[Senate Hearing 110-274] [From the U.S. Government Printing Office] S. Hrg. 110-274 NOMINATION OF DENNIS R. SCHRADER ======================================================================= HEARING before the COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED TENTH CONGRESS FIRST SESSION NOMINATION OF DENNIS R. SCHRADER TO BE DEPUTY ADMINISTRATOR FOR NATIONAL PREPAREDNESS, FEDERAL EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF HOMELAND SECURITY __________ JULY 25, 2007 __________ Available via http://www.access.gpo.gov/congress/senate Printed for the use of the Committee on Homeland Security and Governmental Affairs U.S. GOVERNMENT PRINTING OFFICE 37-364 PDF WASHINGTON DC: 2008 --------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866)512-1800 DC area (202)512-1800 Fax: (202) 512-2250 Mail Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS JOSEPH I. LIEBERMAN, Connecticut, Chairman CARL LEVIN, Michigan SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska THOMAS R. CARPER, Delaware GEORGE V. VOINOVICH, Ohio MARK L. PRYOR, Arkansas NORM COLEMAN, Minnesota MARY L. LANDRIEU, Louisiana TOM COBURN, Oklahoma BARACK OBAMA, Illinois PETE V. DOMENICI, New Mexico CLAIRE McCASKILL, Missouri JOHN WARNER, Virginia JON TESTER, Montana JOHN E. SUNUNU, New Hampshire Michael L. Alexander, Staff Director Kristine V. Lam, Research Assistant Brandon L. Milhorn, Minority Staff Director and Chief Counsel Jennifer L. Tarr. Minority Associate Counsel Trina Driessnack Tyrer, Chief Clerk C O N T E N T S ------ Opening statements: Page Senator Lieberman............................................ 1 Senator Collins.............................................. 5 Senator Pryor................................................ 13 WITNESSES Wednesday, July 25, 2007 Hon. Benjamin L. Cardin, a U.S. Senator from the State of Maryland....................................................... 1 Dennis R. Schrader, to be Deputy Administrator for National Preparedness, Federal Emergency Management Agency, U.S. Department of Homeland Security................................ 6 Alphabetical List of Witnesses Cardin, Hon. Benjamin L.: Testimony.................................................... 1 Prepared statement........................................... 3 Schrader, Dennis R.: Testimony.................................................... 6 Prepared statement........................................... 17 Biographical and professional information.................... 21 Responses to pre-hearing questions........................... 32 Letter from U.S. Office of Government Ethics................. 80 Responses to post-hearing questions.......................... 81 NOMINATION OF DENNIS R. SCHRADER ---------- WEDNESDAY, JULY 25, 2007 U.S. Senate, Committee on Homeland Security and Governmental Affairs, Washington, DC. The Committee met, pursuant to notice, at 10:07 a.m., in Room SD-342, Dirksen Senate Office Building, Hon. Joseph I. Lieberman, Chairman of the Committee, presiding. Present: Senators Lieberman, Pryor, and Collins. OPENING STATEMENT OF SENATOR LIEBERMAN Chairman Lieberman. Good morning. The hearing will come to order. Thanks very much for being here. Senator Cardin, if I may be blunt, do you have the time to sit through the opening statements by Senator Collins and me? Or would you like to make an introduction and then go on? Senator Cardin. Senator Lieberman, you are always so direct. I appreciate that. [Laughter.] I am supposed to preside at 10:30 a.m. I don't know how long your opening comments are---- Chairman Lieberman. Go right ahead. Senator Cardin. I always enjoy hearing from you. Chairman Lieberman. If you want to do the introduction, go ahead. TESTIMONY OF HON. BENJAMIN L. CARDIN, A U.S. SENATOR FROM THE STATE OF MARYLAND Senator Cardin. Well, thank you, Senator Lieberman and Senator Collins. I thank you very much for allowing me this opportunity to appear before the Committee on Homeland Security and Governmental Affairs. It is a great honor to introduce to the Committee Dennis R. Schrader for the consideration of his nomination to be Deputy Administrator for National Preparedness of the Federal Emergency Management Agency within the U.S. Department of Homeland Security. Quite a mouthful, but an extremely important position. It is really my pleasure to introduce to you Dennis Schrader. He is a person who was our first Secretary of Homeland Security in Maryland, appointed by Governor Ehrlich, and he had the confidence of our entire congressional delegation. He reached out to all of us and worked in a way that was in the best interests of the people of Maryland. He put their interests first as the Secretary of Homeland Security. We have regular briefings, and at these briefings, they gave us the chance to truly understand what was happening in Maryland and to coordinate our work in Maryland with what was happening nationally. And it was never partisan. It was always including all of us, and I congratulate him on his extraordinary leadership in setting up that agency in Maryland. I think it was one of the most efficient agencies in the country due to his extraordinary leadership. I also want to introduce his wife, Sandy. Sandy and I have been colleagues. Sandy is a former State Senator, a great leader in her own right for the people of Howard County. So we get two for the price of one here, and they are a great duo. Chairman Lieberman. We have heard that line before. [Laughter.] Senator Cardin. I thank the entire family because serving in public life is not easy and taking on this challenge will not be easy, and it is a real family commitment, and we thank the entire family for being willing to make this commitment to public service. Let me just very briefly tell you a little bit about Dennis. He brings with him an extraordinary background of local, State, and Federal experience, and private sector experience. He is the former councilman in Howard County, so he understands local government, and I think that is an extremely important part of his responsibility in this new position, is to work closely with local officials so that we all work together on the same page on behalf of the people of our community. He also brings a distinguished record in the U.S. Navy. He served in the U.S. Navy for 27 years. Served three active-duty