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Testimony by Secretary Michael Chertoff Before the House Homeland Security Committee

Release Date: 04/13/05 00:00:00

Washington, D.C.
April 13, 2005

REPRESENTATIVE COX: Welcome. This hearing will come to order. Today the committee will examine the Department of Homeland Security's use of the principle of risk to prioritize America's counterterrorism strategy.

We presently have business on the floor of the House of Representatives; we expect three votes to come up in short order. Because I want to honor the time of the secretary and the time of all the members who are here and who will be here after these votes, we're going to begin the hearing on time. We'll go through opening statements and at least get those accomplished before the bells ring, and then we will immediately resume the hearing after the conclusion of our work on the floor. Our sole witness today is the honorable Michael Chertoff, secretary of the Department of Homeland Security.

Mr. Secretary, we welcome you. This is your first appearance before the Homeland Security Committee, and we look forward on both sides of the aisle to working with you.

Using risk management, which is the subject of your testimony and the focus of our hearing, is important because we have, while significant resources devoted to homeland security, limited resources. We also have an extraordinary breadth of targets with which to concern ourselves in the country, and obviously a limit to our capacity to reach all of them.

Using risk management involves, first, intelligence. We've got to examine and rely upon the information that we put together - terrorist capabilities and intentions. We've got to conduct threat assessments to evaluate the likelihood that a given asset will be subject to a terrorist attack. We've got to conduct vulnerability assessments to identify specific weaknesses in given assets that might be exploited by terrorists. And we've got to assess as well potential consequences, such as economic impact and loss of life, to determine the level of significance of an asset, how much protection that asset should receive in comparison to others.

This kind of risk assessment, both within a particular programmatic area and across Department of Homeland Security responsibilities, is a vital management tool. It's one that's new to the United States since September 11th. As a result of the newness of this challenge, it is not yet possible for the secretary or this Congress to evaluate as well as we would like the degree to which we are appropriately aligning our resources to match our nation's greatest risks.

One example of the work that we have yet to do is the billions of dollars that Congress and the department allocate each year to states and local governments to enhance the terrorism preparedness of first responders. Instead of applying specific risks and allocating funds to address them, the system that we presently use sometimes does nearly the opposite. Congress and the department allocate tens of even hundreds of millions of dollars to each state and to certain local governments across the country without the prerequisite analysis of risk. These authorities, then, occasionally find themselves looking for ways to spend the money.

The abuses such an approach invites have been well publicized, and if not corrected ultimately, will undermine our legitimate efforts to prepare our first responders for acts of terrorism. Unfortunately, the lack of risk-based rigor affects even those DHS grant programs that are not formula driven and that are by intention based on competition among applicants. For example, DHS inspector general recently found that $67 million in port security grants had been spent on projects of, quote, "marginal" homeland security benefit and that awards had been made to private sector projects that, quote, "appeared to be for a purpose other than security against an act of terrorism."

The 9/11 commission rightly recognized the inherent dangers of this type of spending, recommending that, quote: "Homeland security assistance should be based strictly on an assessment of risks and vulnerabilities. Federal homeland security assistance should not remain a program for general revenue sharing." That according to the 9/11 commission.

We on this committee and the select committee that preceded it have advocated that federal efforts to prevent, prepare for and respond to terrorist attacks within the United States should be based on risk. That is why we introduced the original version of the Faster and Smarter Funding for First Responders Act 18 months ago. This bill, which has been reintroduced in the 109th Congress and which Ranking Member Thompson and I have coauthored with the support of every one of this committee's members, would expedite the delivery of federal assistance to those first responders who face the greatest risk of terrorist attack.

But this kind of risk-based approach has to be expanded beyond specific grant programs to encompass all of our federal government activity. Strong leadership and clear congressional direction will be required to instill risk-based prioritization and in the formulation of budget into policy and into our programs throughout the department and across the government, and especially the legacy agencies that prior to 9/11 didn't have to think this way. We cannot have 20th century programs to respond to 21st century threats.

That's why, Mr. Secretary, I noted with great interest the speech last month that you gave in which you emphasized your intention to bring a risk-based philosophy to the management and operations of DHS. And that's why we invited you here today to talk about that very important topic.

Not only is such an approach necessary to enhance our national security, it's also critical to our long-term economic security. Each year 440 million visitors arrive in the United States by land, sea and air; 7 million cargo containers cross through our ports, and 118 million vehicles, including 11 million trucks and 2.5 million railcars cross our borders. A layered risk-based security system is the only one that will ensure that our borders and ports of entry remain open and secure to accommodate the free flow of legitimate goods and travelers. We've got to work to strengthen security in ways that simultaneously improve our security and promote economic growth.

The purpose of today's hearing is to start a dialogue with the new secretary to understand how this committee, the Congress and the Department can work together to instill risk-based prioritization and management throughout DHS programs and operations.

I want to thank the secretary for his testimony today and look forward to continuing this crucial dialogue in the weeks and months ahead. I will now recognize the ranking member, Mr. Thompson, for his opening statement.

REPRESENTATIVE BENNIE G. THOMPSON (D-MS): Thank you, Mr. Chairman. I'm pleased to welcome Secretary Chertoff to this committee. Judge Chertoff, you're well qualified for your position, and I look forward to your service. I hope we'll see you more before this committee. And I know this is your maiden voyage on the Hill; I'm sure you will remember it for a long time to come.

Unfortunately, since 9/11, we've had a lot of things with the department that's gone wrong. And you have an awesome responsibility to help us move the department forward. But I want to talk to you a little bit about the past failures to handle risk analysis by the department. This hearing is focused on using risk analysis to prioritize and manage the department's efforts. But in the one area where the department has experience - it is risk analysis - the development of a database of the nation's critical infrastructure, the department has failed miserably. As my Republican colleague Representative Ernest Istook told USA Today in December, the asset database list is a joke.

If the department has not been able to handle risk analysis in the past, then what confidence can we have that it will be able to do it in the future? And I'm sure your leadership will help us in that respect. If the department really wants to prioritize and manage based on risk, then what must be some uniform definition of risk? For example, I live in Mississippi. Most of my district is along the river, and I have a nuclear power plant. Are we planning for risk based on that analysis, or are we using the same standards?

Other issues, Mr. Secretary…We talked about missed deadlines. You're aware that over 100 congressional mandated deadlines have already been missed by the department. We have to do better. There's no question about it. Now that we have pretty much the jurisdiction as a committee, we're looking for your leadership to meet those deadlines, and we'll talk about those a little later.

There are some other issues associated with the department. The whole issue of minority participation from the staffing level is absolutely important; from the issue of Hispanic and other minorities serving institutions, participating in programs in the department, is absolutely essential. At this point under the Centers of Excellence Program, for example, there's no minority or Hispanic-serving institutions participating. We have to do better. From the standpoint of small, disadvantaged and minority business opportunities within the department, I challenge you to make the department responsible and adhere to those edicts. Again, Mr. Secretary, we welcome you here. I look forward to your testimony. And welcome aboard.

REPRESENTATIVE COX: I thank the gentleman. Let me remind all members that you are entitled to opening remarks for the record. And due to our time constraints, I've asked the ranking member whether members should go to the floor in response to the bells or whether we want to risk getting the secretary halfway through his opening statement. I think we should go to temporary recess while we vote on the floor.

There are seven minutes remaining in this vote. That will give members time to make it, and we will return immediately and commence with your opening statement. Thank you, Mr. Secretary. We are in temporary recess. (Sounds gavel.)

(Recess)

REPRESENTATIVE COX: Committee on Homeland Security will again come to order. Secretary Chertoff, again, welcome. Thank you for indulging us during our floor votes. Your complete written testimony will be included in the record and you're now recognized for such time as you may consume to provide an oral summary of that testimony.

SECRETARY CHERTOFF: Thank you, Mr. Chairman. As, as you pointed out, this is my first outing for this committee. I look forward to a long and productive relationship. Mr. Chairman, ranking member Thompson, I think what I'm going to do is simply summarize the main points of my statement in the interest of time.

The Department of Homeland Security was created a little bit over two years ago and it was created to do more than simply erect a big tent under which a lot of different organizations would be collected. It was created to put together a dynamic organization that would identify a set of missions in furtherance of homeland security, that would execute those missions in a integrated and comprehensive manner and that would take a reasonable and sensible philosophy to dealing with the matter of homeland security.

And two years into the department, coming on as the new secretary, I have the opportunity to engage in what we call a second stage review of where we are headed, where we've come and what course corrections if any we need to make. And I, we undertake this process of the second stage review with a very keen appreciation for the fine work done by my predecessor, Governor Ridge and, and his deputies, Gordon England and Jim Lloyd. They put this together in the first instance. They launched the first stage and that's gotten us on the mission but we have to again ask ourselves what adjustments we need to make.

And I think broadly speaking, they fall in three categories. First of all, we need to make sure that all of our activities are not focused on the process of the component that is performing the function but on the mission that we are trying to achieve. We need to be outcome oriented. And the best example I can give to people about what I mean by this is if I have a problem in my, in my house, my appliances aren't working and I call an electrician, I call the plumber, I call the contractor, and they work for a day and they come to me and they say well, we've all done exactly what we're supposed to do; we followed all of our protocols, but the stuff still doesn't work. I don't consider that a job well done. I consider a job well done to be when the appliances work. And that's called being outcome or mission oriented. We want the thing to work the way it's supposed to work, and we don't care about how many of the processes are checked off along the way.

So the second stage review is designed to take a look at our missions, evaluate how far we've come, how far we need to go, and then talk about how we accomplish the rest of our objectives, without regard to the existing structures, but with regard to what it is we need to get accomplished.

Now the second piece of what I want to briefly mention is how we organize ourselves to carry out missions. And this obviously is going to be a function of our study of the mission and where we are and where we need to be. But I can tell you at this point again in general terms, it seems to me there are three aspects in which we need to be operating as a coordinated, comprehensive department.

First of all, intelligence. Intelligence is the driver of everything we do. And we need to operate under a common picture of the threats we're facing. There are two dimensions for that. First of all, we are collectors of intelligence, meaning that we have a lot of different organizations that interact with the outside world and collect information. We need to make sure that we are capturing all of that, we are pulling it together and we are fusing it at the top of our organization. And so some of what we're going to be looking at in this review is how to make that happen and to improve our collection, capture, infusing of intelligence.

The second piece of intelligence is operating within a larger intelligence community, as contributors, as disseminators, and as customers. Obviously we have a new DNI coming on. That's going to create an opportunity for us to work with the community as a whole, to make sure we are contributing the way we should be contributing, that we have the access that we need to have to do our job, and that we are in a position to disseminate what needs to be getting to our federal, state and local partners.

We need to also have a comprehensive approach to policy. Again, we have policy in a lot of different components, there are very smart people there, but we need to have a vision that looks beyond the components through the department. And so elevating and standing up a policy organization that is capable of strategic planning and dealing with policy issues is a second matter we are paying close attention to. And finally, the issue of operations. We have proud organizations that are part of the Department of Homeland Security that have very strong senses of their own missions. But the purpose of the department was to create an organization that could operate jointly, and therefore we need to make sure we have an operational element, an operations coordinator that, that is able to, to coordinate across the board so that when we take an item of intelligence and we try to translate that into action, we do it in terms of prevention, we do it in terms of protection, we do it in terms of response. And standing up a, a comprehensive and robust operations function is a third piece of what we have to do in this effort to look at the way we are structured and operating. Finally, let me touch on philosophy. As the Chairman mentioned, was gracious enough to mention early on in his remarks, a few weeks ago I spoke at George Washington University and talked about risk management as the template for how we do our work. And that means that in our handling of grants, in our deployment of resources, in our policy making, we have to be driven by a disciplined, analytical approach that looks to the issue of measuring consequence, measuring vulnerability and measuring threat. And obviously, you know, there are a lot of subtleties involved in applying this general template, the kinds of individual issues that we face. But if we are at least clear about what our overall philosophy is, I think that's going to go a long way to making sure that we have a coherent and sensible and reasonable set of priorities about how to deal with homeland security. As the Chairman has observed, we cannot protect everybody in every place at every time, we have to prioritize and I think we are launching a process through this review of making ourselves better at doing that. That being said, I look forward very much to working with the members of this committee in the weeks and months to come and I am delighted to be here and to answer your questions.

REPRESENTATIVE COX: Thank you very much and let me take this opportunity to tell you how personally pleased I am that President Bush asked you to do this job. I know that he has selected the right person for the most important task of management organization of the federal government at this time. We have a high degree of confidence in your ability to do this. The second stage review that you're going through right now is, in my view of -- (cough) …inaudible) steps, making sure that we benefit from all that we've learned since 9/11, all that we've learned since Congress mandated the creation of what is now the second largest Cabinet department in terms of authorized spending. All right. You and I have spoken in other venues and as you mentioned, you delivered a speech expressively on this topic about how we might bring more disciplined approaches to risk management, to the choices that we make as policy makers here in Congress and that you make as the manager of that department. When it comes to setting priorities, to determining which threats we're going to protect against, where we're going to place our money across America and around the world. One of the things that has struck me for some time is that because the newness of this task, we're not yet accustomed to making trade offs of any kind, so that if someone points out that terrorists might do this or that this many people would die if terrorists were to do this side or this method of attack, there seems to be a reflective response to go after that, little seat of the pants approach to risk management. Congress, in my view, is much more guilty of this than is the department because you know, we're the job of earmarking things sometimes and we just indulge our collective priorities in this way. We need to discipline ourselves in Congress and we need to help you as we authorize and send you money to maintain discipline in the department. 42,000 Americans, innocent Americans are going to die this year here at home in the continental United States in car accidents. This is a risk that we knowingly take; it is a cost that we knowingly bear. The Federal Government will spend this year about $600 million to mitigate that risk on highway safety programs, but it's taken us a century to internalize this risk management approach with the automobile. We know that the best way to reduce that risk to zero would be to stop driving or stop being passengers in cars or stop using crosswalks. We don't do that because life has to proceed and there are trade offs involved. There are trade offs also involved as we put our economy on the block, send a lot of its resources to preparations for terrorist's attack, towards intelligence to warn us of terrorist's attack and so on, we have to find the right balance, we need to find which terrorist's threats are the most consequential, which are the most likely and where are our greatest vulnerabilities and in a much more systematic fashion, put that all together. As you conduct this second stage review, what are the opportunities that you see for doing this within the department? What are the big picture approaches that you're going to take to head in that direction? And then what in terms of specific resources that you might need to accomplish this task do you want assistance from Congress on in order to help move us in that direction?

