somewhat. i have always loved history. host: why is that? where does that come from? guest: our family does talk about history and politics a lot more than would seem at usual. -- than would seem usual. host: how did you go about making this documentary? for those that just saw it, they're probably saw the graphics you use and different software. guest: every time i make something like this i make learn something new. at this time i learned a lot about motion graphics. i put each image you saw on its own track. what i did is key framed these tracks to make the move.

i took the images and rendered out the image and you got what you saw on the graphics. host: part of the rules are you have to use c-span footage. how did you use the footage you in the documentary? guest: i spent quite a few hours searching the c-span video library about things like the pennsylvania duty in the great compromise. i searched all of that information on the c-span video library, and a lot of interesting things came up that i was able to use for my documentary. a lot of that footage dates all the way back to the 1980's. it was very interesting to see how things have changed in the broadcasting world. host: you went pretty deep into the library to find the material you. can you talk about how much

time you spent in front of the computer doing this? guest: i found most of my footage for the documentary before i even went to washington to shoot the interviews and shipped on-location shots. it was a major part of my pre- production process. i did spend quite a few hours. i do not remember exactly how many. host: what did your parents say when you said this is the topic i want to do? guest: when i talk about my topic, you kind of have to see it. it is really hard to explain in a very short amount of time. i kind of told them this is basically how my documentary will work. they said ok. host: we are talking about compromise in washington. and that was the topic of carl's

documentary. here joining us at the table is donald ritchie to help us take questions from viewers about this topic. let's begin with the great compromise. why was a call that? guest: when the constitutional convention met one of the differences was between the large states and the small states. the large state the new government should be more representative of the population. small states said no way. the constitutional convention almost came to an end over that issue. until they formed a committee over the fourth of july weekend in came up with the ultimate compromise, which were two houses of congress.

then they wrote a special provision and saidit will lose its equal standing in the senate without its consent. no state would ever give that consent, so the senate will probably remain that senate as long as the u.s. government stance. host: karl talked about the great compromise, and he also gives an example of not willing to compromise on an issue. what struck you about the documentary? guest: i thought was very creative. i particularly like the fact that he use so much of senator speeches. i think he would have really loved to watch this documentary and like the fact that there was a good portion of his speeches included in it, but he believed in the institution and believed that people had to rise above politics and the motions of the time and did have to reach a compromise. as henry clay said, all

legislation is a form of compromise. there are certain moment when we all marched together in the same direction, but for worst of our history there is a lot of continuity. -- but for most of our history there is a lot of continuity. host: has there been a great compromise since the one that is documented? guest: there have been many compromises. among the greatest is the missouri compromise of 1820. the other was the compromise of 1850. both of those dealt with the issue of new territory that we have incorporated. how with the territory becoming into the union of states? -- how would the territory becoming in to the union of states? they tried at first to divide the nation with a line, the missouri compromise line. above the line there would not

be slavery and below if there would be. then we acquired more territory. there were great divisions between the north and south over many issues, slavery being a primary issue. in 1850, henry clay and other senators tried to put together a compromise to avoid a civil war. what they did was they delayed the civil war for about a decade. it was known as one of the great compromises. certainly throughout history there are constant compromises and the senate and house because there are 100 senators and 435 house members. every issue that you want to get past you have to build a coalition of support. -- every issue that you want to get passed you have to build a coalition of support. a good compromise disappoints each side. each side has to swallow

something they do not want in order to get something they do want. host: carl talk about this in the documentary as well, but small states. what is the role and what is the impact on that in legislation today? guest: the supreme court said legislative bodies have to be in proportion equally. the only legislative body in the country that that does not apply to is the u.s. senate, because in the unionstate's -- half the population of the united states lives in 10 states. the other half lives in 40 80tes and the havey have senators. in the house california has 53 representatives. william hayoming has two.

that means the small states have a much larger voice in the senate and they do in the house. host: we're talking about the history of compromise. it is the topic of our grand prize winner. we should do the documentary at the beginning of this. if you're interested in watching this again, go to our website. studentcam.org. you can watch all of them there. let's go to florida. first phone call on this. caller: if good morning, and thank you for taking my call. thank yourning, and for taking my call. i wanted to say congratulations to carl. i just watched his grand prize

documentary, and it was fabulous. he really gave me an education. you are never too old to learn. i wanted to call and congratulate him on that. it was a marvelous teaching tool. i hope you continue to make many more. host: tim is a democrat. caller: we need you for president. i really liked that. i just have one question. what was the difference between the emf back then and the emf now? host: we just lost a phone call. i am not sure what he meant. let's talk about history today in the congress. you mentioned robert byrd. he knew the history of the congress and how it worked. has anyone fill that void?

guest: there are a lot of candidates. he was a very unusual senator. he went to law school at night while he was a u.s. senator. he felt because he did not get a formal education as a young man the rest of his life was learning. he continued to read. he got very interested in not only that history but the rules and the presidents of the senate. of thethe presidentence senate. usually every friday afternoon he would stand up and give some speech about some aspect of the history of the united states senate. these were compiled. almost no one else has matched that kind of devotion to it, but

certainly among the senators, especially among the senior senators, people like senator alexander and other people who have been here for a while and to our real institutional list, you often feel in their speeches they will talk about the historical precedents of whatever the issue is today. there is a lot of continuity. if you are debating something today, it is not the first time the debt has been an issue. it is not the first time these issues have come before the senate. some senators have a longer view and greater historical perspective on it. host: is compromise possible today? guest: the onetime absolutely broke down was the time of the civil war. we looked at what happened in that instance. the confederate states left and lost everything they left for.

for one, all of the state senators lost their seats. actually the civil war was at an extremely productive period in terms of american legislature. the emancipation of slavery was something the confederate states have d left the union to avoid, and it wound up suffering. everything they let the floor from was what they wound up losing. that is why you do need to compromise. host: we will go to john on the line for democrats in michigan. caller: congratulations, carl. if the congress was being

developed today, what they're be -- would they do it the same way? what the people be able to represent themselves with internet and telephones and the like? guest: it is very interesting. communications have changed tremendously. that 1880's it took a long time for communications. they would go and spend months at the time for tcapital. members of every state go home almost every weekend. they are connecting with constituents, and they all have internet sites and web sites and they all tweet. they are constantly communicating. the question is at some point could we avoid representation and have people vote on every

particular issue? the issues are so complex and are so fast and furious that it would be hard for the citizens as a whole to pay attention to everything that came along. there would probably be a hard core group of people that would do the leading, and everyone else would wait to see what happened. we are very much dependent on transportation and communication. host: what do you think? do you think politicians today should compromise? guest: i think compromise that we depend on the issue. some compromises like the impending government shutdown, we needed a compromise otherwise we wouldn't have huge consequences. there are other issues that may come up that would not be a good idea to compromise on. in most cases compromise is definitely necessary to get things done in the house. but there are some exceptions. host: it sounds like you are

following this issue, even though you finish your documentary a while ago. guest: yes, definitely. it is very important to me. host: we will go to a calller from ohio. caller: i am calling, because i tould like to ask him have discuss the idea of the unlimited lobbying and unlimited donations that the big corporations are handed out to our suppose it representatives. the fact that they are now owned by these contributions, and what are we going to do about it? isn't this really distorting the democracy? guest: certainly the lobbyists are a daily part of what goes on on capitol hill.

lobbyists are from all different corporations. from large corporations to unions to and our mental groups and others. -- from fundamental groups and others. money talks, and the more money you have, the talk is louder, and that has been an issue from the very beginning. since the 1930's the congress has set requirements that they need to file on the showing who their sponsors are and where their money is going. there were a number of roles in the way finances could be distributed. congress is still trying to grope with this. that issue is not a new one. it is certainly one that has persisted through much of american history. not to say that lobbyists are

pertinacious. they provide information on issues. they also represent groups that have an interest in what ever the legislation comes out. they do not want legislation that will essentially punished one region of the country or one form of industry against another. every piece of legislation that comes up you will hear from all of the groups that are concerned that that legislation will affect them. host: tony, republican. you are next. caller: carl, well done. i really like tell you took me into washington, d.c., with some of the issues. i have a question for you, carl. i understand with the militia that hamilton somehow got us into debt, which paid for the militia. i understand jefferson had an opposite way of doing it. what was his way, or did you know about that? guest: i do not believe that really came up in my research.

guest: alexander hamilton was an economic genius. relieve the beginnings of our country were very much dependent on his decisions that had to do with taxes, a banking issues, the tariff issues. one of his big issues was the united states had to pay off the debt.tion a waary war jefferson believed and a smaller government and opposed this. that was a big issue in terms of deciding where the federal government would be located. in the sense the south accepted the proposal. the north got the economic program they wanted. tried very hards

to reject the debt. there was one moment where they had no debt. there is a brief moment with a pay off the national debt, but national debt has been part of american history since the american revolution. we have only paid for our government through a combination of immediate taxation and long- term debt. host: that brings us to today's headlines in "the washington post." we're talking about compromise today, because that is the subject of the grand prize winner. calller from new york. good morning. caller: good morning. i just wanted to congratulate young carl. good job on the technical aspects of what he did. i appreciate the fact that he

chose a liberal arts history to bring some items forward. could hoping mr. ritchie a lovely -- could elaborate on some of the issues that came about in the project in the situation that arose after world war i when the veterans were striking outside washington, d.c. guest: very good point. you talked about the mutinied but there was ak then, moment when thousands of world war i veterans marched on washington, d.c., to demand the bonus they had been promised. it was not due until 1945, but because of the depression they said we will not be alive to collect the funding.

