 2016. what other reasons given for this? >> the contract was signed by boeing and dhs back in september, 2006, was very ambitious it was probably overly ambitious critical for completion of the project on off-the-shelf technology is to integrate it and have project 28 be the first iteration.

vwhen they got into it, they realized that that was overly ambitious. they did not consult with the border patrol on design. they did not realize how tough it was. there were many lessons to be learned from project 28. as the project has matured, they realized other issues have cropped up. camera distance is a persistent problem. radar flutter on windy days is a persistent problem per these are issues that they are trying to get on top of. >> from a technology standpoint , how close are we on tucson one and ahu one and be able to use of to get as operational and at the capability we have imagined in the beginning after getting through project 28. ?

we could see people moving and see where they are going and apprehend them. you tell me you have looked at it on a dare to when they did not know when you're coming in and on a windy day it all fell apart? >> i am not sure where we are right now. i think it is good that testing is being done. re-testing, re-planning is good the concern is that the testing is finding two things. what is that the testing is finding the same general kinds of problems with the hardware and the interface of the software. >> the same ones as project to 28? >> camera distance was a problem and radar flutter, these issues are being addressed but we won't know until it is ultimately deployed in january and the border patrol takes over exactly whether this will yield the product of the border patrol finds operationally affected.

we won't know until i kind of testing is done. we're concerned with the way testing was designed and executed. we have another term in gao, our information and technology team that has suggested concerns. >> thank you. this is important. i want to come back at some point to talk about the measure and whether -- how we can measure what resource ultimately we can put towards this if we ever get sbi-net to work enough for you to be able to use it confidently. in the interest of time, there are many members who have questions. i will recognize our ranking member mr. souder of indiana. >> thank you. congressman miller and died on june 8, 279 kellen ask for a

copy of the northern border action strategy and we would appreciate an answer. on july 31, three ranking members of the government oversight and natural services and subcommittee members and myself past four the department of interior in cooperation with dhs and would appreciate an answer on those letters. i think the point about the project being overambitious isn't a credible understatement. some of us raised concerns of the beginning not about the partners bought about the concept. when you have hilly areas of the border particularly in the area from nogales to where it flattens out by organ pipe in the aho sector, in my district,

when i'm going back and forth between warsaw and fort wayne, and a little bump level on the hills like california, will cause me to lose my cell phone service. it was not hard to figure out that when you have relay towers, particularly when the subcommittee visited as a group and we saw the tall towers to try to address that, the wind was going to blow that are we already knew that from the military. this would of been transferable information and i don't believe there was adequate advanced planning before plunging into this contract about the realism of it. in to someone, they addressed with smaller towers and taller towers. they are trying to overcome some of the conceptual flaws about how you do this transition of technology in a mountainous area and how that is different in flat areas. it will be easier but there are

not continual flat areas along the border. chief agui8lar did some of those over by dallas and identify how to tell. in saudi arabia, they could not even tell with far more expensive military technology, the difference between tumbleweeds and terrorists coming up on the air base. one of my questions has been how do we get military technology which we have paid for in the government transferred into border tech -- border patrol technology? igt technologies, raytheon and many others all in my district to do electronics worker. i have talked to them. this system is incredibly cheap compared to anything we do in the military. we are trying to do what they are doing in tracking terrorists

and what they are doing in military on the cheap and it has been a struggle. as we get into the particulars, in your contract, because early on we saw that there was not a pre-testing. you build a testing center? >> yes sir, that is correct. >> to the government fund that? >> it was government-funded. i don't know the number of the top of my head. >> was your contract on project 28 fixed costs and you observed -- you are absorbed anything that ran over that? >> it was a fixed cost and the boeing company brought its resources to complete the project. >> would you say that you contributed double what the government did? >> yes sir,.

>> how does that work in tucson 01. ? >> that is a different contract. we are working to deploy that. we are currently part way through our system qualification test and we will move into our systems acceptance test this fall. >> when we invest in something that we had too ambitious a goal and now have this kind of investment, if we switch the partnership group that we have, we lose the testing center and we lose a lot of what you have invested in your private sons or refunds or do we have to pay for that? what you would certainly lose the non-recurring engineering. we would have to look at what portions of the site were funded and which were government- funded. >> we need to understand this because we run into this in military contractor about this type of contract we have or they have to do the cost overruns puts us in a different

situation as we develop future alternatives. this was going to be able to be communicated to vehicles. does that appear realistic and is that in future proposals? that would be a great advance. i know what the system's cost and the transfer them to humvees and it is nothing like the cost that you were telling is about. >> it does not include the mobile data terminals. one of the cost of the other is the operational experience and the con-ops that we gained. spi block one does not include data terminals to deal with those questions. >> will tucson? >> to someone is the first deployment of the so-called sbi- net blok won. the plan for the system -- >>

the plans to go to a center and then communicated to the vehicle? >> correct. >> there was no way to cost this out? >> we're looking at options downstream but they're not in the baseline at this point. >> because it is easier to get in behind in san the people there that to try to figure out how to transmit this data into a vehicle when the terrain is going up and down? >> that is absolutely correct. i yield back. >> i will recognize the chairman of the full committee mr. thompson for five minutes. >> continuing along the lines of your questioning and the ranking members, earlier this year, the border patrol agents had an opportunity to operate the newest sbi-net technology at the boeing test facility. we have heard a and according to

gao, the agent indicated that on windy days the radar had of an excessive number of false detections which is a problem that plagued project 28. the agents also compared the new camera technology to the existing project 28 and mobil unit cameras and said that the new cameras did not even measure up to the existing ones. is this true? >> it is true that that was the conclusion of the dhs. >> the agents don't know what they're talking about? >> that is what the agents experience. one of the reasons for the inspection was to test some other things like how well did we explain the operation system and how well did the train the operators to use the system. they are familiar with project 28 and many of these operators are familiar with the mobile surveillance system.

one reason for doing operational assessment was to collect that information, figure out what the problem was on the cause of it and then if that was an issue. that was to collect that information. in many cases, we do not think that problem persisted. that is what the formal operational test was about. >> if your testimony to the committee is that it happened but there were reasons for it happening and it has been corrected? >> we believe so. we will see for sure in the test. we believe so. >> mr. stana, would you comment? >> that is what you have testing to get the bugs out of the system. the agency tested theç system found the bugs you describe among others. there was a cause for concern. the concerns bay rays were on the cop, but some was with the

hardware itself. if the camera range issue and the radar floater issues are corrected, i would have to see that in testing before i would buy that right away. that is why we have testing and that is why the operational testing by the border patrol in january will be telling. >> i have a diagram that i want to put on the screen. so much for technology.

we have had the information distributed to our witnesses. what you have before you is the original concept behind sbi-net. what i really want to do is to have you explain to the committee what specific steps boeing has taken to make this technology depicted in this diagram a reality. >> are you asking the question? >> both you and mr. peters. >> project 28 which was a prototype but not advertised as such attempted to test this concept of operations and to learn from it. it did at things like satellite communications and the mobile

data terminals and the kinds of things that are depicted here. based on that experience, s.p.a. not -- sba -- sbi-net block one is different. it sends the information back to the station and then the agents can discuss the information for people to respond to. this concept is not the concept of sbi-net block one. >> so, it was changed? >> yes it was >> did that reflect the change in pricing? or just a change in technology? >> the cost overrun by boeing and absorb those costs. as we decide the new system, that is put on by new task force which is like new contracts.

they are priced based on whatñie know or anticipate we want to do next the go forward is priced. the government will pay what it costs spurted this are estimates based on the current concept. >> mr. stana, based on what you just heard, is that a generally accepted procurement procedure? >> i think it is a generally accepted approach to begin with a project and build on what you can actually make work. that is fine. what is missing here and i don't know if it is fair to ask the congress to consider a $6.7 billion investment if we don't know what the endgame will look like. i know there is some development that goes on here but this seems to articulate that this is someone's vision of the end game where you will have made the satellites and sensors and

mobile units and so on and i don't know how much of that is still on the table in the out years. there is a lot of uncertainties. >> the whole issue of procurements is what has us in the weeds most of the time. we're trying to figure out where we are perhaps, we can get some further direction. chief, you might be able to help us clear this up. i yield back. >> i thank the chairman i will now recognize the gentleman from texas for five minutes. >> recently, i went down to the el paso intelligence center. juarez was in a state of crisis. it is probably the most violent american city on the continent red president called a run has said he is a war with the drug cartels. i mention this to talk about

this issue parte. they showed me the physical fans that have been built in el paso which has allowed border patrol to gain more operational control. while the physical plant is nearly completed, progress along the lines of a virtual fans using technology has barely begun. there is a report this as drug trafficking organizations use 300 identified makeshift crossings at low points along the rio grande between el paso and presidio. this according to a study. this on classified map from the dhs and gelles report shows to what and the main drug trafficking locations.