SECRETARY CHERTOFF: Well, thank you Mr. Chairman, for asking me that question because I think it really goes to the heart of what we're trying to do here. I think we have a couple of opportunities, broadly speaking.

First of all, we are going to undertake the process of looking at our objectives in terms of these three issues: consequence, vulnerability and threat. For example, take the issue of cargo. Cargo obviously is an -- cargo security is an issue that falls within the responsibility of a number of components of the department. But what I'm interested in seeing is -- if we look across the board at how we deal with the issue of cargo security and efficient movement of cargo, which are two important goals, I want to look at it across the board and I want to look at it without thinking about what the components have responsibility for. I want to see it in terms of the outcome of a secure but efficient cargo-transmission system: Where are we doing a good job in promoting that and where are we not doing a good job, and then plugging the gaps.

And we're going to apply that template across the board to things like how do we keep bad people out of the country? How do we better service people who want to come into the country and become productive members of America by getting citizenship? How do we deal with the issue of airline security in a way that properly focuses on the priority risks in a way that allows people to enjoy air travel without having it become so cumbersome and difficult that they actually choose other forms of transportation? So this is the approach we want to take across the board in terms of what we're doing.

In terms of how we actually analytically start to measure these things, one of the questions I've asked is, how do other parts of the government -- what kind of analytical tools do they use in measuring risk? What does the private sector use in measuring risk? People do this all the time. As you point out, each of us does this in our own life when we decide whether we want to get in the car and go to the movies, and we trade off the risk of getting into an accident against the benefit of the movie.

But actually government and private industry do this all the time, too, and they have a variety of tools for doing so. So as we are developing and defining our analytical tools, I'm asking people to be looking at other departments and get expertise from their experience -- EPA has certain analytical tools they use, DOD has certain tools and practices they use -- and try to, again, use the benefit of all this experience to help us sharpen our own ability.

And I think we are -- one example of this is -- the preparedness goals which were issued, I think, in the last couple of weeks, are an effort to start to really identify capabilities that responders need in a variety of different scenarios so that we can then start to be quite specific about, you know, what kind of equipment should they be looking for, what kind of training should they be needing. And that would be the kind of tool one could use, again, bearing in mind potential consequences and vulnerabilities and threats, so that when we advise people about what to do, when we talk to government entities about the kinds of steps they ought to take, we can do it with a very specific and disciplined approach.

How can Congress help? I think it may emerge -- and of course we're still waiting for the results of the recommendations that I hear -- that there are some structural changes that would be efficient that might help us comprehensively operate the department more readily, and at the same time might flatten some of the bureaucratic structures so that we would have the benefit of both better coordination and yet a more nimble ability to manage. And I think as we develop this review and we get a better sense of what we need to do, we may be asking Congress for some assistance in that regard.

REPRESENTATIVE COX: Thank you. My time has expired. The gentleman from Mississippi, Mr. Thompson, is recognized.

REPRESENTATIVE THOMPSON: Thank you, Mr. Chairman. I appreciate the testimony, Mr. Secretary.

You've indicated that you have undertaken this second-stage review in a number of things, but let me call a situation to your attention that causes concern by a lot of us. You've had three directors at TSA in three years, you have no head of the Border and Transportation Security Directorate, you are missing the entire leadership of Infrastructure Analysis and Infrastructure Protection Directorate, you have no cyber-security director, and your about to lose your chief information officer, your director of Citizenship and Information Services and your Head of ICE. That's a significant challenge for you, and I'd just like to hear how you propose to close that gap and give us some confidence that we can get some people who will stay on the job long enough to finish it.

SECRETARY CHERTOFF: Well of course it's a concern to me to make sure that we have a good leadership structure within the department. And it's not unusual after people serve a number of years in office for people to move on. In some cases we've had more rapid turnover than in other cases.

I can say, for example, with respect to infrastructure protection, I think the President announced last week his intention to appoint someone to that position who is in a very significant member of the department, Bob Stephan. So that's a position that we're moving to fill. I now have a deputy in place. There's been a general counsel nominated. And with respect to a number of these other positions, we are moving rapidly, working to find the right person for the job. I mean, there's an opportunity here, as well, to draw a creative energy and fresh perspective to the job that we haven't had. And so while it's in some sense a burden to fill the turnover, there's an opportunity we intend to exploit to get very good people into the department to bring a lot of energy and creativity to the task we have to do.

REPRESENTATIVE THOMPSON: One other question. And I would hope that my comments earlier about diversity as you select the leadership in Homeland Security, that it is one of the considerations that you would look at. I think it's important that diversity is taken into consideration.

With respect to the Infrastructure Protection and National Infrastructure Risk Analysis, we have information that there is an inordinate amount of contractors and detailees in the department, and not enough people who are actually employees of the Department of Homeland Security. If that's the case, how do you propose to consolidate this department so that those individuals become employees of the Department of Homeland Security?

SECRETARY CHERTOFF: Well, as I said, I can't tell you that I have a clear fix in my mind of where we have a lot of contractors. I know traditionally it's not uncommon, particularly in standing up a department and trying to get people with a skill set in, to have contractors. But I would like our department to develop an internal structure for career development that would make it, first of all, a very attractive place to work and to recruit, and also build within the department a spirit of opportunity for advancement and for education and for improvement that would, again, inspire our workforce to do a good job.

You know, one of the things that interest me, in terms of building a single department, is developing within the career path for people who work in a department an advantage in cross pollination; in working -- moving out of their particular agency and perhaps working on a joint-coordinating function or a department-level function, much the same as the military does to some extent. They encourage their officers to spend some time in a joint-planning or operations function as a career-development element, and that has the benefit of giving people a little bit of the perspective of other parts of the department. So one of the things I'm looking forward to doing is working with the employees to see if there are ways we can use the career advancement process to bind us together as a unitary organism.

REPRESENTATIVE THOMPSON: Last question, Mr. Secretary.

We've had material breaches with respect to companies like Choicepoint, Lexis Nexis. And have you directed your department to look at that as a potential risk for us to be concerned about?

SECRETARY CHERTOFF: Well, of course, as you may know, Secret Service obviously has an investigative responsibility, shares it with the FBI, in this particular area.

The area of identity theft is a very serious area that we are concerned about from a number of different standpoints. I mean, obviously from a cyber-security standpoint, we're concerned about hackers. That's one kind of threat. My understanding, at least in the Choicepoint case, is it wasn't so much a hacker as it was their internal decision to sell some of their product to somebody who turned out to be different than who they expected. Whether that's something that is corrected investigatively or in some regulatory form, I don't know that I'm prepared to say at this point. But I do agree that the issue of identity theft and identity misuse isn't something that we are very carefully focused on in terms of a whole range of issues that we consider in the department, including things like screening for identity. And that brings us to the issue of biometrics, which of course is one way to deal with this kind of problem.

REPRESENTATIVE THOMPSON: Thank you.

REPRESENTATIVE COX: The gentleman's time has expired. I'd advise members that under our committee rules, members will be recognized for questions in order of seniority, present at the time of the fall of the gavel. For members who arrive later, they will be recognized in order of appearance.

The chair now recognizes the gentleman from Connecticut, Mr. Simmons.

REPRESENTATIVE ROB SIMMONS (R-CT): Thank you, Mr. Chairman. And thank you, Mr. Secretary, for your testimony.

I was very please to see in your testimony that you laid out three priority areas -- intelligence, policy and operations -- and spent much of your testimony dealing with the area of intelligence. It's my honor to be now serving as the chairman of the intelligence subcommittee with my colleague from California. And, I believe that the fundamental obligation of the Department of Homeland Security is to protect our homeland, to protect our citizens and our people from attack. And the greatest investment that we can make is in intelligence so that we can detect, deter, defend, disrupt or mitigate any such attacks. And that while we must prepare, as we have in the TOPOFF exercise, for a failure of that system, that it's most important to put our money upfront and put it into intelligence.

In saying that, I'm aware of the fact that the 9/11 commission report and the recent Robb report have laid out serious failures of the U.S. intelligence community. I'm aware of the fact that your organization is relying in many respects on information collected by that intelligence community; that that intelligence community has relied on secret systems of collection which don't necessarily lend themselves to domestic activities here in the United States because we value our civil liberties. We value our civil rights, our Fourth Amendment rights to privacy.

And so my question to you would be, to what extent of you looked at open sources of intelligence to feed your information analysis system? To what extent to you believe the intelligence community is actually sharing information with you? And I can tell you, as a former CIA officer, there's a culture against sharing. We all know that; that's the way it goes. To what extent are your requirements being given priority in the intelligence cycle by the intelligence community? And finally, do you feel that the Department of Homeland Security is sitting at the table? In other words, do you have a representative, for example, on the president's Foreign Intelligence Advisory Board or other similar boards at this point in time?

SECRETARY CHERTOFF: Congressman, I'm delighted to answer those questions and I may -- I think I've tried to keep track. If I miss one, come back and remind me.

Taking them in turn, I think you put your finger on something very important when you talk about open-source intelligence. My observation has been often times people think of intelligence as by definition, something that is only done with spies or super-secret satellites. And, in fact, intelligence is often the accumulation of a lot of individual facts which may be wide out in the open. One of the things I'm doing internally at the department, and we've talked to the intelligence people about, is recognizing the importance of the thousands of interactions that occur at the border, on airplanes, through ICE investigations, every day that yield important information.

If in fact, hypothetically, we find that people with a particular connection to a terrorist group that turn up in our watch lists are seeking to cross the border in a lot of different places at the same time, an individual officer might not necessarily see the significance of a single interaction. But if we can collect all that and we can bring it up, that's going to tell us something very important.

So, we are going to work very hard, and this is one of my priorities, to strengthen our -- first of all, internally, our collection system to develop a system which I think is similar to what the bureau is putting into effect, of making sure we are getting good reporting from the field that we can then bring up and fuse together in order to maximize what we do internally, through what is either open-source or just kind of, you know, fairly routine intelligence collection.

Second, we need to be able to contribute that to the intelligence community because that is a piece of sitting at the table. I think generally my experience with organizations is your value as a partner is directly proportional to your contribution as a partner. So we need to complete this function so we can contribute. But at the same time, as you point out, we need to be full partners at the table because we have a need for intelligence and a use for intelligence that no other department of the government has because we have to take it an apply it directly to Homeland Security functions: how we handle our border, how we adjust our internal investigations with respect to people who are coming in illegally, how we structure ourselves in terms of what we prioritize for protection purposes.

So, we need to force from that large pool of information that the community has those items that are of interest to us.

And I've spoken to others in the community about the importance of doing that. We obviously have the president, who's nominated Ambassador Negroponte as DNI. I am very hopeful that the restructuring of the intelligence community and the addition of Ambassador Negroponte and General Hayden, if they're confirmed, would be a great opportunity for us to participate in the community at large.

Finally, with respect to the issue of requirements, I certainly have made an effort in my two months here to make it very clear that our requirements ought to be treated significantly in terms of gathering information and, so far -- again, in the brief time I've been here, I've seen a positive response from the intelligence community -- but it is certainly something that I will be paying a good deal of attention to and will be insistent upon because we need it to do our job.

REPRESENTATIVE COX: The gentleman's time has expired, the gentlelady from California, Ms. Sanchez.

REPRESENTATIVE LORETTA SANCHEZ (D-CA): Thank you, Chairman Cox. And thank you, Mr. Secretary, for being before us today, and good luck.

SECRETARY CHERTOFF: Thank you.

REPRESENTATIVE SANCHEZ: As you know, one of the challenges of securing critical infrastructure is that the majority of it is owned by private companies. And in addition to making incentives for them, I think that we probably have to set a minimum set of standards, or at least that's what I've heard from public -- private companies; some sort of standard so that all the companies in a sector are doing the same thing or are meeting the standards that we have. While numerous DHS agencies like the Coast Guard and TSA and Customs and Border Protection have regulatory authority, the Infrastructure Protection Division does not. Do you believe that it should have, so that if we need industries so comply with standards that we set, that they should have that? And if so, do you think they are able -- are you -- is that able to do regulatory work at this point?

SECRETARY CHERTOFF: Well, I think that obviously, as you point out, there are an array of things we can do to get private business to do what needs to be done for security, and again, balancing that with respect to the need to actually, you know, carry out their jobs. I mean that's -- I think, you know, we always have to be mindful of the fact that we don't -- I can guarantee you perfect security at a port, for example, if I shut the port down. That would be self defeating. So I think the first thing is to make sure that the private sector understands that we have an identity of interests here.

I mean, people who put a big investment in their business do not want to see it go up in smoke or do not want to see themselves losing customers because there's a problem. So the first thing we've got to do is we've got to educate them to that. We've got to give them standards and best practices that will enable them to make their choices wisely about how they, in fact, they do protect themselves.