president herbert hoover allow the u.s. army to drive the veterans out of washington, d.c. that was one of the contributing factors to his defeat in reelection. president roosevelt when he came in, one of the things his administration proposed was the g.i. bill to take care of veterans. historian said it had an enormous impact in terms of raising the education level of the united states, raising homeownership and establishing a long time of prosperity that follows the second world war. we do learn from our history along the way. yes, indeed, there have been military difficulties that has played a role in decisions government has made. host: do you get phone calls from senator saying what happened on this issue back then? guest: we do not usually get phone calls from senators on

career issues. the one time we did get that was during the presidential impeachment trial when senators were on their way to eat their press conferences or to town meetings, and they realize that questions of a historical missnature was going to come up these days, and we tend to deal a lot more was that and speech writers who are looking for factual information to support issues, and in fact, we provide the same information to both sides in the debate. the basic factual knowledge of what did we do in the past and what type of responses came out. the senate historical office is much less involved in policy issues the and it is an institutional issues. how the senate as an institution responded to issues. what are the parliamentary

procedures? things like that as opposed to what are the details of this particular issue? the congressional research service provides strong factual information on every piece of legislation that congress will deal with. host: vinny on the republican line. caller: i wanted to get a recommendation for the video. there are two books called " and they areurse" great books on how they had a vision of central banks. host: any thoughts on that? guest: i am really impressed that carl has grasp so much of american history. i hope he will continue in the

enormous amount of reading that can be done on these issues. one of the startling statistics to me is that the average college freshman knows more about american history than the average college senior. it is not because colleges have poor history departments, it is because so many students do not take history class is while they are in college. states require a large amount of american history and world history while you are at a high school level. high school students are pretty well informed of what is going on. i wish our college students are required to take more of it, because there is a rich base of literature to drop from. host: what do you think, would you keep learning about our nation's history? guest: definitely. i think it is very applicable to today'. host: what do you think?

will you do this again? guest: probably. every time i do a project like this i learned something new and do something i have never done before. i hope i am able to enter again next year i will have an even better documentary. host: if what did you learn this time around? guest: i had access to a lot better equipment than i did last year. not only did i have more functionality i was able to take advantage of, but it was also able to really use my equipment to the best of my knowledge to create a lot of the motion graphics, a lot of the audio techniques that reduce and all sorts of things. host: what will you do with a $5,000 to one? guest: i will tithe 10% of it. i will save most of it. the rest will use to upgrade

some of my equipment. i will upgrade to a better software. then i will invest in getting decent lighting. host: we think you look great in your documentary. michigan, paul, independent calller. we're talking about compromise in washington. caller: my question is he seems like a go getter. i am curious why there is such a rift between these parties? could he do a documentary on something that would compromise everyone to be for america? host: are you talking about in today's time? guest: people say is this most political partisan divide in

american history? i say no, quite frankly we have always been a partisan nation. it was the coming together on those positions, first the passing of the constitution and then the bill of rights that really changed the constitution. from the very beginning we have had great disagreements. the whigs and the democrats. the wigs of the republicans. that is a form of dynamic tension in the system that has propelled a lot of ideas, that nobody has a monopoly on the best ideas. that in a sense compromise is forced, because not everyone is an agreement on those issues. no states where there is know disagreements tend to be dictatorships.

host: johnny, democratic calller. and caller: i called to congratulate carl, and called to say i watched c-span as often as i can come and i consider it the best ivy league university in the country. i feel like i am back in college for free. i like listening to the different opinions when people call in. i would just like to say continue the good work, and i will continue to pay my cable bill to make sure you stay on the air. you all have a blessed day. carl, i give a shout out to you. host: thank you. we appreciate that. let's talk about those who talk about compromise. what issues represent a compromise in today's terms? guest: carl made a good point

that not always is compromise the best solution. it depends on what issues were. there were politicians who were famous not for compromising, and to set i would rather take nothing rather than half a loaf. you wanted a full loaf on every issue. he wasn't willing to split the difference. that meant a lot of issues he favored were not going to pass. much of what he did want to come about, but not because of him. he had a very meager legislative record. there are moments where people feel it is the board to draw the line and compromise. if you want to enact something and get something done, you move forward, you usually have to reach some sort of an agreement. the question is how far are you willing to go? how far are you willing to stand on your principal or to relax

its? that is a universal issue throughout american history. host: talk more about politics and how it has changed since the great compromise. guest: since the early years there have been some very difficult changes. we had one senator who was beaten wit a member of the house representatives to came over and objected to one of his speeches. fortunately we do not have physical violence in the chamber, but there is great difference on the issues. it is interesting if you watched c-span today, you hear the senate and house are very polite in the parliamentary language. it is almost 19th century language. that was required by thomas jefferson when he was the presiding officer of the senate. he wrote the first parliamentary rules article.

he said they are always going to be heated arguments, and the only way to have a rational solution to these issues is to try to cool down the rhetoric and cool down the behavior, so that senators are not to address each other by name. they are not to criticize each states or motives. there is a force decorum that the senate has upheld in the senate to a large degree as well and have required of their members to try to have a civil debate over issues of which they feel passionately different. host: how long is the book on decorum and rules for the senate? guest: the senate book of procedures is a very long book. it is well over 1000 pages long. i recall senator byrd standing up and sang every congress he

read through the book underlining different sections. i know there are some senators who have never opens the book. they rely on staff and others to tell them what the procedures are. the senate is a governing body. the rules have not changed dramatically over that amount of time. they sit at the desks that they sat at. there is a great sense of connection to their past. unlike the house, which reinvents itself every two years. the senate is an institution that is based much more on continuity and tradition. that is why so many senators are often interested in the history of the institution in the history of the nation. host: perry, democratic calller

in south carolina. caller: the best compromiser was lyndon johnson in my opinion. even in the senate when he was there and became president, it was all because of compromise that we got a lot of the 1960's civil-rights things past. guest: that is a very good point. he to say come let us reason together. he would get us to sit down and figure out what they needed to get them on board. when they were passing the civil-rights act in 1964, he was president of the united states but almost the super majority leader of the senate at the time. they needed 67 votes. the only way they would do that is for both parties to be on board. it was a minority faction within the minority party. johnson knew he needed to get the minority party on board.

much of the bill was written in the backrooms of the republican leader. they worked with the republican leader to come up with a bill that would bring on enough votes to pass it. that was one of the most of the good pieces of legislation that came about because jobs and do have the legislative process worked. host: thank you for being here this morning. a big thanks to carl for winning the grand prize documentary. thank you for being here. if you missed the 2011 competition, you can go toward nto our website. next year's theme is select any provision of the u.s. constitution and create a video il missed the 2011 comp >> on washington journal, we

will talk about the first ever news conference by a chairman of the federal reserve. then, michael swetnam will discuss the leadership changes at the pentagon and the cia. after that, the defense of marriage act. the department of justice said it would no longer defend the law. david masci joins us. washington journal a is live at 7:00 a.m. eastern on c-span. we will take a look at the political unrest in syria. live coverage from the hudson institute begins at 12:15 eastern. >> earlier, a top military officer talked about the u.s. strategy for pulling out troops in afghanistan. his remarks are next on c-span.

then, an aviation conference. later, federal reserve chairman ben bernanke talk to reporters about the u.s. economy. >> sunday from the los angeles times festival of books, in depth with your questions for tibor machan. he will take your phone calls and females live sunday at noon eastern on c-span2's, booktv. general richard mills has been the -- has been in afghanistan. he will talk about drug trafficking and -- this is one hour.

>> law it is hard to drag our eyes away from the enormous history debt is unfolding in the middle east, it is critical to remember that we are still in the middle of the longest war in american history in afghanistan. 116 months as i count it, and still counting. 130,000 u.s. and allied troops on the ground and a set of challenges, both military and civilian, that have proved enormously resistant to

solutions. as you all know, the list we have of governments -- local government partners does not earn that moniker. it is not as popular or trusted. we have weak afghanistan institutions and and insurgency that still enjoys safe havens across the border in pakistan, a situation that has proven to be almost insurmountable to military victories, both in korea and vietnam. we faced the same problems. the u.s. has made over this long period, a tremendous effort.

changed strategies, unchanged leaders -- changed leaders in struggling to deal with this set of issues and now faces one of the toughest moments, which is to try and figure out how to begin to end it. are we at the end of the beginning or the beginning of the end? where as we have seen this week with the kandahar prison escape, which was particularly telling because in the five months it took to dig this tunnel into the prison -- at

least as far as we are told in the u.s. press -- no afghans came to tell us that this effort was underway. it tells you something about what we are up against. we heard from general petraeus recently that a word of cautious optimism about the military situation, but we are further into this year's fighting period and facing, i think, a changing situation. we have with us today to share his insights into the situation on the ground, we had the privilege of hearing from major general richard mills who has been the senior most lead in afghanistan and has been leading regional commands southwest there where he oversaw 30,000 coalition troops.

he has had two tours of duty in iraq and, before that, in kosovo. he has had a long and highly successful 36 year career in the marines. he has had a long experience with situations of insurgency, not unlike the ones he has faced in afghanistan. we are going to hear his assessment after his last tour of duty in their of where we stand in terms of civil and combat operations and what the challenges are ahead. then we will have a chance to ask questions. we would like to thank you for coming to share your assessment with us and we look forward to hearing from you. >> thank you very much.

>> i want to start off by thanking you for this opportunity to speak. i hope that i live up to all of your expectations. i look forward to the questions i would get at the end of the brief. let me qualify my presentation just a bit so you understand where i am coming from. i am going to talk about the southwest corner of afghanistan. that was mike world the past 12 months. that made up my area of operations where i concentrated and was focused. i will be happy to answer any other questions on afghanistan as a whole, but it would be my opinion and not forced by personal observation. i spent most of my time in the capital. just a quick background -- i was the commander of the first

marine division in camp pendleton. i am 8 very happy with my duties. i went to afghanistan in 2009. the plan was that the 10,000 men would be replaced man-to-man and that would be the extent of our commitment there. president obama made the plan to do a search and i found out i would go with 20,000 to expand our forces within the provinces. i was also told at that time that i would morph into a nato regional command that would encompass the two provinces i spoke about and would add 10,000 british forces to my command. i would also have georgians under my command. it was a nato force.