this is a source of significant drug trafficking and violence. it is alarming to me that the sbi-net project does not anticipate deploying surveillance technology to this section of the texas/mexico border until after the year 2014, at the earliest. we have completed the physical sense, virtually -- fence. why does this take so long to do? >> we have tried to come up with what we think is a reasonable and prudent and acceptable budget. it is ambitious but acceptable for it essentially, the plan you are describing is a planned report for as how much could we do with the most budget we could reasonably expect to ask for. that is not necessarily the

budget we will get about as the plan laid out. we want to get through this sbi- net block one where we can start stamping these out and the pace of that depends on funding and ban any desire to build off of sbi-net block one and if there is anything i need to change. that is fundamentally where the pace came from. it was the most we thought we could reasonably ask for in funding which is not necessarily what we will get. that all has to be focused in on this 2 p, too. >> we still can act as border situation under control with all the money. it seems we should be invested in this technology to get things done more rapidly than the year 2014. my constituents and the american people want this done and they do not want to wait five years to see this thing completed. texas governor rick perry, in the meantime, because of the

crisis has requested 1000 national guard troops be deployed from the federal government. he has not received in response to date. can anybody speak to that request? >> the request of governor perry has made is still being worked out and looked at between dhs and dod. i cannot give you an update now but i will tell you what we have. as soon as we have. >> i would hope the secretary would respond. i think is important that if we can't get this technology done by the year 2014, it seems to me that it is a good idea to get more human manpower and resources down there on the border. would you agree with that, chief aguilar? >> absolutely.

the laydown plan given the capability requirements we have identified from the technology systems space is what gets us to texas in 2014. does not necessarily saying that's where we want to get. we want to get there yesterday. we have identified a capability of requirements that they are looking to create and given the budgets we think we will get, that is the lay down plan timeline for texas. >> i hope on this committee and the full committee that we can work to speed up this process and make it more efficient and functional so we can finally get operational control of the border. >> i think there is nobody in disagreement with you. we have been working on this for a while% of like to recognize one of our members who actually represents the border area where

the most crossings take place. i believe this is mr. cuellar? >> thank you for your leadership and having this baby. i want to thank the witnesses for being here. one question i have, gao and the other committee i said in, government oversight, it just came out with a report a couple of days ago, criticizing all mine security and the billions of dollars that they have invested in technology and saying that it is subject to fraud, abuse and more. start off with that background. i appreciate everything that you will do. it gets us frustrated. you are from the area and you

know where it is and billions of dollars have been invested. if we do not do our work correctly, you will have governors saying we have to take things into our own hands. governor harry came up and said he would send his elite texas rangers. i used to the budget for the texas rangers. did they corbeil which you? >> yes sir, the texas rangers were trained by our national tactical team, vortac. >> do you know how many will become a gun to the border? >> i don't know how many will come down but i think it was 15 that were trying to buy our tactical unit. >> so 15 texas rangers that would come in and supplement the work you are doing? >> yes commissariat i will additional state that the rangers dps and shares have

worked closely with us in the passport >> i am talking about this new lead texas rangers. 15 for the record, 1,200 miles for the texas-mexico border? >> 15 that we trained, yes. >> the other thing and i appreciate the work that boeing has done. i know there is a big question about the work. the defense department has been working on pilot programs. i think they just finished one the northwest. they are saying that instead of millions of dollars for a five- mile radius, they say they can do this in the tneths of thousands. it is not up to par but i still

go back and i have seen some of the work. if it is military tested and they have done this in the heat, that was one of the reasons why we had trouble with sbi and the beginning. they had done the sort before and it was proven and in the tens of thousands of dollars, what are we paying millions of dollars women can do this in the tens of thousands for the same rate we have? >> if we can do for the same amount, we would be happy to look at that. we have talked to parts of the dod. it turns out the applications they are talking about do not always match the way they might think. i spent three-six hours per week talking up to department of defense people and various vendors and contractors because we are trying to collect a reservoir of the technologies so

that we can start as we gain experience and a gain experience with other systems, we can start picking and choosing what we put where. >> i have sat down with these folks several times. i would love for you all if we can sit down and have a briefing. with all due respect, if we could have boeing and the department said down with the defense. i have seen this presentation. unless i am missing something, i would like somebody to tell me i am missing something on this story if we can do the same range for tens of millions of military testing equipment, it has been proven, it is cheaper to the taxpayer dollars, it is quicker to implement, what can we not do that? if you could set that up, madame chairwoman. >> eyes of the armed services

committee so we have been talking to the department of defense. we set up a briefing next week to take a look at some of the applications that they have. i think it is correct to say that they do not exactly match up. we will have the briefing and informational meeting so that we can take a look at it. we can then decide since we set the policy, the congress does, as to whether what the department of defense has done in other areas like iraq and looking at the borders and whether that technology because it tends to be less expensive than what we are experiencing here, whether that is applicable and whether that allows us to steal the competence level we need at our border. >> i would like to sit down and talk because being on the border and having this type of technology and waiting for years

and years for something. if we can do this at tens of thousands of dollars, i would like to see this. >> it gets the job done, i think we would all like to see this. thank you for your question for i will now recognize my good friend from florida for 5 minutes. >> mr. peters, share with us your perspective on lessons learned from previous sbi-net deployments and areas of the department that boeing can improve upon to ensure future deployments are completed in as timely and cost effectively as possible. >> the biggest lesson we took away was probably be as tough as some of the test facility in an environment similar to what you will be deploying in. another one was the early user involvement. we talked about the p-28 to be

the prototype system. we get useful feedback from the users when they looked at that project 28 in terms of the human-machine interface. we also learned lessons going back to the diagram about latencies that were in the system. the project 28 prototype you state ku band communications system and introduced latencies into the system. we knew we had to take those out and went to a microwave system. we talked earlier about the winds moving the radar around and there was plodder in the systems, we had to introduce flutter-rejection algorithms into the system. project 28 was very viable and i had that my opening statement.

it was a very valuable engineering tool to take those lessons learned and introduce them into the block one design which we will take out to the field. [no audio] >> sorry about that. is the department satisfied with the contract a big goal for sbi- net, does it supplied tradition -- sufficient protections for the taxpayer does not work tax doesn't prevent cost overruns? are there penalties for contractor-missed deadlines or program errors that caused delays? >> in general, i would say that the contract we have is awkward. it is not the contract and heinz said that we should probably have. it does have the capability to do incentives and disincentives. ultimately, the responsibility for holding the cost is the

government program management precontract is a standard contract. it gives us the tools that we do in a parade includes elements like an award an incentive fate which adjusts profit based on the performance of the contractor. as we put additional tests on, we are in the position where we put disincentives. on the northern border, there are scheduled incentives and schedules are missed, there are penalties. there are other kinds of tools that we have outside the contract. the contract is structured right now as to get to the point where we have this production system that we can start stamping out, we will need to look at how we get out from under the structure of this contract. >> thank you. mr. stana, you notice the impact of placing towers in environmentally sensitive locations have cost sbi-net and deployment allies.

