[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

EVALUATING INTERNAL OPERATION AND IMPLEMENTATION OF THE CHEMICAL
FACILITY ANTI-TERRORISM STANDARDS PROGRAM (CFATS) BY THE DEPARTMENT OF
HOMELAND SECURITY

=======================================================================

HEARING

BEFORE THE

SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY

OF THE

COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

__________

FEBRUARY 3, 2012

__________

Serial No. 112-111

Printed for the use of the Committee on Energy and Commerce

energycommerce.house.gov

U.S. GOVERNMENT PRINTING OFFICE
75-573 WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202�09512�091800, or 866�09512�091800 (toll-free). E-mail, gpo@custhelp.com.

COMMITTEE ON ENERGY AND COMMERCE

FRED UPTON, Michigan
Chairman

JOE BARTON, Texas HENRY A. WAXMAN, California
Chairman Emeritus Ranking Member
CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania EDOLPHUS TOWNS, New York
MARY BONO MACK, California FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina GENE GREEN, Texas
Vice Chairman DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma LOIS CAPPS, California
TIM MURPHY, Pennsylvania MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia

7_____

Subcommittee on Environment and the Economy

JOHN SHIMKUS, Illinois
Chairman
TIM MURPHY, Pennsylvania GENE GREEN, Texas
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky TAMMY BALDWIN, Wisconsin
JOSEPH R. PITTS, Pennsylvania G.K. BUTTERFIELD, North Carolina
MARY BONO MACK, California JOHN BARROW, Georgia
JOHN SULLIVAN, Oklahoma DORIS O. MATSUI, California
CHARLES F. BASS, New Hampshire FRANK PALLONE, Jr., New Jersey
ROBERT E. LATTA, Ohio DIANA DeGETTE, Colorado
CATHY McMORRIS RODGERS, Washington LOIS CAPPS, California
GREGG HARPER, Mississippi JOHN D. DINGELL, Michigan
BILL CASSIDY, Louisiana HENRY A. WAXMAN, California (ex
CORY GARDNER, Colorado officio)
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

(ii)

C O N T E N T S

----------
Page
Hon. John Shimkus, a Representative in Congress from the State of
Illinois, opening statement.................................... 1
Prepared statement........................................... 4
Hon. Gene Green, a Representative in Congress from the State of
Texas, opening statement....................................... 6
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 7
Hon. Joe Barton, a Representative in Congress from the State of
Texas, opening statement....................................... 9
Hon. John D. Dingell, a Representative in Congress from the State
of Michigan, opening statement................................. 10
Hon. G.K. Butterfield, a Representative in Congress from the
State of North Carolina, prepared statement.................... 49

Witnesses

Rand Beers, Under Secretary, National Protection and Programs
Directorate, Department of Homeland Security................... 11
Prepared statement........................................... 13
Answers to submitted questions............................... 54
David M. Wulf, Deputy Director, Infrastructure Security
Compliance Division, Office of Infrastructure Protection,
National Protection and Programs Directorate, Department of
Homeland Security.............................................. 23
Prepared statement........................................... 24

Submitted Material

Majority memorandum.............................................. 50

EVALUATING INTERNAL OPERATION AND IMPLEMENTATION OF THE CHEMICAL
FACILITY ANTI-TERRORISM STANDARDS PROGRAM (CFATS) BY THE DEPARTMENT OF
HOMELAND SECURITY

----------

FRIDAY, FEBRUARY 3, 2012

House of Representatives,
Subcommittee on Environment and the Economy,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 9:33 a.m., in
room 2123 of the Rayburn House Office Building, Hon. John
Shimkus (chairman of the subcommittee) presiding.
Members present: Representatives Shimkus, Murphy, Pitts,
Bass, Latta, Harper, Cassidy, Gardner, Barton, Walden, Green,
Butterfield, Barrow, Pallone, Capps, Dingell, Waxman, and
Markey.
Staff present: Charlotte Baker, Press Secretary; Anita
Bradley, Senior Policy Advisor to Chairman Emeritus; Jerry
Couri, Senior Environmental Policy Advisor; Andy Duberstein,
Assistant Press Secretary; Dave McCarthy, Chief Counsel,
Environment and the Economy; Andrew Powaleny, Assistant Press
Secretary; Chris Sarley, Policy Coordinator, Environment and
the Economy; Peter Spencer, Professional Staff Member,
Oversight; Alex Yergin, Legislative Clerk; Jacqueline Cohen,
Democratic Counsel; Greg Dotson, Democratic Energy and
Environment Staff Director; and Caitlin Haberman, Democratic
Policy Analyst.
Mr. Shimkus. The subcommittee will now come to order. We
would like to welcome our panel, and I would like to begin with
an opening statement.

OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS

In my time serving in Congress, I have learned, as
oftentimes is the case, that the initial problem isn't as big a
deal to people as a poor explanation of a problem can be.
Further, cover-ups are the best hope of people who know they
are in the wrong and the worst move for those who get found
out. People who try to hide problems or minimize their
existence usually face a swifter and more ferocious corrective
response from Congress and the public than if they had simply
come clean.
It is with great surprise and disappointment that I read
the internal memorandum about the operation of the division
implementing the Chemical Facility Anti-Terrorism Standards Act
(CFATS) and its program at the Department of Homeland Security.
I, for one, have historically been a strong supporter of
this program. I believe the statute is sound and the
regulations reasonable. In fact, the Anderson Memo calls for
only one legislative change: long-term extension of the
program.
The CFATS program was not meant to be another EPA-style
program designed to fine people or a bureaucratic back door to
overregulate chemicals. CFATS was meant to be a collaborative
effort to secure ``high risk'' facilities with facility-
appropriate measures based upon the risks presented.
Congressional intent was that cooperation would get facilities
into compliance; we did not intend to increase Federal revenues
through enforcement actions. I hope DHS is not looking to
abandon our original intent.
Last March, I acknowledged CFATS was a work in progress,
but I felt security was being enhanced and significant public
and private investments were being made to implement the
program. I still believe security at facilities with chemicals
is much better today than before Congress gave DHS this first
ever regulatory authority. Unfortunately, my confidence in DHS
and the substantial amount Congress has given to it is not
nearly as strong.
Someone compared CFATS to an unmanned police car positioned
at the side of the highway. It wards off speeders, but not much
else. We need to be reassured that DHS's CFATS program has a
plan and intends to focus solely on correcting its internal
problems, implementing the CFATS program as drafted in law, and
not suggesting the CFATS program should take on any other
additional responsibilities. I mean, they better first do the
responsibilities designed under law than to take on additional
ones, such as drinking water or IST issues.
CFATS is an appropriate component of this subcommittee's
jurisdiction, and the days of matador oversight of this program
are over. I urge all members of this committee to join me in
that effort.
As a fellow U.S. military officer, I have tremendous
respect for Under Secretary Beers' service to this country.
That said, he and I have been taught that there are only three
acceptable responses when questioned by an officer: ``yes,
sir;'' ``no, sir;'' and ``no excuse, sir;'' or ``sir, I don't
understand.'' Four. I expect no less than that today.
I want to welcome Under Secretary Beers and Deputy Director
Wulf, who along with Director Penny Anderson showed great
courage with the frankness of the internal memo. Mr. Wulf, both
of you should know that the committee takes very seriously any
evidence of undue pressure, influence, intimidation or
retaliation whatsoever, because of your testimony today while
we continue to investigate these important issues. In other
words, we really do appreciate this internal memo. I think it
has been very, very helpful and we want to ensure those who
came forward are not penalized for that. Please let my
committee staff know right away if you have any concerns.
Retaliation and intimidation of Congressional witnesses is
illegal and will not be tolerated.
Mr. Beers, I trust you will ensure that you are in
agreement with me that no retaliation should be tolerated, and
we will hold you and any other White House officials
accountable to that.
[The prepared statement of Mr. Shimkus follows:]

[GRAPHIC] [TIFF OMITTED] T5573.001

[GRAPHIC] [TIFF OMITTED] T5573.002

Mr. Shimkus. With that, I now yield to the distinguished
ranking member from Texas, Mr. Green, for 5 minutes for the
purpose of offering his opening statement.

OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS

Mr. Green. Thank you, Mr. Chairman, for holding the hearing
today.
Under Secretary Beers requested an internal memo on the
status of the CFATS program and recommendations for improvement
in the summer of 2011. This memo was delivered to Mr. Beers in
November of 2011, and it leaked to the media and detailed in a
story on December the 23rd, 2011. I must say, when I read the
internal memo, I was surprised and dismayed by the level of
dysfunction and the lack of progress within the CFATS program.
I am also amazed that during this time, the subcommittee
discussed CFATS program this year during our work on H.R. 908,
the Full Invitation of the Chemical Facility Anti-Terrorism
Standards Act. We were simply unaware of the severity of the
situation within DHS and the CFATS program. The portion of the
internal memo as related to challenges to implementing these
priorities--I won't go into all the details, but it seems to me
the root of the problem lies with the fact that DHS has hired
people that are unqualified for their positions and was
prohibited from hiring appropriate and qualified individuals,
and they had no training program to help those folks who were
unqualified. These inappropriate hires, along with a lack of
proper training of the employees, has forced DHS to instead of
reassigning inappropriate employees, rely on contractors to do
work that should be done by the Agency.
The internal memo outlines several priorities of the
program, including the process for the review of the site's
security plans. Unfortunately, at the time of the memo, DHS had
received 4,200 site security plans and not a single plan was
approved.
I know that DHS is working to clear up all the Tier 1
facilities, but it has been 6 years since the program was
enacted and we haven't even cleared the low level facilities.
They decide how to conduct compliance inspections and preparing
staff to do the inspections. To date, DHS has conducted not a
single compliance inspection. Not that any of my industries
that I represent along the Houston Ship channel are looking for
an inspector to come knocking on the door, but they are--they
have been working to comply and they have made substantial
private investment. In some cases, we actually were able to see
grants through DHS for Homeland Security protection and our
plant protection.
But I must say that this proposal reinforces problems
identified in the internal memo, which mostly revolve around
the fact that DHS is constantly making things more complicated
than they need to be, and not relying on existing systems, such
as the TWIC card, to work. What I am speaking about is
developing the personnel assurity programs. DHS transmitted a
new personnel assurity program to OMB, and I have some concerns
about this problem--this proposal, and will discuss that later.
One, because at earlier hearings in this subcommittee, I felt
like I had some assurances that the TWIC card would be used as
a standard ID for someone working whether it be in waterside or
land-based industry under CFATS. My concern is additional
personal security programs will make the duplication of the
CFATS. So that is one thing our committee needs to look at.
Last year at the subcommittee hearing, I asked Under
Secretary Beers if the Department intended to integrate TWIC
into the personnel assurity program and I received a positive
response, and yet, the proposal does not make clear that TWIC
is an acceptable background check. Quite frankly, now is not
the time for DHS to go reinventing the wheel when implementing
the personnel assurity program. The memo also includes the
Agency's planned response, including a plan of action for 85
items.
I look forward to hearing from the witnesses today to
confirm, but I believe several of the action items haven't
initiated or completed. To say the least, I am disheartened by
the lack of progress in the CFATS program, which seems to stem
directly from lack of appropriately assigned and trained
employees and serious lack of moral in the program, which seems
to stem from the fact that no one constantly knows if the
program will be reauthorized by Congress. Chemical facility
security is surely important to the protection of our public
health, and particularly in the district I represent. I
represent the Houston ship channel, which is the heart of the
petrochemical complex that stretches from the Texas Gulf Coast
and produces more products essential to modern life. It is also
the largest petrochemical complex in the country. I can't
stress how important the success of CFATS is to my constituents
who are the employees and live in the communities that surround
these facilities. They deserve the best security standards
possible to prevent the act of terrorism on U.S. soil.
Our role today is to listen to our witnesses and get a
better understanding of the problem, and see how Congress can
assist. The Agency recommends several legislative fixes, and I
am hoping we have--we on the committee can work together and
find a compromise on how to assist DHS, after hearing their
suggestions and hearing from our stakeholders. The program is
too important to our national security to be this much in
distress.
Mr. Chairman, thank you for the time and I yield back.
Mr. Shimkus. The gentleman yields back his time.
The chair now looks to the--to my colleagues on the right,
if anyone would like time for an opening statement. Hearing
none, the chair would like to recognize the ranking member of
the full committee, Mr. Waxman, for 5 minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA

Mr. Waxman. Thank you, Mr. Chairman, for calling on me, and
more importantly, for holding this hearing to examine the
implementation by the Department of Homeland Security of the
Chemical Facility Anti-Terrorism program, or Standards. The
letters have been made into a shorthand called CFATS. This
program is intended to address the threat of terrorism to the
Nation's chemical facilities. We will hear testimony about its
successes. But we are also going to hear about the program's
many challenges.
The CFATS program was established in 2006. Now, almost 6
years later, it is clear that implementation has stumbled
because of serious challenges and limitations in the program.
Under Secretary Beers will testify about a detailed report
that he received in November of last year. This report takes
the form of a memorandum, and DHS has also provided it to the
committee. It paints a stark picture of this program. According
to this memorandum, the program has been plagued by personnel
issues, budget issues, and statutory limitations.
The challenges described in the memo are serious, and they
must be addressed.
Department of Homeland Security has a plan to address the
identified problems, and that plan deserves our careful
scrutiny. This is a crucially important effort and we must get
it right.
In some ways, the odds have always been stacked against
this program. This program was created by a provision not
authorized by this committee, but a rider on an appropriations
bill. The program was not established with carefully crafted
legislation that defined its mission and forged a vision for
its implementation.
It did not have adequate enforcement authorities,
enforceable deadlines, or clear procedures for approving or
disapproving site security plans. It never even had an
authorization.
And in some ways, it is fortunate that we have learned of
these problems when we have, because this committee can now
return to this issue and do the hard work of understanding
where the problems are and determining how to fix them.
It is stunning to realize that this committee of Congress,
which has jurisdiction over this issue, reported legislation
that simply rubber-stamped the current program for 7 additional
years. We didn't really know how the program was working. We
didn't give it any guidance. We didn't do our job, and that
legislation needs to be revisited in light of this new
information.
I look forward to the testimony of Under Secretary Beers
and learning more about the Department's efforts to get this
program on track. The Department can take constructive actions,
but it can only do so much. They cannot address shortcomings in
the underlying statute. That task falls to us as the committee
of jurisdiction and the committee that should have been
involved in crafting the original provision. That is a
responsibility we must take very seriously.
I hope today's hearing will be part of an ongoing effort by
this committee to address these serious challenges facing our
chemical facility security program. This is an important issue.
It deserves our attention.
In the last Congress, when I was chairman of the committee,
we were working on a bipartisan basis. We brought in all the
stakeholders to craft legislation to authorize the program. It
was a major undertaking. We brought in industry, we brought in
labor, we brought in everybody else that had a concern about
this issue. We were consulting everyone throughout the process.
That is the type of undertaking we should begin anew, because
what we saw this last year was not a furtherance of examination
of the program, but simply saying oh, it is already in effect
for 6 years. We will continue it down the road and we hope it
will do a good job. We have got more work to do than just
sending our best wishes for the long period of authorization
without doing a thorough examination to figure out how we can
make this program work the way we intended it to and the way it
must to protect the security of the American people.
Thank you, Mr. Chairman. I yield back the time.
Mr. Shimkus. And I thank you, Mr. Waxman, for your
statement.
I would like to yield, with the permission of the
committee, to Mr. Barton for 5 minutes, but before I do, I
would just like to say, based upon my opening statement, I
think Mr. Waxman's response was pretty much what I said. When
problems are hid, you are going to face a swifter and more
ferocious corrective response by Congress, and that is really
part of that concern. I would also say, we did have a hearing
prior to the markup of that bill where Department of Homeland
Security said things were going well. Obviously--and industry--
--and obviously, that is not the case, either.
So with that, I would like to yield 5 minutes to the
chairman emeritus, Mr. Barton.

OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS

Mr. Barton. Thank you, Mr. Chairman. I am not sure I will
take that time, and if I don't, I am happy to yield it to
anybody else that you wish it to be yielded to. I do appreciate
you for holding this hearing, you and Mr. Green, on the
Chemical Facility Anti-Terrorism Standard Program, which has
the acronym CFATS.
Back in March of last year, we discussed the concerns and
dissatisfaction that the program had not met its goals. This
program was set up to serve and protect the companies and the
general public against the potential threat of terrorist
activity. I was chairman of this committee back in the 109th
Congress, and one of the authors of the Chemical Facility Anti-
Terrorism Standard Act that was included as Section 550 of the
Department of Homeland Security's appropriation act for 2007.
The intent was very clear. It was for the safety of the
Nation's businesses and its citizens against the threat of
terrorism in these types of facilities. I understand that the
program has got many facets and that the orchestration of a
thorough implementation plan at an expedited pace could have
challenges. What I don't seem to understand is how the Under
Secretary could be so unaware for so long of so many of the
internal problems. Why have employees been hired in managerial
positions who don't have the skill set to fulfill their jobs?
Why has it taken 3 years to start addressing the internal
managerial staff training and implementation problems? The
industry has invested billions of dollars to upgrade security
to meet the CFATS requirements. This is beyond disappointing.
You have totally mismanaged this program, Mr. Under Secretary.
We have spent about $90 million a year, and we have no well-
developed direction and no plan.
It is my understanding that you have received over 4,200
site security plans to date, but not even one has been
approved. Now, we have our differences on this committee and
this subcommittee, and there were differences between the
Democrats and Republicans when this bill was put into law, but
there is nobody, no one, regardless of political affiliation
that says if you receive 4,200 site security plans, you don't
even get one approved? Not one? I mean, when I read that a
couple of days ago, I was just astounded. Your own national
protection and programs directorate have prevented you from
hiring personnel with the experience and qualifications to
review these programs and to conduct the compliance inspection.
You have allowed the hiring of inappropriate staff and have not
taken control of your own infrastructure security compliance
division to fix this problem, and it has been 3 years. The
administration of the CFATS program must be fixed immediately
to provide stability to the program and regulatory assurance to
thousands of covered facilities, many of whom are members of
the Society of Chemical Manufacturing and Affiliates Alliance,
SOCMA. They have invested heavily in security measures over the
past 5 years to attempt to be in compliance.
I have to say one good thing. Your office has been open and
candid and transparent in providing the internal memoranda for
committee staff to review. That is one positive checkmark in
your column. Having said that, everything else is in the
negative and everything else is black. It is time to get this
thing done. If you can't do it, resign. If there are things
that need to be fixed, tell us and we will try to do it. I
think Mr. Waxman's opening statement was very good, as was Mr.
Shimkus's, which I wasn't here to hear, but I did read.
With that, Mr. Chairman, I have got a minute left if you
want me to yield it.
Mr. Shimkus. Let me reclaim that time and look to Chairman
Emeritus Dingell to see if he would like to use the remainder
of your time.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN

Mr. Dingell. Most briefly, Mr. Chairman. Thank you.
I want to welcome our two witnesses and our panels today,
Secretary Beers and Mr. Wulf, and I want to commend you for
having this hearing. I want to note that it is being conducted
in a bipartisan fashion, something which merits high praise
around this place. Having said that, I look forward to the
results of the hearing today. I would note that I have a number
of these facilities in my district, and when they let go, as
one did not long back, it causes lots of excitement and can
cause significant numbers of casualties and enormous hardships
on the communities in which the facility might exist. So your
labors and your leadership, Mr. Chairman, are much appreciated
and I look forward to the hearing going forward in the spirit
in which it has begun, and in the hopes that we will be able to
see to it that we get these programs of widely differing
character under different agencies in the point where they are
pulling together and working together to accomplish the great
purpose of seeing to it that we have safety and security for
the country.
Thank you, Mr. Chairman.
Mr. Shimkus. Thank you, Mr. Dingell.
With that, the chair calls forward today's witnesses, the
Honorable Rand Beers, the Under Secretary of National
Protection and Programs Directorate at the Department of
Homeland Security, and Mr. David M. Wulf, who is Deputy
Director of Infrastructure Security Compliance Division, Office
of Infrastructure Protection, National Protection and Programs
Directorate at the U.S. Department of Homeland Security.
As you know, the testimony that you are about to give is
subject to Title 18, Section 1001 of the United States Code.
When holding an investigative hearing, this committee has the
practice of taking testimony under oath. Do you have any
objection to testifying under oath?
The chair then advises you that under the rules of the
House and the rules of the committee, you are entitled to be
advised by counsel. Do you desire to be advised by counsel
during your testimony today?
In that case, if you would please rise and raise your right
hand, I will swear you in.
[Witnesses sworn.]
Mr. Shimkus. You may now be seated, and it is my
understanding that the only opening statement will be given by
you, Mr. Secretary, and Mr. Wulf is here to answer questions
with regard to the internal? They are both going to give it,
OK. Change in direction from last night, so Mr. Beers, if you
would then--you are recognized for 5 minutes to give your
opening statement.

TESTIMONY OF RAND BEERS, UNDER SECRETARY, NATIONAL PROTECTION
AND PROGRAMS DIRECTORATE, DEPARTMENT OF HOMELAND SECURITY; AND
DAVID M. WULF, DEPUTY DIRECTOR, INFRASTRUCTURE SECURITY
COMPLIANCE DIVISION, OFFICE OF INFRASTRUCTURE PROTECTION,
NATIONAL PROTECTION AND PROGRAMS DIRECTORATE, DEPARTMENT OF
HOMELAND SECURITY

TESTIMONY OF RAND BEERS

Mr. Beers. Thank you, Chairman Shimkus and Ranking Member
Green, and distinguished members of this committee. I am
pleased to be here before you today to discuss the Department
of Homeland Security's efforts to regulate the security of
high-risk chemical facilities under the Chemical Facility Anti-
Terrorism Standards Act.
As you all are aware, the Department's current statutory
authority to implement CFATS came about, as mentioned earlier,
in Section 550 of the fiscal year 2007 appropriations act, and
it has been amended recently to extend that authorization until
October 4 of 2012. I believe strongly in the CFATS program, and
I welcome the opportunity to continue to work with this
committee, with the Congress, and levels of government and the
private sector to further improve this vital national security
program.
Since the inception of CFATS, we have issued a basic rule,
we have defined chemicals of interest, we have jointly
conducted two surveys with industry to define the facilities
that have a substantial enough quantity of chemicals that
caused them to be determined could be at high risk. After
receiving the initial submissions from more than 40,000
facilities that might potentially be under the program, we have
narrowed that down now to about 4,500 covered facilities. And
in the process of doing that, more than 1,600 facilities which
would have fallen under the program and 700 facilities--1,600
facilities have totally removed their chemicals of interest and
700 have reduced them to the point that they are no longer
under the program. So I think we can say that these actions
represent some of the successes have happened with respect to
this program and the adoption of the regulation. So I think we
can say that there has been a reduction in risk throughout the
Nation, and that the Nation has correspondingly been made more
secure.
The Department has done much work over the past few years
to establish and implement this unprecedented program, but as
the report suggests and as we acknowledge, CFATS still has a
number of challenges to address. In recognition of this and
upon the arrival of Penny Anderson and David Wulf, I asked both
of them to provide for my consideration the views on the
successes and challenges of the program. Candid, honest
assessments and challenges to the program. These kinds of
assessments are extraordinarily valuable tools that we need in
order to evaluate progress and to determine where improvement
is needed. Furthermore, in an unprecedented program like CFATS,
course corrections are to be expected and ongoing decisions
will need to be made.
In late November of 2011, a detailed report was hand
delivered to me. It is important to note that in addition to
the referenced challenges, the report also proposed for my
consideration a charted path that will address those
challenges. Specifically, the report included an action plan
with detailed recommendations for addressing the issues
identified, and we have shared those recommendations with this
committee. Since my receipt of this report, each of the nearly
100 items in the action plan have been assigned to a member of
the program's senior leadership team and I have already seen
progress on these issues. For accountability planning tracking
purposes, the members of the leadership team have been asked to
provide milestones and a schedule for completion of each task
assigned to them. The program's acting chief of staff will
monitor that progress. In addition, program leadership now
meets with my principal Deputy Under Secretary, Suzanne
Spalding, at least once a week to provide status updates to
this program.
Mr. Chairman, let me assure you, there will be no
retaliation to the people who wrote this report who have served
me and you and this Nation by frankly telling us where we had
challenges and what we need to do about it, nor will I tolerate
any retaliation between me and the office director and her
deputy. You have my pledge on that and I expect to be held
accountable to that issue.
The Department does take its responsibilities for CFATS and
the Nation's security seriously, and we are going to move
forward both quickly and strategically to address the
challenges before us. Again, we believe that CFATS is making
the Nation safer and we are dedicated to its success. We will
make the necessary course directions to improve the program to
protect the Nation.
Thank you for holding this important hearing, and I will be
happy to answer any of your questions.
[The prepared statement of Mr. Beers follows:]

[GRAPHIC] [TIFF OMITTED] T5573.003

[GRAPHIC] [TIFF OMITTED] T5573.004

[GRAPHIC] [TIFF OMITTED] T5573.005

[GRAPHIC] [TIFF OMITTED] T5573.006

[GRAPHIC] [TIFF OMITTED] T5573.007

[GRAPHIC] [TIFF OMITTED] T5573.008

[GRAPHIC] [TIFF OMITTED] T5573.009

[GRAPHIC] [TIFF OMITTED] T5573.010

[GRAPHIC] [TIFF OMITTED] T5573.011

[GRAPHIC] [TIFF OMITTED] T5573.012

Mr. Shimkus. Thank you.
Now I would like to recognize Mr. Wulf for 5 minutes. There
might be a button. There you go.

TESTIMONY OF DAVID M. WULF

Mr. Wulf. I would also like to thank the members of the
committee for the opportunity to testify before you today.
In July of last year, Penny Anderson and I assumed our
positions as deputy and deputy--director and deputy director,
respectively, of the Infrastructure Security Compliance
Division, or ISCD, the division within NPPD that manages the
CFATS program. In response to the Under Secretary's request
that we provide a fresh perspective on the program, Penny and I
produced an internal assessment of what we see to be the
essential priorities, challenges, and action items necessary to
the success of the program. Both Penny and I feel strongly that
while the challenges we have identified are not insignificant,
they also are not insurmountable. I welcome the opportunity to
answer any questions you might have on the background and
context behind the challenges we cited, but I would also like
to echo the Under Secretary's focus on the action items.
We have already made tangible progress in addressing some
of the challenges in the report. One issue identified in the
report is ISCD's ability to complete facility's site security
plans--site security plan reviews in a consistent, reasonable,
and timely fashion. To help overcome past difficulties in
meeting this challenge, ISCD is utilizing an interim review
process that allows the Department to authorize Tier 1 facility
plans in a more effective and timely manner. Using this interim
approach, over the past few months ISCD has been able to more
than quadruple the number of conditionally authorized plans.
Specifically, throughout all of 2010 and through November 28,
2011, we had conditionally authorized 10 site security plans.
In the subsequent 2 months leading up to January 23 of this
year, we conditionally authorized an additional 43 Tier 1 site
security plans. ISCD expects to complete our review of all Tier
1 site security plans and to notify the facility's of ISCD's
decisions on those plans within the coming months. ISCD also
expects to begin issuing authorizations to Tier 2 facilities
during fiscal year 2012. While this interim review process is
underway, we are also working on an even more efficient long-
term approach to site security plan reviews for facilities in
Tiers 2, 3, and 4.
This is one example of how we have identified programmatic
issues such as the lack of an efficient site security review
process and found workable solutions to ensure near-term
improvements and progress, as well as the long-term success of
CFATS. While not every action item will have a near-term or
simple solution, what I can tell you is that I am very proud to
represent the hardworking men and women of the CFATS program
and I am confident in our ability to address these challenges
together.
I welcome your questions and look forward to working
together to further the success of this important national
security program.
[The prepared statement of Mr. Wulf follows:]