We have to use market-based incentives when we can, including working with the insurance community. I can tell you from the Y2K experience we had a few years ago, we can get the private sector to be quite sensitive to the need to secure things if there is a -- if we work with the insurance community and we work with the marketplace to build in incentives.

Now there are going to be some instances where that's not going to be enough. And I know, for example, in the area of chemical plants the president has indicated that if we couldn't get what we need in terms of security by using these various kind of market-based incentives and best practices, that we would look to the possibility of some kind of regulation in order to make sure that we get to where we need to get. So I think these are all tools that we have to have available to us. The idea is to try to work with the interest of the private sector, which I think is identical to ours, where we can.

REPRESENTATIVE SANCHEZ: I understand that, Mr. Secretary. I'm just telling you that when I've spoken to private-sector companies, their big pitch is, "Look, we'd like to. It's going to cost money. We need a set of standards. We need to know what do you think we should do in conjunction," obviously planning with them. But more importantly, they're concerned that their competitors won't be required to do the same things that they would like to do but will cost money. So again, the question is, can this agency take on the responsibility of being a regulatory agency if that's what we deem in the Congress in conjunction with the administration?

SECRETARY CHERTOFF: Well, we certainly do have, you know, some regulatory authorities. And I think, as I indicated in the area of chemical plants, there are obviously some times when you need to regulate in order to prevent people from free riding, basically; I mean, can -- you know, relying on others to enhance security and not doing it themselves. But we want to be -- as I said, we want to be judicious about it. I think there's a lot we can do. We clearly have to set good standards and we have to let people know what works and what doesn't work, and that's part of what we are trying to do right now.

REPRESENTATIVE SANCHEZ: I had a second question because I sent you a letter with respect to the TIF grant. And it looks to me that you're eliminating existing port, rail and transit security grants under the Urban Area Security Initiative and putting them all together. On March 9th, before the Senate Homeland Security and Government Affairs Committee, you testified that you thought in general that every transportation presents its own issues. And I agree with that statement, and that's why I feel it's unwise. And I've sent you a letter, signed by some of the members of this committee, for the department -- I think it's unwise for the department to force all of the transportation sectors to compete against one another for that funding. I'm also concerned that the program will not work without a completed National Threat Assessment, National Infrastructure Protection Plan and National Asset Database to help us all decide how to prioritize funding. And of course, the budget only has 600 million (dollars); it's nowhere close to meeting the needs. Could you comment on that?

SECRETARY CHERTOFF: Sure. I mean, clearly -- well, let me begin by saying I think in general the idea of allowing a broader category of infrastructure to be measured makes sense in terms of risk management. It is true that they present peculiar issues and different issues, but at the end of the day there are certain commonalities that we have to be concerned about, going back to what we originally talked about: consequence, vulnerability and threat. And in allocating money and in taking account of these three characteristics, you know, it's going to differ depending on where you are in the country. In some parts of the country, rail service is a huge part of what moves people back and forth. In other parts of the country, it's less significant in terms of its impact on the population. Likewise, the way air or, you know, bridges are configured and how they would be measured from an infrastructure-protection standpoint might differ. So the ability to look at all of them together makes sense if we're going to be risk- based. But you're also correct that we then have to be, you know, pretty specific about the kinds of characteristics we're going to look at. And I think we are moving down that path, although we're not there yet.

We have, I think, each year that we've been involved with grants, gotten more refined about the kinds of things we look at that enter into our formula for grant-making. We are developing better and more refined tools for analyzing consequences; you know, what the relative significances of what the consequences are; what the vulnerabilities are; and what the threats are -- so that these common principals, I think, as we get more information, as we get more sophisticated analytical tools, will in fact be the way in which we operate an infrastructure-protection program in the most intelligent way possible.

REPRESENTATIVE SANCHEZ: Thank you, Mr. Chairman.

I guess I would just say that it's difficult for me to know which is more risky, ports or rail, transit or buses, and I don't think anybody here can answer that. We've been waiting and waiting a long time to get some more information on the infrastructure-protection plan and its assessment through threat-based threats and vulnerability, and I think the chairman talked quite a bit about this. And I'm hoping that you will spearhead that and get that done for us so we can do our job up here.

SECRETARY CHERTOFF: I will.

REPRESENTATIVE COX: The gentlelady's time has expired.

The gentleman from Washington, Mr. Reichert.

REPRESENTATIVE DAVE REICHERT (R-WA): Thank you, Mr. Chairman.

(Off mike.)

Can you hear me okay now? That's better. Just a couple of quick things.

First of all, I think we need to pause for just a second. And as I was reading through the first page of your comments, "Ours is the difficult mission to prevent another deadly and catastrophic terrorist attack." Stop and think about that. Our world has changed tremendously. You've only been in this job two months. This is your mission: protect the country, United States of America. You have 180,000 employees to do that with. Not only is it your mission to protect this country from another attack, but then you also have a mission to respond -- to assure that we can respond and recover quickly. You have a huge task ahead of you. I hope that we can help you in your task, as you about mentioned earlier in some of your comments.

I agree intelligence is where we need to focus our efforts and our attention. Intelligence is where we will be able to assess risk, gather intelligence, analyze intelligence, investigate those leads that intelligence offers us. And once we've assessed risk, then we can allow and understand. We can allow our resources to be placed in those areas where those risks are identified.

We do that every day in the sheriff's office. As you know I used to work for the sheriff's office in Seattle, and you assess risks and have to analyze where to put your resources every day.

One of the things that really is important, through, as you go through that whole exercise and process of gathering intelligence, analyzing intelligence and assessing risk, and then assigning resources, is accountability. And my question is, as the money is allocated -- for example, in the state of Washington, $234 million have been allocated to the state of Washington, $60 million alone to Seattle-Tacoma area in the Northwest. Only 27 percent of that money has been spent thus far. And as we know, as we watch "60 Minutes" and some other reports come out, some of those monies aren't being spent in a wise way. What's your plan for holding not only your people internally accountable to do their job, but how do we hold those other agencies, those local agencies, accountable to use the funding that has been allocated to them?

SECRETARY CHERTOFF: Well, I think this is obviously a very important issue for us. We issued in the last couple of weeks our Interim National Preparedness Code, which basically sets forth 10 tasks and I think 38 capabilities, which cover the range of things we think that state and local governments need to be able to be prepared to do in the event of any number of scenarios that might occur. In fact, I think it got a lot of publicity because in building those capabilities, we essentially imagined a bunch of scenarios that were pretty grim and then used those as ways of identifying the kinds of things you would need to be able to do if something like that happened.

Underneath that one document is a series of templates on each of those capabilities that is really quite specific about what kinds of things one needs to be able to do. And they take account of the differences between the requirements of a City of New York but, say, in a rural community. For example, in a city we might say you need to be able to get hazardous material personnel to a place within a certain period of time. In a rural community, it might be a longer period of time. And because it's capabilities-based, it is designed to allow state and local governments to find different ways to achieve the capability as long as they get there. This is as we -- again, we're not completely through this process yet, but as we refine this process, this is going to be a great tool for us not only to give guidance, but to give accountability.

If I can just take one minute to talk about our state and local partners. I want to be fair to them in this because sometimes they do get an unfair rap.

First of all, we have to distinguish between monies that are actually spent and money that's obligated. We all know, as a common- sense matter, that when a grant is awarded, what the state and local government is going to do is it's going to go out and find the stuff the need, they're going to pay for it. They do not obviously draw down on the money until they get the material. In fact, if they were to spend the money immediately before the got the product, we'd be criticizing them for being wasteful and foolish. So I think what's important to look at is what's obligated. And I think when I looked at it yesterday, I think approximately 96 percent of the funds that have been granted up through 2004 have been obligated, which I think is a very good number.

Second, even with respect to some of the stories about, you know, people in small communities buying HAZMAT trucks or things of that sort, obviously we're always going to find examples of ways to maybe misspend resources, but I also want to want to be fair. Sometimes what we have encouraged communities to do is to pool resources. We might say to a town, "Look, you know, you buy something with the understanding that it's going to cover the whole region and it's going to be available to everybody." And so when they do that, I think it's a little unfair when the press goes out and hunts them and says, "Well, here's a shiny, new HAZMAT truck in the town of X" without bothering to tell you that X covers really five counties and that's what the deal is. So we want to be disciplined with them, we think the preparedness documents are going to going to help them, but we also want to be fair to them.

REPRESENTATIVE REICHERT: I'm glad you touched on the regional issue. That was going to be my next question, and that's, I think, important.

Just one last comment. Having been a part of a large sheriff's office, the sheriff of the largest sheriff's office in the state of Washington, and working with the COPS office and the grants process there, the COPS office, and Director Carl Pete (sp) has a great process in place for holding police departments and local agencies accountable. It might be worth taking a look at the process they may already have used for a number of years.

SECRETARY CHERTOFF: That's a good suggestion. I will do that.

REPRESENTATIVE REICHERT: Thank you, sir.

Thank you, Mr. Chairman.

REPRESENTATIVE COX: The gentleman's time has expired.

The gentleman from Washington, Mr. Dicks.

REPRESENTATIVE NORMAN DICKS (D-WA): Thank you, Mr. Secretary. I want to welcome you and congratulate you on being confirmed by the Senate.

One of the issues I'm concerned about is container security. A couple of years ago, there was a lockout of the longshoremen on the West Coast of the United States. Within five days, companies all over the country were yelling and screaming about not being able to get goods.

And so I'm worried that -- we have to take this container security issue seriously. I think in any risk analysis, it's got to be up there near the top of our concerns.

Now recently, 29 Chinese nationals were discovered at the Port of Los Angeles. These men lived inside a container filled with machinery parts for two weeks, and DHS officials had no idea that migrants were in the container until it arrived in the U.S. This is disturbing but not surprising, given the millions of containers arriving in the United States without being screened or inspected. This event occurred despite the fact that there is a 24-hour rule -- a National Targeting Center to assess the risk of a container before it is shipped to the U.S., and the fact that we have customs inspectors stations overseas as part of the CSI program, including at the Port of Hong Kong, where the container transited. If 29 humans can be smuggled inside a container full of legitimate goods, can we be sure that our current strategy will prevent a dirty bomb, or worse, a weapon of mass destruction, from entering our country through one of our West Coast ports or the Port of New York? And this is one area -- you know, this and port security are areas of concern that I have in my region.

SECRETARY CHERTOFF: Well actually, that story bothered me a lot when I read it, too. And to make it worse, right before I was confirmed, there was a similar story involving the Port of Los Angeles, and so I had asked a question about this. So needless to say, I was disturbed, and it's something we're examining. And also there are some elements that are classified that we can give, you know, a classified briefing on later.

Let me just make a couple points.

My understanding is that the containers in question at the time that the migrants were discovered were still in the pre-inspection area of the port, meaning they had not yet come to the part of the port where they would be inspected. So you should not assume that they would not have been inspected. They might well have been inspected before they came into the rest of the port and were then sent out in other parts of the country. So that does not necessarily mean there's a failure of our screening process. It's kind of a geographic issue.

That does get to your second point, which is Container Security Initiative; can we do more of this overseas? And the answer is, that's a great example of why we ought to pursue this initiative further. We do it in some ports; we don't do it in every port. Ideally, if we could do it in more ports, we could, instead of finding the people in the pre-inspection area of whatever port we have in this country we would find them in a port overseas.

Third, you know, my instruction when I see something like this is look, we've got to go and track that shipping company, the container company and find out what is the problem from their end. If it is a single failure of security and they can tighten it up, maybe we then, you know, we then address that.

REPRESENTATIVE SIMMONS: Do you think there's -- I think there's a role for technology here, too. And there's got to be some way -- and we did this at the port in Tacoma many years ago where we had -- that we'd run these containers through a sensor on both sides and use -- and if there was something radiological or there was something of concern, it could detect it without having to inspect it.

The other thing I think we ought to do is what the military's been doing for quite a while now, and that is having a sensor and a lock on these containers so that, one, we know where the containers are, and two, we know what's in it and whether it's been tampered with.

SECRETARY CHERTOFF: Well, I think that's exactly right. We have been deploying radiological detectors in ports -- land ports, entry ports. That's a very important program. As we've indicated, I think, today we've sent up an 872 notice indicating that we're going to stand up a domestic nuclear detection office, which is going to be an interagency office, the function of which is going to be to move further forward on the technology for detecting radiological devices.

So absolutely correct -- again, I mean, part of our strategy has to be these noninvasive detection devices as well as other technological issues. We're going to look comprehensively at the issue of cargo; I think I mentioned that at the outset.

But I'd like to say, on this particular issue of the migrants, I actually did -- it annoyed me too. I've asked questions. I mean, in fairness, it was in the pre-inspection part of the port, but I think it's a cautionary tale for us about what we need to do here.

REPRESENTATIVE SIMMONS: Thank you, Mr. Chairman.

REPRESENTATIVE COX: The gentleman's time has expired.

Before I recognize Mr. Dent from Pennsylvania -- the committee inquired of the department about a week ago and we're still waiting for an answer, whether in this human smuggling incident the shipping company was a (CTPAT ?) member, and if so, whether it received a lower score and was not inspected for that reason. If you could get back to the committee on it, we'd very much appreciate it.

SECRETARY CHERTOFF: We will.

REPRESENTATIVE COX: Mr. Dent.

REPRESENTATIVE CHARLIE DENT (R-PA): Thanks, Mr. Chairman.

Good afternoon, Secretary.

You were talking about threat vulnerability and consequence or criticality. How do you in the department go about determining the relative importance of these critical infrastructures when you're looking at a nuclear plant versus a bridge or some kind of telecommunications infrastructure? How do you go about that?