my deputy was 8 uk 1-star to served with me during my year on the ground out there. it was a marine air-ground task force based abound -- based around a marine division of 13,000 men. we and artillery, light armored vehicle, engineers, and aircraft units, and the entire gamut of rotary wing aircraft. we had close air support provided by hueys and cobras. we were operating in the southwest corner of afghanistan. there are about 2 million afghans who live in that area. most of them live within helmut

province. there is a very low level of insurgency there. the province was the capital and had a long connection with the united states of america. people remember the americans very well. wek in the '50s and '60s, set millions of dollars to build and arrogant -- irrigation system that turned the desert into a very lush agricultural area about 10 kilometers wide on both sides. the process was dominated. it eventually flows into iran. it provided some challenges to my aircraft. the population is focused along

the river -- about 1.5 million. they live in strings of towns along the river. just one more word on the irrigation system. it does play an important role for us. it was built by the americans in the '50s and '60s. it is a simple system. it provides power to parts of afghanistan. more importantly, it provides water control so the area is formed 12 months at the year. the irrigation system is simple, but very effective. it is gravity fed. it has been maintained by the afghans ever since. they remember the americans quite finely. if you see some old photographs , you will see american ladies

playing tennis in short skirts at the country club and american men moving around and american people in western dress working closely with americans. it was the breadbasket of afghanistan for many years. they grew everything from corn, wheat, and potatoes. if you have not had a pomegranate from the process, you have not had a pomegranate. [laughter] it was quite lush. the area is also a natural garden for pot. para oneof the world's is from there. -- heroin is from there. it is a cash crop every farmer dreams about. the guide shows up in october and hands you a big bag of seed, you throw it on the ground. it blooms in beautiful flowers and then hardens into a ball

where you -- that you squeeze to get the sap out of it. another guy collect the sap and easy money for it. unfortunately, it ends up in the streets of new york, chicago, l.a., london, paris. it is the main source of the insurgency's funds. we dealt with it as that. we interdicted it. we did not get involved in eradication, but we dealt with the introduction of those drugs. generally when he found a cachet of weapons, even on drugs with it. the border was a key note in that supply session. drugs were sold there. weapons were bought and then moved up to feel the insurgency. once again, the southwest corner of afghanistan. this was an operational approach to our time there. i would just point out a couple

of things here. the river that flows -- the green line that runs from north to south -- those of the various towns along the river. most of them are market villages that you would find in any rural, agricultural area. small shops, marketplaces or you can buy and sell cotton, wheat, and potatoes. unfortunately, you could also buy drugs a year or two ago. that is not so anymore. we operated very closely with the afghan government. everything we did was partnered with our afghan security partners both in the military and police role. i had a full court of afghan soldiers in my area it -- 250. formed in march 2010. i had three brigades of about 12,000 soldiers on that. unwelcomed, will lead, and increasingly well-trained.

six weeks ago, they were effectively conducting independent operations with just enablers support from our forces. things like communications, air support, and medi-vac. they get the same capabilities that our own forces enjoy. we had an integrated information campaign that we operated with the western media, coalition media, and afghan media. we wanted to get the story of what we're doing out on the streets to the afghan people. perhaps some slight change could have been the emphasis on maintaining the momentum of the enemy. when we arrived, it was sort of a stalemate. we had cleared many of the areas you see on the map. our forces were relatively stable. i in my opinion, the enemy had momentum on the ground and could

dictate when and where the fighting would take place. they used lethal -- we decided to change that. we consolidated some basis and went on the attack. we felt there should be no place within the province where the enemy was free to train, plan, and take some time off. we were in areas they thought were safe havens. the battle of marcia was overweight -- under way -- the battle of marja was underway when we arrived. the impact of that was to disrupt the enemy, pushing back on his back foot, and let him react to us. we found that to be extraordinarily successful. it's a tough resilient enemy has

ways in which he liked to conduct his operations. he likes to fight in a series of positions taken fall back on. he does not like supporting arms. he is terrified of air support. he is definitely afraid of being maneuvered against. all those we brought to bear on the enemy in serious battles and drove him away from the population centers, pushed him out into the desert, pushed him away from the green zone, and pushed them into areas where he could be less effective. we had some success at doing that. the battle of marjeh was a major fight for us all last summer. it morphed into a collector plates. if you go there today, there are restaurants that are open. there are stands or you can get a nice lunch. there are bakeries and shops where you come by whenever it

is you are interested in. it is a town where downtown has very few security people whatsoever. it has more afghan security providing their own security out on the streets. the afghan police force -- when i arrived in june, i ask about a afghan of local security force. they all shook their heads absolutely not. they wanted no part of the afghan police. the afghan police had a reputation for thuggery, thievery, and being shakedown off -- shake down officers. they slowly gave in. we were able to transfer some veteran police officers do not the process to get a footprint on the ground. then we actively recruited marjeh boys.

when i left, we had 120 police officers who were local boys who were returned to do their police work. in the training, we stressed police techniques and skills, but we also stressed to protect and serve like the paramilitary does. we had some success in doing that. one of the battles we had was you had to have a third grade education. it is hard to find someone with a third grade education. the literacy rate is below 10% for men. for ladies, it is below 1%. there is no way to gauge the female literacy rate because our ability to deal with them is relatively light. i will talk about that in a minute. we had a literacy program going

on in the police training academy. we used local teachers to teach basic third grade literacy. the is the way we've found process when we arrived. we found a resilience, robust insurgency that had been kicked out of some of the key population centers, but still had a significant presence within the province. on that map, it is read, that is dead. if it is yellow, that is where the government of afghanistan is going to take control. they will be backed up by a coalition force. in april, significant insurgency on the ground, well funded to the use of drug money. well organized and a significant link of communication.

primarily coming north out of pakistan through the red blob ec of the bottom. we focused on the population and a look at the areas in which the majority of the population who lived. when we arrived, we were obviously going to do full- fledged operations, but we felt that it had been a little bit out of whack. all you have to focus of the population, you could not lose sight of the enemy. it did not allow the enemy to dictate what is happening on the battlefield. if you could not allow him to murder and intimidate his way to the efforts we were trying to make. we took the battles to him to make them uncomfortable, to make them react to us. we found that to be relatively successful. a series of battles in marjeh

and then through the fish-hook -- i would put some more grain and some wore yellow on that map if i was doing it again. we believe we regain the initiative in controlling this population centers. people think of marjeh as a manhattan island, but those are not roads. those are actually it -- irrigation canals. these are some of the metric you can use to judge whether not we were successful. this is an overhead shot taken by u.s. satellite capability of the crops being drgrown in marjeh. on the left is marjeh before we arrive.

if it is yellow, it is poppy. if you see green, it is sweet. it is the purple, that is some other crop. on the left, just prior to our arrival, it shows you the progress being made. as we take control of those areas, as the government of afghanistan news in and does what local governments do, one of which is a strong eradication program, you begin to see the poppies disappear. the local governor is rapidly anti-drug. he has programs against poppies. he has a strong eradication program that he does on his own. the as a substitution program which we work with them on that has been very effective. we at 5000 farmers signed up to

take part in the crop substitution program. what they got was a wheat seeds, a fertilizer, and instructions on how to grow it -- not for free, but at a reduced price. it encourages them to participate, but it is not a free ride in any form. it will be a slow reduction in overall -- i see of funds the insurgency will not get. that is why marjeh is so important. it was their funding source. we had to fight for it. in addition to being the center of the pashtun committee, it was materially important to him. i fully anticipate and -- a

counterattack this spring. he cannot give it up. he cannot afford to. we cut his operating budget in half last year because of the reduction of the poppies. it turned into have tried to .s from thel i edie.e.d ground.

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keynote speaker next, and he has agreed to speak over your clatter, so i hope that as you're mother taught you and as thomas donohue says, to also use your silverware silently so we will be able to enjoy this next presentation. we first want to thank boeing

and jim albaugh for being the key sponsors in the entire event. it's a big undertaking and we are most grateful to boeing, and jim, we really appreciate your presence here today. i don't want to take any time away from what he is going to have to say other than jim albaugh has been with the boeing company for 36 years, and during that 36 years, he has had thee most incredible background. it's really an amazing career for any one person. he has been president and ceo of so many different divisions and businesses at boeing that it would be hard to remember them all, but he started out as president of the rocket dyno propulsion and power division and then president and ceo of

boeing space transportation, and then president and ceo of boeing integrated defense systems and also president and ceo of the boeing space and communications division. i believe he was president of a couple of others that i may have missed, but in every one of these positions, it was because of jim's leadership and capabilities that he was moved to the next presidency to take over once again and make that a stronger program, and so when he speaks to you today, i know you'll see why because he's a great speaker, but he's also a great leader, and needless to say, jim, you have been the right man at the right time for so many different jobs at the boeing company, and now you're the right man at the right time to be the luncheon keynote speaker, so please come

forward. [applause] >> well, good afternoon, everybody, and thank you for that introduction, carol. you can see i vice president had a very -- haven't had a good time of holding on to jobs. i keep moving around. i'll touch on not only commercial aviation, but defense and also space as well. it's good to look out at the crowd. i see a lot of good friends, customers, competitors, and i should have checked the program because i see allen mccarter is talking after me, and i was hoping i'd talk after him. we're great friends, and it's a healthy competition, and it's very good for the industry. i want to talk about the importance of aerospace, you know, talk about the state of aerospace today, and talk about some of the challenges that i think we have. i really do believe that our industry is at a cross roads. nobody's ahead of the united states in aerospace, at least not yet, and we are the

industry's leader and build the industry's most capable airplanes. look at the programs we have coming from the department of defense, they are really unparalleled. the commercial satellites, military satellites we have do things that are just phenomenal and our orbital man space program is second to none, and unfortunately we're parking the shuttle sometime very, very soon, but i think the leadership position we're in is threatened, and certainly there are other countries that would like to come after the dominance we enjoy right now, and, you know, we're not in the business of reclaiming our lead. we have the lead. i think the question is are we going to take the steps necessary to maintain that leadership position, or are we going to allow aerospace to join that list of u.s. industries that we used to lead? i'll talk about that today. you know, to understand why it's so important, let's take a look at what aerospace has done for our countriment i was very

fortunate to join aerospace in the last quarter of the 20th century, and to me, aerospace really defines the 20th century. you think about commercial airplanes and it shrank the world and brought countries together and in world war ii you think about the tens of thousands of airplanes build and technologies that bring us together and certainly when we walked on the moon for the first time, it changed forever how we look at the world around us. i'm convinced that aerospace defines the 21st century. i think the question we have will it be u.s. aerospace that does that? i think that's a critical question because aerospace truly does help to keep america strong. you know, there's no industry that has a bigger impact on our economy than aerospace. look at exports, there's a $53

billion surplus as a result of what the people in this room do. you know, president obama called for doubling of our exports over the next five years, and aerospace will be in a leadership role in doing that, and if you look at the impact of civil aviation alone has on the country, it's really breathtaking. it's responsible for 12 million job generating around 6% of gdp. what's the commercial marketplace look like today? it's vibrant, growing, challenging, but rapidly changing as well. those of you in the room who operate airlines know what happened in the last 15 months. the market really has come roaring back. 2010 was a year everybody really enjoyed. it's been subdued somewhat this year as a result of oil prices, but still, in a very positive position. in boeing there's a seven year