[GRAPHIC] [TIFF OMITTED] T5573.013

[GRAPHIC] [TIFF OMITTED] T5573.014

Mr. Shimkus. Thank you, Mr. Wulf. What I would ask--I am
looking also at the staff, I don't think we have a copy of that
and some members may want to refer to that, so if I can get
staff to grab a copy of that and get it copied so that we can
distribute it, because we did have the Under Secretary's
opening testimony for the record.
With that, I would like to recognize myself for 5 minutes
to begin questions. I am going to bounce around a little bit,
but the first one, we are in a very fiscally constrained
environment, Under Secretary, as you understand, and with the
challenges that are going to occur to our military, 45 billion
to 90 billion a year that could be cut, we at the national
level are going to be looking for everywhere we can go to try
to adjust dollars so that we can meet the needs of the primary
role of some of the Federal Government's operations.
So let me start with just this whole--this budget type
question. The Anderson-Wulf memo states on page 15 that ISCD
lacks a system for tracking the usage of consumable supplies
which creates an environment for fraud, waste, and abuse. Our
concern is this not an IG or GAO saying that, this is a program
manager describing their own program. How can a member of
Congress choose to fund a program that is so self-described?
Mr. Beers. Let me begin the answer to that question and
turn to my colleague here. The report notes these deficiencies
in the program. We had asked for a management review of the
program in December of last year. That program review was
completed while this particular report was being prepared and
was incorporated into the report, and the comments that you see
are part of an effort by management at the most senior level--
that means me--asking to make sure that, in fact, this program
was working properly.
I want to turn to Mr. Wulf now to talk about what we are
going to do about these findings.
Mr. Wulf. I would just add that, you know, we did not find
any actual indication of fraud, waste, or abuse with regard to
the purchase and tracking of supplies. We found that a system
was not in place, and it is something we have already moved
forward to address. We----
Mr. Shimkus. Let me reclaim my time, and I--we know there
are action items. We are going to move forward. But that is
obviously a major concern that the--that we are going to have
to deal with, not just the committee ourselves but our
colleagues in this whole debate. So we will go ahead and follow
this. I do appreciate the fact that you in July brought Ms.
Anderson and Mr. Wulf on board.
I guess a question would be since you have been on board,
Under Secretary, since June 19, 2009, what took you so long to
have an overview of this program?
Mr. Beers. The initial indications of concern surfaced in
the following year. Prior to that, I had definitely had the
sense that the program was an evolving program, that changes
were being made, but they were being made in due course with
appropriate diligence by the program managers. In July of 2010,
I discovered a discrepancy in the way that people were being
paid within the program, and moved at that point to correct it.
In the fall of 2010, we posted an announcement to----
Mr. Shimkus. And let me--not to be disrespectful, just to
move to another question, because the timeline is kind of
important for us because you testified before us March 31 of
2011 and statements were made. Again, that is--my comments back
to Mr. Waxman was, you know, we were given a pretty good signal
that things were going well. There were small problems but
nothing major.
One of the questions I asked you was about the high-risk
tiering process and the reasons for a drop in the number of
those facilities tiered. This is--at that time, I was not aware
of any mis-tiering problem. Were you?
Mr. Beers. No, I was not, sir.
Mr. Shimkus. And that is--if not, when did you first learn
about the tiering problem?
Mr. Beers. I first learned about the tiering problem in the
beginning of June of this last year.
Mr. Shimkus. Was it the earliest time, to your knowledge,
that DHS personnel discovered that some facilities have been
mis-tiered was the month that you had given? Was there--in
other words, were there other folks within the Department that
knew that this tiering process was all messed up?
Mr. Beers. There was an indication in May of 2010 that
there might be a problem with respect to tiering. The
individuals within the office looked at the problem and felt
that they had resolved the problem and informed people up the
chain of command. I did not know that there was a problem at
that point in time. I was not informed of that, and the program
went forward from there.
In 2011, with a new acting director of the office, he asked
for a review of the program and he discovered that--or
rediscovered this discrepancy issue and asked for a much deeper
dive into that. That deeper dive is what resulted in the
problem being identified to the assistant secretary and
immediately to me. And that was in June of 2011.
Mr. Shimkus. And my time is expired. Just so we can move
forward, we are going to continue--obviously we are going to
have to continue to do oversight over this process and I hope,
if there are any relevant activities that folks within--under
your office that have not been doing their job, that through
the legal process of removal that some people can be held
accountable, because I do think there are probably--if there
wasn't waste, fraud and abuse, there may have been. There may
be theft and that would be helpful to understand that the
government can correct bad actors.
Now I would like to recognize Mr. Green for 5 minutes.
Mr. Green. Thank you, Mr. Chairman. Secretary Beers, thank
you for being here.
As I said in my opening statement, it seems like the
problems with--for the last 6 years is the inability to hire
quality individuals and the lack of morale. I think some of
that comes from having year to year reauthorization. Mr. Wulf
said in his statement, but I apologize, none of us have a copy
of your statement, Mr. Wulf, what has been done since the memo
was released or since mid-December or since it was released on
the 23rd, there has been some action that has been done that we
haven't heard about except this morning.
Mr. Beers, do you know Mr. Wulf's statement about some of
the things that have been done in the last month or so?
Mr. Beers. Yes, I do, sir. I want to start this response,
but I also want Mr. Wulf to respond as well. We have looked at
the training issues that were identified in the report. We have
removed the impediment for hiring training officers within the
program so that that can go forward, and we have begun to look
at the training requirements in order to take the people who
were hired who may not have adequate training for that position
that they are in. But lastly, the other thing that we need to
focus on here is we have to define what it is we, in fact,
expect from our inspectors when they are doing the final site
authorization inspections and when they are doing compliance
inspections. David?
Mr. Wulf. I would add that, you know, we are very excited
about the progress we have made in the past couple of months on
the review of the Tier 1 site security plans. I believe the
progress we have made in that regard and the statistics I
mentioned are included in the written testimony as well.
We have a very aggressive plan to move forward with the
review of the site security plans and to conduct outreach and
to get into the reviews of the lower----
Mr. Green. OK. I know you gave some hard numbers. I only
have 5 minutes; in fact, it is down to 3 now almost.
You gave some hard numbers on what has been done in the
last 30 days. Could you reiterate that?
Mr. Wulf. Absolutely. We started 2 months ago with 10 Tier
1 site security plans that had been authorized. We are now at
53.
Mr. Green. OK, and that is the only hard number that you
gave in your testimony? Like I said, we don't have your
testimony and it is hard to go over something outside----
Mr. Wulf. Absolutely, absolutely. So we have done--we have
authorized 43 or conditionally authorized 43 additional Tier 1
site security plans.
Mr. Green. OK, and----
Mr. Beers. All those were taken from my testimony. Those
facts are all in my written testimony.
Mr. Green. OK, but was that based on actually site visits
or is that from what has been provided by the companies?
Mr. Wulf. That is based on what has been provided by the
companies, in some instances following compliance assistance
visits conducted on the sites by our chemical security.
Mr. Green. OK, let me get to another issue I have talked
about. I mentioned about the personal security program which
was submitted on June 14 of last year by OMB and listed as the
third priority in the DHS memo. I am aware that we need to
screen individuals against the terrorist screening database. As
the proposed personnel security program would require each
facility to submit background information on all existing
personnel within 60 or 90 days upon implementation for existing
personnel, any new unescorted individuals will not be
classified as personnel will need, if they have a TWIC card,
their information submitted to DHS within 24 or 48 hours.
In the real world, we went through a big roll out of the
TWIC card a few years ago, and it was not as smooth as we would
have liked. In fact, I think there are 260,000 TWIC cards
issued in our district in the port of Houston. And so when you
are going to overlay it with a personal security requirement,
what did the TWIC card not cover that you think we need now
under the personnel assurity? Because I am concerned about
reinventing the wheel, even though like I said, it wasn't--the
wheel didn't run too well earlier, but it is running pretty
well now.
Mr. Beers. Sir, let me clear up some perhaps
misunderstanding of the way we intend to use the TWIC card. We
will accept the TWIC card as a proof of a background check. We
would like to know the names of the individuals who come onto
the site who have TWIC cards in order to determine that the
TWIC card is, in fact, still valid, but anybody who possesses a
TWIC card, that will be the standard--that will be an
acceptable standard, and anybody who might have access to
getting a TWIC card can do so to use that in lieu of any other
background check.
Mr. Green. OK. I want to make sure that is what was
submitted, because I have some concern about that. Sometimes
what we hear and what even passes in law doesn't get to the
final stage. Was that submitted that the TWIC card would be the
ID when submitted to OMB?
Mr. Beers. David?
Mr. Wulf. The leveraging of TWIC and other existing
credentials is part of the--was part of the information
collected and was submitted to OMB.
Mr. Green. Well, I would feel comfortable seeing in writing
what you said, Secretary Beers, about the TWIC card because
again, we have thousands literally, I don't know how many
hundreds of thousands around the country that we don't want to
also have a breakdown in redoing something. And I know working
with the industry and the bargaining units and everything else
is something that ought to be important.