SECRETARY CHERTOFF: You know, that's not the easiest thing in the world to do. We have used a variety of different analytical tools to look at the question of consequence. You obviously look at possible direct loss of human life. You look at economic consequences. You know, what would blowing out a particular power grid do to the economy? You might look at other kinds of consequences that are indirect consequences in terms of illness or things of that sort. To some degree, at some level, you do have to -- there is an element of kind of art rather than science in making the judgments. But I do think they're at least reasonable and I think analytically sound judgments that we make. And again, you know, because we're not just looking at consequences, we're also looking at vulnerability and threat, no one issue where there might be a disagreement is going to be necessarily dispositive. I mean, it's going to be a factor, but there will be a number of factors, so that I think although someone could disagree at the margins, I think in general, broadly speaking, it's a pretty sensible way of making a determination.

REPRESENTATIVE DENT: More specifically: You know, if you have something that might be considered not very vulnerable but of high consequence -- maybe like a nuclear plant -- how do you make those determinations, I mean, when you have -- the vulnerability is low, the consequence is high, how do you --

SECRETARY CHERTOFF: There's actually a -- there are actually formulas that you can apply to that -- and without getting into things, again, which I think are, you know, somewhat classified, what I will say is I think it's intuitively obvious. Consequence is really a big driver in the sense that, you know, a cataclysmic consequence is one which you pay a lot of attention to, even if there was, you know, comparatively low vulnerability; whereas something, on the contrary, with very little consequence, you don't care about. Like the footbridge down the road from my house, I'm not going to waste any time on, even if it's very vulnerable. So consequence is a big part of that.

REPRESENTATIVE COX: The gentleman's time has expired.

The gentlelady from California, Ms. Harman.

REPRESENTATIVE JANE HARMAN (D-CA): Thank you, Mr. Chairman.

And welcome, Mr. Secretary. Count me as a big fan, because I think that this notion you have of getting your hands around the whole problem and attacking it with a strategy is exactly right; they'll never succeed with the squeaky wheel theory of homeland security.

Let me make a couple points. First of all, we are all aware of the substantial turnover at your department. In that regard it pleases me to see Pam Turner behind you. She's excellent.

I hope you're staying, Pam. (Laughter.) You've been excellent.

As you may know, I served on the commission on terrorism, which predicted in 2000 a major attack on U.S. soil. I actually hosted an event in my district in August of 2001 with the question, are we ready? And clearly, in September of 2001, we weren't. And I would say we're still not ready. The key to getting ready is to have a strategy. The goal of the Homeland Security Department is not to rearrange the deck chairs but to create one deck, one common national integrated strategy.

And I think, if I'm hearing you right, that your focus on intelligence policy and operations is directed precisely to that. Am I right?

(MS. TURNER ?): That's correct, yes.

REPRESENTATIVE HARMAN: And I just applaud you for doing that. We can't protect everything equally, and we shouldn't. But a risk analysis applied to everything in some organized way will lead us to protect what we must, and boy, must we protect many things, like our ports, better than we are.

I represent the communities around the Port of Los Angeles. I hope you will visit them soon. There have been two incidents, as you point out, where human beings have come - you know, exited containers at the port. In one case, I know the bill of lading said the contents of that container were clothing, and it missed all the screens, and just an astute crane operator happened to notice people getting out of the container and called the police, and fortunately, we had eyes and ears at the port, and maybe or maybe not they would have been picked up. They were human smuggling rings; they weren't terrorist cells, but there were more people in each container than attacked us on 9/11. So it's a very, very serious problem.

I want to ask you about two things. One of them is not intelligence. I think you have the right fix on intelligence, and if I can be helpful, please call on me. But there are two big problems that I don't think have been mentioned today, and I just hope they're on your screen.

One is interoperable communications. Congressman Curt Weldon and I have for years been trying to require that Congress keep its promise to make some analog spectrum available for interoperable communications by the end of next year. That's a tough sell. The broadcasting industry opposes us. But boy, do we need that. Just in Los Angeles County alone, the largest county on the planet, all we can manage at the moment are bridging technologies, trucks, that carry frequency integrators on them so that you can plug in at the site. That is just not near good enough - not for L.A. and not for the country. So please put that on your screen.

The other one is our broken threat warning system. I think the color-coded approach was a good try. But I joked at one point, and Tom Ridge did find it funny, that he sounded more like an interior decorator talking about what we could with yellow than he sounded like someone who had the - who earned the confidence of the country - that talks to people and first responders about threats. So I hope you will figure this out. That is a primary mission of yours, your department. That is not resident in any other department, and I don't think the DNI is going to be the threat warner. So I would urge you, as my light turns to red, to get on top of that as quickly as possible.

SECRETARY CHERTOFF: Well, speaking of interior decorating, as you mentioned, I was trying to figure out what the heck you could do with orange in interior decorating.

I think both those are serious issues, both of them are things which we do have as part of our second stage review. And I think we have to - you know, particularly with respect to the warning system, you know, there are a lot of things that are geared to that system; we have to figure out whether we've come to a point where we need to make some adjustments with it. And you know, we have now a little bit more experience about what's useful and what's not useful, and it's a good time to take a second look.

REPRESENTATIVE HARMAN: Thank you.

Thank you, Mr. Chairman.

REPRESENTATIVE COX: The gentlelady's time has expired.

The gentleman from Pennsylvania, Mr. Weldon.

REPRESENTATIVE CURT WELDON (R-PA): Thank you, Mr. Chairman.

Thank you, Mr. Secretary, for being here.

Mr. Secretary, if there's some pessimism coming out of this hearing today, you'll have to understand the mind-set that comes from the members on the committee. I agree with you totally on the intelligence aspect of preparing for protection of our homeland, but it was the Congress back as far as the summer of 1999 that proposed creating a national collaborative center - we call it the NOA, National Operations Analysis hub - which would have brought together all 33 classified systems managed by 15 agencies. In November of '99, the FBI and the CIA said we don't need that. It took us until January of 2003, in the State of the Union speech, for the president to announce the TTIC. The TTIC's exactly what the Congress proposed four years earlier.

The Congress has tried since 1995 to deal with what the gentle lady referred to; that is interoperable communications. That's when the Public Safety Wireless Advisory Committee came out and said we have to set aside 20 megahertz for public safety. This is 2005. We still haven't done that. And all across the country when you meet with first responders - as you did last week, and we thank you for coming to the dinner - their number one problem is they can't talk to each other. When I went to the trade center in '93 and talked to the fire commissioner, he said the same thing that the fire commissioner said in 2001: We can't talk to each other. So there's frustration here that the agencies just still aren't getting it. And we've talked to Secretary Ridge about this repeatedly.

The issue of technology transfer: I happen to serve as vice chairman of both this committee and the Armed Services Committee. And it's frustrating to me to see us spend billions of dollars on technology a first responder ought to have, but for some reason we can't get it to them. When I was at - (inaudible) - earthquake walking the freeway with the fire chiefs of Oakland and San Francisco, they were looking for people in the freeway with dogs. I said, "Why aren't you using thermal imagers?" They said, "What are thermal imagers?"

That was 12 years ago. The Navy had produced that technology five or 10 years before that.

I was at the Loma Prieta earthquake, walking the freeway with the fire chiefs of Oakland and San Francisco, they were looking for people in the freeway with dogs. I said, why aren't you using thermal imagers? They said, what are thermal imagers? That was 12 years ago. The Navy had produced that technology five or 10 years before that. We don't use the technology well.

If you could use and perhaps establish an enhanced effort to integrate the technology transfer between DOD as opposed to reinventing that. You know we're spending a lot of money on UAVs. UAVs are going to become very important for homeland security as well as other transmission and other related technology.

In terms of private interface, I would hope that the agency has done, or would do, an assessment of all the stakeholders. I spoke this morning to ASIS (ph). ASIS as you know has 33,000 members. It's the largest private sector representation of the private security leaders of our Fortune 1000 companies. They don't have a direct relationship yet to the agency. I asked them if they would. They said, absolutely.

And Mr. Chairman, they've offered to establish a consulting role with this committee, provide the ongoing interface with the private sector.

In my opinion, the number one threat to our security from the broad standpoint which is not being addressed is the threat of any MP (ph) letdown, a terrorist country getting the capability of a low yield nuclear weapon, launching it over our shore, detonating it. And then you basically fry all the electronic components, and you dumb down the entire country.

We're not prepared for that. In fact up until two years ago, when Congress mandated the establishment of the NP Commission, the military didn't want to hear about it. That's a homeland security threat that we've got to interface with the private sector on. So I hope you would see that as a priority for you.

And finally you referred to the people that are doing the first responder, and I appreciate your sensitivity to them. Because as you know, 85 percent of them on the fire and EMS side are volunteers. And many of them are not part of government. They're parts of 501(c)(3)s. They operate on their own. They have bought (sic) their own money through chicken dinners and tag days to buy their equipment.

We need to be sensitive to keep that base in place, because if the federal government ever tried to replace that it would bankrupt the nation.

And simple things like the -- and you just came from the Justice Department -- the Justice Department ruling that says that a firefighter under 18 is really not a firefighter. The Federal Government has never defined what a firefighter is. But all of a sudden after 25 years as a public safety officer death benefit program, one person in DOJ decides that a 17-year-old firefighter is not a volunteer firefighter.

Well, that's outrageous. The states determine criteria in line with their local departments.

And that's having a terrible effect across the country with a 32,000 fire department who have got to recruit new people. And so we've got to address those kind of concerns to keep those people volunteering, and I'd ask you to be sensitive, as you were when you came to the dinner and gave an outstanding speech by the way that was very positively received by all the firefighters in attendance, to make sure that we're nurturing that group of leaders that will in fact be there to defend the nation.

Thank you.

SECRETARY CHERTOFF: Well, taking the last first, because on a personal level, in the communities I lived in, most relied on Boston firefighters. And I gave my share of chicken dinners, and participated in that process. And I think they are the backbone of our response in many if not most communities.

We do owe them respect, and also, we need to attend to their needs and their capabilities.

I think all the points you make are important points. I know with respect to intelligence sharing which has been a long time coming, the president is very committed to making sure that we are sharing and we're operating off the same page. There is no mistake about that.

And he welcomed the most recent report by Judge Silberman and Senator Robb's commission. And we have a new DNI coming in. So I think we really have -- the table is set for completing this process of integration.

However, I agree. I think that we need to work more closely with the Department of Defense on getting the benefit of some of those technologies. Although I would put in a plug for the dogs. When all is said and done, the dogs are actually very good at a lot of the stuff that they do, including the bomb detection and USAR (ph) teams.

And if I can just again be allowed like a little moment of sentimentality, there were stories in 9/11 in the area of the crater of dogs that almost broke down because they couldn't find people, you know, in there that they were trying to find. So I don't want to diminish their utility as well.

REPRESENTATIVE COX: The gentleman's time has expired.

The gentleman from Oregon, Mr. DeFazio.

REPRESENTATIVE DEFAZIO: Thank you, Mr. Chairman.

Mr. Secretary, I think that you've got a tough job in ascertaining on a risk basis system where to allocate resources. But I think we'd all agree there is a continuing high interest in high risk aviation, so I'd like to just focus on that for a couple of minutes.

I just want to get your vision. As you know, Admiral Stone, the third director of the TSA, is departing in June. And I see there is some ongoing problems with the agency, and some of which I think he was cognizant of, at least as he represented in hearings trying to deal with.

One is the over centralization and bureaucratization of the agency, which deprives the local security directors of the flexibility they need to hire, fire, train, split shifts, do things like that, which create certain frustrations with the airports in meeting the needs of passengers.

So he was very aware of that, kept telling us he was going to deal with it, and it never quite got done, and I'd like to hear what we hope to do there.

Secondly, he certainly was a good soldier, and didn't -- let’s put it this way. He was aware, as was everybody, of the fact that we aren't investing enough in the technology as we heard from the previous gentleman.

We have airports lined up who want to go to the inline system, waiting for federal grants that aren't available, which is in part a failure of the Congress, but also the administration. We have not deployed technology that exists for what I consider to be the highest threat, which is bombs. I mean the Russian incident is pretty clear of the last maybe wake up call before something happens.

And I'd just like to know what your vision is. And I particularly have a concern that Michael Jackson, whom I've dealt with over the years in his previous iterations with the government, went to the private sector. Just before he came back he gave what has been described to me as an extraordinary speech to the Homeland Security Institute saying that there as no way to do aviation security except privatize. And I'd like to know if you intend to push, because very few airports have applied to go back to privatized systems. But they do want those problems that I described fixed with the federal system.

SECRETARY CHERTOFF: Well, we do have, as you know, some pilot programs with respect to privatizing, and that is certainly an option which the current system lays open for them. And maybe that, in terms of our doing things we ought to do under the safety act, we've not been as efficient as we should be. And that's an issue we're going to look at.

I think that there is no question that a key part of the issue of dealing with aviation security is technology. The issue of explosives is obviously of great concern.

Now that's a little different than the 9/11 issue which involved people turning aircraft into weapons. But it's of course in itself a serious issue.

And there are technologies out there that we have to start taking a serious look at in terms of whether they can be deployed, and how they would operate, and that includes a back scatter, it includes puffing. And some of these things, people have arguments about whether they are intrusive or not. And we have to think about ways to deal with those arguments in ways that take account of legitimate concerns about privacy.

But you are quite right that ultimately our best tool, and our advantage in this kind of asymmetrical warfare with terrorists, is technology. And I think we need to make some decisions about getting new generations of technology.

There also may be, in terms of financing this kind of new technology, some tools we can use in terms of alternative ways of financing that would get it out there more rapidly than in the conventional method. We've got to look at that as well.