tours, five tours in the U.S. Navy Reserve in assignments that included the Pentagon, Navy Bureau of Personnel, and the Defense Threat Reduction Agency. Captain Schrader earned four Navy commendation medals and three Navy achievement medals before retiring earlier this year, and we thank him for his service to our country. I got to know Dennis best when he was--I call him our ``workout specialist'' for the University of Maryland. When I was Speaker of the State Legislature, Dennis was called upon to help us deal with the University of Maryland. At that time, it was a public hospital in terrible financial condition. Dennis used his extraordinary executive leadership to work out the problems of that hospital so that today the University of Maryland Medical Center is one of the great academic medical centers in our country. I must tell you, it just did not happen. It took an extraordinary game plan and talent, and he was part of the team that brought that about, and I thank him for that leadership, which I think will also help him as he deals with the challenges in FEMA and in Homeland Security and making it work in the best interests of the people of our country. Mr. Chairman, I am proud to support the nomination of Dennis Schrader to be the Deputy Administrator for National Preparedness. I thank the Committee for giving me this opportunity to introduce to you a Marylander that we are very proud of and believe will continue to serve the people of our Nation. Chairman Lieberman. Thank you, Senator Cardin, for a very thoughtful and obviously sincere statement of support. And you are now free to do whatever you would like at this point, but I thank you. Senator Cardin. Thank you. With your permission, I will ask to be excused. Chairman Lieberman. Understood. Senator Cardin. Thank you very much. [Prepared statement of Senator Cardin follows:] PREPARED STATEMENT OF SENATOR CARDIN Chairman Lieberman, Ranking Member Collins, Members of the Committee. Thank you very much for this opportunity to appear before the Committee on Homeland Security and Governmental Affairs. It is my great honor and privilege to be here today to introduce Dennis R. Schrader for the consideration of his nomination to be Deputy Administrator for National Preparedness of the Federal Emergency Management Agency within the U.S. Department of Homeland Security. Mr. Schrader has had a long and distinguished career serving the people of Maryland and Nation in the private sector, the military and at the local, state, and Federal levels of government. I have had the opportunity to work closely with Dennis over the years and it is my pleasure to welcome him to Capital Hill today. I would also like to extend a warm welcome to Dennis' wife, Sandy. Sandy Schrader is another accomplished public servant, having represented the citizens of Howard County from 2002 to 2007 in the Maryland State Senate. Sandy, we are all glad you could be here today with Dennis Dennis Scharder served in the U.S. Navy for 27 years. Dennis served three active-duty tours and five tours in the U.S. Navy Reserve in assignments that included the Pentagon, Navy Bureau of Personnel, and the Defense Threat Reduction Agency. Captain Schrader earned four Navy Commendation Medals and three Navy Achievement Medals before retiring earlier this year. We thank him for his honorable service. Mr. Chairman, one of Dennis' greatest contributions to the State of Maryland, and to the medical community, was his leadership at the University of Maryland Medical System. In the mid-1980's, the University of Maryland Hospital was an aging facility with millions of dollars in annual losses. As Speaker of the Maryland House of Delegates, I worked with my colleagues in the State to find a way to turn the troubled institution around. Dennis was a key member of the team that was assembled to transform the struggling public entity into a modern and financially successful private, non-profit organization. Today, the University of Maryland Medical System is a nationally recognized center of excellence, with six hospitals, 10,000 employees, and a revenue base of over $1 billion. Dennis has a proven record of implementing organizational and programmatic innovation to turn around a foundering public agency. Most recently, Dennis has served as the first Director of Homeland Security for the State of Maryland. As Director, Dennis applied his experience from the military, the private sector, and his elected service on the Howard County Council to create a modern, efficient agency capable of identifying and responding to the threat of foreign and domestic terrorism and natural disasters. Dennis built on existing State functions and local initiatives and leveraged new resources and strategies to create a continuous, cost effective, and sustainable ``Culture of Preparedness'' in Maryland. In particular, as Director of the Governor's Office of Homeland Security, Dennis always made a concerted effort to reach out to the Maryland Congressional delegation as valued partners in bolstering the safety of our citizens. His efforts to reach out across levels of government--and across party lines--are a testament to his success in emergency management. Mr. Chairman, I am proud to support the nomination of Dennis Schrader to be Deputy Administrator for National Preparedness. I thank the Committee for the opportunity to appear on behalf of such a dedicated public servant. Thank you very much. Chairman Lieberman. Thank you very much. I appreciate very much the introduction by Senator Cardin, and I now formally welcome you, Mr. Schrader, to this hearing. The Deputy Administrator for National Preparedness is a new position within FEMA, created by DHS, Department of Homeland Security, to implement part of the Post-Katrina Emergency Management Reform Act, which I am proud to say was authored by Senator Collins and me, and basically all the Members of this Committee. That legislation was the result of this Committee's 8-month investigation into why the response to Hurricane Katrina was so horribly botched at all levels of government and what needed to be done so that kind of deadly debacle will never be repeated. In the aftermath of Hurricane Katrina, some called--and still do--for FEMA to be taken out of the Department of Homeland Security. I believed--and