as the gao quantified these concerns for the environment and what they have had to technology factors? >> there were three factors that tug at the pace at which the sbi block one was being fielded for the environmental concern was one, there was some confusion as to whether the provisions of the secure fence act applied to the sdi program and it turns out it didn't. they had to go through environmental procedures to place the towers near rhodes. the other things had to do with fencing and completed by the end of 2008 for the sdi program was not ready for full fielding. they had to re-plan at re- test. it is not to say they would have met the two dozen a dates that they put out there because there were re-test at re- plan issues

out there. the delays persist and it is not only due to environmental issues. there were other testing issues and the readiness of technology to the field of issues that were still there. >> thank you very much. >> the chair recognizes mr. thompson for a comment. >> you said the contract was offered. for the committee's information, who developed the contract? >> ultimately, weir's responsible for the contract so we developed it and are responsible for its major. >> i would assume that because we know is an awkward contract now, we will not enter into any more awkwardw3 contracts. >> i cannot promise that. i hope that we learn our lesson. i have the contract i have a i have to make the most of it

until i am a reasonable time position to fix it. >> maybe i need to ask the chief. >> that she does nothing to do with the contract. weren't you not allowed to suggest deployment? >> at the beginning, we were not involved in the contract. it would be a cbvp responsibility overall as to how the contract is designed to rid. we will look for a realignment where it can be done. i agreed that it is an awkward way of doing business. >> i am told it is a possibility that you may doing an add-on or extending in the very near future. does that mean the extension or at odds will be offered also? >> the extension of the contract is done. the contract itself has subcontracts. that is what makes it awkward because the elements of each of

-- each of these task orders are connected but they look like they're independent. that is the awkward part. the way we're managing that now is we have imposed requirements on the contractor to connect those this is so we can work around it. in the future, to the degree that i'm in control of the design of a contract, we would not do this in the future. it is what we have. >> i believe mr. souder had a comment? >> it is a board that mr. peters acknowledges that it was a tad awkward on your side and generally speaking, boeing does not have the intent of entering into contracts that cost 2.5 times what you get? >> it was a development contract. there multiple test orders and they are like to gather but they're treated separate. .

>> i think the record needs to reflect that this is a competitive process. it was not a sole source. boeing knew there was a risk going in. at risk -- >> supposed to be born by the private sector. mr. kilpatrick, you have been very diligent. you are also from a border state. >> it is an honor to yield to

the extreme -- the esteemed colleague from taxes. thank you to the panel for being here. the security of our nation depends on maintaining operational control of our borders. if the fbi that is able to meet our ambitions -- if the fbi net. officials from dhs and boeing had told congress that the program is back on track, past programs are resolved, and everyone is ready to move forward. we find out the problems have not been fixed and there continues to be delays. today we are hearing the same story. after months of being told fbi net is ready for deployment, the gao was reporting the technology had many of the same because it has had for years. the program is too important to

keep missing out and it needs to get back on track. how much closer are we now than we were two years ago to having an operational system that works the way we have envisioned without the operational shortfalls that have been evident in the past? >> that is a good question. i do not have the complete answer. the testing regimes that had been designed for block 1 are more rigorous than they were 428. xd-- for project 28. we are seeing the same kinds of issues we have seen in camera projects from the 1990's about range, effectiveness. we will find out in the operational testing. i share your concern about optimism. this is the third boeing vice president i recall here. each time it has been announced

that -- an optimistic assessment. i think we have to wait and see exactly what is delivered in if it is operationally efficient and effective for the user, the border control. >> why are we not testing until january of next year? why not start now? maybe you can answer that, mr. peters. >> we actually are testing. there are phases. the contractor has to sell the stuff to me as the engineering feat. that starts shortly. some of it has already started in tucson. at that point, i make, if i think boeing gave me but i -- what they're supposed to give me. now i am going to turn that over to the chief of border patrol and he will make whatever conclusion he chooses to make. that is the testing we start in january. >> can that be accelerated? >> we hope it can, but again the

schedule we have given year is the schedule that we think is reasonable. it there are risks. i do not want to overpromise. i want to think -- i want to tell you that i think we have done the best we have been able to. we are working with boeing but we are not confident we will succeed. >> i appreciate your desire not to overpromise. we do need an operational system. thinking. i yield back. -- bank year. >> i recognize mr. rogers for five minutes. >> i think the witnesses for being here. -- i think. when i was chair in my subcommittee we did an investigation. i thought that could never happen again. it seems like this is eagerly similar. this has a lot bigger numbers from that debacle.

could you tell me why you think we have let this happen again? >> i cannot tell you why -- the only thing i can tell you is that i think we have had to build our own confidence in managing a program like this and learning what you need to put in place. some of the things we put in place at the start of this ñiprogram, in hindsight, were nt affected. now we are in a position where we can stop or reduce stop and start over or fix what we think we need to fix to make the risk burden. that is what we are doing. -- to make the risk prudence. we are trying to fix what probably should have been fixed before this program. xdi cannot explain how we got here. >> i do not understand from a technical standpoint it is so difficult. the are basically cameras on a

pole. çóand you wanted to them and the dispatch format. i doñi not understand why we hae problems. this is not the most sophisticated technology. çówhat we are doing inñr iraq is much more sophisticated. >> in some ways it is and in some ways is not. there are two things going on. i will use an analogy. what we bet on, and it probably was not a good idea, but this was like buying a new printer for your computer. you're supposed to be able to plug in and it works. half the time, the printer does not work. it's supposed to but it does not. eventuallyxd i would get it to work. that is one factor. the other is i think we missed çóthe pointñi that this is a nek system. that is very important. all of these towers are connected. what that means is, in the case

of tucson, you have nine radars, nine carries,ñi 9 of these all coming together in one pipeline said there is the process to have to go through to manipulate the data from those things to get them to fit. >> my point is that is basic technology that we do here. we have all sorts of information systems here just in this one building. this is not rocket science. but i do not understand is why we cannot do the networking effective way. >> we can. if we had started with the assumption of looking at the requirements and band with we had in design systems, we probably would have been ok. we started with the assumption that we could plug them together and it would fit. once we did that, we were in trouble. when it did not fit, we then

started from the natural beginning and now we have to make it fit. we started the wrong way. >> you used the figure $6.70 billion during question that is the total estimatedçó cost of a fbi net of a fiscal year 2007 through fiscal year 2014. >> so no one knows what it is going to cost? >> i am amazed we have spent more than $3 billion already and we do not have a system that works. blimps. we use them for whether purposes, in the military, aerial surveillance. they can stay up for extended periods of time. do you currently use them along the border for aerial surveillance? if so, how many and what kind of platforms do you use them for? >> we do not currently use them.

we have attempted them in the past in arizona specifically. we do not have any now we do fly some radar along the southwestern border. one of the things we are asking is specifically the capability. if he believes that is a proper platform to take a look at it. this is the good thing about the way the relationship works between the border patrol, fbi net, and whoever the contractor will be. we articulate requirements. this is what we need from an operational perspective. they do the research and assess what can bring this that capability in the most effective and reasonable manner. >> it is so expensive. the blinds are being used by the military and weather services. -- the blimps are being used.

one of my concerns about cameras on polls is that they can be shot at -- cameras on poles. you do not get the really high surveillance that allows you to look over into mexico. we will talk more about that later. >> i will now recognize ms. jackson lee for five minutes. >> let me thank you for the hearing. the background of a number of my questions will be simply the conditions that i think are well known and have accelerated over the last year. the gunrunning, explosive violence on the mexican side of the border and spilling over into the united states, and the

interest of the american people about whether or not this can be contained and what elements we are using. certainly, fbi net deals specifically with the issues of securing the border in ways that might capture the less endowed a criminal because there are other ways promulgate the violence going on. if you would give me when you think is the major achilles heel of this program, the major indictment of this program. chief, would you give me a status of the lawsuits and negotiations dealing with the defense?

ñpiñiçóxdñiñrñiñri would also ly there was an extension of the boeing contract. >> with a broad stroke, getting something that works to spec has been difficult. project 28 was accepted. it did not meet all specifications but it is within the right of the secretary to accept it and he did in march 2008. it has not worked to spec. the spec for acceptance is now 7% identification rate. when you're talking about drug runners or criminals, it can be accepted if they can find seven out of 10. >> of 3 can be explosive. >> i hope that magic word,. figuring three out of 10 of get by and you can still accept the program, as i understand it, that seems to be a lower bar

than we want. >> what about the training of the border patrol agents? >> they have been trained to use project 28. they were trained on mobile units. i think the border patrol is doing what it -- what they can, but until this is deployed -- >> they ask a question about the agency said they were uncomfortable or could not get their hands around it. >> the border patrol agents were curling traded during project 28. -- were poorly trained -- tho roughly trained. >> if you want to comment on that and the lawsuits. >> i will ask him to speak to the contract extensions and fill in the gaps relative to the land

condemnation lawsuits going on. as we speak, we have built 92 miles of fence in taxes. that is where maas -- most of the lawsuits are happening faugh. we intend to build 150 miles in total. we have 23 miles caught up in some kind of litigation or concerns. we are working for those lawsuits and condemnations. we fully expected to either build a fence by the end of this year or articulate and means to which to get feedback and begins we are looking to get in those areas where we cannot build a fence because of the lawsuits. >> i would like to pursue this, but if i get the answer her on the ballot question. -- but i would like to get the answer on the boeing question.