And I know I am over my time, Mr. Chairman. I have a number
of other questions I would like to submit if we don't have time
today.
Mr. Shimkus. Without objection, I thank my colleague and I
would like now to recognize Mr. Murphy from Pennsylvania, the
vice chairman of the committee, for 5 minutes.
Mr. Murphy. Thank you, Mr. Chairman.
Secretary Beers, the memo states that CFATS must build on--
in its ability to critically evaluate itself and conduct mid-
and long-range planning. So to that end, let me ask for your
candid responses. Why was this not done until now?
Mr. Beers. I beg your pardon? By whom, sir?
Mr. Murphy. Why was some of this not done until now in
terms of really evaluating itself? Was there anything that
stood in the way of delaying this kind of self-evaluation?
Mr. Beers. No, sir, there wasn't anything that prevented
it. As I indicated to the--earlier, we have had several
reviews. This is the most extensive one which we have asked
for, but we have had several reviews over the course of the
program since I became the Under Secretary.
Mr. Murphy. Let me--just for clarification, who sets the
CFATS goals and objectives for each year? Who is responsible
for that?
Mr. Beers. I am sorry, sir?
Mr. Murphy. Who sets the CFATS goals and objectives for
each year? Who is responsible for doing that?
Mr. Beers. Sir, the program directors provide those goals.
They go up the chain of command to the assistant secretary and
on to me. Ultimately, I am responsible for them.
Mr. Murphy. Are those public information, in terms of those
annual goals and objectives?
Mr. Beers. I will have to check, sir. I don't know whether
that is public information.
Mr. Murphy. OK, and how do you measure those goals and
objectives? Is that something you have in terms of internal
documentation of how you review those?
Mr. Beers. Sir, let me ask David Wulf to answer that.
Mr. Wulf. There are established performance metrics that we
prepare and send up the appropriate chains. The performance is
measured with respect to things such as numbers of inspections
conducted, percentage of inspections conducted as compared to
the totality of the regulated community.
Mr. Murphy. Well clearly from the evaluations, things that
you are talking about--and I add my comments to the chairman's
in terms of we appreciate getting your candor on these. But in
addition is who would like know, are these factors--are these
evaluations somehow factored into employee compensation, such
as raises or bonuses?
Mr. Beers. Sir, as a general matter with respect to the
entirety of NPPD performances factored into the issue of
bonuses or promotions, Dave, do you want to add anything
specifically?
Mr. Wulf. I would echo the Under Secretary's sentiments.
Meeting our performance goals is and will be a significant
measure for us in assessing allocation of bonuses.
Mr. Murphy. Do you know if any of the CFATS employees or
superiors received a bonus since 2009?
Mr. Wulf. I am sorry, sir, could you repeat that?
Mr. Murphy. Do you know if any of the CFATS employees or
supervisors or superiors received any bonus since 2009?
Mr. Wulf. I don't have that information. We could----
Mr. Murphy. Would you let--it may be helpful to this
committee if you would let us know in conjunction with some of
the information given. We would appreciate that.
Let me also say, the Anderson-Wulf memo that you have
states that employees felt uncomfortable delivering bad news to
superiors. So to what extent does the failure to inform you
caused by this chill work environment, and who chilled the
environment that--was it you, someone else? Who in the chain of
command had that effect? Secretary Beers?
Mr. Beers. Sir, let me start in answering that. I have said
as a management principle based on my 40 years in government
that I appreciate hearing bad news and I don't want to hear bad
news from anybody else. This particular issue has been used as
a teaching moment by me for the entirety of my workforce,
because no one, no one should feel that they can't tell me bad
news, because bad news is usually something that we can do
something about, and if we don't hear it, we can't do anything
about it. I can't speak to the culture within the office that--
and the words in the report, but I want you to understand that
to all of the people who work for me, I say that time and
again. I am perfectly prepared to hear bad news, and I really
don't want to hear from somebody outside the organization.
Mr. Murphy. As a Navy officer, I admire a Marine officer
saying that. I recall the former chairman of the Joint Chiefs
of Staff, Admiral Mullen, saying that as he climbed the chain
of command the food got better and the news got better, too.
Unfortunately, it is important to have that bad news coming up.
So are you confident now that you are getting full accurate
information, full disclosures on CFATS information?
Mr. Beers. Sir, I have complete confidence in Penny and
David making sure that that information comes to me, and they
know that I want to hear it and they know that I want to fix
problems that they surface to me to the extent that I have the
power to fix it, so yes.
Mr. Murphy. Mr. Chairman, I am over my time. Could I ask
Mr. Wulf to give an answer to the same question?
Mr. Shimkus. Yes.
Mr. Wulf. Sir, I can confirm that Director Anderson and I
received the message the Under Secretary was just discussing
that he wants the bad news within the first week or two of our
arrival on the job, and that is very much the spirit in which
this report was written for him. Yes, within the organization I
can't necessarily speak to how the culture evolved, but I can
tell you that Penny and I have gone to great lengths to create
a culture of transparency, a culture in which our employees are
not afraid to raise issues that they view as problems. We have
an open door policy. We have all hands on meetings on a regular
basis, and we have made it clear that we don't tolerate
repression of concerns that folks may wish to bring up.
Mr. Murphy. Thank you very much, Mr. Chairman, I yield
back.
Mr. Shimkus. Let me, before I yield to the chairman
emeritus, Mr. Dingell, let me ask unanimous consent for 5 days
for members of the subcommittee to submit opening statements
for the record. Without objection, so ordered.
Now I would like to recognize Mr. Dingell for 5 minutes.
Mr. Dingell. Mr. Chairman, thank you for your courtesy.
Secretary Beers, why did you commission a top-to-bottom
study of this program?
Mr. Beers. Sir, when it became evident to me that, one, we
had a re-tiering issue that was brought to my attention in
June, and that we had had an issue about locality pay and we
had had a slowness in terms of the approval of site security
plans, that I needed to make sure that the new management which
we had brought in to take over the program and make sure that
it was running solidly brought their full attention to giving
me as accurate a picture as possible in this program.
As I said earlier, we had already commissioned a management
study which was completed during the time that the report was
prepared, and that was part of the report as well. So the final
request of Penny Anderson and David Wulf was the result of an
increasing concern on my part that the program was not running
well.
Mr. Dingell. Thank you, Mr. Secretary.
Now, is Department of Homeland Security working to engage
the industry in helping to get this program successfully
implemented? Yes or no.
Mr. Beers. Absolutely yes.
Mr. Dingell. Mr. Secretary, I know there has been some
controversy recently regarding some misclassified facilities.
Can you assure me and the members of this subcommittee that you
have properly addressed this issue and that you have correctly
identified high-risk facilities? Please answer yes or no.
Mr. Beers. Yes.
Mr. Dingell. Now these questions to Mr. Wulf.
Mr. Wulf, as your internal memo points out, there have been
a number of challenges in implementing this program. Do you
believe that the program is fixable? Yes or no.
Mr. Wulf. Yes.
Mr. Dingell. You do agree or believe it is?
Mr. Wulf. Absolutely.
Mr. Dingell. Thank you.
What are the top two or three things that need to be
addressed to bring this about, in your opinion? The top two or
three things.
Mr. Wulf. I would say the SSP, the site security plan
review process, which we have already begun to move forward
considerably over the last 2 months, and preparing our
inspectors and our--the rest of our team to move forward and
conduct authorization and compliance inspections.
Mr. Dingell. Now what progress have you and the Department
made in addressing these issues?
Mr. Wulf. We have quadrupled the number of Tier 1 site
security plans that we have conditionally authorized just over
the last 2 months. We have commissioned an inspector tools
working group as well to develop the standard operating
procedures, other policies, and to determine what tools our
inspectors will need as we move forward to the next stages of
this program to actually conduct authorization inspections and
to get into the regular cycle of compliance inspections moving
forward.
Mr. Dingell. Thank you, Mr. Chairman. You will note I
returned 1 minute and 27 seconds. Thank you.
Mr. Shimkus. Thank you, Mr. Dingell.
Now I would like to recognize the gentleman from New
Hampshire, Mr. Bass, for 5 minutes.
Mr. Bass. Thank you very much, Mr. Chairman.
I am not as familiar with the substance of this program and
its history and so forth. I don't have a lot of facilities in
my area. I am, however, very concerned about this memo. We have
oversight responsibility, and to some extent, we are as
vulnerable, if you will, to criticism for failure to be--to
perform adequate oversight and be vigilant about the use or
abuse or alleged abuse of taxpayers' funds. And that is why
this memo is bipartisan, because we all know that we have a
responsibility to make sure that the government is run well.
I am also a businessman, and have over my life hired and
fired people to do things. I don't like to fire people, but it
happens. Mr. Beers, if you were in my position, looking at this
report, would you consider yourself to have done a good job on
your role to date?
Mr. Beers. Sir, as I have said publically before, I hold
myself responsible for this--these sets of problems, and I am
committed to fixing them.
Mr. Bass. If you were your own boss, would you keep you on
the job?
Mr. Beers. I can't answer that question, sir.
Mr. Bass. I mean, do you--have you considered the
possibility this might not be the right role for you, and it
might be time for you to step aside? Mr. Barton referred to it
in his opening statement.
Mr. Beers. Sir, I consider that every day I work for the
Federal Government. I swore an oath of office on at least three
occasions to protect and defend the Constitution of the United
States, and I believe in that. And if I believe I can't do the
job, then I will walk away from it as I have done before.
Mr. Bass. Do you think it is unusual to have an action memo
that for all intents and purposes, you are not really
disputing, with 70 different recommendations, a lot of which
are noted in progress? You also noted in your testimony or
answered a question a minute ago that you could address these
issues ``to the extent that I have the power to fix it.'' Do