REPRESENTATIVE DEFAZIO: I'd be very interested to follow up on that. And Mr. Mike and I had talked about that in the past, but didn't get much response from the administration in terms of some ways to fund these things up front and get them into the field.

SECRETARY CHERTOFF: We're thinking about those things, and we're exploring some of those as possibilities. And we'll be interested in engaging on that subject.

REPRESENTATIVE DEFAZIO: And one other for all of your portable memory units sitting there behind you writing great notes, a number of firms have been certified under the safety act for aviation security. As I read the act, it's basically they carry a liability insurance, and that's the limit of their liability. And I've been trying to find out what the liability limits have been set at, particularly for screening companies, since we saw significant problems with screening companies pre-9/11. So if I could get that information.

SECRETARY CHERTOFF: We'll get that.

REPRESENTATIVE DEFAZIO: Thank you.

Thank you, Mr. Chairman.

REPRESENTATIVE COX: The gentleman's time has expired.

The gentleman from Connecticut, Mr. Shays.

REPRESENTATIVE SHAYS: Thank you, Mr. Secretary. I'll join with a heartfelt congratulations, and prayers as well. You have an awesome responsibility, and a great opportunity.

I wanted to just say to my colleague on the other side of the aisle when she talked about being on the commission, there were three commissions, the Bremer Commission, the Hart-Rudman Commission, the Gilmore Commission. They all said we need an assessment of the terrorist threat before 2001.

We needed a strategy to combat that. We need an assessment threat, a strategy to deal with the threat, and we needed to reorganize our government to implement the strategy.

And all three basically concurred on that, except the Hart Rudman Commission went the furthest and said we needed a Department of Homeland Security, and that's what we have.

We established the Department of Homeland Security, frankly, before we really established the strategy. And really had an assessment of the threat.

If I were to ask you now what is our strategy, what would it be?

SECRETARY CHERTOFF: I'd say the first part of the strategy is not part of what we do in this department, but what the president has done in taking the war to the enemy.

I have to say, I continue to believe that the first layer of defense is a good offense, and that means as we eliminate camps, we eliminate labs that the enemy has, we kill or capture them, we put them in a position where they spend a lot of time worrying about their own safety rather than training and recruiting, that is the first piece of a major strategy.

A second piece of the strategy is working closely with our allies all over the world in making the world inhospitable to terrorists. And that again is a second piece.

And then of course there is a piece that begins at our own borders, which is complementary and part of the layering approach. And that involves having increased capabilities both at our ports of entry and between our ports of entry to protect ourselves from bad people and bad stuff getting into the country; a capability inside the country to protect our transportation and our infrastructure; our special effort that we're undertaking now with respect to nuclear detection capability, which I think is an area where need almost a mini-Manhattan Project in terms of technology as well as deployment.

I think these are all parts of a comprehensive strategy, D being that we are going to do our level best at every level to put them on the defensive, take them -- take them off the boards, prevent them from coming in, prevent them from shipping their stuff in, protecting our infrastructure and transportation if they do get in, and then if worse comes to worst, we have to prepare for this too, being able to respond the mitigate the harm.

REPRESENTATIVE SHAYS: The last answers please me the most because it seems to me that the Cold War is over, the world is a more dangerous place, that the Cold War strategy of contain, react, and mutually assured destruction went out the window. And that is has to be attack, prevent, and it may have to be preemptive, and it may have to frankly be unilateral.

And it seems to me that that's what the main framework is. And then what you said about the strategy, taking the war to the enemy, working globally with our allies and so on, are parts of that.

I'm concerned that we are not doing enough to protect and prevent, and I realize that's part of your responsibility. With the time I have left, how can we justify for a minute giving resources to deal with the reactive part of dealing with the consequence of an attack? How can we for a second justify giving to a community resources that they don't need as much as, say, New York City or D.C. or some -- you know, even where the Hoover Dam is, because clearly they need to have some. How can we justify that?

SECRETARY CHERTOFF: We need to be -- and I think I've said this before -- we need to be driven by risk. And that means that the resources have to go where they will do the most good to prevent, protect and respond, based on consequence and vulnerability and threat. And that's where we have to put our resources.

We cannot -- we don't have money to waste, we don't have effort to waste. We have to be realistic about the fact that we have a menu of a large number of different things we have to protect. Some of them are -- you know, there are obviously people we have to protect directly, there's infrastructure, there's transportation nodes, there's no cookie-cutter answer to this.

But I completely agree with you that we can't afford to waste money just by making everybody feel good, like they got a little piece of something. It's got to be driven by a sense of priorities about what we have to worry about the most.

REPRESENTATIVE SHAYS: I just wanted to hear you say it again. Thank you.

REPRESENTATIVE COX: The gentleman's time has expired.

The gentlelady from the District of Columbia, Ms. Holmes Norton.

DELEGATE ELEANOR HOLMES NORTON (D-DC): Thank you very much, Mr. Chairman.

And thank you very much for being with us and for your useful testimony. I appreciate the distinction you made between obligation and spending.

I'd like to say a word about your -- ask a question about your own definition of a risk-based approach. As I see it, the two top challenges you face are putting Humpty Dumpty together, not again but for the first time. That's very difficult. These are melding together agencies that nobody ever meant to be together. Were it not for 9/11, they wouldn't be together. They still have domestic responsibilities that have nothing to do with yours. That's (real hard ?).

The second one has been of great concern to this committee, and that is developing and applying a risk-based analysis. I looked at page 10 of your testimony, and I was rather much attracted by the way you went at the notion of, quote, "a trio of threat, vulnerability and consequence." I kind of like the notion of giving example, your example of a two-lane bridge down the street from your own house -- hate to see that (downed ?), but comparing it to an attack on a major multi-lane bridge. This is a tough approach, but it -- you know, it's -- what it seems to me -- does is give one an objective standard. Until we get an objective standard, we are going to have great problems making jurisdictions as vast and diverse as those represented even at this table understand why A got more money than B, and that this is not another of those population-based programs.

Let me try to apply the notion -- the trio notion in your testimony to two rather disparate examples, since I understand best that way.

One has to do with rail security. I've had a bill for rail security -- very, very concerned. You come from a part of the country where you ought to be more concerned than I am, particularly after Madrid.

I don't know what the latest figures are. It looks like 141 million (dollars) in the '05 budget. After 9/11, of course, we pumped money into aviation, and we better had -- what I really am trying to get at is whether we're using any risk-based approach either to budgeting or to other things.

Compared to air security, I mean, it pales beside the number of people to get on the subways, buses, light rail every day of the week. And I have been flabbergasted by how far behind rail is. It doesn't hardly register here -- I'm not even talking just money -- on the screen for approach, as far as I've been able to tell.

I would like to ask about your approach, threat vulnerability and consequences applied to that way of doing budgeting.

That's number one. Then let me take a specific example of whether that approach even works in the everyday world.

We've got now two bills by the chairs of two committees to bring general aviation back to the nation's capital. Both chairmen have gone (at TSA ?). We even had a briefing. It was embarrassing. Far from a risk-based analysis, it was a -- this was about a couple of years ago, Judge Chertoff. It was a kind of doomsday approach, you know, as involving the Monument and the Capitol. It didn't have any analytical sense of risk versus cost in commerce and convenience and the rest, the kind of things you would expect a market society to do by instinct, almost. It was more like a science fiction movie.

Here now you have what I regard as an override of the Department of Homeland Security because TSA has taken no action. Both of these chairs now are going to have committees. They both have introduced bills that no longer call for a plan in the FAA bill. There was a section that said TSA had to present a plan. There having been no plan for 18 months, now they call for opening general aviation. They don't have any risk-based analysis; they just know that something is wrong with the Department of Homeland Security if they make it even look like they don't know how to protect the nation's capital. Understand, general aviation was up and running in New York City after 9/11 within days, helicopter service, all the rest of it, where the great debacle occurred.

I'd just like you to take a stab at your own approach to risk- based analysis -- threat, vulnerability and consequence -- and apply it to the two examples that I've just presented.

SECRETARY CHERTOFF: Well, I think that they do apply. And let me take the second one first. We are working, as we speak, on this issue of general aviation, because I think actually it demonstrates two facets for this risk-management concept.

One is, you know, we have to really think hard about what the consequence would be if someone misused a general aviation plane in Washington, how vulnerable we are at this point given what's been put in place, and how real the threat is. But you know, there's another piece to risk management, which I think the chairman alluded to earlier, which is there's also cost-benefit, because I can completely eliminate risk by having no air travel, and there will never be a risk of an aviation problem --

DELEGATE NORTON: That's what's happening now.

SECRETARY CHERTOFF: -- (inaudible) -- no risk. And that's clearly not the right answer. And I know that there was an understandable tendency on the part of some people right after 9/11 to take the attitude that protection overrides everything. But I think we understand now that this has got to be a long-term strategy, you've got to be structured for a long-term war against terror, and that means we cannot destroy our way of life in order to save it. So whenever we make a risk analysis, we have to also make a cost-benefit analysis. And we have to say how much risk are we prepared to tolerate or should we tolerate in order to make sure we have a free flow of commerce.

And that's an approach we're taking across the board. So that I think in the area of general aviation we are working hard now with general aviation to talk about what are precautions to put in place, to have a plan so that we neither have nothing nor "Katie bar the door," everything goes like 9/11 never happened. Neither of those approaches makes sense. What makes sense is an approach that opens up the possibility of general aviation, but in a way that guarantees a reasonable amount of security, bearing in mind consequence, vulnerability and threat. So I think it very much does apply.

Likewise with rail, we are obviously looking at the issue of rail. We have to consider the consequences of a rail incident, bearing in mind that just a couple of months ago in California there was a derailment. That was a bad thing, but it was not a catastrophic thing.

DELEGATE NORTON: South Carolina.

SECRETARY CHERTOFF: And South Carolina, too. And then we have to build things like a response capability, a security capability in terms of sensors on the tracks, things that might anticipate someone driving on the tracks. So again, that's something we are working on. We're using exactly the approach I'm talking about, and I think it is valid across the board and one which I think will give results that may not satisfy everybody, but will at least be reasonable.

DELEGATE NORTON: Thank you very much.

I appreciate the responses, because I'm going to be looking -- you do at the department -- to see whether or not in these two areas I see this approach being carried out. Thank you very much.

REPRESENTATIVE COX: The gentle lady's time has expired.

The gentleman from Georgia, Mr. Linder.

REPRESENTATIVE JOHN LINDER (R-GA): Thank you, Mr. Chairman.

Mr. Secretary, welcome. Nice to have you here. I just had an honest question I ask people all the time. Do you ever think another airplane will fly into a building?

SECRETARY CHERTOFF: Do I think it will? I think it's certainly possible.

REPRESENTATIVE LINDER: Do you think the passengers would tolerate that?

SECRETARY CHERTOFF: You know, I -- I mean, I think it would depend on a lot of circumstances. Are we talking about a large commercial airliner? Are we talking about a private airplane? I think the chances are much less now, but I can't rule it out. And I think -- the one thing I can tell you is that as we take each step to secure the airlines from that kind of a possibility, we reduce the chance measurably. I don't know that we're completely here yet. And I certainly wouldn't suggest reversing direction and tempting fate.

REPRESENTATIVE LINDER: I just can't imagine a flight full of passengers on a commercial airliner allowing some people to take it over without going after them themselves --

SECRETARY CHERTOFF: I -- I -- I --

REPRESENTATIVE LINDER: -- because they know what's going to happen. They know what it's all about. And they'd rather risk dying in an effort to fight than going into a building. Now, we've spent $5-1/2 billion looking for fingernail clippers.

SECRETARY CHERTOFF: Well --

REPRESENTATIVE LINDER: It seems that money could be spent more wisely worrying about, as you said, there's a difference between bad things and catastrophic things.

SECRETARY CHERTOFF: I'm not sure that -- I certainly think that toenail clippers are not the thing we're worried about. And I do agree with what I think someone said earlier, I think we need to be concerned about explosives. But I don't think that I would draw the conclusion because I would rely on the passengers that we could stop searching people for knives or guns. I mean, I think that we want to continue to keep those kinds of things off planes.

REPRESENTATIVE LINDER: It would be a bad thing if an airliner went down and 200 people died. But it wouldn't be catastrophic. What would be catastrophic is if we could find a way to use some of that money to worry about the intelligence for the bigger things, like the nuclear bombs, the radioactive or biological threats (sic). And I worry that your department that you inherited -- and I appreciate your 60-day review. But I worry you get so bogged down in a huge bureaucracy doing, really, some stupid things that you don't have the time to think about the big things.

SECRETARY CHERTOFF: Well, actually, I worry about that, too. And I -- and, you know, I don't want to keep invoking the review, but I do want to tell you that almost every morning I get up, you know, I have a briefing as to what's going on from the intelligence standpoint. And I sit around with the very top people in the department and we talk about exactly the kinds of things you're talking about. We talk about whether we are, you know, spending too much time worrying about what kind of risk it is, comparatively less, or a consequence that, while serious, is not catastrophic and not enough time worrying about other things. And we really try to dig into this.

One of the reasons I do want to see us have a more powerful policy capability is precisely to be able to start to think about these things department-wide, to avoid the issue I think you're pointing at, which is, you know, every component focused on its world and its vision without someone standing back and looking at the whole menu. And that's really what we have to do. We have to look at the whole map.

REPRESENTATIVE LINDER: Have you -- your challenge is becoming a very sophisticated intelligence organization so that when a threat arrives in some location -- it may be in Reno, or may be in Hahira, Georgia -- that you can alarm those folks, let them know ahead of time of the risk. And it's probably not going to be the same risk you might face in Phoenix.

And I don't know how much percentage of your budget is spent on intelligence. Do you have an idea on that?