>> we need to extend the contract for them to be able to do that. the task orders had periods that are not the same as the master contract. we stand in the contract to allow them to continue the work that is contracted under task orders. because of the task order contract extension, it provides is the ability for them to continue the work and to follow up work as needed. >> i think we need to have a steadfast monitoring of the progress here. this is an ongoing saga of the 10 years oplus and our borders the the right kind of security. i look forward to some is in office briefing for. i yield back. >> thank you miss jackson-lee.

>> thank you. thank you for calling this hearing. i want to think the witnesses as well for their testimony and to the chief and director. we appreciate your service and what you are doing which is not an easy job. i am very interested in fbi net. i went to talk about my experience in my region on the northern border. we always talk about the southern border. i am not minimizing and i'm cons -- i'm cognizant. our northern border has some similar challenges. in principle advocacy of mine is the northern border. it was mentioned about some of the buffalo sector.

let me say that our experience is happening very quickly and positively in regards to fbi net. i want to personally bank -- thank the detroit sector chief. we do not want to lose him. as we have rolled out fbi net in the sector, we have a letter and surveillance cameras along my sector as well as a a mobile unit at the guard base in the immediate geographic area that has is different facets of the military. fbi net is complimenting under the cbp pa umbrella the great

lakes and northern border when which has air assets and water assets. some of the unique dynamics, not only do we have an asymmetrical theater with the great lakes but we also have the two busiest border crossings. we have busy rail entries. we have a lot of the same kinds of things that are happening on the southern border. we are anticipating that we have a ground mission in 2010. the soviets under the dhs cbp. -- this will be under the dhs cbp. the rollout of the surveillance cameras, you can imagine how we were concerned about how the

public would say, big brother. you are putting these cameras up in one of the busiest voting sectors in the world. are you going to be looking at me? there was a lot of consternation about this. arbitrate sector chief -- our detroit sector she brought in the stakeholders, look -- a local law enforcement, county, sheriff, the coast guard, our canadian counterparts, everyone. the public has accepted this now as it not an intrusion into their privacy but something they are looking forward to. i think the very first thing we have as a result of these cameras will dissipate any public hesitation about this and what an important tool for border security going forward.

i know i should ask a question, but i want to make the committee aware and speak to this. i was noticing this. as we look at this, when the other things that is happening is something called operation integration sector along the northern border. we have all the water sean on here. all of these various cameras and various types of things, all of this data needs to be collected. we collected, analyzed, and then get back to the border patrol agents who are protecting our border. they are putting in an integration center at the great lakes and northern border rain which will be a pilot program for the northern border of analyzing all of the data.

i think that is one of the things we learn from 9/11. you have to move a from the need to know to the need to share information amongst all the agencies. my time has run out. i would invite you to come see the work firsthand on the northern border. our experience has been positive and we are looking forward to this. >> i would like to knowledge your continued efforts to talk about the northern border. america always worries about the southern border. the reality is we have three real borders. the southern, the no. which is quite open, -- the northern, and the maritime. we are very worried about the caribbean situation with the

drugs coming in which does not get a big of a play. we are hoping on this committed to address both the caribbean region as well as the northern border. pimm we will try at some point to make a trip up. we did a few years ago when we went to the niagara-buffalo area. the stronger we become on one side, we make the links that people will go to stronger. --the lengths that people will go to stronger. >> the gentleman from new jersey for five minutes. >> thank you. our inability to find a security solution that after the works

makes it impossible for the congress to enact real, comprehensive immigration reform. that is a bottom line. with all due respect, and i think you for your service -- thank you for your service -- it is not the technology that is the problem. i do not think the technology is the problem. it is our inability to articulate a coherent policy for practicing and protecting our borders. that is the problem. i do not think they are the problem. i think we are the problem. the administration is the problem. before and now.

you could put more personnel, we just discovered we had a northern border and in the last two years for a i thought it disappeared. de-materialized. you did have a more walls, fences, electronics and we are good at that stuff. we are not good at accomplishing what we set out to do and that is to have an overall plan and had a clear budget. this budget is certainly not clear to me. maybe it is clear to all of you. i have a simple question for the two of you on the actual results we have seen from the secure work initiative. since fiscal year 2005, the fbi funding has amounted to over $3.7 billion. this year, the department of

homeland security has asked for $779 million in espionage funding. but are the actual results on the border before and after we put all of this funding and to technology on the border? my second question, to be clear, how many more illegal crossings have we stopped in the years since we started this as opposed to the years before? how many more drug seizures have we made? how many weapons of the stock from going across the border? if you remember, madam chair, we were not concerned about the weapons going from the united states to mexico which are not killing our citizens. we do not want to stop industry, do we? we want those weapons to continue to go over to all kinds of sources. let's start with those two

questions. >> 1 million narcotics. we will end up with 545 -- 5 root 50,000 apprehends is which is a decline of 62%. oh, and by the way, the narcotics apprehensions is about 2.5 million pounds, a tremendous increase. that is because of our ability to focus on other threats such as narcotics. when we've mitigate the illegal persons we are able to focus our efforts on other threats. with the reasons we have been able to do that is because of some of these expenditures of funds.

within these $3.7 billion that you spoke of, we got the capability is such as the mss, the mobile surveillance system, which gives us a stand-alone capability. it is not network but it gives us a tremendous amount of enhancement. >> what about weapons going from the u.s. to mexico? >> we have increased our efforts as a department. >> how many weapons? >> i do not have a number for you. >> any idea? >> i would not guess. >> is that a priority? >> it is a dhs and cbp priority. this congress has given the border patrol 44 specific positions for next year in order for us to continue to assist. the main forecasts -- the main

focus is checking traffic southdown. >> can you let us know how many weapons have been confiscated going from the united states into mexico? >> yes, sir. i would take the opportunity to address something that is important. the level of support congress has given cbp, madame chair, i think we may have been provided with some ronstadt. i am very pleased to put this fourth. as of the 29th of august we have 20,000 border patrol agents. we have grown tremendously. that along with the capability given to us by project 28, its evolution and development. this is helping us tremendously. we still have a lot of work to go. we are working very hard but we

do need to secure this border. >> will there be a second round? >> we will see. the key to the gentleman from new jersey. -- thank you. when i began this i spoke about metrics and trying to understand whether putting at a physical fence or a virtual funds is really going to allow us to, if you will, take scarce resources and deploy them to use them better and so that, in fact, we can apprehend the number of people coming across illegally, the number of drugs. how completely share your view that until we fix the immigration issue we will continue to have access people trying to get into this country -- and excess people.

we're trendy the bad guys, drug dealers, people who would harm this country. -- we are trying to get the bad guys. this is one piece of that. it is fair to say the people of the united states do not believe we have been doing a good job of securing our borders. that is why the sbi net, physical fences, are all so important for this cause. we can be vigilant and keep people out and also catch the bad guys. i appreciate your bringing up the issue of how important the reform of immigration is. i'd like to at this point recognize a member we gave

unanimous consent to sit on this committee today. there the chair of our oversight committee. he and i have shared many hearings together. we have been looking at the issues of border security. it thank you for waiting around. -- thank you. >> thank you for the gracious invitation to attend. i have several questions, probably more than five minutes. this is about the last time we will gavel -- gather on the subject. chief, you mentioned in your comments that you have a three legged stool that is all interdependent. i think one of the legs, the technology leg, is wobbly. how're you compensating for that? >> we are compensating for the

wobbly leg by continuing to develop our capabilities within the technology realm, going from stand-alone technology to an integrated system or a network of systems where technology is where we need to get to. >> i know when we need to get to, but what are you doing now? >> that is part of the development that we are going through. our responsibility, as agents, is to identify and articulate the requirements. his responsibility is to search out a means with which to fill the void we have articulated as a need. we have technology. we have stand-alone technology. we are putting pieces together in a rudimentary fashion, but we are working towards the integrated network system that is what we are requiring. it is a work in progress. >> in a rudimentary fashion, ok.