you have the power to fix these--all of these problems?
Mr. Beers. As far as the issues within this particular
action plan, yes.
Mr. Bass. So would you----
Mr. Beers. But with respect to Mr. Green's comment about
TWIC cards, no, I can't make the TWIC card be broader than the
current authorization of the TWIC card, which means that you
have to be a transportation worker.
Mr. Bass. All right. Well, Mr. Beers, this is a disturbing
memo. We appreciate the fact that it has come to our attention,
and I certainly hope that we--that you understand that most of
us haven't seen anything like--this is a very unusual and
unusually poorly run agency. If it is not going to--if at any
time you believe that you are not the right person to turn this
troubled agency around, that maybe there ought to be a
different managing structure.
So having made that point, I think--I hope that the
committee will carefully watch the progress in this action
plan, because the American taxpayers are not going to stand for
this kind of alleged or perceived incompetence in management
for this very important agency to our Nation's security.
Mr. Shimkus. Would the gentleman yield to me----
Mr. Bass. Yes, sir.
Mr. Shimkus [continuing]. For the remainder of your time?
I want to follow up on this. We really got to get a handle
on this card issue, and we would like for you to provide us
your legal opinion of why you cannot deal with this TWIC card.
We think you can. We, and that is the Energy and Commerce
Committee, have been in discussions with Homeland Security for
months trying to resolve this. We think it is within your
jurisdiction and if it is not, we would like to see the legal
reasoning why it is not so that we can change the law. We think
it is within your power now, and I think my friend, Mr. Green,
would be very pleased if we can get a handle on this. So help--
work with us. This is an issue, again, that was brought up in
the March--in March of last year's hearing that we thought we
were moving in some direction, and there have been multiple
consultations with Homeland Security, and we are not any
further than we were in March of 2011.
I would like to yield to my colleague.
Mr. Green. If the chairman would yield? I know we went
through this last year, and because the TWIC card is under
Department of Transportation and Coast Guard, I know there is
an issue with Homeland Security. I just don't want to reinvent
the wheel, because so many times those same workers that work
on the dockside are also at an inland plant. And so that is why
I would hope with interagency agreement, although in 908
earlier this year our committee passed, we gave that
authorization there language, but it hasn't passed and hadn't
passed the Senate, so we need to work on it.
Mr. Shimkus. And reclaiming the time, I would just say that
Coast Guard is under Department of Homeland Security. This
should not be difficult to do.
Now I would like to recognize Mr. Pallone, my colleague
from New Jersey, for 5 minutes.
Mr. Pallone. Thank you, Mr. Chairman.
We are here this morning to discuss issues facing the
Chemical Facility Anti-Terrorism Standards, or CFATS, program,
and we are talking about this leaked DHS internal memo from
2011 that clearly shows that DHS faces serious implementation
problems with the CFATS program, most notably that the
Department has received 4,200 site security plans but has yet
to approve a single one. The CFATS program was enacted as a
rider to the 2007 Homeland Security appropriations bill in
order to give Congress time to enact comprehensive legislation,
and we did just that in the 111th Congress by passing H.R. 2868
in the House. That bill provided a comprehensive security
program to protect Americans living near these facilities, but
unfortunately the Senate did not take it up.
I am not here to claim that H.R. 2868 would have magically
fixed all the problems outlined in the DHS memo, but it
certainly provided a much stronger framework to protect the
more than 100 million Americans that live in the danger zone of
a chemical disaster.
Last May, this committee had the opportunity once again to
exercise its jurisdiction and set forth a full authorization of
this program to replace the vague and inadequate CFATS program
enacted in 2007. Unfortunately, the committee decided not to
address shortfalls with the CFATS program, and just moved a
simple extension of the current law.
Mr. Chairman, in New Jersey we have the unfortunate
combination of both a large number of chemical facilities and a
high population density, so the consequences of insufficient
security are dire. I regret that this committee has not taken a
more proactive approach to securing these facilities, and I
will continue to push for a more comprehensive security program
to ensure the safety of my constituents living in the shadow of
these facilities.
Now to questions. The November 2011 DHS report begins to
explain why nearly 5 years after these regulations went into
effect, not a single site security plan has been approved. It
reveals that this committee was rash, in my opinion, in passing
legislation to rubber stamp the program for 7 years without
investigating or addressing the program's shortcomings. Many of
us have heard from those in the business community that the
CFATS program is still strong and that businesses have done
everything that they are required to do under the program.
According to industry representatives, we should be comforted
to know that companies have acted prudently and are prepared
for compliance inspections, should the Department ever begin to
conduct them.
I hope this is true, but our national security is
inherently a governmental function. Many members of this
committee have worked for years to establish a robust
regulatory structure for chemical facility security, and none
should be satisfied with the suggestion that approvals and
inspections are insignificant or that the role of the
Department in this program is insignificant.
Now Under Secretary Beers, do you think that the Department
of Homeland Security should play a role in ensuring that our
chemical facilities are secure?
Mr. Beers. Sir, I strongly believe that the Department has
a role and that the office that is tasked with doing that can
play that role.
Mr. Pallone. Do you think that the Department must play a
role? I mean, do you think that it is absolutely necessary that
they play a role?
Mr. Beers. I am sorry, sir?
Mr. Pallone. Do you think that the Department must play a
role, that it is absolutely crucial that they play a role?
Mr. Beers. I think that the original intent of the Act is
absolutely appropriate, and yes, the Department must play a
role.
Mr. Pallone. Would you say that site security plan
approvals and compliance inspections are necessary and
important to ensure chemical facility security?
Mr. Beers. I think that they are absolutely essential to
making this program work effectively.
Mr. Pallone. Well, I mean, I agree with everything you have
said, and I think the failure of the Department to complete
security plan approvals and compliance inspections is a very
serious issue. I am glad to see that the Department is treating
it as such, and I welcome the opportunity to work together
towards a strong and effective program.
But I guess the point I am really trying to make here is
that this committee has a responsibility to put together an
appropriate comprehensive authorization bill, and not simply
rely on this paragraph or whatever it is, I mean, it is like
this long, in an appropriations bill that really doesn't give
you sufficient guidance or mandates or inspection or
enforcement capability to do what you have to do. So I am not--
I understand that there are all kinds of problems with the
Department, but I think a big part of the problem is that you
never had a comprehensive authorization bill to tell you what
to do and to give you the authority what to do. I mean, we
could sit here all day and talk about how bad you are, and you
know, there certainly are problems, but I think that it is our
responsibility to do something more comprehensive to provide
the guidance, Mr. Chairman. That is my only point. Thank you.
Mr. Shimkus. The gentleman yields back his time.
The chair now recognizes the gentleman from Ohio, Mr.
Latta, for 5 minutes.
Mr. Latta. Thank you, Mr. Chairman, and gentlemen, thanks
very much for being here today. We have such short little time
to ask all these questions, but if I could, first, is it my
understanding and am I correct in hearing that we spent about--
$480 million has been appropriated for the program since its
inception? Is that correct?
Mr. Beers. Yes, sir, I believe that is the right number. I
can give you the exact number if you want.
Mr. Latta. OK, but that is a ballpark. Thank you.
And as Chairman Emeritus Dingell does, he is very good at
getting his rifling in on his questions, yes or no, but one
thing I want to go back to is the question about working with
industry. You said that you are working with industry, but you
know, as we--reading the report that came through and looking
at the site security plan that, you know, again as has been
said a little bit earlier, that we have received--that you have
received about 4,200 SSP submissions and that none have been
approved.
Did you ever hear from industry during this timeframe that
gee, what is going on? These things have been submitted but we
are never hearing back from the Department.
Mr. Beers. Yes, we did receive inquiries from the industry
about when they were going to be approved.
Mr. Latta. Do you know how many inquiries you have been
receiving?
Mr. Beers. I don't have that information at the tip of my
fingers, sir.
Mr. Latta. Do you know when you might have received the
first inquiry?
Mr. Beers. Excuse me?
Mr. Latta. Do you know when you might have received the
first inquiry from industry as to when they might have these
approved?
Mr. Beers. No, I can't tell you precisely when, but I can
get you that information.
Mr. Latta. OK, because again, going back to the earlier
testimony that when you are looking at, you know, those 5-1/2
years since the enactment of CFATS, and that is also the stats
of the statute itself, and 4-1/2 years since the final rule. It
kind of--I really would like to find out when these--the
industry that was being regulated was finding out if they were
or not being approved, because you know, there is quite a
timeframe there.
Let me go to the other thing that Mr. Wulf had brought up a
little bit earlier saying that, you know, there is going to be
an--and I am sorry, again, I don't have it in front of me but I
just kind of wrote it down--saying that you are going to have
an open door policy and not afraid to raise issues. The reason
I bring this up is I was a county commissioner for 6 years,
years back, and we had about 1,100 employees in the county. We
regulated all kinds of things. We had a lot of different
departments. It wasn't unusual for an employee that worked in
one of those departments that served underneath the Board of
Commissioners to bypass their supervisors and call me at home,
or being from, you know, a county of 125,000, they would run
into you at the county fair, they would talk to you at the