continue to believe--that would be a serious mistake because it would weaken FEMA, not strengthen the agency. Our legislation strengthened FEMA by making it a distinct entity within DHS, similar to the Coast Guard and Secret Service, but it also, I think, strengthened it by putting it together in the same Department with the various other agencies that are clearly part of the preparedness and response responsibility of our government and within DHS so that the whole really would be, and I think is becoming, greater than the sum of the parts. The Post-Katrina Reform Act was designed to ensure that FEMA became the hub of the Federal Government's efforts to prepare for and respond to disasters of all kinds, and it could best become that hub in DHS where the rest of those agencies are. One of the most important parts of our efforts to remake FEMA into a world-class disaster response agency was to reunite preparedness and response capabilities within FEMA. We don't want to be in the position again where we are trying to build the kind of teamwork and logistical relief operations among all levels of government in the midst of the chaos that inevitably follows a disaster, as clearly happened in the days and even hours after Hurricane Katrina struck. As part of implementing this requirement of the Act, the Department of Homeland Security created the National Preparedness Directorate to organize and oversee key parts of our national preparedness efforts, and the Secretary placed that directorate under the control of a newly created Deputy Administrator for National Preparedness, which, of course, is the position for which you, Mr. Schrader, have been nominated. Along with making sure that preparedness is fully integrated into the new FEMA, another major responsibility of yours will be to oversee the disaster exercises and training programs that we clearly need to fix and make better. We saw that in the lead-up to Hurricane Katrina with Hurricane Pam, not being related and acted upon in a way to make the response to Hurricane Katrina better. In our Hurricane Katrina investigation, we also found that some of FEMA's senior leadership lacked sufficient emergency management and homeland security experience needed to effectively do their jobs. So we made it a requirement of the Post-Katrina Management Act that people who are put in high positions have the required experience, the relevant experience. And I note with real satisfaction, as Senator Cardin's introduction made clear, that you, Mr. Schrader, have very relevant qualifications and experience that will clearly be an asset to you if you are confirmed. Mr. Schrader, the responsibilities of the position for which you have been nominated are critical to our homeland security, and your ability to carry them out will make sure that we will never again have to ask the question that we asked in our Post-Katrina hearings, which is: ``Why weren't we prepared?'' Senator Collins. OPENING STATEMENT OF SENATOR COLLINS Senator Collins. Thank you, Mr. Chairman, and welcome, Mr. Schrader. The FEMA Reform Act written by this Committee--and signed into law last year--reunited the preparedness and response functions of a strengthened FEMA within the Department of Homeland Security. As the Chairman has indicated, the Deputy Administrator for National Preparedness is a new position created by that reform Act, and it will play a critical role in meeting the challenges that are set forth in the reform bill. The need for this reunification, for this strengthening, and for this position was made clear by our investigation into the flawed preparation for and response to Hurricane Katrina. And, thus, the responsibilities of the position for which Mr. Schrader has been nominated are extensive. They include policy development, contingency planning, exercise coordination and evaluation, emergency management training and hazard mitigation, to name but a few. Beyond the specifics of a job description, the Deputy Administrator for National Preparedness must be a builder--a builder of a new FEMA as an integral part of DHS, a builder of a new culture of all-hazard preparedness across all levels of government, and, above all, a builder of a restored faith within the American people in government's ability to meet its fundamental obligation of protecting our citizens. Mr. Schrader brings significant experience and expertise to this great challenge. As has been mentioned, as Director of Maryland's Office of Homeland Security, he worked to develop a regional vision for homeland security--that has been an issue that the Chairman and I have long pushed of having a more regional approach and, thus, stronger regional offices, for example. He also was responsible for implementing accountable and measurable program oversight for all homeland security dollars coming to his State. And he helped establish the Maryland Coordination and Analysis Center. His service on the U.S. Attorney's Office Anti-Terrorism Advisory Council and as the Chairman of the Public Safety Communications Interoperability Governance Work Group bears directly upon two issues that have long been at the top of this Committee's agenda. No aspect of our Post-Katrina legislation has stirred more debate and more disagreement than our intention, our commitment to keep a strengthened FEMA within the Department of Homeland Security. In the end, our proposal prevailed because it is clear that the challenges of the 21st Century require a single agency to plan, coordinate, and integrate homeland security and disaster operations. DHS is that agency and FEMA is its core. But passing legislation is only one hurdle. The real challenge comes in its implementation, in creating a vigorous, coordinated, and accountable national emergency management network. I commend Mr. Schrader for his willingness to accept that challenge. I look forward to our discussion today. Finally, Mr. Chairman, let me note that I have a staff member, my deputy chief of staff, Mary Beth Carozza, who worked very closely with Mr. Schrader in his position in Maryland. She personally vouches for him, and I look forward to questioning him today. Chairman Lieberman. Thanks, Senator Collins. That is high praise. Senator Pryor, if you would like to make an opening statement, you are welcome. Senator Pryor. Thank