i have to compliment you on a comment you made offhandedly which was not lost on me. p28 was not sold as advertised. i do not know anybody who on this committee who thought it was a prototype but now it is being sold as one. somehow it was a slight of hand and it rankles me to hear that. in any event, you said something that was interesting. he purchased several printers over the course of your time, and sometimes they work and the half the time they don't. you continue to buy the products that do not work as advertised? -- do you continue? >> we had this discussion with the department. they say that is why you buy a

mac. you we have is come as an individual, when i go to buy, a mac costs there times more than a pc. do i want to pay the 1/3 and the pain or 3 times as much and have the confidnece? that is the situation we are in. -- and have the confidence. we go with the 1/3 cost. that is essentially what happened to us. >> mr. peters, i think you are in a better position than your two predecessors. we asked the question -- we asked the question about two years ago about what happened. they say we did not have the a- team. i am not sure how much down

further it was, but i want to believe that you are the "a" team. we want to be able to believe you. you have to understand in the context of what has happened in the past that it is tough. my subcommittee, to believe in your words until we see results and results are going to be successful. the trials and coming up in the next couple of months, we are going to be paying very close attention. it would not surprise me if we get a request from the committee in my subcommittee to observe them. on the ground when they are going on -- because we are planned at close of attention. this is a yes or no question. i know it is hard in government, but has the american taxpayer, so far, but what they paid for? >> no.

>> no further questions. i think the gentleman from pennsylvania. i thank the gentleman. ok. i want to go back to one of the original things i said. metrics. one of the discussions you and i have had over time is, without giving you 20,000 positions you have done a great job in finding people, training them, bringing them along, building the culture that it is about getting the bad guys and that most of the people crossing the border really have a reason. you're making sure people feel confident about that. my question is to you, if we get sbi net working and we put

out a physical fence in places as we have, is that going to create more work, in a sense, for your workforce or is that going to make it a necessity half -- not to have the 20,000 agents that you currently have? the last time we discussed this, i believe you said something to the effect of, i do not really know if my work force will decline or whether we will be catching so many more people that i will need more people to get them, to detain them, to put them to the process. what do you think now? what is the metrics? however going to judge whether we are making busywork for ourselves and not really using the scarce resources to still go after the bad guys, the

terrorists, the person who needs -- who means to bring in chemical weapons, which i think is our biggest desire to get the bad guys before something happens. >> i think it is important we speak to this. i think it is important that we recognize the ongoing efforts are to secure our borders. each one of our borders, all three you articulated, they require a different enforcement model. the purpose of the model, on the southern border, is to mitigate the high level of illegal cross border traffic that is happening because of the exploitation of the high traffic by not only narcotics traffickers but the terrorists looking to come into this country.

applying the correct enforcement model but to the right type of technology, the right level of technology, the right number of personnel in tactical infrastructure, the metrics that correlate to that is how do we measure the mitigation of cross border activities? there are several ways. third-party indicators, what happens to activity that is associated with a high level of cross border activity? we see, in san diego, we used to see a lot of stolen vehicles, people getting run over on major highways. we used to see a lot of breaks and murders on the immediate border. -- a lot of rapes and murders. there were social costs because of hospitals and having to cater to the illegal traffic. we measure of those to gauge what is happening overall from a global perspective as it relates to specific areas of the border.

we take all of those into account. some of the things we take into account our assaults against our officers. we know when we're going into an area of operation, assault are going to escalate. there are going to go up. we fully expect that. we trained, organized, and equip our officers to be responsive. we're looking for the outcome to secure our borders. on the northern border, we have an absolute need to increase our situational awareness of what is happening. at this point, frankly, there are some points where we do not know. we are not out there to the degree we need to be. so, what are the metrics? intelligence,ibis, fbi, dea, interlocking all the intelligence we have and getting greater fidelity. those of the metrics we're

looking at. as we move forward, one of the complexities we are faced with is we are dealing with the obvious -- human criminal suspect. for every action we take they are going to react whether it is because they are wanting to come into this country to make a better life or to destroy our real life -- our way of life or to bring in their narcotics. there are certain draws to come into this country. the human aspect we have to take into account. we plan for the displacement. it is going to move until we are at a point where we have secured our entire southwest border. as we speak, in california two days ago we had two loads of aliens that went out 20 miles into the pacific and went north

39 miles and landed. the reason is because they cannot get passed us on the land borders of san diego. that is a measure of success. the coast guard is involved in this so we take that avenue away from them also. those of the things we are tracking, those are the metrics, and that is how we preplanned where we are going. >> thank you, chief. do you have more questions? >> i wanted to make a couple of comments and a fundamental question. the have talked about the north border. i did a border report prior to 9/11. i have worked with them for many years. i have visited every state on the northern border and had held

in joint meetings with the canadians for the creation of this committee. the problems we had is contraband. nuclear, chemical weapons, narcotics, and it is a constant challenge. people can becoming for work, and terrorism, a variety of reasons. anything can get through. the challenges, how do you get zero moutons run we have a huge border -- is zero tolerance when we have a huge border? carter of the jobs of the whole agency is to try to hold the agencies accountable. you do not have all the information that you provide an independent track. we need to hear that constantly.

i not know whether or not this program ultimately will be justified in cost. quite frankly, i was one of the early skeptics because i felt this was an excuse to avoid building a real offense and dealing with it and was to mass of an approach. a good this match many into 28 miles, it was not going to be workable. i do not agree with the statement that some of us did not raise that question in the very beginning. with questions as to what the deal was. the prototype was an ideal structure and that, in the military world, would have been incredibly expensive. we did not have the money to do that. you can see where the gun is. agents that have been killed in california, had they had the technology coming to tell them

there were three guys with the gun. if you can't seem where a park ranger was killed in oregon, if we had information that would have been able to get down to them there come and they would have been able to see where his gun was and where the drugs were. what can we do that is reasonable, workable on both borders to add the technology to the people and to the other matters. he made a terrific point. you push them out more, increasing their expense, reduce the numbers, more chances that the trip up and you will see them. we will never reach 100% but to the degree we make it harder more likely we will catch them. we are much more aware than we were on 9/11. my fundamental question is that

there were some signs that you were going to lookout -- look at this in january and whether or not this would proceed. if we are doing the north, too, congress has not seen with the range of the cost of this project is. here is what we did for 28 miles and now we are we doing that with tucson, what percent do you extrapolate? then we end up with huge figures that scare of congress. do you see yourself, because ultimately we need some sort of a "effective control of the border," do you see yourself moving towards a different strategy, a faster strategy, a building block strategy? what do you see? >> we see ourselves as going to a building block strategy.

but we have at this point is a plan, that if appropriate, it talks about covering the whole border. we need to be prepared to execute that plan. like you, we did not have all the data to convince ourselves it is the right plan. it may make more sense to be more selective about where we put this. one areas of responsibilities covers about 20-40 miles of border. it costs us loosely speaking about $50 million to put it in and then there are operational costs. as we figure out what the costs are on technology which is why i am having these three-six hour meeting every week to gain experience and the department will be in a better position to prepare to cover the whole border. before we do that, let's take the experience to see if this is really the most cost-effective way to mix technology,

infrastructure, and personnel. our strategy is to be prepared to do it. it to the point where you are prepared to do it as quickly as told, but also make sure as you do it that you have a criminal steps where you can check. we can have a discussion about how much is the right amount. >> it is important for anyone who reviews the record of this meeting that while we are focused on the sector of arizona which continues to have the most intense pressure, all we -- although we do not know what we do not know, your agency is not just focusing on this area. you are working the whole border. that is just the most intense border region. i yield back. >> the border is much more than just a land border, also.

border, maritime, and -- >> i want to ask you about standards. i know homeland security keeps changing its goal. it makes it more difficult for them we did the other folks to do with the have to do. it is my understanding that at various times when it has become apparent that the sbi net will not be able to meet criteria that the department has lowered standards rather than fixing problems with the system. at one point there were nine such criteria. now there are three. at one point the system was supposed to identify and

classify 85% of entries and now that is only 70%. what can you tell us about the performance criterium for both project 28 and tucson one? our regrading on a curve? -- are regrading on a curve? >> the criteria was 95% plus or minus 5%. i believe the objective is 85% for tucson one but 70% is acceptable. i would hope over time the bar would go up because it seems a little low. 2010 will be crucial with these operational tests. if the technology turns out to work with a few tweaks or right out of the gate, that is great.