grocery store, or they would say can I talk to you someplace
else? Did you all get any contact from anybody at any time
saying gee, I would like to talk to you about something that we
think there is something wrong going on with the program?
Mr. Beers. Sir, on this particular program, yes, and that
is part of the reason that some of the efforts in order to
investigate problems took place in the past.
With respect to bypassing the chain of command, in order to
prevent that particular problem, we in management and I in
particular have meetings with either individuals or groups of
people throughout NPPD that are well down in the chain of
command in order to elicit their thoughts and suggestions so
that we can improve the program overall.
Mr. Latta. OK, let me ask you this question. Do you know
when you might have started first getting an inclination that
there was something wrong with people contacting you, going--
bypassing the chain of command to say, you know, there is
something really wrong here in personnel or the way the program
is being run?
Mr. Beers. --that I can report to you on is in the--excuse
me. The first instance that I can report to you that this
occurred would be in the summer timeframe of 2010 when it came
to our attention because of a report by an individual that
there seemed to be a problem with the locality pay. As soon as
we found out that that was an issue, we took that on and went
through the process to determine what had gone wrong in terms
of the appropriate pay to the individuals involved.
Mr. Latta. So this would be actions. So the first
inclination would be a couple of years after the program was
put in place, would that be correct?
Mr. Beers. Yes, sir.
Mr. Latta. OK, thank you.
And just real quick, I know my time is running out, Mr.
Chairman, but if we could get some of that information back
because again, you know, I really, really hope that that open
door policy really does exist and that folks aren't afraid to
come forward, because this has got to work. Again, when you
look at the number of--with 4,200 SSPs that have been submitted
and trying to get these things caught up, it is very , very
important not just for the Department itself, but for all those
industries out there trying to comply.
And with that, Mr. Chairman, I yield back.
Mr. Shimkus. Gentleman yields back his time.
The chair now recognizes the gentleman from Georgia, Mr.
Barrow, for 5 minutes.
Mr. Barrow. I thank the chair. I would like to yield my
time to the ranking member of the subcommittee, brother Green
from Texas.
Mr. Green. Thank you. I am going to revisit the personnel
assurity, but Mr. Wulf--and I appreciate the update that you
had. I saw your testimony and I am going to encourage the chair
that maybe two or three months from now, we invite you back to
enjoy our hospitality again and see how far along we are,
because this is such an important issue or a lot of areas. I
know Mr. Pallone and mine, we have substantial chemical
facilities that are not waterside based.
Let me get back to personnel assurity program, because that
is something that is sensitive, because I have plenty of plants
on the water, but also plenty of plants that are not. The same
company owns them, and often times they transport personnel
back and forth. My concern is what was submitted from the OMB
that the OMB did not recognize that the TWIC card, from what
you said in your testimony, would be used. And I can understand
why something regulated by your agency can't apply for a TWIC
card. But it seems like in the Federal Government we could use
the same database. The Coast Guard, Department of
transportation, the TWIC card, and use the same database for
the background and the TWIC card would be interchangeable.
And my idea, and I can tell you, you know, some of my folks
are going to be frustrated if they end up having to pay another
few hundred dollars to get a second card because their company
transfers them some where and not all companies are really nice
and they say no, that is part of your requirement for the job.
You have to have your driver's license to drive the company
car. So that is my concern. The proposed personnel assurity
program will require facilities to submit background
information on all existing personnel within 60 or 90 days upon
the implementation, and any new unescorted individuals who are
not classified as personnel would need--even if they have a
TWIC card, their information submitted to DHS 48 hours in
advance. Was that part of the submittal to OMB, because that
doesn't sound like you are getting TWIC cards consideration.
Mr. Beers. Sir, I believe that is part of the submittal to
OMB, and what I am trying to convey here is that we are looking
at all of the opportunities to leverage the various cards and
want very much to go in the direction that you want to go.
Mr. Green. OK. Well--and I know there may need to be an
interagency memorandum to work together, and I know sometimes
our Federal agencies don't like to do that, but we have--it is
redundant information if we are using the same database. And I
don't understand why DHS, as we proposed in two separate
legislations earlier, harmonized TWIC with the leverage and the
operational--the background checks. Is there a justification or
an incident that I am not aware of that have existed within the
TWIC system that would require DHS to go beyond TWIC?
Mr. Beers. I am not aware of any, sir.
Mr. Green. OK. And it seems to be--because I try and stay
pretty close to the ground there with a lot of my folks, and I
have not heard on. In our area, people may not like some of the
chemicals that we produce, but they are things that we don't--
they produce them because somebody needs them in our country,
and we want to make sure they are safely produced both for the
people that live around it, but the folks on that plane. Every
time I talk about the issue with DHS, you assure me they
incorporate TWIC. I just want to make sure it goes forward from
that, and I think maybe we will even contact OMB and express
that concern that don't reinvent the wheel, even though we have
two separate Federal agencies and hopefully that would come
from both agencies, including Department of Transportation.
They use the same database that you have.
Mr. Chairman, I don't have any other questions. I would be
glad to yield back to my colleague from Georgia, and I
appreciate his courtesy.
Mr. Shimkus. The gentleman from Georgia yields back his
time. Chair now recognizes the gentleman from Mississippi, Mr.
Harper, for 5 minutes.
Mr. Harper. Thank you, Mr. Chairman, and I certainly thank
the two of you for being here today, and Mr. Wulf, I want to
thank you and Ms. Anderson for the work that you have done on
this. This may come as a shock, but you know, it is not always
surprising to us to learn that an agency may be dysfunctional.
So this is not always a surprise.
But we appreciate the candor and no one should ever be
criticized or subject to anything for being very open, which
you and Ms. Anderson have done, so I thank you for that. I
believe that gives us some input.
But I wanted to ask you a few questions, if I may, Mr.
Wulf?
You know, as I looked through the report, one of the things
that you spent some time on was the issue of unions within the
organization. Can you tell me when the workforce in the
division was unionized?
Mr. Wulf. I can't give you an exact date on that. It was
before Ms. Anderson's and I arrival, but I want to say spring
of last year, maybe March.
Mr. Harper. Well let us--can you tell me, does each worker
have to cast a vote in order for their votes to be recorded, as
far as do you know how the process works? Non-voters are
considered voters to unionize, how that is counted?
Mr. Wulf. I am not completely certain about that process.
Mr. Harper. Can you get me that information?
Mr. Wulf. Absolutely.
Mr. Harper. That would be great. Can you tell me how many
employees there are in the CFATS program, and how many are
eligible to be represented by government unions, and how many
affirmatively voted to be represented by unions?
Mr. Wulf. I don't have the totals on the voting, and I will
say, there are approximately--and I don't have the exact
numbers in front of me--a little more than 200 Federal
employees in the CFATS program. Of those who would be eligible
for union--or to vote in a union membership, that would be our
field force, non-supervisory field force, so a little bit under
100 of those.
Mr. Harper. At the time of unionization, were all
programmatic and accountability measures and job descriptions
in place that applied to that workforce?
Mr. Wulf. As we noted in our report, we are continuing to
refine the requirements for the sections and----
Mr. Harper. Well, explain what--when you started out in
your report and you said that the presence of the union at this
stage in the program will have a significant negative impact,
explain that.
Mr. Wulf. I appreciate the opportunity to provide a little
additional context to that.
Mr. Harper. Yes.
Mr. Wulf. The report was not intended to be a statement
concerning whether unions and Federal workforce are good or
bad, but rather a recognition of the fact that this is a
program that is very much in its emerging stages, and we are
very much in the midst of putting into place policies and
procedures for the conduct of inspections, for the operation
and review of site security plans, and so forth.
So it certainly adds a layer of complexity that wouldn't
otherwise exist. That said, though, along with the union we
have very much a shared interest in moving the program forward
in a collaborative relationship.
Mr. Harper. Certainly. We have an overall big picture here
of an issue of national security that we have now kind of
gotten bogged down and does it not make it more difficult,
though, after the unionizations take place to implement some of
these policies? Are you not already seeing that even on the
reference that you had to the mileage reporting?
Mr. Wulf. It does add a layer of complexity, but it also, I
think, adds voices in the development of policy that will allow
us to develop more sustainable processes moving forward.
Mr. Harper. What was it, 16 weeks that you reported for the
mileage requirements to be done?
Mr. Wulf. I believe that was the estimate.
Mr. Harper. While I understand the need, everybody has got
to work together. The fact is that this has caused delay, has
it not? Why don't I not make you answer that question. I think
we know.
I appreciate your time, Mr. Wulf, and for you and Ms.
Anderson to be so candid with your situations. Thank you.
Mr. Shimkus. The gentleman yields back his time.
The chair recognizes the gentlelady from California, Ms.
Capps, for 5 minutes.
Mrs. Capps. I thank the chairman for recognizing me, and I
apologize for the state of my voice, but I am feeling well. I
am pleased to be here and I think you both for your testimony.
The internal Homeland Security report from November, 2011,
provides new support for concerns that problems in the
statutory language creating the CFATS program hindered its
successful implementation. And of course, we are talking about
Homeland Security here. According to the report, CFATS
personnel have not yet determined how to systematically review