backlog, $263 billion, and with air traffic increasing at 1.5 times the world gdp, you know, we think the future is pretty good. you know, our estimate is that the gdp is going up over the next five years between 3.5%-4%. you do the multiplication on that and not discounting what's going on in northern africa or the fuel prices, over the next 20 years, we believe there's a market for some 31,000 commercial airplanes or $36 trillion, and that's a marketplace a lot of companies and countries with eyeing. there's a lot of factors to shape the market, and i'll talk about some of them. first is globalization and the second is competition and the third is some of the shifting demographics we have in our work force. let's talk about globalization, you know, first. the world is very interconnected, but i think that interconnection certainly has made the world much more

complicated as well. we saw the earthquake in japan and despite the fact that the epicenter was some 4,000 miles away from our manufacturing facilities in pugot sound, it impacted us. tom friedman was correct when he said the world was flat. globalization means many of the partners we deal with and you deal with are outside the united states and globalization does drive air traffic. we went back and took a look at air traffic back 20 years ago, and about 72% of it was in the united states and it was in europe, and we project out another 20 years, and the number is 45% and soon half the world's gdp comes from emerging companies and that changes the marketplace. we've seen increased competition, and we know it's been interesting between air busts and boeing and allen would

agree with me it's rapidly ending. in other companies and countries are attracted by that $3.6 trillion market i talked about. there's china and dray zill, canada and russia. .. to 22,000 feet

that's hard to do. i have no doubt that they'll be able to build a very good airplane. at the same time, you know, china is the largest market that we have. and they've gone from being a supplier and a customer to a supplier and a competitor and they have done that in about 40 years. they have decided to make airplanes. airplane manufacturing a national priority. i'm sure they will be succesul that presents another issue for many industrialists in the united states. it is a huge marketplace. it's a marketplace where you have to pay to play. and like any country where we put technology, we have to be very careful that we're not giving away technology that ultimately could help a competitor compete with us around the world.

you know, it's interesting, you know, china there you go and it's amazing every time that i visit the improvements, the changes that have been made and certainly they will do that in their aerospace industry as well. meanwhile, military threats have certainly evolve as well. during the cold war we knew who our enemy was and we trusted them not to used weapons of mass destruction. today, oftentimes, we don't know who that enemy is but ultimately given the chance. they will use those weapons. they have done it before. and as a result we see a lot of shifting dynamics in the department of defense. a lot of focus on the asymmetrical threats and certainly a changing mix of platforms in the security of defense. the demographics are a big deal, i think, to all aerospace companies and right now about half of our engineers that work for the boeing company could retire in the next five years if they chose to do so. and that's the same story at lockheed, raytheon, northup

grummond and all the aerospace contractors in the united states. we simply are not producing enough engineers to support the need as people choose to retire in the years to come. you know, to me what's that's going to contribute to what i call the intellectual disarmament of this country. and that along will put our country at risk. if we continue on this path we could lose our lead in aerospace and break that long-standing continuum of capability in our industry, and our economy will lose an important engine of growth and our country also could become more vulnerable and less secure. now, that's kind of a tough picture to maintain but, you know, companies like boeing will survive. we will go to where the years are. if we are not producing them in the united states we will go where they are, where the capabilities might exist. in my view, you know, our industry right now faces, you know, five different threats, you know, one the industrial

base, our weakening industrial base, a lack of innovation and technology, a good environment and a level playing field and our industry as an industry and as a country we have to decide, you know, how we're going to respond to those threats. you know, today i think we take our industrial base for granted but we do so, i believe, at our own peril. think about what a strong industrial base has meant for this country, you know, over the last 60 or 70 years. it was the arsenal democracy as i mentioned during world war ii. it put a man on the moon. it made america the world leader in space, commercial aviation and defense. but a strong industrial base is really is not a given. it's a product of the right policies, the right investments, the right priorities but also it takes a lot of time to put in place. you know, we don't have to look very far to see what can happen and how quickly an industrial base can be diminished. you don't have to look any further than the u.k.

they used to have a great tradition, both commercial and military airplanes, and now they're buying f-35, c-17s, you know, apaches and chinooks as well as airbus and boeing airplanes. they don't manufacture airplanes in their country anymore. they realized they needed an industrial policy in place and they put in place and it will take years and it will take decades. when we don't invest in development programs and when policymakers don't consider how procurement decisions impact the industrial base, we risk losing talent and expertise that has taken us decades to build up. our engineering challenge is not a fixed asset. if they don't have work to do in the area ospace area, they will go to other industries or they'll retire. and reconstituting that capability will be very difficult to do. you know, right now believe it or not with the f-35 in the flight test program, there are

no department of defense airplane programs in development. and i think this is the first time that we've been in that situation in probably over 100 years. you know, my view as we risk following the u.k. and dismantling our industrial base if we don't do something about that. now, you might say that we're building airplanes for the military so, you know, that's not a problem from an industrial based standpoint. i would admit to you that being a viable contractor, to be an integrator of very complex systems, you have to understand how to do r & d. you have to take r & d into detail designed and into production. you have to run your production systems and you have to have a very healthy supply chain. and what we're seeing right now with no new starts in the department of defense is we are losing our capability to do detailed design. we're losing our capability to transition design into manufacturing. once that's gone, it will take a

long time to reconstitute. so i know this is an issue -- that was one of the problems we had on the 7a7 program. we had not done a new development program since the 777 and we paid the price as a result. on the space side, tens of thousands are very experienced engineers are going to be going out the door, you know, very soon. once we park this shuttle, you're going to see, you know, thousands and thousands of people who have taken 50 years to really build that capability up and go out the door. you may have seen recently where united space alliance who operates the shuttle for the -- for nasa, they announced they're laying off 2500, you know, engineers last week. and, you know, once the shuttle is parked this summer, i would submit to you and the article in "usa today" notwithstanding, i would submit to you that the chinese will walk on the moon before we once again put an american into lower orbit and

it's unconscionable that we would do that. there's steps to take, every country is concerned about strengthening their industrial base. and the one we have in this country is one of market forces that in my mind that is not a clear, coherent or comprehensive-enough policy for the united states of america. and i'm not saying we need a policy that defines specific outputs and production or that we need to build things that people don't want. but we need to start a dialog about an industrial strategy to ensure the long-term viability of our defense and industrial base. it's critical to the long-term economic and national security of this country. we can't wake up a decade from now and decide that we want a capability and find that we don't have any contractors that have that capability or have the ability to do development programs, and i fear that that's the direction we might be going.

this is an area where we can engage in dialog. the industrial base might not seem essential but think about what commercial aviation has gotten from the defense side, you know, things like radar, things like gps and the heads up display, satellite communications, all things, you know, very important to what we do. and i could go on and on with that list. if you realize the industrial base affects everyone in this room. i find it curious that the industrial base was not considered during the tanker competition or at least it wasn't apparent to me that it was the government was willing to put a lot of work offshore and, unfortunately, that didn't happen. but i don't think anybody should think that just one program is going to be enough to sustain the industrial base in this

country. it's not. you know, the second threat to america's leadership in aerospace concerns innovation and technology, and we're seeing much more competition on the commercial and defense sides from around the world. in commercial aviation, i talked about the new entrants from canada, from brazil, from russia and from china. and we're also seeing, you know, other people enter the defense market as well. i know that many saw the new j-20, the chinese stealth fighter as a threat. you know, i really saw it as a new competitor in the global defense marketplace, and it will be. and i think to win in the face of increasing competition and subsidized competition, the only way that we can do that is through better innovation and technology. and at boeing what we always say we want to do is to make sure that we're building today's airplanes -- we're building tomorrow's airplane when the competitor is building today's airplane. the 787 dream liner is a great

example of that. it's an airplane to say it's the first new airplane of the 21st century and i know that airbus delivered the 8380 in the 21st century but i would submit to you that the 787 is the first airplane to use 21st century technologies in the manufacture and development of the airplane. you know, some companies build an airplane and then they try to sell it. what we do we sell an airplane and then we try to build it and sometimes that presents some issues for us. [laughter] >> you're reading about some of those, i know. but what it does, it always provides an airplane that people and will continue to do that. and from my perspective, there's certain ingredients to innovation that you can't be successful without. you know, first of all, you have to have a desire to be the best. you have to compete on the world's stage. you want to make sure that you're always building the best that you can in the markets that you serve. you also have to have a

commitment to invest in technology and also in the human resources necessary for innovation. you also have to have a culture of openness where people are very comfortable talking about radical ideas, pushing the envelope and changing the way things have always been understood to be built or to be designed. and then you have to have a skilled, capable work force and leadership culture that encourages innovation. and then i think you also have to have an awareness that the best ideas don't necessarily come from your company but can come from other companies and also other countries around the world. you know, innovation is very important to my company. i know it's very important to all the companies that you represent. but it also, i think, represents, you know, america's future. you know, studies have shown that technology and innovation have been accountable for about half of our gdp over the last couple of decades. and looking ahead, innovation is going to be just as important as

we go forward. just imagine in aerospace some of the innovations that we could see. i mean, you could see smart composites that actually morph in flight, you know, based on the aerodynamic loads that they see. we'll have airplanes that fly on bio fuels i'm sure very soon and billy glover i know will talk about that later today. you could have hyper sonic wave riders that skim across the top of the atmosphere. those are all things that are very doable and will be done. i think the question is, will we do them or will somebody else do them? there are a number of policies that i think that are important that encourage innovation in america and certainly the r & d tax credit is one of those. and wherever r & d goes, innovation and economic growth follow. the tax credit will expire once again at the end of this year, and i think we all subscribe to the fact that we need a permanent, stable and predictable incentive for research in the united states. and when you think about the tax

credit, the r & d tax credit, last year it supported some 18,000 different companies and president obama wants to spend 3% of our gdp on r & d and certainly a permanent tax credit will help us do that. you know, the third major threat of american aviation, i think, comes from the environment. it will be something that will limit our growth if we can't figure out, you know, how to reduce the carbon footprint that we have. i think everybody knows that about 2% of the carbon footprint in this world comes from commercial airplanes. it's not only c02, though, that we're going to be asked to reduce. we're going to be asked to reduce noise. traffic density is going to be an issue and i think we're going to be limited also by air infrastructure. and when we take a look at the environmental issues we face, there really are five areas we're focusing on that are aerodynamics. we're focusing on lightweight materials. we're working with the engine companies on more efficient engines. we're looking at biofuels and we also think that there's great