if it does not, then perhaps the department needs to think about a plan be. this is the second prototype, in essence, cents project 28. if this does not work, then what? >> let me ask you this question. anticipate. you have overseen the situation for quite some time now. we have witnessed the changes i have talked about. the goals changing. what is the main problem here? since we are not satisfied, both sides of the aisle, as to what is happening and it is not in any way a reflection of the hard work that the chief does and the other people do. we are not getting this done. while that is not getting done, we are not responding to the

major problem of immigration. in fact, the at -- the economy of america has more to do with how we make sure who comes in from this country wherever they come in from north, south, or from the planets. what is your analysis? >> this is an extremely difficult thing to do. we can talk about hooking up printers, and i've understand he is trying to use a metaphor, but it almost as -- oversimplifies the task at hand. maybe we are still having an expectations gap. is the technology really ready to do what we have contacted it to do? the second thing is in setting contract you talk about the whole northern and southern border in three years. it seems like every time we have one of these meetings things

will be fixed and we are disappointed. maybe it is time to really think about whether this is the way to go. our cameras really -- are cameras really the technology to get the 10 mile range and that they would like? are the radars able to handle the wind? is there another plan? i know the border patrol likes the mss as a stopgap. in thinking about this, maybe the grand plan is something that is not achievable giving the current state of technology. depending on what happens in 2010, it might be time to think about other options. >> i want to thank you for your honesty. i ask this question to you because i respect to acumen. perhaps we might to get

immigration policy first before we deal with the border situation because if weñr had a robust immigration policy that we could come with from both sides, that would helpçó the traffic on any of our borders. it might simply save us a lot of money in doing what we are doing which is not succeeding to the extent that we want it to. i am very concerned with putting our men and women in jeopardy. tóñiif w(olicy in the first plai would suggest that we are not. i will stand corrected if i am wrong. i have seen too many valleys in this thing and not enough peaks. we have been here together before we were even a committee

to bring something hopefully positive. i think we are headed in the wrong direction. that is my opinion. i am not going to ask whether you agree or disagree. >> i am not a policymaker. i tried to providexd information and analysis. >> the gentleman's time has expired. >> the republicans administration overñi promised e ability and we appreciate the new administration does not overstated, come in with a realistic goals and a realistic budget and we will try to address this from there. >> i think overall what you are hearing is that we are very concerned about it -- securing the border and i think we have worked in a very bipartisan manner to do that to keep the politics out of this. there are always politics involved whether it is immigration policy or the

border. i have one more question. this is called border, maritime, and global counter- terrorism committee. as you probably hear, and i hear this over and over, some of us have made some trips to the areas to be secured. we were talking about the colombian drug issue. he spoke about how people are avoiding the land and going around and coming through the ocean where there is a real open area as far as the caribbean arena, and so, there has been bantering about the fact that they go and travel and take a look at these things. i want to ask you, do you think it has been worthwhile for the members to come out and actually take a look at sbi net and to talk to mexican officials about border violence?

do you think we should be going to the northern border? is talking about what is happening going on in the pacific and caribbean, do you think it is worthwhile or it do you think we should take your word? >> i would absolutely recommend that you continue going out into the field. it is a very complex matter that we are handling. it is a requirement of a comprehensive approach. the enforcement model i spoke of earlier this very specific to each one of those borders and even within those borders, within specific areas, and needs to be designed for the area we are focusing on. i would absolutely love to have you and the rest of the committee members out there. i think it is critical you get a look at this first hand. >> i would like you to take my word for things, but i think it

is essential. i get down there three or four times per year. they are good enough to take us around. there is no substitute for seeing it first hand, what works, what does not work, what the challenges are. it sounds simplistic to say you put it -- you put a camera and radar together, but it is difficult. the challenges are there. getting down there is a firsthand appreciation is the difficulty of this task. >> i appreciate your comments. i want to remind all of you, in particular, that you did not have many questions representing boeing. this is not about a witch hunt. this is attractive figure out how to make a system work. the american people are tasked with spending the money to do so, but we have such broad issues out there that affect so many people on a day-to-day basis that if we cannot get this

under control, cannot work together, cannot figure this out is very difficult to work on some of these and have the confidence to work on some of these other issues that are out there. i want to thank all of you for being before us today, your valuable testimony. i want to thank the members for attending. members of the subcommittee, they may have some additional questions for you but i hope you get them to as it as quick as possible. hearing no further business, the subcommittee stands adjourned. . .

>> cuban president raul castro said that a contractor arrested from nevada was accused regarding satellite equipment. this program last about one hour and 20 minutes.

>> in the cuban government has exhibited a very shrewd use of internet. many of you recall that fidel castro retired as president of cuba in february 2008. but you may not remember the manner in which he did it. it was a posting his letter of resignation on line. it was at 2:00 a.m., thereby having the editors of the associated press and reuters based in london calling their havana-based correspondents and waking them up in the middle of the night to say, hey, there is a breaking story here. the cuban government, indeed, has been very watchful over its online images and impressions. nevertheless, the cuban

government, like every government in the world, has been subject to the onslaught of viral videos. there are any number of which that one can view on youtube, which includes an outburst by castro in 2006 during an argument in argentina. there was a well-known case just last year when a young cubans didn't confronted riccardo allentowarcon and complain abouk -- a young cuban students confronted ricardo alarcon and complained about the lack of access.

[unintelligible] then you have the rise of independent cuba in los feablog. it receives millions of hits every month. she is one -- she has won a number of notable prizes, but she has not been allowed to leave the country. the united states has changed telecom policies. earlier this month, there was in the arrest of a u.s. contractor accused of distributing equipment in cuba.

we have to top experts who will try to navigate through this complicated maze with us and provide some insight on how technological changes impact cuba. our first speaker will be ted henken. he is widely known for his expertise on the cuban underground economy. he has visited the island many times. he has done several interviews on the island. he recently launched his own blog. it has since become an important reference examining issues facing the island. he will be followed by carlos lauria appeared carlos currently serves as the american program coordinator. he is ardsley from when as iris,

argentina. -- he is or originally from blaine osiribuenos aires, argen. this last fall, he wrote an influential report looking at the impact of the internet on cuba. from there, i may add a few comments. >> thank you for your invitation. i am very excited to be here. you were staring directly into the crystal ball. this has only been a very interesting last three months or four months in the glogosfera cubana. if you look at this painting,

the cuban flag it is not there once or twice, but there are three cuban flags and that little thing. they must have hired a cuban painter to pay debt. >> actually, we did. >> there you go. i am going to begin by playing devil's advocate. the problem with that is that there are a lot of doubles and bald. is -- a lot of devils in a vaul. -- a lot of devils involved.

[unintelligible] this is part of what she said when she stood up and spoke. what relationship business between they trumpeted bandwidth and why we cuban citizens cannot access the internet on en mass. why is censorship being repeated, intimidation, stigmatization of people because they think differently? now i am going to quote an expert in the united states who has headed for a long time and the internet and information technology in cuba. his name is nelsonville best --

his name is nelson velealdez. he has a very different take or understanding and explaining the restrictions on access in cuba. "poverty and the access hinder productivity and used. cuba is limited access has to be understood in that context. moreover, u.s. policy has sought to hinder cuba's progress in that arena. we have noticed that the united states limit cuban access to e- mail before 1994. thereafter, the u.s. government permitted in efficient connectivity but always stressed the necessity of using e-mail and the internet in order to

subvert the cuban regime. those critical of the cuban internet situation seldom take these conditions into account. the lesson i will read to you before i assure my comments -- the last thing i will read to you before i share my comments, there is orlando pardolaso who became well-known recently whenh yovani sanchez. this was published in a magazine in the times. at the very beginning of his very interesting and educational peace on the blogosphere, he

said this, "on the island, it is an insipid sphere. although there are controversial use and awards were one, it is not well known here. with a net access restricted to the very few, a functions as a kind of guerrilla underground. their work doesn't independent agents whose existence heralds a reactivation that will modulate raul politique."