you, Mr. Chairman, but I do not have one. Thank you. Chairman Lieberman. Thank you. I will now do the formal introduction. Dennis Schrader has filed responses to a biographical and financial questionnaire, answered pre-hearing questions submitted by the Committee, and had his financial statements reviewed by the Office of Government Ethics. Without objection, this information will be made part of the hearing record, with the exception of the financial data, which, according to Committee custom, are on file and available for public inspection in the Committee offices. Our Committee rules require that all witnesses at nomination hearings give their testimony under oath, so, Mr. Schrader, I would ask you to please stand and raise your right hand. Do you swear that the testimony you are about to give to the Committee will be the truth, the whole truth, and nothing but the truth, so help you, God? Mr. Schrader. I do. Chairman Lieberman. Thank you, and please be seated. Mr. Schrader, I now welcome your opening statement and invite you to introduce at your pleasure the significant number of family members you have with you. TESTIMONY OF DENNIS R. SCHRADER,\1\ TO BE DEPUTY ADMINISTRATOR FOR NATIONAL PREPAREDNESS, FEDERAL EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF HOMELAND SECURITY Mr. Schrader. Yes, Mr. Chairman. Let me start by introducing family members: My wife, Sandra, who Senator Cardin referred to; my daughter, Whitney; my brother, Rick, who I grew up with in Buffalo; my aunt Marguerite Collesano, who came from Buffalo; and my cousin, her daughter, Jennifer Adams. I thank them for being here today. Thank you. As well as many other friends. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Schrader appears in the Appendix on page 17. --------------------------------------------------------------------------- Chairman Lieberman. Thank you. We welcome you. I did not realize you are from Buffalo. That inherently means you are from strong stock. Mr. Schrader. Yes, sir. [Laughter.] Went through a lot of snowstorms. Good morning, Mr. Chairman, Senator Collins, and Members of the Committee. My name is Dennis Schrader. I would like to start by thanking Senator Cardin for his kind introduction. It was a privilege working with him as then-Congressman Cardin during my tenure as the State Homeland Security Advisor. I am here today as the nominee for Deputy Administrator for National Preparedness at the Federal Emergency Management Agency, a critical role that this Committee envisioned as part of the Post-Katrina Emergency Reform Act of 2006. I am very honored by the President's nomination and glad to be here today to address your questions as you consider my nomination. It is a great privilege to be considered for this position and to perhaps have a role in furthering our Nation's readiness at this important moment in our history. In preparing for this hearing, I had an opportunity to not only reflect on the past 30 years of my career, but also to consider how much I relied on my family's support and patience during those years. My wife, Sandy, and my daughter, Whitney, who I have just introduced, are here with me today, and I would like to thank them for their support. The life of a public servant, as you know, can mean long hours and much time away from the home. And Sandy and Whitney have endured that with both grace and understanding. In addition, I also owe much to my parents, whose character and selflessness set such a sterling example for me during those years I was growing up in Buffalo, New York. Whether it was my father working two jobs at a time or my mother working part-time in addition to her household responsibilities, they instilled in me a sense of civic responsibility that I carry with me today. If confirmed as the Deputy Administrator for the National Preparedness Directorate, I would address the concerns of many State and local officials, private sector companies, and individual citizens who play key roles in our national preparedness. I would advocate an approach that expects the unexpected. The task at hand requires superior planning, excellence in training and exercises, and an ongoing assessment process that measures improvement. I have had the benefit of being coached and mentored by a variety of outstanding individuals throughout my career. Just a couple of examples: Rear Admiral Fred Kelly inspired me to work toward my professional engineer's license, and Captain James Kovalcik showed me how to think outside the box to solve tough government contracting problems. The breadth of their knowledge and depth of their character have been an inspiration to me throughout my career, and I am grateful to them. During my 7 years on active duty in the Navy, I saw firsthand the importance of large-scale contingency planning, both on a national and international basis. In 1980, I found myself on the isolated island of Diego Garcia in the Indian Ocean with the ``Can Do'' Seabees. There I learned the value of readiness when you are so far removed from basic medical services we take for granted. In 1981, I learned about and prepared for the risk of tsunamis and typhoons on the Pacific Island of Guam. From 1982 to 1984, I contributed to the forward-based construction in Sicily and was sobered by the terrorist attack on our Marine barracks in Lebanon just a few hundred miles away. Finally, during my time at Bethesda Naval Hospital in 1985, I routinely exercised with the Presidential Treatment Unit, only to suddenly have to press it into service on a Friday evening in July that year for President Reagan. After returning to the private sector in 1987, I spent 16 years working with health professionals who came to work every day with the mission of saving people's lives. When lives are on the line, you work as a team where everyone expects you to be preparing and improving your skills and systems on a daily basis. Health care is a logistics and equipment-intensive business which often encounters the unexpected. For example, in the early 1990s, a major neighborhood substation exploded, and we operated the medical center on emergency power for 3 days while the transformer was replaced. In 1999, we spent $35 million preparing for Y2K and enjoyed the evening of December 31 in the command center while the uneventful New