promise in atm and i know that's a subject that has been talked about here today and will be talked about, i'm sure, a little bit later today. you know, at boeing, about 75% of our r & d has direct applicability to the environment. and it's amazing when you think about what we've achieved over the last 50 years, there's been a 70% reduction in fuel consumption on fuel on airplanes and a resulting c02 fuel reduction. the progress continues today. if one looks at the 747-8 airplane that's in flight test right now, it's going to burn 16% less fuel than the 747-400 that it replaces and if one looks at the 787 dreamliner will have a 7% reduction and a 737 and 777 that we're delivering today much more efficient than the ones we initially delivered to our customer years ago. in terms of noise, another incredible story, you know, over the last 50 years we've been able to reduce the noise

footprint by some 90%. infrastructure, though, is going to be a limiting factor in the u.s., as many of you know it, can take up to 20 years to get all the permits in place and also to build a new runway. and you compare that to what's going on in places like china where they plan to construct from 45 to 55 new airports over the next five years. and to the best of my knowledge there aren't plans to build any new airports in the united states during that time period. air traffic management, i think, has huge potential. it could reduce the carbon footprint by anywhere from 10 to 20% depending on who you're talking to. when you look at the money that we're spending on the 787, you look at the money airbus is spending on the a350, you know, we will reduce the carbon footprint on those two airplanes dramatically from the airplanes they replace. but a similar investment for next generation air traffic management system will reduce

the carbon footprint from 10 to 20% on every airplane flying today. it's an investment that we need to make. let me talk about the policies, though, we need a sound approach to the environment that achieves real results but does not disadvantage u.s. industries relative to international competitors. and i'm very pleased that there is an international body that's working to make sure that we have consistency in those policies, you know, around the world. we need a level playing field where everyone in aerospace operates within a rules-based trading system. and we were very pleased to see the recent w.t.o. decision that there will be a message with everybody we're competing with that the rules-base is important and that we all need to play the same way. vigorous enforce of the w.t.o. rules we hope will send a

message and i think it will. another big issue for us is the export/imimportant bank and i know it's important to talk about banks. last year they guaranteed some $34 billion worth of loans which helped us sustained over $200,000 jobs in the united states of america. and 85% of their loans, you know, directly supported small business in the united states. and it's also a bank that didn't need to be bailed out. it's actually a bank that returned money to the united states government. since 1992, you know, they have put $5 billion back into the treasury as a result of the loan guarantees they put out there to many of the airlines that i know that are in this room. and if one thinks about, you know, what it takes to reauthorize the bank, you know, we think that it will be a real step in the right direction

double the exports that president obama is talking about. now, we can get all those things right that i talked about but unless we address the issues we have with education, i don't think it will matter because the future of aerospace, i believe, is dependent on the educational system we have in this country. it used to be the best and bright jessica to the united states. they studied and they stayed. and now they study, they go home and they compete with us. you know, we have, as i mentioned, half of our engineers who can retire in the next five years. that's half of 36,000 engineers. and we know we're going to have a very difficult time replacing them because not nearly enough engineers are graduating from college. it's about 60, 70,000 a year. and you go to a country like poland, it's about the fifth of the size of the united states. they're graduating just as many engineers as we are in this country. and you have to wonder why american students, you know, aren't embracing engineering as enthusiastically as they are in

other parts of the world. and i think part of it is the fact that engineers really aren't celebrated in this country the way they should be. i was in moscow -- i think it was in september. i went to the cemetery right outside -- right outside of red square and i was walking around and, you know, they had the graves of many important historical figures in the 20th century in russia. they had artists, you know, and they had play wrights and they had government officials and people from the military but buried among, you know, those very famous people we all know were many of the engineers and scientists and physicists of the soviet union during the 20th century. you know, all very famous airplane designers and they had places of stature among the rest of the famous russians. and it made me wonder when was the last time we saw the picture of an engineer on the cover of

"time" magazine or some journal in the united states? you know, i think it's also interesting to note that in china, you know, their leader today is an engineer and the heir apparent is an engineer as well. and i think another reason why too few students today pursue careers in math, science and technology is because we haven't really inspired them with exciting goals. i think young people around the world are looking for careers where they can make a difference, where they can grow and reach their full potential. and where they can connect with something that's greater than themselves. and, you know, i think we can recapture some of that imagination and my generation and many of you were drawn to aerospace because president kennedy's mission to go to the moon but we have many important things to do in this country as well. and i think that the real goal of engineers of the next, you know, 50, 60 years is going to be to help save the spaceship we're all on together and that's

the planet earth and i think they will have a chance to work on things like energy dependence, global warming, you know, health care and they're going to do tremendous things to rebuild the infrastructure and i know they'll do amazing things in aerospace as well. but if we're going to inspire people to go into those s.t.e.m. related careers we have to have a good k-12 educational system and despite the fact we are spending more than other countries, we certainly aren't having the results. and i know in many states right now are struggling with budgets. especially in the state of washington we certainly are but if there's one thing we need to put around, a defense around relative to reduced spending it can't be education. and all of us have a role -- i know every company in this room is doing something to support s.t.e.m. but at the end of the day, education really is a public responsibility. and if there's one thing that our country should guarantee is every child growing up gets a good, quality public education. now, in closing, you know, maybe

i've painted a challenging -- a challenging picture of the future, and i think it is challenging, but i have no doubt that we're going to be able to take the right steps and we're going to continue to keep the lead that we currently have today. when you go back to 1903 when the wright brothers first flew, you know, they flew 120 feet in 12 seconds and, you know, i was thinking about that. 120 feet, you could put that flight in the inside of a 747-8 intercontinental, you know, it's amazing how far we've come, you know, decades later, neil armstrong went and walked on the moon and during the '60s all the astronauts were given a little personal packet that they could put some personal belongings into and neil armstrong, whom i know many of the people in here know, what he asked for was a piece of the wood of the propeller of the 1903 wright flier and also a piece of fabric from his wing. that thread started with the wright brothers and continued,

you know, through apollo is going to continue today. and i don't think that anybody can do what america can do in aviation aerospace. we've proved that time and time again. you know, the lead that we have today is ours to keep or it's ours to lose. the advantages that aviation gives the united states of america is ours to keep or it's ours to squander. by every measure i think, you know, aviation helps answer, you know, the toughest questions about america's future, a future that i think will continue that we have the power to shape. thank you and i think, carol, questions, is that right? >> that is correct, jim. we are going to take about five minutes of questions. but let's first give jim a big round of applause. [applause] >> we can start out with

questions from the floor, and i can't imagine that there wouldn't be some who wouldn't like to ask a question of jim albaugh. all right. we have the first one right down here. i believe that's don phillips who is waiting for a microphone. >> can you hear me? yeah, okay. >> i can. >> you mentioned

>> i see a lack of a infrastructure. you don't have to go very far outside of the united states to see that other countries certainly have passed us in the quality of infrastructure that they have. i'm talking about roads, talking about high-speed rail, talking about airports, you know, air traffic management -- i hope we don't get left behind there as well. >> jim, i might just follow up on that because tom donohue in his remarks this morning talked not only about supporting boeing in your effort to stay in south carolina, but he also talked about the importance of infrastructure, and the chamber

appearance huge infrastructure effort underway where the public/private partnerships are a big potential. obviously the public/private partnerships are very popular in other parts of the world and we really see a very important role in business in what we're doing and we hope you and the boeing company and airbus and others will take a lead in helping us come up with new ways in which we can do the necessary financing besides taxes for the infrastructure of the future, and that's just not airways and waterways and highways but it's also broadband and certainly the electric energy grid and other aspects. >> well, we certainly will and i know that's something ellen and i totally agree on. a lot of limiting factors to the airlines, you know, i mentioned some of them, you know, atm, airports, the environmental questions. you look at some of the threats

we have in europe. they're not building airports. they are building high-speed rail, plug-in nuclear reactors, i mean, those are all threats. >> we have one last question for jim albaugh. right over here, if you can get the -- i thought we saw a hand up over here. jim, i can't believe that the president doesn't want to ask you a question. >> i think they asked them all in the earnings call this morning. >> here we go, right down here. >> a question for you about the overall industrial policy for 787. you talk about the overall moving toward engineering areas offshore where engineers may be more available. back in 2001/2002,/2003, a lot of the resources were being allocated offshore. would you say that's either a symptom of the demographic changes or cause of the demographic changes that are being taken place in the u.s.?

>> let me make sure i was very clear on that. when i said that we'll go where the engineers are, we will. you know, clearly we're a u.s. company. you know, having the engineers colocated close to work is important. but in the event we can't hire the engineers in the united states because they're not available, you know, we'll go to where they are. right now we've got a design center in moscow, for instance. we've got some 1200 engineers there. we've got some 400 that code software for us. we've got six r & d centers around the world. and my guess is that we'll continue to take advantage of skilled workers wherever they might be. here we are talking about boeing employees. we're not talking about moving up the value chain and asking our suppliers who maybe don't have the skills of value chain to do that and i'm talking about boeing employees. >> jim albaugh. you are a star and you're fabulous to be here today. we appreciate

[captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] so i hope this will be a lively and interesting panel on sensible security solution and with that, i turn it over to you, don. it is all yours. >> all right. thank you. when carol asked me to do this, i'm going to tell a little

secret i hope doesn't get her in trouble, but i said, but carol, i haven't flown from a u.s. airport for five years. and it is all because of the t.s.a. i just had all i could take. i may not be exactly fair, as hard as i want to try. and she said i knowwwww. but this will be a little lively. but anyway, i intend to do something that i probably will fail at miserably and nobody here is going to believe and that is try to keep myself out of this as much as possible and just ask questions and let them do the talking and be the moderator. but i spent a little time in europe and talked to a lot of the top security people over there and they helped me

understand a lot about why the united states was doing the things it was doing, especially early on in security. it was a bad, bad, bad time in many ways. and then i would fly to europe and the t.s.a., their version of the t.s.a. was very polite. easygoing. professional. all that sort of stuff. and i talked to several friends and said what in the world is going on here? all of your people are polite and your citizens, your flyers will not put up with any crap. and they seem to know that. and they said, don, don, don, don. let me explain something to you. your country is only a little

over 200 years old. ite's only had one war on its shores and in that one war, it was you fighting you. and now you sing its praises for whatever reason. and it made you a country. fine. but we have had people marching across our fields for centuries and centuries and we learned long before you were a country that at the end of the day, no matter how much violence, how terrible things were, wa countries were taken over di who and -- by who and how many deaths there were, the vast majority of us will go home to a nice dinner and a nice glass of wine. we understand that and your people don't understand that yet.