SECRETARY CHERTOFF: I can't tell you. I mean, partly I can't tell you because there pieces of intelligence that are placed within a lot of different --

REPRESENTATIVE LINDER: Rob Simmons tells me it's 2-1/2 percent.

SECRETARY CHERTOFF: It may -- I'm not in a position to dispute that. I know it is -- it is parceled out in a lot of different areas, frankly, and one of our challenge is to unify it and fuse it so we get the benefit of all of it.

REPRESENTATIVE LINDER: I think the biggest threat that I'm worried about is biological. How much of a component in your intelligence community that you have is (exports of ?) biothreats?

SECRETARY CHERTOFF: Well, I mean, we deal with biological threats in a number of different ways. In terms of intelligence, of course, we get not only whatever intelligence we have within our department, we get what the intelligence community generates. But there's a separate piece of this which has to do with preparation, preparedness and response. We have in our science and technology directorate scientists and medical people who have expertise. We largely also, though, draw on the expertise of HHS and the Centers for Disease Control in terms of understanding the different kinds of biological agents there are.

We have a Biowatch program in a large number of cities in which we have very sensitive sensing devices that do monitor for various kinds of biological agents. And then we also are -- and I think it's an important piece of this entire approach, is we focus on having a clear set of plans for what to do in case of a biological incident, and that requires us to understand the way the agent works, to have access to the appropriate antidote and a plan for deploying that antidote, and a sense of how to do it in a way that is most efficient in terms of getting it out and preventing the spread of the agent.

REPRESENTATIVE LINDER: Just one last question, Mr. Secretary. How did the plan work when the Pentagon withheld information for five days on their anthrax threat?

SECRETARY CHERTOFF: Well, you know, we have done I guess what you call an after-action report. I think the state and locals have, too. We have talked to all the agencies involved. The Defense Department has changed its protocols. Thankfully, that was not a real -- it was not really anthrax, but it was for me actually a very useful lesson in terms of seeing where we had a deficiency in our response capability and where we could correct it.

You know, I think where I want to go beyond that is, I think we need to have on the shelf -- and I think we're in the process of developing this, we have a lot of good product -- an ability, with respect to any one of the likely agents, to understand how the agent works and have an ability to think about how to respond, because the response is different depending on the agent. It depends on how contagious it is; it depends on how long it persists in the environment. So we jumped on studying this right away.

We have embodied some immediate lessons that we've now changed. But I think we are building on that incident as a way of now going all around the federal government and making sure that everybody has got their protocols and their plans in place for dealing with this kind of situation.

REPRESENTATIVE LINDER: Thank you, Mr. Chairman.

REPRESENTATIVE COX: The gentleman's time has expired.

Mr. Pascrell from New Jersey.

REPRESENTATIVE BILL PASCRELL, JR. (D-NJ): Thank you, Mr. Chairman.

Mr. Secretary, you've done a lot of good things in New Jersey concerning homeland security. And I would say that under Mr. Casperson, I would put us up as a model in terms of bringing all the entities together in New Jersey. But that entity cannot do its job unless we share intelligence with that entity; and this is not happening. This is not happening.

I think the 9/11 commission, Mr. Secretary, got it right. And I think you have it right. I'll tell you why I think that. You have a philosophy which you bring to the job. I never even heard that word before in the last 2-1/2 years. It's not a scary word for me. You bring something to the table and not just reacting and responding. I think this is important, extremely important. And while you say in your opening statement that you can't guarantee, realizing that we can make no guarantees, we can't guarantee, but we can minimize our vulnerabilities.

We need to be primarily dependent on intelligence. And you bring this up. And, of course, that can mean a lot of things to a lot of people. I want to get into that in a second.

So, before port security, aviation security, train security, border security, all the way down the line, philosophy and strategy is very important to what we do.

And so, we've seen a lot of finger-pointing over the last two years at the CIA and the FBI. Now, we know they've made mistakes, but it's been driven -- if you read the 9/11 report -- all of us have read it -- you know that that is driven by security -- excuse me -- by philosophy and strategy. And if you're not -- I'm not saying you, personally -- if you're not willing to accept that, then nobody's ever held accountable. And that's the situation that we had. That is why, looking back over that 9/11 commission report, no one has been held accountable. Take a look. Unless I missed it in the news.

So we can line up all the mistakes and we can point fingers at the FBI and the CIA, but those entities run on the basis of where the president -- be it Clinton, Bush, whomever -- want to go. And let's not mistake anything about that.

So intelligence can mean a lot of things. If it's supported by a strategy, if it's supported by a philosophy and we hone in on an enemy. Now, you say, who's the enemy? Take the war to the enemy. The end result of this is saving a lot of money, as you say, because we want to know where to spend that money. You say take the war to the enemy. The problem is, we don't know who the enemy is. We are fighting non-state terror. If it's a state, we know it's easier to get your hands around. We are not fighting Islam, we are fighting extreme fundamentalist Islamic radical terrorists. That's who we're fighting. We have not made that distinction in our policy or in our philosophy. And that is why some members of this body support increasing the profiling -- and you know exactly what I'm talking about -- in getting at the enemy.

Now, I believe we are at war. I believe that from the bottom of my heart, and that we are at war with terrorists. But we need to preserve the freedoms, and you, more than anyone else, knows that, and you've struck that balance in your entire life. I say that not patronizing you, because -- I say it because I mean it.

Are you -- what is your reaction and response to the issue of profiling, keeping in mind Chapter 12 of the 9/11 report about who we should be reaching out to?

SECRETARY CHERTOFF: Well, let me say this. First of all, before I get to that, I just want to make it -- leave no uncertainty about the fact that the president and everybody who works for him is committed to the idea of intelligence sharing. I know the president was committed to that before Judge Silberman and Senator Robb presented their report.

And I know that only reinforced it. And that's been a very clear mandate.

I agree with you, Congressman, that we have to be very careful about who we're fighting. We are fighting radical jihadists. The vast majority of people who follow the religion of Islam are peaceful. Members of this community in this country are, you know, every bit as good Americans as everybody else. And we make a grave mistake if we allow the actions of jihadists to spill over into everybody who is practicing Islam, any more than we would do so if we were to identify the acts of Timothy McVeigh with people who, you know, are Christian or, you know, pick someone Jewish who does something wrong. So we have to distinguish between them.

I am dead set against religious profiling, for the following at least two reasons, maybe three reasons.

First of all, it is counterproductive. It is counterproductive because we do need to reach out to -- we cannot -- this -- we will not do well if the world walks away with impression that we are fighting a war against a religion, because we will do very poorly in the world, and we'll be very -- do very poorly with the hearts and minds we need to win.

Second, I can guarantee you that if we telegraph that we're going to look at a particular type of person when they come into the country, that al Qaeda will find someone who does not look like that person to come in and carry a bomb. So we would be making a big mistake if we were so obvious and so kind of unsophisticated in what we do.

And third, obviously, it strikes the fabric of our own country and what we believe in our -- in terms of our Constitution and our civil liberties to single out people based upon their religion.

People who have consciously adopted an ideology of hate and war we should be remorseless with, we should pursue without quarter. But those who are peaceful -- you know, religion should not enter into it.

REPRESENTATIVE PASCRELL: Thank you. Thank you very much, Mr. Secretary.

REPRESENTATIVE DANIEL LUNGREN (R-CA): Thank you, Mr. Secretary. Obviously, I'm not Mr. Cox, even though it says that. My name is Dan Lungren. I'm a Californian. As Secretary Rumsfeld said, I'm a retread. I like to think I'm returning congressional veteran. It sounds better. I came back here because of 9/11. I know you've taken this commitment because of 9/11.

I guess my first question is, because of the need for certainty and continuity, is it your intention, if you continue to have the confidence of the president, to stay for the rest of his term in this position?

SECRETARY CHERTOFF: As long as the president wants me to serve, I will serve.

REPRESENTATIVE LUNGREN: I appreciate that.

Secondly, with respect to risk assessment, you know, we can all talk about the failure to complete that task to this point by the department, but the Congress bears a great deal of that burden as well. My observation is, we have not made the transformation after 9/11 to recognizing that we need to reorganize ourselves and reprioritize with respect to that.

I would just ask you, very simply -- you have not been described to me as a wallflower in any of your previous experiences. I hope that you will -- if you think those of us in Congress, in terms of the legislation we're presenting or the pressure that we put on your department to ignore risk assessment, you will feel emboldened to tell us that and to loudly tell us that.

SECRETARY CHERTOFF: Well, I will, Congressman. I think I've really been pretty blunt and hopefully polite -- but blunt in saying, you know, that that -- I understand this approach of being risk-driven will disappoint some people. What I can hopefully hold out is that we will at least present an analytic approach that people will understand and respect, even if they disagree with it. But you know, this is not an approach that says let's give everybody a little something to make him happy. It's an approach designed to maximize the benefit of what we do to avoid the greatest risk.

REPRESENTATIVE LUNGREN: As important as getting that right, it is important that we be able to articulate it in such a way that members of Congress can go home to their districts and explain why they may not be getting the money and why it is necessary, why we are national legislators. So not only in terms of the substance but in terms of the ability to articulate -- and frankly, we need you in the bully pulpit doing that. And I hope you will.

Let me turn to the question of the SAFETY Act, because it appears to me that the effort of the Congress was to try and stimulate the technology development, technology transfer that you talked about in your testimony by setting up a mechanism by which we could have some limited protection in terms of liability. I come from the legal arena, as do you. We know we've had legal reform here in the Congress, and it's been somewhat controversial.

Here you have something where the Congress basically came together and said it's important for us to do that. And yet if you look objectively at the results of that, I think you would have to be -- at least I'm disappointed in the number of applications for that kind of a review and the assessment completed by your department. It seems to me if we are to look at setting priorities -- and you have talked about the mechanism of transfer of technology to aid us in that -- that that would be one of the top priorities of your department.

And yet, as I look at what has happened thus far, maybe it's just because of start-up difficulties, but I don't see that as a priority. Would you please comment on that?

SECRETARY CHERTOFF: Well, we did, I think, recently change the regulations to try to streamline them, because I think there was a sense that the original set of regulations may be too onerous. And that will hopefully help in terms of encouraging people to apply. But I did -- you know, I had the same observation when I came on to the job, that we -- it seemed we were not getting as much out of that program as one would have hoped. And so, you know, that's an issue which we are currently looking at as part of this review. I don't know whether the regulatory changes are enough or whether we are being unduly nit-picky in terms of what it is we are requesting. So, I mean, that -- but I do think that that is a powerful took to harness the private sector in terms of its ingenuity. And I think we -- if we don't make full use of it, we're really short-changing ourselves.

REPRESENTATIVE LUNGREN: And let me ask you this. Will there be a prioritization of the type of applications that are made? That is, if you make a risk assessment and you determine that there are specific areas in which we really need some assistance, would it be your thought that the department ought to, in a sense, try and put that on the streamlined highway, maybe over something else that might be important technically, but in terms of your department's review of the assessment would not fit the need as readily?

SECRETARY CHERTOFF: Well, I would hope we can actually get this to the point that it is all pretty streamlined. I think we do want to encourage certain kinds of technology, and there are some other tools that even may be more powerful than the Safety Act, which, of course, is really a liability capping act. But there are things -- you know, we have a version of DARPA called -- I can't -- SARPA. And, you know, DARPA was a great tool for the Defense Department. I want to make sure we're using that tool, and also that we are -- part of what we need to do is get our procurement system more unified, and then connect it up with our research so we really have a kind of a powerful economic engine to drive important technological advances.

REPRESENTATIVE LUNGREN: Thank you very much, Mr. Secretary. My time has expired.

The gentle lady from the Virgin Islands, Ms. Christiansen.

DELEGATE DONNA M. CHRISTIANSEN (VI): Thank you, Mr. Chairman, and welcome, Mr. Secretary. I'm encouraged, like the others, by your statements, your brief opening remarks, and your responses, and especially, of course, knowing that you've come from the Third Circuit.

SECRETARY CHERTOFF: Where the Virgin Islands is, for those who are not initiated.

DELEGATE CHRISTIANSEN: Yes. (Laughs.) Mr. Secretary, as you work to change and improve the working culture at the department, I wanted to add another challenge, a very basic one, and that is that the department respect this committee's work and responsibility and be fully forthcoming with the information that we need to work with you and to give you the support you need and to fulfill the work, the tasks that we have charged. That's not always been the case.

I want to ask a question, again around port security. The IG report on port security grants generated a national debate within the maritime community on how grant funding ought to be distributed. Some say funding should be distributed solely on risk; others feel that the Maritime Transportation Security Act is a federal mandate on all ports, and therefore all ports should receive security funding regardless of risk. Some of the op-eds that followed criticized the fact that ports in the Virgin Islands specifically receive grant funding because they believe that these ports did not have the same risk compared to the larger ports such as New York and Los Angeles.

As a member of the committee, I do know that more financing is needed at all of our country's ports. But I believe that we ignore the smaller ports at our peril as well. And while ports in the Virgin Islands may not have as many containers moving through as New York or as some of the other ports, our ports are host to cruise ships, passengers, anywhere from five -- very rarely at 5,000, and maybe as many as 12,000 on any given day, second only to Miami.

So, if you feel that homeland security should be risk-based, what would be your definition of risk? Because in the maritime environment, I feel it has to go beyond just looking at containers.

SECRETARY CHERTOFF: Well, I don't think risk is only containers. I think risk is -- but I think it is, at the end of the day, consequence, vulnerability and threat. And as I say, I mean, that will not necessarily result in everybody getting something.