Year passed. On two occasions, we came close to evacuating patients, but in each case our organizational preparation saved the day. In 2002, we used the Emergency Management Institute training courses to design a full-scale field exercise that tested our incident command system for a WMD event. It was a major wake-up call for our team. That training we received from EMI highlighted the importance of the common citizen's role in the culture of preparedness. Many of our citizens volunteer every day. I personally served 19 years in the Naval Reserve, and our citizens want to contribute, and we must welcome their participation. We have got to make it easy for them. If confirmed, I hope to build upon the good work being done at both the Citizen Corps and Ready programs. In our national preparedness efforts at the Federal level, we have to engage our State and local partners who provide the core public safety and public health capability across this country. In 1997, I recall as a county council member voting for over $30 million in bonds to replace our county radio system and observed how expensive these systems can be for local government. We owe a great deal to the Nation's thousands of local elected officials and their teams, and I look forward to working closely with them in the future. Since September 11, 2001, the Nation has been mobilized to meet the challenge at hand. In the past 4 years as a State official, I managed the State's response to numerous local events, including Hurricane Isabel, an I-95 tanker fire, a threat to our harbor tunnels in Baltimore, as well as coordinating the State's assistance during the response to Hurricane Katrina. The public demands and deserves our best efforts. We continuously challenged ourselves to be better as we reached out to our neighboring States and local jurisdictions. I cannot emphasize enough the importance of collaboration to foster a regional approach. In closing, the Congress has set the preparedness bar very high for FEMA, DHS, and the Nation. I would welcome the opportunity to meet that challenge and respectfully ask this Committee to confirm my nomination to lead the Preparedness Directorate at FEMA. I thank you, Mr. Chairman, for the opportunity to appear before you, and I would be happy to answer any questions you may have. Chairman Lieberman. Thanks very much, Mr. Schrader. That was a very strong and encouraging statement. I must tell you, I would imagine Senator Collins feels the same thing I do. There is a lot of frustration in Congress these days for all of us, but when you are involved in this Committee, as this Committee was, in the investigation Post- Katrina, when you are able to work with your colleagues to adopt legislation and to try to drive a reorganization of FEMA and DHS that makes them more effective in protecting the American people, when the Department creates a position such as yours and then fills it with somebody so eminently qualified, it is very satisfying to see it happen. Now, you have got to do the work, but I think you are an excellent choice. One of the key aspects of the Post-Katrina Act was obviously to put preparedness back in FEMA, reuniting it with response. If you are confirmed, you will have very important responsibilities for fully integrating preparedness into FEMA, and I want to ask you to talk for a moment about some of the measures you would plan to take to ensure that preparedness is fully and successfully integrated back into FEMA. Mr. Schrader. Well, by starting, sir, I think the first step is making sure that we have the very best possible career leadership at the agency, and I think the first responsibility that I would have, if confirmed, is to make sure the key leadership roles in FEMA are filled with quality people. But we also need to make sure, while we are doing that, we have diversity. We need to have a mix of different folks particularly that know how to reach out to different areas. As you said, DHS offers a tremendous resource to the agency, and the integration of that will require folks who can work in a matrix leadership style reaching out to other folks. For example, within DHS they have set up--and I experienced this as a State official, working with the information analysis people. Mr. Allen's group is very good. We worked with them. So we need to be able to reach in and collaborate with folks, as well as across, interagency, because FEMA will be required to lead the effort to pull together, folks from the Health Department, HHS, and the Department of Justice. So it really is a frame of mind in terms of how you approach leading. Chairman Lieberman. I thank you for that answer. One of the additions that the new legislation makes is to require the development of a comprehensive assessment program for how the grants that we all support and are trying to increase from the Federal Government to State, locals, and first responders are actually being used. As part of this position, Deputy Administrator for National Preparedness, you will have a responsibility for implementing a comprehensive assessment program so that taxpayers and Members of Congress know how the money we are sending is being spent. Given the inherent difficulties, which I know you are aware of, having had the experience you have, in defining whether a given State or locality is well prepared for a disaster or a catastrophe like Hurricane Katrina, how will you go about trying to measure this as the law requires? Mr. Schrader. Yes, sir, Mr. Chairman. Let me start by saying that the first thing that Governor Ehrlich told me when we got started was that he wanted me to stay on top of all the money coming into the State, and it took a while to pull all that data together, but over 5 fiscal years, we realized that we had over $438 million coming into the State. We set up project management functions to oversee all that, and what I learned and I realized at the Federal level is there are two things that are critical. One, we need to have the regional offices at FEMA, which have the relationships with the States, be more engaged in that process. And now through the wisdom of this Committee, that has been made possible, that would be something that would need to be done. Second, we need to support the States in what I call program management. We have to begin to