i said oh, so let's get on with this. i a ut with and from tim turn am until the end and pile everything on. i'm sure a lot of yohave a lot of qustions. the main thing i will say to the panelis and to the audience, everything, let's keep it short and to the point. we have only got an hour here and the first question i want to ask d it goes to everybody on the panel, and it may sound a little harsh, and maybe it is, but just -- the tsa after 10 years still need to exist, and if it continues to exist, where does it need to go now and if not, what would replacit? so let's just -- oh and i should say who is on the panel,

shouldn't i? i knew i wasn't -- i knew i was miing something here. we don't give, as you kn, long drawn out things. keep that question in mind and think about it. to my left is gary wade, vice president for security at atlas worldwide, moma gell and with command consulting, ralph basham with command consulting, roger dow, ceo of the u.s. travel association, and lob pool with the reason foundation and i cannot resist one short story about lob. he is th an outfit that doesn't exactly always cater to passenger rail and this is the only time i am going to mention that. but he has a massive model train set in his basement and i have now decided to go down, probably

this fall, and spend some time with him on it. i am impressed. anyway, back to the question. we will go to you first. >> with that i probably, that question wouldn't be asked if there hadn't been as many bad experiences that people have had in the past. from a cargo perspective, yes, they need to be in existence and they are doing a much better job working with the industry, the cargo industry now in formulating regulations and policies that help us meet the threats as opposed to doing it independently. nobody knows the aviation businessike the aviation companies. we know what -- we do it every day in 150, 160 countries and 300 cities so we know how the freight moves. we know where the soft pints are.

we know where our vulnerabilities are. we just need their help to show us where the threat is. so the short answer, yes. >> i think absolutely that -- i don't know what you would replace it with now. would be afraid to suggest what that might be, but i think there is a genesis or there is a generational change the air that needs to happen and i think anybody regardless of whether it is causeby an event are caused by the experience of friction that occurs atheck points where with what gary said with cao and the industry, i think it matures, that it does need to change in terms of how to address the future, say 2015 etc.. i don't think you can say tsa needs to be replaced but i do think that there are some fairly dynamic issues that have to resolved and i don't think it will be resolved by a government

agency. i think it is going to have to be resolved by the industry itself and the people who use that mode of transportation. and it is time that we face that and we start when you say that, be ready because you will have to sign a risk-based managing risk means something could happen and everybody needs to understand that. regardless of what system you put in place you have to understand that is the case so signing the dotted line is what we need to do. >> i have a very simple thought on that. i guess until the president of the united states can look the people in the eye thi country and say to them that they nolonger -- there is no longer a thrt to u.s. aviation, then tsa or sething like tsa has to exists. the american people expect to have that security and until we can assure them that there is no

longer a threat, then it is our responsibility to ensure that they are safe and secure on those airplanes. >> i concur with my colleagues i guess there has to be a tsa, but i believe in this world of technology, information, data and a country that put a man on them and there has got to be a better way and what we have to do is explore a better way. you can't treat every treats everyone equally likely to be a threat. i also think when we created tsa to the legislation that was hastily enacted in the fall 2001 and i was in some of the debates on the hill on that, the congress made a fundamental mistake. they combined aviaon security, regulation and policy with the provision of a piece of that, namely the passenger screening, passenger bag screening and candidate didn't do that, europe didn't do that. in europe in particular screening responsibilities devolve to the airport level

under national government policy and regulation that is enforced, and the airports, most of them can do it either in house with their own workforces or by hiring a federally licensed qualified private security fir that is a far persevere your model in my view and would put the providers of security on the same arm's length basis with the security regulators, the successor to tsa as the airport itself is, as the airlines are, everybody else is regulating. when tsa screws up they are not objectively evaluating their own performance. we have evidence and fact that they have tried to cover up the study that they commissioned on how their performance compared to the private screeners and didn't like the results and didn't publish it and it was only because gao did a report on this that we do know that existed. >> do you expect that to happen in this administratio >> well i am not sure. i' seen no it -- from the

ministration but april 15, peter king and mike rogers, homeland security and the house said they were going to do an authorization. a reauthorization of tsa this ar the tenth anniversary of 9/11. i think it is highly appropriate timing to raise that question. take a fundamental look at what did we do right and what did we do wrong and do we need to revise a legislated and change the nature of how it was created. >> roger, you cme out with a report not too long ago about recommending a trusted traveler program and doing some other things that would speed things through security. could you tell us a little bit about it, what it is, who should supervise it, and if i might go one step further, obviously this would do a lot for the frequent traveler and the businessmen.

what about the one time flying mommy with two screaming kids? wh would you do for her? >> i think as you said we did put that study, wch was sically a blue ribbon panel together headed by tom ridge the first head of the -- that is the new guy cong up next wk. the first tsa and also -- but we also have david frum fedex. they know a lot about moving things and where things are. we had security experts. we had -- stephen had the civil liberties folks and we had every group take a look at it and we basically came to the conclusion, the panel did that we have to have based trusted traveler program and to have a trusted traveler program that means who is going to run it? that parhas o be governed right. you the databases and you have to have the information and you also, i would like to agree he but my concern is one of the things we found is inconsistency. the problems you have is in one airport you have to do this and

another airport you have to do that so we do think that you have to have a consistent program. maybe you could run it with the airport but we do have a data. the second thing ithas to be voluntary, the civil liberties union folks went berserk on a lot of things but we basically set him at the bottom line is i will give up my high school grades if they want them if he gets me through the line faster. it is not going away with security but it is changing the level of what you go through and having randomness and lastly that is the real benefit. we can treat everyone the same with one-size-fits-all. i literally and personally watched gerard get patted down. i personally have seen colin powell get patted down. you have to say wait a minute something is wrong here and about the first-time treler, this is where i agree with carl. i think you have to profile by experience. you have to profile by frequency, by background and all that and tho kinds of things, once you have that data than the first-time traveler probably has to through different security process because they are not the same as all of us who travel 50

times a year and we know an awful lot about us. >>oes anybody else want to discuss that point? >> the report, 85% of the report i am absolutely in agreement. i believe that the only way that we are going to succeed in the public attitude, first of all i would say it is my thinking that it is the governments responsibility to ensure his safety and security of the citizens of this country. we have got to find a way to reduce the size of the haystack and we have got to figure out a way to get information that is sufficient to give tsa and dhs the sense that the people that we are doing minimal screening on represent the least threat, to focus their attention,

resources on those individuals who we know could represent us. the trusted traveler programs, advanced information, better data, better systems, better sharing of iormation is a critical piece of this. we have to address the legislation. the legislative issue as you pointed out, bt i think in terms of that report there are many -- most of that report i would be total agreement. now, the problem is how do you bring that report and the information that report to fruition and with this in the hands of the men and women who are on the frontlines? and, i have heard people say you know, how can disney keep people standing in line for three hours with a smile on their face waiting to go into space mountain? well, those people in that line for three hours are not going to be faced with searching their

personal belongings and i don't think there is any concern if someone is going to blow up space mountain, so it is a different -- but you are absolutely right, but tsa has got a huge job on its hands. i am trying to be brief. >> i understand. >> i was part of the beginning of tsa as was mo and i can tell you it was probably the most difficult. i've been in government for years. that year and a half was probably the most challenging. john who was the first administrator had tremendous job ahead of him trying to do that and they are still young. we can't look at tsa likely look at the secret service or customs that have been around for hundreds of years. so there is some maturing that needs to go on and there needs to be some correction. >> ifill yesterday and i hit for airports. pretty happy experience quite

frankly. >> and mo and i had a very interesting discussion out in the hall earlier, and looking at it, i wonder if you could take us from the point you left us there, that is not a sadly left us but the beginnings, things were kind of rough, and we sort of know what it went through a little bit later, but where is the tsa now in terms of what we the passenger or at least they the passenger would see, and where is it going? at is being emphasized now? ..

this was rushed to find solution and we didn't have time to stop and take a breath, starting up an agency from scratch and we're still, i think feeling the effects of that time frame and never had a chance to sit down and really think about it and -- we were trying to change this aircraft engine while it was in flight and that is a very challenging thing to do. >> just to give you -- if we can digress for a second in terms of -- i agree. the gov it. have a said to

protect the populous that they govern. i believe you can't protect the community about the community's involvement heavily. what i think is, you got to get the people in the room t design the right program, and do it right, and leave it to government to do in and of itself, i'm not sure you are going to get the kind of program that you need. i support it. tsa when it was ready stated, people in the room who i can see, the bright lights there as well. you have to understand, you walk in the door and there was a small group of one people that sat in one room and answered all of the phones. they decided they had to have how many scurity officers, where are they going to get uniforms, who's going to design them? who has something we can get today and invite 380,000 uniforms. it's not like you can build an organization from the topdown with a lot of thought.