But I think to put it in perspective, it's important to know that our entire effort toward security involves a lot of different things. And I think there was some confusion about the role that the port grants play in terms of container security. The port grants are designed -- or were designed, because they're now rolled into the total infrastructure program -- they were designed to deal with the actual security of the port itself. But the security of containers, which is a cargo function, is addressed in a lot of additional ways. It's addressed through Customs and Border Protection, and in screening and inspection, and the Security Initiative; Coast Guard plays a direct role. There are -- depending on where you are, there may be state grants or (UASI ?) grants that are available also for ports.

So, unfortunately, when you isolate a single program, particularly one that's directed at a particular function, you're not, frankly, capturing all the resources that are brought to bear. And I think the thing I would ask when people evaluate how we do is they recognize that sometimes we may accomplish a result using a different set of tools. And again, you know, we are, ultimately, capability- and mission-oriented. We want to get the job done. We want to keep the bad stuff out. If we do it by having Coast Guard do something as opposed to giving a port security grant, if we get to the right result, that's good. And that's the kind of philosophy we're going to take.

DELEGATE CHRISTENSEN: Well, I appreciate that. And that means that perhaps our Coast Guard will be getting some more funding and more assets as well, because -- I appreciate your approach that brings all of the different components together in a smooth working -- a smooth operation.

You've undertaken a overview -- a look at the department with an eye to reorganizing it around the threat, vulnerability and consequence. We're about to -- we're authorizing the department -- I'm surprised this question wasn't asked before -- and we may do it before the end of the month. What is your opinion as to whether we shouldn't extend the current authorization until such time as you have completed your assessment so that we can do this -- at least take into consideration, as we reauthorize the department, some of the recommendations that you, the secretary, would be coming up with?

SECRETARY CHERTOFF: Well, actually I'm not sufficiently versed in the legislative schedule to know what the normal schedule is. So I think it probably would not be a good idea for me to be specific about that. I hope, obviously, that whatever is done -- I'm going to try as hard as possible to at least get to you what we can in a timely fashion to have it incorporated in -- the extent we need legislation, you can incorporate --

DELEGATE CHRISTENSEN: And what is your time line?

SECRETARY CHERTOFF: Well, I'm looking at recommendations -- I've set a deadline for recommendations, substantially all the recommendations, by the end of May. And -- but there may be some things, you know, working with the committee that if there are some things we can identify ahead of time that might require some legislative action, that might be something worth exploring.

REPRESENTATIVE COX: The gentlelady's time has expired.

SECRETARY CHERTOFF: Thank you.

DELEGATE CHRISTENSEN: Thank you.

REPRESENTATIVE COX: We have the secretary for 29 -- well, no, 19 more minutes, and we have seven people who are in line. So I intend as the rules are, to recognize people for five minutes. But if they would -- if they can possibly do less than that, you might allow another member to ask a question.

Congressman Rogers from Alabama is recognized for five minutes.

REPRESENTATIVE MIKE ROGERS (R-AL): Thank you, Mr. Chairman --

REPRESENTATIVE COX: For such time as he may take of that five minutes.

REPRESENTATIVE ROGERS: I got it.

Thank you, Mr. Secretary, for being with us. I want to talk about first responders. I'm of the opinion that currently our organization for training first responders does not meet our nation's needs.

And I'd like to specifically reference the Gilmore commission report from December of 2003, which recommended the Department of Homeland Security develop a comprehensive process for establishing training and exercise standards for first responders, and I agree with that statement.

What I'd like to know is your thoughts on the current organization of training within DHS and your plans for maybe improving the organization and provision of those training programs.

SECRETARY CHERTOFF: I think through our preparedness process, in which we've laid down capabilities across the board, which includes the response, and then the underlying supporting template of the kinds of functions -- you know, that's designed to drive us in all areas, including responders, to see, you know, what do they have to have the capability to do, what does that mean in terms of the kinds of tasks they have to be able to perform.

And then that, in our view -- and it's not in the final -- we don't have a final product. But we've kind of created successive cuts of this that are more precise. That should be the guidance for what, from our standpoint, we need to have first responders capable of doing, not necessarily every community to do everything, but every community to have -- be covered, geographically, by some capabilities that can perform those functions. And the idea is to get -- you know, use regional support networks to make sure we're not simply giving everybody the same thing over and over again.

REPRESENTATIVE ROGERS: Great. And the last thing -- I'd just like to make a comment. Earlier, my colleague from Mississippi talked about his concerns, and he outlined several civil senior management positions within your department that are vacant. And I think that's a very real problem, and it could have some real management consequences down the road if that's not remedied.

I see those, the number of vacancies, and they're not just people -- you know, you made reference to something similar happening in the military. These people have left the department.

SECRETARY CHERTOFF: Right.

REPRESENTATIVE ROGERS: I think long-term, while your idea of people being cross-trained is good, we've got to find a way to keep that institutional knowledge that we're building for our long-term benefit.

SECRETARY CHERTOFF: I agree with that.

REPRESENTATIVE ROGERS: Thank you. Thank you very much. That's all, Mr. Chairman.

REPRESENTATIVE COX: The gentleman yields back.

Mr. Etheridge of North Carolina is recognized for five minutes, or as such time as he may consume within the five minutes.

REPRESENTATIVE BOB ETHERIDGE (D-NC): Thank you Mr. Chairman.

Mr. Secretary, welcome. And you've got an important job and a tough one. And today you've been very candid thus far.

Over the last several years I have raised the issue with people, as they came before this committee, about an issue that they say is a local level, and that's our public schools. But we saw in Russia and we've seen recently that can, number one, be a high profile, and number two, it can send terrible shock waves.

So when you look at the whole issue of threat vulnerability and consequences, you may not fit the first two categories, but you've got huge consequences. And all the other things we may do will slide off the sheet when that hits the front page. And it will, when you're dealing with people's children.

So I hope, as you go through your second stage of your review, that this will be an issue that you'll pay a lot of attention to, how you're providing not only just a template to the local level, but we have a plan or systems. Having been state superintendent of schools, I can assure you that should be a higher priority than we're paying attention to. And I'll just leave that where it is, and I'll ask that question again when you come back.

SECRETARY CHERTOFF: Okay.

REPRESENTATIVE ETHERIDGE: In the 2001 Hart-Rudman report, "Road Map for National Security: An Imperative for Change," the authors stated that the greatest threat to our country at that point, prior to 9/11, second only to the detonation of a weapon of mass destruction, would be a failure to manage properly science, technology and education for the common good over the next quarter century.

That being said, the Department of Homeland Security has got a tough job. You've got to deal with the stuff (that's there today ?), you see immediately. But at the same time, you've to balance those current trends with long-range planning.

Let me just share some statistics with you. Education may not be your responsibility, but we better be paying attention to it, and I hope you're meeting with the other secretaries.

Currently one-third of all U.S. science and engineering doctorate degrees and 40 percent of the Ph.D.s in computer science go to students who are outside the United States, come here and get an education. Some stay. Many go home. It's a great plan, but the problem is, if we don't do a better job of training here, we've got a challenge.

So my question is this: How is the department planning to address our nation's current and future needs for technically and mathematically proficient students, who we're going to need to maintain that cutting edge in science and technology to be able to meet the challenges for our homeland security?

SECRETARY CHERTOFF: Well, I do think, you know, we have, I think, programs in terms of science and technology that deal with centers of excellence. And I think we may also have or are contemplating having some programs that would try to encourage people to get into areas of research and study that have an application to the kinds of issues we deal with in Homeland Security.

I -- you know, obviously, the Department of Education is a separate department, but I could not agree more that the long-term advantage we have in this war is the advantage of our technology and our science. And that's -- we can't afford to lose that competitive advantage.

REPRESENTATIVE ETHERIDGE: Mr. Secretary, let me encourage you to have that meeting. And number two, I know within your department you have some of those funds to encourage that. And I would hope that you would encourage your folks to spend some time, because I think this is critical issue.

SECRETARY CHERTOFF: I agree.

REPRESENTATIVE ETHERIDGE: And I think it's not only long-term, it is short term. We need to pay a lot of attention very quickly. And if you'll do that, I will appreciate a follow-up on that, if you would.

SECRETARY CHERTOFF: I will.

REPRESENTATIVE ETHERIDGE: And I'll yield back.

REPRESENTATIVE COX: Thank you.

Mr. McCaul, from Texas, is recognized for five minutes.

REPRESENTATIVE MICHAEL MCCAUL (R-TX): Thank you, Mr. Chairman.

Mr. Secretary, it's an honor to have you here. It was an honor to serve under you in the Justice Department, and you did a great job then. I think you're doing a great job today. You have a lot of challenges, but I know you're the right man at the right time for the department. So thank you for that.

I also applaud the department's support for the risk-based funding. I toured the Houston Port Authority with Senator Cornyn last week, and it's the largest port in the United States. It's obviously a target. And I think the fact that my state and California and New York are at the low end of the funding -- a change would be for the better, based on risk.

I want to focus on -- and I know when you were assistant attorney general, you saw this issue coming up quite a bit. In my view, the number-one mission is and should be in the Homeland Security Department protecting our border and protecting our citizens from threats from outside coming in. And we have a situation that I believe is really getting almost on an epidemic level in terms of the number of crossings illegally.

But my biggest concern has to do with what I'm sure you're familiar with. It's called the catch and release program. And it involves people not necessarily from Mexico but other -- countries other than Mexico. And as you saw with your intelligence when you were at the department, I probably saw some of the same things. And we had the Mexican border in our jurisdiction, and it was -- it's a real concern of mine. The thought of a terrorist crossing with a nuclear or biological capability is truly frightening.

In the case of the people from other than Mexico, because of the repatriation process, as you know, it takes two weeks. In many cases they don't have any space to detain. In the McAllen sector in Texas, 90 percent of these people get basically released into the streets with a notice to appear, and then they don't show up. You recall Ramzi Yousef, the perpetrator of the '93 World Trade Center bombing, got into this country that way.

So my question, without giving a speech, is simply, what is the department doing on this issue, and how can you make members of Congress and the American public feel safer on this issue?

SECRETARY CHERTOFF: We're doing two things. First of all, we are -- there is, in terms of when we release, the decision, there are priorities and we do pay attention to whether we're dealing with somebody who is a special interest person, so those people are not released. Likewise, people who are -- have criminal issues are not released. We do -- and, you know, this is a problem, obviously, that all law enforcement faces when you release people on bail, you know, there's -- we want everybody to appear, but we certainly prioritize detaining those who pose a threat to the community. So that is our template.

Second, we have actually begun and are vigorously pursuing a project of pursuing absconders, people who don't come to appear when they're supposed to appear. And we actually -- our numbers of people apprehended have increased since the program has begun. That's a very important program in terms of getting compliance. We are trying, for example -- we did a repatriation program with Mexico. You know, frankly, if we free up beds for other people, we then have more beds for people we can't move out that quickly. So another part of our strategy, again, is to try to cut the time that we're holding beds for people who we can deport more readily so we can have additional beds for people who we want to hold. But we are -- it's a serious problem. And at a minimum, what we need to do is make sure we are prioritizing and keeping the people we really have to be concerned about in custody.

REPRESENTATIVE MCCAUL: And as you know, I'm in favor of prioritizing that issue, making those appropriations for that purpose. I think there's no greater issue or threat facing this country. So -- and thank you for being here.

SECRETARY CHERTOFF: Thank you.

REPRESENTATIVE COX: The gentleman's time has expired.

The gentleman from Florida, Mr. Meek.

REPRESENTATIVE KENDRICK MEEK (D-FL): Thank you, Mr. Chairman.

Thanks, Mr. Secretary, for being here. I wanted to talk a little bit about the grant process and some of the nuts and bolts of the department. But I can't help but resist sharing with you -- which you probably already know -- in your first evaluation before the hearing, I told you I was from South Florida, which is unique in itself as it relates to protecting the homeland. I think there's no other place in the country that faces some of the issues that we face, not only as it relates to immigrations, but also threat.

I know you're familiar with the act that was passed by the Congress, which is the Federal Information Security Management Act, which as you know, the department has received an F two years in a row as it relates to securing its own technology and systems. And we can talk about protecting the homeland, but if the other side, those that are working to infiltrate or to harm us are able to hack our computers, we have a serious problem.

We can have TOPOFF programs throughout the country. If they can go in and find out exactly where we're weak from the privacy of their own home, we have a real issue. And with the Department of Homeland Security receiving a threat out of some 24, 25 agencies and we're supposed to be the leader in securing our information, I think we have a real situation. I think it's very alarming.

Also, with -- as you know, there's a GAO report that has been written, the chairman of our subcommittee and also the ranking member and the chairman of the overall committee. We're going to be having a hearing tomorrow on this issue. Obviously, we're going to be hearing some people, some folks from the private sector. I served on the subcommittee last year that put forth a bill. Two fine members of this committee will be introducing that same legislation, from what I understand. But the department within, I would like to hear as much as you can share at this point of what are some of the steps we're taking to protect our -- some of the information -- I mean, as simple as patrols on the border, as simple as -- you know, some of the main functions of the department as it relates to intelligence. If someone -- if we're getting an "F" and there's other agencies that are getting C's and B's, I don't see the improvement. And there are -- if there's improvement that's ongoing now, we'd like to hear about it. And I have one other small thing that I wanted to share with you, but I would appreciate an answer.

SECRETARY CHERTOFF: Well, my understanding is that even within -- I can't tell -- I would -- I don't see any other reaction to an "F" than disappointment. I mean, that's -- there's no way you can sugarcoat that and make it seem good. I think that notwithstanding the "F" -- and I think it was an "F" in a prior year you're thinking -- there has been some improvement. But there's no question, more generally speaking, that as a department our IQ function needs a lot of work. I mean, we were -- you know, we inherited IQ functions from a number of different regs and departments. Those have not been fully integrated. And bringing somebody on to be a CIO, it's is going to be important to make sure we get that integration process right, not only to upgrade our ability to defend ourselves, but also to make us more interoperable. I mean, you can't function in the 21st century without an ability to have an integrated computer system. So I think you're right to point that out as a significant challenge for us.