have an expectation, and that has started. The last two grant cycles required that the States create program management functions. But I think we need to engage in that process and make sure that there are projects that are being implemented. At the State level, we did that. We had regular briefings with all of the agencies involved in putting projects together, and we tracked those projects, and we made sure that the money was being invested effectively. And I think that is the kind of thing we have to do nationally, but we have to do it through the regional offices. We cannot manage it out of Washington. Chairman Lieberman. I appreciate that, and I particularly appreciate the emphasis of the regional offices. But what would you see the regional offices doing to assess the preparedness of State and local agencies? Mr. Schrader. Two things, and I use the term ``crawl, walk, run.'' Chairman Lieberman. Right. Mr. Schrader. Because in building the relationship with the State, we do not want to play ``gotcha'' with the States. We want to begin the assessment process so that we get accustomed to working with each other. I think we need to stay focused on the eight national priorities. Over the last several grant cycles, we have made it very clear that there are eight priorities, things like implementing the National Incident Management System, the National Response Plan, like the Interoperability Program, just to name a few. We should focus on those eight priorities and begin to make sure that there are assessment measures. For example, we have already been assessing interoperability at the State level. We ought to take those measures and use them and then begin to orient the States to the fact that we are going to be assessing performance. So crawl, walk, run would be, I think, the most appropriate because we have to build that trust relationship. Chairman Lieberman. Good answer. Sensible answer. I have got a little more time, but I am going to use it to ask you some of the standard questions that we ask all nominees. First, is there anything you are aware of in your background that might present a conflict of interest with the duties of the office to which you have been nominated? Mr. Schrader. No, sir. Chairman Lieberman. Do you know of anything, personal or otherwise, that would in any way prevent you from fully and honorably discharging the responsibilities of the office to which you have been nominated? Mr. Schrader. No, sir. Chairman Lieberman. Finally, do you agree without reservation to respond to any reasonable summons to appear and testify before any duly constituted Committee of Congress if you are confirmed? Mr. Schrader. Yes, sir. Chairman Lieberman. Thank you very much. Senator Collins. Senator Collins. Thank you, Mr. Chairman. Mr. Schrader, I want to pick up on the discussion on interoperability. This afternoon, the Chairman and I will be offering an amendment to the homeland security appropriations bill to designate some funding for interoperability programs in the States and the regions. This is something that both of us have been working on for a very long time. It was disheartening in the aftermath of Hurricane Katrina to hear the same kinds of interoperability problems that hampered the response on September 11, 2001. They were still there in Hurricane Katrina. You have served on Maryland's Interoperability Council. Give us your thoughts, please, on where we should be going with interoperability, your assessment of the efforts of States, and how can we encourage a more regional approach? Maryland is probably more sensitive to that than most States because you have to work with Virginia and Washington, DC. Mr. Schrader. Right. Senator Collins. But give us your thoughts on that challenge. Mr. Schrader. Yes, Senator. Let me start by saying that the first thing that we did in Maryland is to establish a governance process under Governor Ehrlich's leadership that brought together all the counties and local jurisdictions and the State enterprise, and we met every month for many months, and we developed a master plan for the State. That is the first thing. And this was predicated on a study, a seminal document that was produced about 4 years ago called ``Why Can't We Talk?'' And it was a national consensus document that had five issues, and they said if a State is going to do interoperability, they need to pay attention to governance, there needs to be coordinated planning, you need to have focus on budgets and projects, and you are going to in some cases have to invest and replace some equipment. So at the State level, it is within the States' purview to organize this governance process and have a master plan. I think those are absolutely critical. I will give you one example about the regional part of it because one of the things I am very proud of, in the Midatlantic States, we had organized a 501(c)(3) organization called the ``All Hazards Consortium,'' and in the last grant cycle, in 2006, we got West Virginia, Pennsylvania, Maryland, and Virginia together, and we put in a proposal for a quad- State interoperability project. When we did that, we signaled the staff at DHS that we were going to do it. When it came to the review process, they did not have the mechanisms to be able to deal with it. However, to their credit, we had a closed-door meeting with them subsequent to that and said, you guys need to fix this, and to their credit they did. And my understanding is that this year in the grant guidance, it was put in there, and there were over 150 regional projects submitted by the States. We are really proud of the fact that Maryland initiated that because the people in western Maryland said to us, look, it is great that you are working in Baltimore and Washington, DC, but it is more important to us what the county in West Virginia to the south of us and the county in Pennsylvania to the north of us think because there is only 10 miles separating us. We need more of that kind of thinking, and we need to encourage it. Senator Collins. Thank you. I want to ask you about the status of the revisions to the National Response Plan. As you are well aware, this is the document which all emergency managers--State, local, and Federal--take their cues from on how to respond to a disaster. Many of the witnesses who testified