the real tsa din't start until about july or august until about 2002, when you started rollin out across theairports. i remember distinctionly, and i've told this to others, one night about 9:00, i was sitting in the room and the phone rings and it's her grandfather, saying that his daughter is getting ready to travel to the middle of the u.s. he wanted to know if it was safe to travel. how in the hell me got me, i have no idea. but the truth of the matter is we had no idea. and as much as we tried to bring in, and the industry frankly was in flux because it had a huge impact on the operational capability and their employees as well. to find the people that understood aviation and transportation along with security experts, it became heavy to secure, which frankly, it probably should have been. but you just didn't have time to manage or direct the way that you knew you needed to, because

there was a congressional mandate, a deadline that you had to meet. no excuses by the way. you didn't get stake, and we have another year. it was do it, do itnow, and smile. i don't know how many have ever tried to do that, by formlating a work force of 65,000, butt smiling part was ard. but we got it done. and in the end we got it done. and i think everybody in the audience, including those with tsa would say that we all wish they could use improvement. i've been out of the ring about two years. i'm rusty. i don't -- i'm not adept in understanding today's policies, procedures, and technology as i once was, but in my heart ofhearteds, i believe that the american people really want those officers on the line. now how they treat people or act and what they do is up for

debate. >> was there a strategic mistake, just a quick follow up, when this chine was put out there that seemed to strip people naked? what were -- were you surprised, i gather, that the currenttsa leadership was quite surprised at the uproar that came out of that. where did that uproar come from? and again, were you surprised? >> i this that that event points to another of the problems that tsa faced. if you remember right after 9/11, richard reed with the shoe bomber, that was totally unanticipated threat. so you immediately had the responsibility of responding to that threat. then in 2006, august of 2006 with the liquids. that represented a huge threat

to the american flying public. people said my gosh. we got to do something about this. then on christmas day who, you know, i don't know whether he said in 39a, you know, purposely to be some strategicpoint there. so it's a reaction, a reactive process that tsa has had to go through. because if youwere to try to anticipate and build a security system that was going to break every single and every threat days. it has to be threat days in what is likely or what is written. because if we did build a ystem that was going to avert every single possible, potential, for an attack on an aircraft, you couldn't be flying. because that's the only way to prevent it is to keep the airplane on the ground. and so -- but i think there's a lot that can be de. i think this rept that you've put out and others who have made

the suggestions here. but it has to be a partnership. it has to be done in a mutual environment of cooperation and discussion, and it can't be this beating each other to death all the time. it's got to be setting down, what's in the best interest of this country, and the flying public, and the industry itself and the economy of the country. it's got to be done together. >> when you talk about the challenge that was faced just before the hlidays with the new scanning machines, the reality is it was close to 1,000 machines and 4500 plus, i don't remember the numbers quite off, portals. you say to yourself, you are a terrorists and there's 3500 uncovered areas, what is putting all of this emphasis on the thousands of machines going to do. tsa is between a rock and a hard place. they don't have the machines. they are trying to put forward a procedure like i had 4800 machines, and you don't. that's a challenge.

the machines don't pick up the explosives. >> how would you have -- if you are a tsa, if you are the administration, how would you have responded to this new threat? i mean because there was a demand that something needs to be done. and i'm not suggesting that was the right thing. my confidence -- >> my suggestion would have been to expand the watch list, the ople that were mandated to have secondary screening. use a much broader of the various watch list and use the ait machines for that purpose, for geatly expanded, secondary screening for people that you have a reason to think might be trying to bring explosives on to the plane, instead of pretending that you are going to do it to every one and trying to go forward with that. >> when i go to most aiports, the machines aren't being used. i was just recently going through bwi and all of that.

i said gentleman, i'm not being critical. i'm curious why you aren't using the machines. he said labor, you got to have one up front, one looking, each machines is adding three or four people. we don't have the work force to operate all of the machines. it was interesting there. >> the people have a correlation with how long t lines are. because it takes three or four times longer to put someone through that than walk through the magnetometer. >> fortunately, there was not enough people out there to thoroughly process. i read in the report, there's an expectati that there was going to increase by a third over the next five ears or whatever that number. we had better be starting now to start thinking about a redesign, trying to figure out how we're going to move, what is it going to look like? i don't care what technology

that you have, you are still going to have to go out ad reconfigure the airports to go out and accommodate the passengers. the point about someone blowing themselves up in the line, waiting to go through the machines. i go back to rome and the red bride. that's been an issue in airports for many years. this is not a new threat. >> not exactly an unknown tactics. >> right. >> i might add after living and working in europe, i see that the vast difference in the philosophy of their version of the tsa and this one. here any failure is a total failure. congress will raise hell. there, their version of the tsa is recognized as the last possible gate. it's a gate with civs, anything

can just about get through it. but if the intelligence section of their version of the tsa hasn't found it, and by the way, this may disagree with something that you say, they say why do you people have so many people on your watch list? we've got about 300. we know who they are. we watch for them. >> but, don, yet, the europeans are so still goosy loosey, they won't share passenger name data in a truly effective transatlantic way. >> i think it's interesting to do it back and forth between europe. >> is it getting better? >> all right. >> all right. i want to go to gary in a second, first, does anyone out here have a question now? no hands. did you guys have some wine for

lunch or something? [laughter] >> all right. okay. >> i'd lke to ask you to pck up where you left off there about the transatlantic. what are some of the thing that is could have been done to increase the transatlantic cooperation and make a system that would benefit both because you've got more layers and more people doing the right things? >> well, one the -- one the challenges that it's facing now is different for the airline is the second screening when someone continues on. we said that we trust and we're comfortable that the passenger taking off from europe is not going to be a ri landing in new york, or chicago. but when that person is going to go on to des moines, we don't

trust what they went through, so we have to put them through the process. which is a challenge. i think we have to figure that connection issue. i don't tell letters of misconnections, miscruies, through stuff that we said was okay in our minds wen it left amsterdam or whatever, which our friend wasn't. but the bottom line is that's one issue that transatlantic really has to be addressed. >> you know, you have to understand, honestly, that you are dealing with a very complex system. and in the complexity theory, and the dynamic response, if you touch one thing, there's results to that throughout that system or that netwrk. if you are going to go through a federal inspection station, coming into the country, then -- and you say you are going to miss cnnections, then you also have to think, okay, what are the schedule they are on as well? and are there accommodating schedules associated with that? mean all of these things are connected. if you ask somebody and a lot of people that i see, by the way,

i'm a travelers, i travel a lot now. so i see it a little bit differently; right? and what i think is is that the end -- people see airport experience as airport experience. they see it whether it's transatlantic or u.s. they don't -- many of them don't distinguish -- i've actually met when was back doing this with actually met with passengers and cities, and they didn't even know who it was. we went through a program with them where they helped designs check points for us. you would ask them questions about securit they saw all one. they thought -- some of them still thought the check points were by airline employees. this has been ten years, back then it was seven years.

you have to understand that anything that you touch may six that one piece. but there results. and it was in the cargo world, supply chain, logistics, challenge movement, or whether any of those things that happen is a very complex network that are occurring. when you ouch them, there's a result. if you don't calculation that as part of the result. i don't think tsa have the answers. i think people in the audience have the answer to all of that. you have to sit down and think about any time that you touched something were results. because gary is going to know in his world that the u.s. travel association is going to their that the airline carriers are going to know in there. you have to understand that the regulatory body that represents,

i don't know. i think you can make it work. everybody wants to make it ork in this country. >> i'm going to ask a question myself here. because i too just came into atlanta and went through the second. and i was curious as to why do after having gone through a screening, you now, very, very efficient screening in a foreign country and came in. but the problem that i'm told is unless you can creation a totally sterile environment within that area that the passengers coming off of those planes and then, you know, going into the u.s. system. i'm not suggesting that is curate or not. i think that's a part of -- you know, secret service takes the president to europe and relies upon to a great extent their

security. maybe you can help me with that one. >> well, it depends on -- there's certain parts of the world you'll be more comfortable with than others. >> yeah. >> and i've been to some that i think probably should divert us. but the truth is then you -- then you began to segregate what you are accepting as the lever of security that you feel is appropriate. and you can tell you even some of the countries that i've been through, some of them paid more tention than others. they don't want anything to happen. going through he federal exception, getting your bag, getting it and going back, and catch it. the carriers were trying to make it as easy as they coo.

having a place to go through the bag and have a check point, and design a system in an international airport where you can process those people separately in a streamline way would be the right answer. then you have to tell the airport, we want you to change the facility. we want you to change and do some construction to change it this way. they are going to say you guys are paying for it; right? no, just do it out of the goodness of your heart. so you are not going to -- any time that start down that path, you have to understand that there's ramifications. until you see that level of presencety, i'm not saying they don't need to be, i'm saying again everybody has to sign up. >> i think was your question more to important that's

improved with respect to the sharing of nformation and data between -- absolutely. i think there were great strides made during the secretary chertoff's time at dhs. negotiating, yu know, agreements, particularly in europe. and i think secretary napolitano has continued to work on trying to becae they recognize that a big part of that is going to having to to rely upon our foreign partners out there to ensure those passengers arriving from a foreign country has been screened, have been checked, they have been provided with the proper information to run the data, to see as we said, someone use that dirty old word a while ago, profile. we are targeting people that we should be targeting, and the other 99.99% can pass through the check point and get on their

way and not go through that hassle. but it is about -- but, you know, a lot of these countries are very hesitant because of sovereignty issues, legal issues, of being able to provide the information that we feel we need for us to be feel comfortable that that peson is a quote, unquote, trusted traveler. and so they are still working on that. that's a big part of the solution. as i said before, cutting down the size of a hay stay. >> one more. >> yeah, i think not on this particular question. i want to hit the reality. i've said here in this program and they've talked about by 2020 there will be abillion travelers, and it'll be three times by 2030. and if you look at 2004, there were 618 milion passengers. last year there were 63 million. so there were five million more passengers. yet in the same time period, tsa's budget went up by 70%. we're hitting the point if those

numbers are true, increasing, this system will just fall in on itsfs. i agree with what both ralph said he agrees with 85%, moe said i don't have all of the answers. i agree. what has to happen is a huge priority of etting the experts together and working it out nd making it a high riority of here's some thoughts from some smart people. it now has to go what these guys said, get the right people and make it a high priority. we cannot with the level that we have right now, cover -- it's unsustainable. yeah, it's unsustainable. right. >> i'd like for you to -- in your report, you talk abou the privatization of the screening system. i mean i'd be interested to know where you see the advantages to privatizing what i consider to be, you know, fundamental government responsibility. >> this is an ongoing long debate.

i mean i think there's a number of reasons. for one thing, the little empirical evidence that we have in the united states shows that the screening performance measured by things like, you know, detecting fake gun images on he screens and so forth is as good or better with the private firms than have been certified by the tsa as the tsa n screening. second, i think there's greater accountability. you can -- if the firm does not perform, you can fire it from that airport, yank it's certifications so it can't be in the business any longer. that's very difficult to do when you have a one size fits all government ciil service, now unionized work force that becomes an insitution with it's own self-perpetuate as a major goal. those are some of them don is eager to get on to another subject. >> it's okay. you are answering the second question from now. go ahead. we'll finish that one off.