REPRESENTATIVE MEEK: And, of course, you know this is a bipartisan feeling here in the Congress, it's not -- you know, being in the minority side, being -- you know -- what are you doing in the administration. A couple of my colleagues, including the ranking member, addressed the issue of attrition and turnover within the department at some of the highest levels. Some of the -- some of the leadership positions in the department that received some of the highest security clearances, I mean, they're spending eight months, six months in some cases, and moving on to the private sector and doing other things. And I don't know if it's an issue of pay or attention, or it's something -- it's so much work to be done, we're saying, we're doing something we're not actually doing, and I don't want anything to happen under my watch, so I'm out of here. That could be one.

SECRETARY CHERTOFF: Well, I mean, I think --

REPRESENTATIVE MEEK: The other could be -- the other could be, I can see if there were great opportunities within the department, and you saw talent, and you say, "Hey, I need you over here to be able to fill this void." These folks are gone. I mean, they're out of there. And so, we're starting from A as it relates to the whole training issue, and that's what the GAO report was addressing, that the issue of training, the issue of retention, the issue of occurring -- being able to -- testing of contingency plans. I mean, these are issues that are not there.

Some of those issues are IT issues, but some of them are human resource issues and we have to address those. But I know that you have limited time.

Mr. Chairman, one last thing I wanted to share with the secretary. There was a letter that myself and the ranking member sent to you as it related to some of the reporting that the department has to make to the Congress to help us and give us guidance on what we're doing good or what's working and what's not working. Mr. Secretary, I would ask, as you do your review, hopefully before the second review starts, is hopefully report back to the Congress, which is statutorily mandated that we receive this information because it will help us in resolving some of our shortcomings in protecting the homeland.

SECRETARY CHERTOFF: We are going -- I want to try to improve our responsiveness on these issues. I also have to make a plea that we get some relief from too much reporting, and also some sense of priority. If we know something's really important, we can move to that first. And, you know, it's a perennial issue. I mean, sometimes I feel it's the nature of an agency. Everybody feels they have to touch something before it goes out the door. And I want to try to streamline that process. But you can help us -- (off mike).

REPRESENTATIVE MEEK: Mr. Chairman, I know I'm out of time. Mr. Chairman, I just would like to ask that hopefully you could speak with the ranking member and maybe share with the secretary what's a major priority of what we need as it relates to the work that we're going to be doing, because I think that will be helpful. Some report is better than no report. And I think the secretary's put an offer on the table that's good.

REPRESENTATIVE COX: Thank you. The gentleman's time has expired.

The gentlelady from Texas, Ms. Jackson-Lee.

REPRESENTATIVE SHEILA JACKSON-LEE (D-TX): Thank you very much, Mr. Chairman.

And thank you very much, Secretary. I was impressed first of all by your focus in your opening statement that seemed to suggest that you too believe that one of the important aspects of security, in the functioning of the homeland security, is understanding the aspects and facets of the department. And your reference to having initiated a comprehensive review of the organization, operation and policies, I think is very positive.

I think, however, the Congress may have made a mistake. I'd like to be proven wrong. I am very disturbed at the size, as it has become very clear, of the department; 180,00 personnel, I'm sure all very hard-working. But I have a sense, as this review may show us, that we have a problem with one hand not knowing what the other hand is doing.

I would refer back to the ranking member's comment about the number of vacancies. And I know that you are just about two months on the job. I'd like to pinpoint really a pointed answer on what will be the steps taken, immediate steps taken -- though we're looking for good people -- to fill some of those very vital spots, particularly in border enforcement and security.

My next question would be -- I can just do all three of them -- is the dilemma that ICE is in. Before the Judiciary Committee, ICE representatives came and said things such as, "We don't have uniforms, we don't have badges. In the transition, we are still carrying the same badges and ID that we had in our previous position." There was a reprogramming of money, allegedly $500 million. You might comment on whether that has occurred.

And finally I would say I hope that as you look to the policy, as I see the theme throughout your statement, if there is ever a need for policy cooperation, it is in immigration. We have failed in immigration. We either spend more time stigmatizing it or labeling it, criticizing it, disregarding it, not wanting it. It's here to stay. And I think you need to have a combination of the policy part of it on immigration benefits and enforcement.

I did not hear one statement -- and I understand that it was a level of frustration on these citizens' part -- but I did not hear one statement commenting on the existence of Minutemen on the border of the Arizona -- on the Arizona border, comments being made that the next state would be Texas. I understand the citizens' frustration. But if we're to have our hands around homeland security, as Congress indicated it should be, as this department's establishment suggested it should be, then the frustration of citizens, to the extent that Minutemen are on our borders and no policy has come from the administration -- meaning no policy statement has come from the administration to suggest that that is intolerable, or that we seek to fix it, or that we will immediately dispatch numbers of Border Patrol agents, possibly from other areas, to me is a silence that we cannot tolerate.

So I'd appreciate and look forward to working with you on these issues. I am particularly interested in the border. We spend a lot of time in that area, being from Texas. But I do think that what we have on the Arizona border poses a dangerous combination for disaster for the citizens who mean well and for our Border Patrol agents who every day are putting their lives on the line to do the best job that they possibly can do.

I welcome your thoughts, Mr. Secretary. And I thank you for staying for all of us who are here at the very end.

SECRETARY CHERTOFF: I'm pleased to do it, Congresswoman --

REPRESENTATIVE COX: Mr. Secretary, I would just alert you that it is just a few minutes after 4:30. I understand that you have a hard deadline that we've agreed to for you to depart at 4:30. I want to give you the opportunity to do that.

I also want to let you know we have only one member remaining who hasn't --

SECRETARY CHERTOFF: I'll hang in there. But I'll talk fast.

REPRESENTATIVE COX: -- so if you can stay, we very much appreciate it.

SECRETARY CHERTOFF: I'll try to deal with each of the three.

In terms of the vacancies at the senior leadership, again, I mean, in some instances, frankly, I think people who are leaving are leaving because they've done a good job and they're being promoted or moved to something else. And we do have some very talented people who are in the process, I think, of being considered -- we've already got some positions that are filled where we have nominations. And frankly, of course, to the extent we deal with confirmed positions -- and this is an issue for the Senate, obviously -- you know, it's a long process. And so we want to move quickly as possible.

As far as ICE is concerned, the reprogramming documentation has come up. I think it came up a couple of weeks ago. We believe that that will finally at least fix the financial problem that emerged when they broke the original INS and Customs apart. We need to get that fixed. We are looking hard at the question of how we can improve their financial management -- they got caught short with that -- including the possibility of having another component step in to take over that function. And that would be a big help.

Beyond that, I think ICE does a tremendous job. And I need to find a way to elevate its profile within the department and make it clear how much -- what a valuable contribution ICE does make. They've done a tremendous job in dealing with this MS13 gang; in dealing, obviously, with things like child pornography; but also with, you know, human trafficking. I mean, there are huge, very high-profile and very important areas of investigation that they have a premier role in, and I want to work very hard to make sure that's appreciated and understood.

Finally, as far as immigration is concerned, I think -- you know, I think the president has it exactly right. He's proposed a temporary worker program which would enable us to identify, you know, those people who are in this country illegally but with no intent to harm, and pull them into the system in a way that would be regulated and controlled, thereby freeing up resources to focus on people who don't want to operate within the system and who are potentially a threat.

At the border, we added over 500 Border Patrol agents. We moved them into Arizona as part of our Arizona Border Control Initiative. And that was very successful last year. We hope it will be successful again. We've got -- you know, we've got sensors, we've got -- we're working on getting UAVs stood up over the summer.

There's no question, I completely agree with you, this is a big concern of American citizens, rightfully so. We've got to put a package together, I think the president's package of having, you know, temporary worker effort, but also, you know, stepped up and smarter enforcement is exactly the approach that we need to take.

REPRESENTATIVE COX: The gentlelady's time has expired.

The gentlelady from California, Ms. Lofgren.

REPRESENTATIVE ZOE LOFGREN (D-CA): Thank you, Mr. Chairman.

And thank you, Mr. Secretary. I will be quick. And I appreciate your staying. It has been a pleasure to listen to you here today. And I am -- you said much that there is to like here and an approach that's methodical and organized and logical. And frankly, that has not always been presented to us. So I'm very eager to work with you in the years ahead.

I would like to -- and I very much agree with your emphasis on technology. That is the key to our being successful in this mission.

Just a couple of issues that I wanted to raise, and perhaps you can comment on them.

In terms of technology, I've focused on the issue of immigration functions for several years. The press is reporting that the data integration project at the immigration function has been abandoned for budget reasons.

I don't know if that's true. If it is true, I'd like to know. And if -- whatever the case, what the plans are, we're still creating paper records. And obviously, you can't search the database if it's a paper record. I firmly believe that unless you have all of the records computerized with a biometric, you're really not going to be able to search them.

And that gets me to my second question: we've never really, so far as I am aware, settled on, with probably the assistant of NIST, the appropriate biometric or metrics -- they can be redundant. And we've deployed systems that are now incompatible, and therefore not fully usable. So I'm wondering what you plan to do about that problem.

Finally, I served last year on the Cyber Security subcommittee. We have not made progress in implementing the cyber plan. We have had turnover. Congressman Mac Thornberry, who chaired the committee last year, and I had a bill which we reintroduced this year for an assistant secretary for cyber security so that we can get some attention to this area. I'm sure you read about the NSF funding to avoid what (Shaftri?) has said, a cyber Pearl Harbor, we all hope to do that. And I'm wondering if you have a position on that bill yet.

Finally, in terms of science, the SARPA program is really taking a short-term approach, it's not taking the kind of DARPA long-term approach that I had envisioned. And I think in terms of science and technology, we face some very huge risks. My colleague from North Carolina mentioned the lack of computer and math and physics and science graduates. Half of the graduate students are foreign students. Well, no more, because half of the universities in America reported that their foreign students and graduate department students show up with a visa problem. So that's also your department. We can longer get scholars into the United States. So the international science projects, the big physics, are going to have to be located in other countries rather than the United States because we can't get Nobel prize winners into the U.S. I'm wondering if you have a plan for dealing with all of those issues.

And again, I thank you so much for your approach, and I really look forward to working with you.

SECRETARY CHERTOFF: Thank you. I think I can -- I'll try on all of these.

I'm not quite sure what the report is about us abandoning data integration. So, that's a little hard for me to answer. I'm not aware -- I mean, clearly. we need to have, and we are moving toward making available -- and I believe we have at the ports of entry -- an availability to search records to make sure are getting watch lists searched. That obviously is something that's not complete yet, but we have a lot deployed there.

Likewise with the issue of a biometric standard. I think I can tell you that there is significant progress made toward reaching a resolution of this debate about what is the appropriate biometric standard. And part of it's a recognition that there are different standards for different functions. For identification -- if you take fingerprints, for identification you can have one-to-one, actually one or two prints is enough. But for searching a large database against latent prints, which you want to do in the case of terrorists, you probably need 10. So --

REPRESENTATIVE LOFGREN: If I may --

SECRETARY CHERTOFF: Yeah.

REPRESENTATIVE LOFGREN: -- I agree with that. But if you've different algorithms on the two fingers versus the 10 fingers, you can't use the system, is the concern I was trying to raise.

SECRETARY CHERTOFF: Well, it depends -- it depends what -- see, you can use different systems for different things. And, in fact, sometimes you don't want to have one system, because you're -- both for purposes of speed and purposes of actually privacy, not everybody needs everything. In other words, if I get someone plugged into the system, enrolled, I want to search the widest database and make sure they're not a terrorist. But once I have locked down that identity and I'm comfortable with the person, all I need to know is each time the person presents themselves as the same person. And that doesn't require a full search, it requires a one-to-one. So I think we are moving towards resolution in that area.

On the area of cyber, I do think we have -- that is a serious vulnerability. As to whether we should, you know, have an assistant secretary or particulars of a bill, I don't know that I'm in a position to say that. But it is something that we have -- we're clearly aware of and is -- we are looking at.

Finally, on the issue of visas for foreign students, I mean, I think we've already taken some steps in terms of lengthening the stay period. We -- it comes back to the original point. Maybe I should close with the original point the chairman made. We want to have a balance. We need to keep bad people out, and there's no question, historically, dangerous people have abused the student visa system. We have to figure out a way to weed them out but then also welcome the rest of the world.

I believe, as I think you do, that technology and biometrics, properly deployed, actually is the way to achieve both of those goals -- to vet people to make sure we're keeping bad people out, but then to be able to give them a freer ability to go back and forth, so as to make this really a friendlier place for the world, so we attract the leading minds and the leading capabilities.

REPRESENTATIVE LOFGREN: I totally agree, and that's music to my ears. Thank you, Mr. Secretary.

REPRESENTATIVE COX: Well, it is appropriate that we end this hearing on what can sometimes be a dismal topic with music and happiness.

SECRETARY CHERTOFF: Great. (Chuckles.)

REPRESENTATIVE COX: And I want to thank you very much for spending so much time with us. Your testimony is very valuable.

I want to thank the members for their questions. The members of the committee may have some additional questions. We will hold the hearing record open for an additional 10 days, and Mr. Secretary, we'd ask that you respond to any such questions in writing.

SECRETARY CHERTOFF: Thank you very much.

REPRESENTATIVE COX: Thank you all. The hearing is adjourned. (Strikes gavel.)

END.

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