before us during our investigation said that the emergency response to Hurricane Katrina was so poor in part because the original National Response Plan had only been issued just shortly before Hurricane Katrina struck and, thus, first responders and emergency managers had little time to absorb its changes, to be really familiar with the document. Now, DHS is in the process of a second round of changes to the National Response Plan to incorporate the lessons of Hurricane Katrina. But the problem is DHS was supposed to have completed that task and issued the revised plan in June. We are now well into hurricane season. What assurances will you give us that you will make completing this plan, the revisions, a priority? Mr. Schrader. Well, one is that I have not been privy to the internal details of what has been going on in the Department as far as the development of the revisions. But I will say, coming from a State perspective, when I received the original document, it was 400 pages long, and you can imagine sitting in a State Governor's office with a handful of people getting a 400-page document. My initial thoughts were, it was too long, it was too Federal centric, and it did not lay out roles and responsibilities that could be easily understood from a State because all incidents start at the State and local level. So my sense was that the National Response Plan should really be more organized around what happens on the front end at the State and local level and then expands from there. I have made these comments to leadership at DHS and FEMA, and I have been assured that is the approach that is being taken in this revision. Having said that, if I am confirmed, this would be at the very top of the list, getting this plan out there, because, quite frankly, in its original form it really was not a plan, per se. The second thing I would also mention is that what we really need to do is we need to modernize the planning system nationally. We need to build on that guidance that comes out of the Federal Government and work through the regions with our State and local governments to better put together real operational plans, very similar to what has been done in the last 40 or 50 years within the Department of Defense. There is a well-worn path along those lines. So it is not just reissuing the plan. It is really moving to the next step and making it even better. And I think the National Plan Review was an excellent initiative, and I felt, as a State advisor when that came through, that was really a very positive step forward toward engaged partnership. But we need to do a lot more. Senator Collins. Thank you. Chairman Lieberman. Thanks, Senator Collins. Senator Pryor, I am delighted you are here. I would say to Mr. Schrader, and maybe others, Senator Pryor is the Chairman of our Subcommittee on State, Local, and Private Sector Preparedness and Integration, so he is directly interested in your area of responsibility, if confirmed. Senator Pryor. OPENING STATEMENT OF SENATOR PRYOR Senator Pryor. Thank you, Mr. Chairman. And as part of that work, we had a hearing in the Subcommittee on June 21 where we talked about the fact that 85 percent of our Nation's critical infrastructure is owned by the private sector. And your soon- to-be colleague, Marko Bourne, stated the other day that FEMA does not have a private sector outreach office or any office that provides a direct line of communication between FEMA and the private sector. So the first question for you is: Do you plan to create some sort of official line of communication, whether it be an office or a process through your office? Mr. Schrader. Well, Senator, let me first start by saying that I spent 9 years at General Motors early in my career and also 16 years in a private sector hospital. Having been in that hospital on September 11, 2001, trying to get ahold of the FBI and figure out what was going on was very difficult. That has changed dramatically, but a lot more needs to be done. We need to make it easier for the private sector to participate. In the process of being briefed, I have had an opportunity to be briefed by Martinez Fonz's office and him personally on the work they are doing. I think this is an example of where FEMA and DHS can collaborate. What we need to do is--and this is what we did in the State of Maryland also. The governor gave me nine people, and we ran the entire State enterprise with nine people. But the trick to it was we had key people in 14 agencies and offices, as well as partnerships with the Federal local offices like the FBI. We did not have to own everything ourselves inside the office. It was the relationship building and the task of organizing that got it all done--and we got a lot of work done. I will also say we had a private sector outreach program in Maryland which was very effective, and we did it through the critical infrastructure program because, as you said, 85 percent is owned--my philosophy, working on behalf of the governor, was that you cannot have a critical infrastructure program without working with the private sector. We had an exercise, for example, where we tested interdependencies and created interdependencies awareness. We had 200 people there. Over 100 of the folks represented in the room were from the private sector through the relationships we had built. So it can be done, but it is a cultural issue, and it really requires an orientation to the private sector that I would bring. Senator Pryor. You mentioned that we need to do those things. Is it your intention, assuming you are confirmed, to come up with a concrete plan to try to implement them? It sounds like you have private sector experience and State experience. Is it your goal to bring that experience to the Federal level? Mr. Schrader. Absolutely. There is no question, if I am confirmed, that would be my intention. I would also mention what I have found to be the barriers in government. Oftentimes the perception is that, well, when private sector people approach government, their only intention is, A, to sell something or, B, there is a concern about I do not want to violate the procurement laws. And what we had to do in Maryland--and I am sure there will be similar challenges in the Federal sector--is to get staff comfortable with the idea of partnering with