>> okay. [laughter] >> i don't need to be the moderator. >> if we redesign the contracting to be a little less rigid and centralized, in other words, approve a set of how ever many verbs can pass the tsa's criteria for being acceptable for this size and so forth, let the airports pick from the list of firms and hire them and fire them with the tsa federal security director over seeing the process, making sure they abide by all of the regular laces and so forth. that way, you have ability for the firms to innovate and come up with new things. as long as they still keep their tsa certification and are, you know, not doing anything that the federal secity director says is out of line. i think there's a real potential there, you hear this from airport directors, including the ones that have, like sfo, that have the private firms. they feel frustrated.

the private firms would like to do some things, but the system is too rigidded that they can't do to innovate and drive more value for the dollars that are being spent right. let's go on to a fascinating, fascinating area. i talked with gary on the phone the other day. it was supposed to be sort of a short chat about, you know, to help me understand what qstions to ask. an hour later, i looked at my watch, i had no idea that much time had passed. you -- you helped these people. you don't have the time that we had. but help -- and i don' even know what words i can use to ask the questions because i'm not sure what i would reveal ifi didn't watch myself. but so just walk talk to me about the coordinate problems or opportunities or whatever you want to call it, the differences in coordination between

government and the private sector and talk to us about risk management. now the floor is yours. because i think it's a fascinating subject. >> thank you, don. many of the issues you faced in the chicago world you heard here earlier. the oly difference is we can profile cargo without risks. [laughter] >> they don't complain. >> the word term risk management is thrown around in every venue multiple times. the only heart part of risk management,he key to risk management, is the threat based part. you got to know what the threat is to formulate a risk management policy. how do you find ot what the risk is? as administrator pistol said, the key to the passengers and

cargo is timely and accurate intelligence. where there's been a reluctant, this is a reluctant on the part of the government to share that key information that we need to protect our carriers, our airport, and our employees from terrorists acts. we're working with department homeland security under the hand of secretary napolitano to change the intelligence information sharing paradigm so that the enforcement, intelligence community, tsa, dhs has a comfort level with the heads of security of all of the airlines to reach out to them and share information that is actionable. above the terror line information is no good for us. that's -- you can read it in "new york times" before the "washington post" before you can

get it on the web site. we need rely the terror line, actionable intelligence that says here's the threat. we've gotten through whatever source information we are utilizing, and you need to go heaven us find and identify where that threat is. we have the heads of security all of the airlnes that we work together and very closely in cargo airline association in ata and security committees. and all of these guys have a lot of experience, they all have secret clearances, they all have a lot of experience in handling and sanitizing sensitive information. so we have hundreds -- each ofae suspect passengers, suspect boxes, suspect cargo. so it never gets on to the aircraft. asopposed to 1028 when those passengers actually made it on the aircraft. i don't want it on my aircraft.

i want to help the government agency find it before it gets someone else in the supply chain before it gets in the air. so we have the information to do that. we are working on projects that give tsa, dhs, and customs the information, as far as in the cargo information as far in advance as we can to find out and identify who the suspect shippers are. that may not be a suspect shipper by company, it maybe a suspect area of the world that's the threat is coming in from particularly now. >> uh-huh. >> so it -- and that may change. the dynamic of terrorists, they change all the time. so we need to information on a regular basis. mae it's indonesia today, aybe it's somewhere else in the middle east tomorrow. where there are hot spots, we

can take acloser look at suspect cargo ships. what we can't do is look at all cargo, all the time, all over the world. atlas alone, all this wasn't intothe united states, we moved two billion pounds of cargo worldwide. how can i screen two billion pounds of cargo. that number is small compared to what comes in the united states on a yearly basis. we can't screen away, we can't x-ray our way out of this problem. it's got to be intelligence driven, and it's got going cooperative where we push the look back up the supply chain. so it doesn't get on the aircraft, and we have to have -- have to have that information to be able to do that. so if you look -- i you kind of look at a triangle and said, okay, the trusted entity or trusted shipper. who's your most rusted shipper

out there. they worked into the triangle, and you would provide or apply the least level of screening to that. maybe screening, maybe there will be a screening level just notionally. a screening level that didn't require opening the box. maybe a screening level would be at a trusted shipper, may mercedes-benz. and they shipped on atlas every week. or samsung, or whomever. and we know wo they are. they ave a program to vet and do backgrounds on their employees, and they have security personnel watching the packing of those boxes, they use tamper evident tape to seal those boxes. so why should i have to look at that? that takes my resources that i should be looking at in a real suspect package away from me dedicated to something that i know is not a threat. as moe said, once you guy into

threat-based risk management, you guy in all the time. yes, nothing is 100%. but you are more likely to be successful if you focus your resources on the real threat. not things that aren't threats. uh-huh. anybody want to ask a question of gary before i ask one or two? okay. >> fargo airline association. it's easy to say we need better communication. between the united states and other parts of the world, how in the heck do the get the various branches of the united states government who are possession of the intelligence to cooperate so that somebody can give it to the industry so we can act on it. i know we have former government people on the panel. to me, one the biggestproblems in the intelligence area i getting cooperation among the government agencies to get the intelligence together in a timely fashion to get to the

industry. it's not just good enough, i don't think, to say we need the intelligence. how do we get it? >> steve, one the things that we did on our working groups, it's ultimately chaired by secretary napolitano, we made the point. there is an issue of government sharing information, critical information, the private sector. but the throughout of the -- truth of the matter is, they aren't sharing information amongst themselves. sometimes tsa won't have the information that we need. we looked at ta. why didn't you give us the information. didn't have it. that's the truth of the matter. one the things that came out of our group on cargo security was i asked th government officialed that were there, you know, i said when 10-28 happed, i didn't get a call. i learned about it from the newspaper or on the news.

i didn't get a call and said you need to be looking out nor. he said the packeses weren't going to be on atlas air. i said, yeah, but i had a jet on the ground in dubai that was loading cargo. and it wasn't loading express cargo. how do you know and how do i know that this wasn't a to use a term, the spectacular events where they were using multiple types of explosives in multiple modes where they aren't maybe all in heavy lift cargo. it would have ben nice for us to know that. so the exchange of information wasn't necessarily in the hands of the people that could tell me that maybe would have told me. it never got transmitted to them, and it definitely didn't get transmitted to me. steve is ight. we made a big point of it. there's not the sharing information of the government. they talk about the shring

information. but it doesn't happ. some are good and some aren't so good. a lot of it is protection. there's only a certain amount of people that know the information that we need. they want to protect the sources, they want to protect their sovereignty, so to speak. we have to get open. we are not trying to solve crimes anybody and convict people in court. we are trying to stop catastrophic events where lives are lost, airline employees are lost. >> as a reporter, this is an ongoing story that has not changed for the entire 40 years. >> i want to thank to the idea that there's not information sharing. there has been in my last ten years of my service as part of the tsa and secret service and

u.s. customs and border protection, there was a realization that we needed to break down the stove pipes that had been created over years. and there's a tremendous effort, on going effort to deal with this problem. but it's not whether -- it's not sharing information. it's controlling it once you've shared it. and the aspen'ses that that information is not going to -- i mean we could all turn to wikileaks and know everything. with respect to information. but it's how you control the information once it gets out of your particular, you know, agency. and that's -- this is a very challenging issue to deal with. i'm not suggesting that it's not something ha needs to have a tremendous amount of work. but it's not so simple to say we need to pick up the phone and

call the cargo guys and give them all of the information that we have. we don't know where that's going to go. you were inaw enforcement, you know, -- i just think it's a bigger challenge and but there's moregoin on in this area than a lot of people realize. >> you know, i don't hear the two of you says much different. i mean you are saying this ppens and something needs to be done. you are saying there's a reason. >> there's different solutions for both problems. there's to secretary napolitano's working group, we take the security and give them top secret clearance. if you are still uncomfortable, then let's give them a course in

handling sensitive and classified information. give them a course in how to sanitize the information. most of them know it with the prior. i understand that concerns. i was o that side of the road for 32 years. i understand source protection and i understand sensitivity to it. but at the end o the day, at the end of the day, if youdon't share the information, someone is going t die. what's more important here? a life, or the information? at the end of the day? >> okay. and your response? >> yeah, there's issues that i see. so i want to make sure that we distinguish between information and intelligence. because intelligence is a different animal than information is. and intelligence collection and information -- rather distribution for a response and information design.

intelligence is a entirely different animal. i would suggest if you are going to go top secret, you can't stop there. you are going to have to go sbi to get it. so keep those two separate, think about it in terms of information that moves rapid once you know it, so that you can move it, and it is distinguished to get it out there for the operators or the industry in times react the way they need to. because they do need to respond. because the government can't respond to what gary is talking about. there's no way they can sent the agency the ceiling say in dubai or the foreign courts. intelligence is a whole different world of classification. how you move intelligence will be different. information has to move very fast, very rapidly to get to those that need it. >> i see carol coming up to the podium. was there any reaction to what

was just said? >> i agree with both of you. >> fine. we could go on for another hour or two. >> before you end this, don, i would like to make a comment. because at the time of 9/11, at the end of the day, the hea came together and with the faa we worked all night and we came up with the new safety regulations that would allow the airlines to fly again. and there was a complete and total sharing of information. and we knew the level of trust whether the people had security clearance or not, the information had to be shared and it was. that's what got us through that irst hurdle. then the iea and the notion of creationing a tsa came agent. and when that happened, much to the disbelief of the ata and the airlines, they were not included in all of the sessions that were

created to come up with the plan for tsa. and it was because they entrust us. we really got past that. then we had a variety of meetings and as it turns out, only those of us with a clearance would be in on the meetings. which meant the ceos of the airlines who were directly impacted could not participate in those meetings. and we got around that for the most part. that's neve completely changed. and i think what gary says and what ralph says are both accurate, but i still see a need to have better communication about sensitive information that does require a clearance. all of the security guys have those clearances. if you are going to share the information with airlines, passenger airlines, then you

should certainly be haring it with the cargo people as well. if we just -- i think, gary, what you are doing is absolutely correct. you are working with the secretary and i believe that this is such an important issue that has to be resolved for the long term. because there is always going to be that hesitancy to share information that could be life threatening if we're not careful about it. so with that, i think this is has been a fabulous panel. everybody really has learned from it. don, great moderator. but the panel was fabulous. >> federal reserve chairman ben bernanke was asked yesterday about economic growth and inflation. his news conference is next on c-span. we will talk about his news conference on "washington journal" and get an update on the pentagon and cia. "washington journal" is each

morning at 7:00 a.m.. this morning, the joint chiefs chairman mike mullen will discuss military leadership. he is also expected to give an update on the wars in iraq and afghanistan. he will address the government executive media group. live coverage is at 7:15 eastern on c-span 2. later, former senator rick santorum will discuss foreign policy. the pennsylvania republican formed a presidential exploratory committee earlier exploratory committee earlier this month