essentially, what i have laid out are a couple of models. the first model is the blogostroika. in other words, the internet and new information technology, communication technology, functions as a kind of a roman senate. of course, they say that blogostroika is a grassroots phenomenon that does not take permission to exist. another model for us to understand the internet is --

from the cuban government's perspective -- it is destabilization, not democratization. one man's the democratization is another man's destabilization. it feels like it is under threat. in the sense, cuba and is not seen as a -- cuba is not seen as a communistic dictatorship. it is very hesitant to open up because of a stated policy of its neighbor is regime change. whether it is a regime change

with a w with a stick or with a carriage with the obama -- or with a carrot with the obama administration. finally, they would say, we have a different kind of a system. they would use this explanation for many things in cuban society. they would say, our social priorities and economic priorities are not for household usage for all. in developing countries, that is not possible. is used for development and for science and for education and for medical science and is provided to institutions. the democratization says that it

is an excuse for control. this is the debate. i will give you three other quick metaphors. one is the internet as not to the roman senate, not the trojan horse, but the asian miracle. it is not democratization so much, not destabilization so much, but development. they have used it in a number of ways. they use e-commerce, through tourism, to market software and industry. the two other ways you can think about the internet in cuba is, one, a parisian salons. it is the intellectual world and the artistic world sharing ideas and their work. this is partly what led to what dan mentioned before, this internet debate. they call it a war of the e-

mails. it is a debate that took place over the melamine intellectuals in 2007, which is actually part of the pre history, the spark that gave birth to yovani sanchez. she felt frustrated, shut out, without a voice. her generation did not get to participate, she felt. so she started her beloved to much later. -- her blog two months later. in response to that end the international popularity of it, the u.s. -- the cuban government and other cuban bloggers had

exploded into the blogosphere itself. they're people who are inspired by her and people who react against her. there is a burge oning blogosphere. yoandri is their reaction to yoani. this is someone who says, i am part of your generation and i do not agree with you. i agree with socialism.

the cuban government has a new posting site called desde cuba.net. they're not dumb. there is another fessing site called bloggers cuba. i have not made an evaluation on this one yet. i am still learning about it. it is a portal site that gathers together 12 or 15 independent bloggers. i am trying to learn about it, educate myself about it, exchange e-mails with them so i can figure out how independent it actually is. when yoani came out first, was she independent? when she supported by the cia? or the cuban version of the cia?

questions will be raised about this in a politicized context. but let me extend that model is a little bit on both sides. i will give a little bit of a history and then move into looking at some of the blogosphere. let's talk a little bit about those two ideas, democratization vs destabilization. on the democratization side, we can say that the obstacles in that model would be political and ideological, bureaucratic,

and then there is the internal obstacles, the cuban government. on the other side, of course, the obstacle would be economic, but infrastructure, and geopolitical, and they would be external. the cuban argument is that this is a challenge for us, so silly, buckley --, socio-economic waal. in the mid-1990s, cuba was allowed to connect. by 1996, they were online. the cuban internet world is only about 21 years old. only about half of that time or two-thirds of that time have they had full access.

finally, we consider that the two embargoes fit into the model. the first one is the one we always talk about, which is the one that the cuban government uses to explain its restrictions on a lot of ways in cuba. and then there's the embargo against the town, the ingenuity, the creativity of the cuban people. that embargo is an internal embargo imposed on the cuban people by the cuban government. maybe both have something to teach us about the restrictions in cuba and countries like cuba around the world. the recent arrest really highlights these issues.

how do we help? i tried to explain how not to help. i argued that this is an example of how much to help. if you want to know how to help, read the blog post, right? let me say a couple of words about history. cuban activation into the computer world it's back to the beginning of the revolution, but there firstlings were largely like all of the other links that the maritime, which were largely through the eastern bloc, through the soviet union and poland and their main computers and connections. in 1988, that was when cuba started to become connected outside of that context. over the next few years, they

made a number of negotiations, first with canada and then with the united states on and off. this is laid out in a number of publications. essentially, there are two types of negotiations. one was with the canadian government and through canada. this was set up in the early 1990's, 1991 and 1992. an all-out for 11:00 every night for all e-mails sent from cuba to be sent over a telephone line. they all went through. that one on for a couple of years. but canada was paying for it. cuba, in the negotiation, said they could not foot the bill for that. canada did. but that ran out, partly because

canada stopped paying for it, but also because cuba ended up getting connected through other means, through satellite means to the internet throughout the world. one thing about the canadian negotiations that were important is that they were generally not politicized. questions about who has access and questions about how the information will be used were not raised by the canadians. therefore, hard-liners in cuba did not raise security concerns that these internet connections could be used to destabilize cuba. so there's gonna be tit-for-tat. if the outsiders asked these questions, the hard-liners inside of cuba would raise security concerns and may lose the negotiations and the bureaucratic debates.

with the united states, and we have seen this over the past few years, but back in the early 99 -- early 1990's, there were negotiations to try to get cuba hooked up to the world wide web. this was successful. the problem has been cuba's being reticent to connect to fiber-optic line. some sectors in the united states desire to keep them from being connected. so that dance continues now with the obama administration reaching out, trying to allow that to happen, but the cuban government is still being it isn't. they say, hey, we have other options and that is venezuela. they have constantly said in

2010. we will see a 2010 brings a connection with venezuela. the final thing i will say in- couple of minutes is to sketch out of bed about the history of internacion igriega. let me talk about history and then i will talk about the project. you can break up her blogged to six stages. i will -- her blog into six stages. action chisholm, a personal exorcism, which is what she calls it -- exorcism, that is

what she calls it. ñimarch is when the cuban government started to clamp down and blocked her sight from access within cuba. the next stage you can call the stage of repression. that was from march to august 2008. then there is "from cyberspace to public space." this started a with yoani and her friends protesting the arrest of a rockero.

they camped outside of where he was being held and then he was released. then there were increasingly public activities where there were leaving the blogosphere and entering the public sphere. ñito her credit, she uses her on popularity to try to spread the power, and effectiveness of the blogoshpere encourage other

people in cuba to start their own blogs. concenso, desdecuba, con todos, voces cubanas, iteniario, and des de la havana -- those are platforms that have evolved over time. her group started with a magazine, an online magazine called concenso. this is prior to her blog. then they converted that into something called "con todos." that was transformed again into a platform that is now called "voces cubanas."

if you give to their website, that is a platform that has -- that hosts 16 different blogs, including herblock, her husband's law, -- including her blog, her husband's blog, and others. there is a biweekly workshop that they hold in cuba, usually in their home, for bloggers to come and talk about blogging and learning about blogging. this is obviously a cause for concern in the cuban government. they have tried to restrict these meetings, but they continue. i think there every tuesday and every friday. finally, there is a project that the first round of it took place.

it is basically an awards round. it is called una isla virtual. it was to award and recognize some of the better blogs. i will leave it there and i look forward to your questions. >> thank you very much. that was an excellent and fascinating overview of a world that some of us may be familiar with pieces of it, but i do not think i have seen it laid out with the interconnections to have posed that way. carlos, we are going to turn the floor to you. pull the microphone a little closer and tell us what you think. >> thank you. the committee to protect

journalists, we do research on press freedom conditions. i am the coordinator of the oversight of violations on the island. we have really launched a report that looks into this phenomenon of the cuban blogosphere and the the huge obstacles they face. i am going to start by making a short introduction of the present conditions in cuba. the cuban constitution grants the communist party the right to control the press. it recognizes press freedom only

in accordance to the goals of the socialist society. the state owns and controls all of these outlets. cuba is closed system does not allow -- cuba's closed system does not allow any kind of independent reporting and is highly repressive. in fact, cuba, according to c.j. research, ranks among the top jailers of journalists. a recent report found cuba the third largest dealer of a journalist in the world, after china and iran. there are currently 22

journalists in jail in cuba, solely for exercising their right to express themselves freely. most of them, 20 of them, were arrested during the massive crackdown against the dissidents in the independent press in 2003. while the attention of the world was focused on the u.s.-led invasion to iraq, they led a massive crackdown on dissidents. 75 of them were detained, some merely tried, and given a lengthy prison sentences. among them were 29 journalists. there were given prison terms ranging fromçó 14 yearór to 27 years. most of them are still jailed.