the private sector because you are talking about different cultures, but it can work. The private sector has enormous resources to bring to bear, but it has to be preplanned. And those relationships have to be established up front. Senator Pryor. I think that is critical myself. When you look at what FEMA does, obviously terrorism is a focus, and it should be. But there are many more natural disasters than there are terrorist events, and the bread and butter of FEMA is to be prepared to respond to the natural disasters. From your standpoint, is there a difference in planning for a natural disaster versus planning for a terrorist event? Or does it require the same preparation? Mr. Schrader. I would say that the process of preparation is the same, but the people that you have to bring together are slightly different, and let me give you an example. We had a tanker explode on I-95, which backed traffic all the way down through Virginia toward Norfolk. So there is a lot of coordination that goes on in that I-95 corridor. That turned out to be not a terrorist incident, but on the front end, there is an investigation that has to go on very rapidly to determine if it is or it is not. We had built the relationships through our Joint Terrorism Task Force where we had the Coordination and Analysis Center working very closely with the State Emergency Operations Center, and I am not going to tell you it was perfect. There was always a little bit of friction. But we made it work. And what we found is that back-and-forth communication on a real- time basis allowed us to very quickly determine it was not a terrorist incident, and then very quickly a unified command was set up. So the bottom line is it worked in that case. If it had been a chlorine tank that was exploded by a terrorist, the process would have been exactly the same. I would argue that what we need to do are more real-time incident analyses to improve our processes and more functional drills rather than so many--what I have found in my experience is there is far too much emphasis on doing full-scale exercises for the media and the cameras with very long documents that have lessons learned that sit on a shelf, instead of doing more critical analysis of what are the key issues. So I would argue that the process is very similar, but the people are going to vary in the process. Senator Pryor. You mentioned in your prepared statement that it is important to enhance multi-State partnerships. How do you plan on enhancing those? And how do those partnerships play a role in national preparedness? Mr. Schrader. Well, let me start by saying two things. One is I very much believe that there need to be in every region of the country multi-State alliances. There is one in the Pacific Northwest that is very mature that I have become aware of and talked to those folks. The Northeast has begun to evolve. The Southeast part of the country has some structure in place that is evolving. And, of course, in the Midatlantic, we had a very robust group that we put together. The reason that becomes so important is we have to have a mechanism for the States to collaborate State to State. They are never going to accept the Federal Government imposing their will as almost a superior. What we need is a partnership, and when the States can--what I found in the Midatlantic, when we as the States were able to collaborate together in our 501(c)(3), we then went to Region III and were able to work as full partners. The second thing we need to do is we really need to grow the capability in the regions for program management and to put the right kind of people there that are leaning forward. They have to also be oriented to move not just from natural disasters but also to reach out and work with the Department of Justice and the FBI. One last thing I would mention is there are tremendous regional resources in the Federal Government if one is oriented toward collaboration. We found, for example, our U.S. Attorney was an invaluable resource in the State of Maryland, and we leaned on them, and they provided us tremendous support. The same thing with the FBI. The FBI gave us space to work out of. They provided computer systems. We just had to be willing to work together. And so we need to promote this collaboration, not only between agencies but between the States and local jurisdictions. Senator Pryor. Thank you. Chairman Lieberman. Thanks very much, Senator Pryor. Mr. Schrader, thanks for your testimony and your willingness to serve. I must say I am very impressed by your record that you bring with you to this position, your military service, your service in the nonprofit sector and in the public sector. It is really quite extraordinary. And I am impressed by the way you handle yourself. So I think the President has made an excellent decision here, and I know I do not have to say this, but I think your family has a lot to be proud of. They probably know that already. I would say that, without objection, the record is going to be kept open until 12 noon tomorrow for the submission of any written questions or statements for the record. The Committee's next markup is next Wednesday, August 1. It is my intention to bring your nomination before the Committee at that time. I hope we can get it out and, with a little luck and help, through the Senate before we recess for August so that you can be officially in place. Senator Collins, would you like to add anything? Senator Collins. Thank you, Mr. Chairman. I really think you summed it up well. I have a few more questions that I am going to submit for the record, but I think based on the careful review the Committee has done of this nominee that he is clearly very well qualified for this important position. And I share your pleasure that the Administration has nominated someone who really fits what we had in mind when we created this new position as part of the FEMA reform act last year. So I join you in supporting the nominee, and I appreciate your expeditious consideration. Chairman Lieberman. Thanks, Senator Collins. Thank you again. Mr. Schrader. Thank you, Mr. Chairman, Senator Collins. Chairman Lieberman. The hearing is adjourned. [Whereupon, at 10:54 a.m., the Committee was adjourned.] A P P E N D I X ---------- [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]