they're under inhumane conditions. nothing has really changed in terms of press freedom conditions since rolraul castros taken over. there is low intensity repressionñi against dissident journalist and this new community of bloggers. this is something that this highly repressive environment really caused us to see in the last two years that this vibrant community of bloggers have prevailed over the regime is

tight internet restrictions and have been able to disseminate news online. the bloggers are mainly young adults of different professions and have really opened a space for free expression in cuba and offer a glimmer of hope for the rebirth of independent ideas in cuba is closed system. -- in cuba's closed system. at least 25 independent journalistic and regularly updated blogs produced by cuban writers exist. as many as 75 other independent blogs are maintained also, although they are mainly focused on personal or family issues, rather than being

editorial or news-based context. in addition, close to two hundred officially approved blogs are being produced by members working for the official media. the emergence of the blogger community can be led back to april 2007 when the first few were written by students. most independent journalists and free press advocate -- free press advocates point to yoani sanchez.

her blog and six others are hosted by the german portal base des de cuba. bloggers are largely based in havana where computers and internet are is your -- are easier to access than the rest of the island. most of them are in their 20s and 30s. they are students, teachers, artists, musicians. also, of you right under pseudonyms, but many do -- also, although if you write

and under pseudonyms, many do right under their own bylines. they write about food shortages, housing problems, education, health care, and restrictions 2 internet access. there are also some blogs that chronicles sports and arts news. there are a handful of that right political commentary. -- that write political commentary the. they face severe legal and economic limitations.

13 percent of cuba's population has access to the internet. although, independent journalists say that this figure is considerably inflated. even judging by the official numbers, cuba has the lowest rate of internet access in the americas. ownership of a personal computer waq restricted until 2008 when president raul castro took up serious economic reform. in may 2008, the government authorized consumer salesñi of personal computers, dvd players,

and cell phones, all of which cubans had been barred from purchasing. many people on the island have told us that the prices for these electronic prices remain extremely expensive for the average cuban. for the vast majority of cubans, internet access is still restricted. the government-owned service provider must approve all connections. accessing the web through the state's internet service provider also requires a password. it is issued by the government. like most commodities in cuba, passwords can be obtained in the black market at steep prices.

largely, and in practice, those who have access to the internet in cuba are foreigners, intellectuals with connections /links to the government, high- ranking officials as well as doctors -- certain doctors and hospitals and academics at universities. how do those bloggers access the internet? they go on line at the government-owned cyber cafes, at universities, and at diplomatic venues. hotels became another option in

2008 when the government lifted regulations that forbade ordinary citizens from entering tourist venues. but even at these places, cuban lover's face -- cuban bloggers face economic impediments to excess. foreign journalists say that sending to e-mails, for example, can take between half an hour to an hour. it is very costly. internet at hotels and cyber cafes cost about 160 pesos, which is equivalent to $6, which is almost a third of eight

cubans monthly salary. plumbers said that the government's intranet is -- bloggers say that the government's internet is a cheaper alternative. -- bloggers say that the government's intranet is a cheaper alternative. some shy away from going to embassies because they think that they may be perceived as members of the political opposition.

the cuban government has been in place a very repressive regulatory system. ñrin 2009, they say they are intended to defend the country's security. on-line information is restricted also buy it. enter-ministry administration charge -- by an interministary a demonstration. -- by an interministary administration. into the nighinternet service pe

to adopt measures to impeding access to sites and good customs and the use of publications that affected the integrity and security of the state. despite all of these limitations, bloggers still find ways to up load their stories, their posts. they write at home on personal computers. some of these computers are put together by black market parts. they loaded their information on flash drives that they take to cafes, hotels, or diplomatic venues. some say that they are able to sporadically post directly to their blogs, but, in fact, most

of them e-mail their post to friends outside of cuba who load them on to their respective websites. cubans have restricted limited access. ñrmost of their posts, most of what to do lagers right are read outside of cuba.

they also want to make you aware of what they're doing. in order to disseminate what they produce, they save their posts to cds or flash drives. it also planned, photocopy, and bring their posts -- the also print, photocopies, and bring their posts to grips and handed them out. it is clear that the emergence of thesis vibrant color communiy is evidence of a generation shift.

even a country as isolated as cuba is slowly moving into the 21st century. >> great. thank you very much, crowes, for those comments. -- thank you very much, carlos, for those comments. >> thank you, both of you. most working cubans and do have a little more access to e-mail them to internet. that has created a lot of contact between cubans and cuban-americans. for many years, i had very little contact with anybody in cuba. now have more than 100 e mills from family and contacts and colleagues. there is information like text

and photographs and sound trivial information like happy birthday are happy mother's day and then more interesting content. but it has helped to unite families and intellectuals inside and abroad. we take for granted the isolation in cuba. also, in the last year alone, i can think about four or five important postings in the internet about things happening in cuba, the discussion of students with alarcon, panfilo, a drinking street guy who said

there was hungry in cuba and it went worldwide, and, recently, a couple of weeks ago, students complained about the quality of the food. it is a lengthy complaint about how can you go to school and showed the kind of food they were giving. it is not only that it is posted. there is someone out there filming it and putting it on youtube in some way. i think that also shows the use. in the complaint about the food, you can see other people taking it was much as whoever posted it appeared there was more than one

young person taking photographs -- posted its. there were more than one young person taking photographs and recording it. these are elements of new technologies that are there. the concert of juanes was televised live in miami where there are so many cubans. it made a lot of people in the atlantic and outside the island -- it made a lot of people inside the island and outside the island share something. television has come a long way. there are communication changes

there getting them very slowly into the 21st century. >> it strikes me that to the united states clearly is trying to take this changing technological landscape into account and changing policies toward cuba. it is still must clear that we have the right mix. on the one hand, earlier this year, president obama authorized in number of changes in u.s. policy with telecommunications, including allowing u.s. telecom providers to enter into agreement around optic fiber that links cuba to the united states. they enter into roaming service agreements. when you're working with cuban providers, that is clearly the cuban government.

the desire to increase those official types of linkages -- at the same time, the u.s. has tried to help facilitate society in cuba and provide technology along those lines as well. with regard to tecological changes in cuba, in the process of trying to facilitate downloading development, downloading democracy, or downloading destabilization -- those other things that are very much on the minds of those cubans on the island. with that comment, we would like to open it up to questions from the audience.

please identify yourself. >> my main question is to the gentleman from the committee to protect and journalism. you spoke about the legal and regulatory framework for online activity. still, the penal code does not mention anything regarding on- line activities. do you see, in your monitoring efforts or analysis, a move in the short to medium term by the cuban government to modify the peel code to include sanctions -- the penal code to include sanctions? >> that is a good question. i am not sure about that. i didn't think they need the penal code to criminalize blog

directtv. -- blogger your activity. -- blogger activity. a month ago, blubbers were on their way to a peaceful march in havana. -- bloggers were on their way to the peaceful march in havana. they were forced into a vehicle by government agents. they were beaten. this can give you an idea of hell for the government can go in termsñi of going after dissidentsçó. çóas i said before, we have not

seen yet the widespread crackdown on dissidents and independent journalism withñi raul castro that was seen before with his brother. taking into account what happened before, when the movement of independent journalists flourished in the 1990's and got a lot of recognitions by publishing their stories, mainly on web sites in the unit states and europe, this does not preclude the fact that a major crackdown may happen. >> under cuban law, there is a catchall phrase. in a certain sense, that is so

broadly defined that, even online activities are not explicitly forbidden, depending on what one rights, they could fall under that phrase and there could be penalties that come with that. thank you. >> i have a question related to sell phones. video has been important. cell phones are important. that is not just in cuba, but throughout latin america. cell phones are becoming a way to access the internet and post things. how is their access to sophos? how does cuba restricted? -- to sell phones? how does to restrict it? -- how is their acces to

cellphones? how does cuba restrict it? >> there is a blogger that addresses some of the u.s. contracting and advisers who are advising the u.s. government on how to provide this kind of global connectivity to cubans. absence makes the heart grow fonder. the fact that a lot of young kids are missing this technology does not make them more ignorant. it makes a more knowledgeable than we can be. i have a blackberry and i do not what to do -- and i do not know what to do. they can make a car work for 50 years. they can write up a lot of technological things