site security plans. Although the Department has set up an
interim process to try to get these plans reviewed, staff are
still working to develop a process to be used over the long
term. Apparently, many initial site security plan reviews have
to be redone. The November reports states that they have been
found to be, and this is a quote, ``inconsistent with the
spirit and intent of the program's mandate.''
Mr. Beers, can--would you please elaborate on what the
report meant when it stated that site security plan reviews had
not been conducted consistently with the spirit and intent of
the statutory mandate?
Mr. Beers. Madam, I can't specifically speak to the reason
behind that. I can give you some broader context about what
happened with respect to the efforts to get site security plans
that, in fact, met the requirement.
As the program was rolled out and as it evolved, the
guidelines for the information that needed to be provided in
the site security plans failed to elicit appropriate responses
from industry. Some of that undoubtedly was or could have been
done better if the guidelines that we had put out had been more
clear and some of it was simply on the part of industry not
providing that information. I don't mean to suggest in any way
that that was an intentional act, but it required us to go back
to those particular facilities and ask for more information in
order to be able to get to a site security plan that, in fact,
appeared to meet what we needed to have in order to have a site
security plan. That iterative process ended up taking time when
those site security plans were initially filed, and that is
part of what I regard as the due diligence that we and industry
need to undertake together in order to ensure that a plan that
is finally authorized and approved is a plan that is capable of
providing the kind of security that you all have charged us to
build.
But let me turn to Mr. Wulf about the specific comment----
Mrs. Capps. And I wanted--yes, briefly if you would,
please, so I can go on to another question.
Mr. Wulf. About the site security plan review process
specifically?
Mrs. Capps. Well, it is just why--I am very concerned that
these delays have occurred.
Mr. Wulf. Yes, we have taken steps to address those through
the implementation of our interim review process, and as the
Under Secretary and I have mentioned, you know, we, in the last
2 months, quadrupled the number of SSP--of site security plans
we have been able to authorize, and I think the future is
bright moving forward on that path.
Mrs. Capps. I thank you for that, you are trying, and I
appreciate the Department is working to address these issues
and establish a consistent site security plan review process.
I am concerned, however, that flaws in the law make
ambiguity and consistency in the review process unaffordable. I
mean, you may have taken care of this one, but it is going to
pop up again. That is because Section 550 grants discretion to
the Secretary to approve site security plans that fail to meet
the risk-based performance standards under this program. The
law says only that the Secretary may disapprove a plan that
fails to meet those standards.
As many of this committee will perhaps recall--I recall it
well, because I offered an amendment during the markup of H.R.
908 that would have changed that word ``may'' to a ``shall'' to
require that site security plans be disapproved if they failed
to meet performance standards. That word ``may'' is what causes
the ambiguity and the having to go back and re-question, and
time is of the essence when we are talking about Homeland
Security.
So Mr. Beers, back to you again. Do you agree that site
security plans failing to meet the standards should be
disapproved?
Mr. Beers. Congresswoman, our objective here is to get the
yes, so the notion of disapproval doesn't necessarily
accomplish that. The point is, when we say we are not prepared
to approve it, that is the functional equivalent thereof. But
what we want to do is have a cooperative relationship----
Mrs. Capps. Right.
Mr. Beers [continuing]. With industry in order to say
whether or not a plan requires more information or more
clarification.
Mrs. Capps. And industry needs to have this as well. May I
just finish one sentence?
Mr. Shimkus. We are trying to get these in before the votes
on the floor.
Mrs. Capps. Well, I believe that it should be a requirement
so that industry is clear about what they need to do.
Mr. Shimkus. The gentlelady's time is expired.
The chair now recognizes the gentleman from Louisiana, Mr.
Cassidy, for 5 minutes.
Mr. Cassidy. Thank you. The memo is--one, let me just
commend you for asking it be drawn up. On the other hand,
obviously it paints a disaster in terms of acquisition,
inventory management, attitudes, I mean, it is just a total
indictment. Now, as a guy that represents an area with lots of
PETRA chemicals, lots of businesses and workers dependent upon
this, if I concede the argument that your job is important for
safety, it frankly seems not just an indictment of your
organization, but it frankly seems to place my constituents at
risk.
Now that said, how many employees does this particular
division of DHS have?
Mr. Wulf. I want to say 206.
Mr. Cassidy. Two hundred and six?
Mr. Wulf. I believe so.
Mr. Cassidy. Now, this problem seems so endemic. How many
have been fired? I mean, it seems like an easy target because
they speak consistently of people being hired because they know
somebody. People who are--I mean, you list--you can almost
write somebody's name in here if you only have 206 people. So
clearly, it wasn't how many have been fired. How many are going
to be fired?
Mr. Beers. Sir, with respect to the issue about the re-
tiering----
Mr. Cassidy. No, I mean, just a simple question. I mean,
clearly there is an endemic problem here, and it is rife. How
many have been fired? It is a pretty simple question if you
only have 206 employees, and how many do you have on the
chopping block?
Mr. Wulf. Sir, with respect to the leadership of the
organization, the people who were in the leadership positions
in the organization----
Mr. Cassidy. I only have 3 minutes. Can I have a number?
Mr. Wulf [continuing]. Have moved on.
Mr. Cassidy. How many?
Mr. Wulf. That is two people.
Mr. Cassidy. OK, so two out of 206, one percent, and yet we
have people here hired, apparently, because they know somebody,
promoted because they know somebody, apparently fudging on
their gas reports. We only have two, only one percent? It seems
like the organization--and I don't mean this to be kind of
snitty, but I am just amazed that we are tolerating this level
of incompetence.
Now I am struck. In your document here, you say that--I am
quoting from page nine--``We have yet to approve a site
security compliance inspection. Moreover, we have not yet
determined what it will look like. And yet, since this report
was reported in the news, we have quadrupled the number of
compliance reports issued.'' Is that my understanding, or do I
understand incorrectly?
Mr. Wulf. It is--what we quadrupled is the number of site
security plans we have conditionally authorized, which the step
that precedes the conduct of an authorization inspection, which
then leads to the final approval of a facility's site security
plan, sir.
Mr. Cassidy. OK. So the indictment of the report stands
that we are 6 years into this, and we have yet to come up with
a compliance inspection program. I just don't know what to say.
Now, I do know what to say. Clearly, there are ways to
contract this out. I don't know how you just don't start over
with this program, but I understand the Coast Guard has the
authority to use an alternative security program. Can we use an
alternative security program? I understand, again, you have
this authorization already. Can we use that now since it looks
like the current program is so dysfunctional to be beyond
restitution?
Mr. Beers. Sir, the short answer is yes, and I will let
David describe what we have done with respect to that.
Mr. Wulf. We do already have some alternative security
programs that have been submitted by industry stakeholders, and
we are working very aggressively in partnership with our
industry stakeholders to develop some templates that can be
used. We can't prescribe a specific template, but we are going
to work through some templates that will--the hope is allow for
more expeditious, speedy review and approval of----
Mr. Cassidy. But this does not include contracting out this
function, correct? Can you go to a third party to conduct these
inspections? I mean, what you describe here is a staff which is
poorly hired, poorly trained, and has a poor attitude and has a
sense of law enforcement wanting to clear--be called commander
and wear pistols as opposed to actually go through and look at
something in terms of compliance.
Mr. Beers. Sir, compliance inspection is an inherently
government function. We have to have the people who do that be
Federal employees.
Mr. Cassidy. Now it is my understanding, though, that the
Coast Guard actually has an alternative standard, and frankly,
Bummerd now has it, the whatever they call the offshore for the
oil rigs. They have a third party that is inspecting oil rigs.
Mr. Beers. I can't speak to the Coast Guard, sir. I am not
aware.
Mr. Cassidy. OK. I have much more to ask.
Mr. Shimkus. The gentleman yields--they also have some
contractors doing TSA function at some of the airports. It is
worth looking into.
I would like to yield now 5 minutes to the ranking member
of the full committee, Mr. Waxman, for 5 minutes.
Mr. Waxman. Thank you, Mr. Chairman.
None of us can be happy about this memo that came out last
November, showing how poorly this program is serving the
American public. This is a serious matter. This is a matter of
national security, possible attacks by terrorists on chemical
plants. I note that all of us are concerned, not just the
people here in the Congress, but Mr. Beers and others in the
administration. We have a stark and troubling picture, but
perhaps there is a silver lining, because it appears to me that
the Department is taking the situation clearly.
But I want to talk about Congress's role. It is easy at a
hearing like this after we get a report of a failure to beat up
on the people running the program. But Congress has a
responsibility as well. This program was established in an
appropriations bill, not a bill that came out of this
committee. It was a rider on an appropriations bill. Mr. Beers,
is there a provision in Section 550 that addresses personnel
hiring?
Mr. Beers. I am not aware of it, sir.
Mr. Waxman. Is there a provision that addresses use of
travel cards or purchase cards?
Mr. Beers. No, sir, I am not aware of that.
Mr. Waxman. How about a provision that details how
inspections are to be conducted?
Mr. Beers. No, sir.
Mr. Waxman. Is there a provision that explains how
background checks should be conducted?
Mr. Beers. No, sir.
Mr. Waxman. Are there any enforceable deadlines in this law
that are written in the appropriations bill?
Mr. Beers. No, sir.
Mr. Waxman. The answers to these questions are all no, and
the reason is that this committee never held a hearing or
conducted a markup on legislation to create this program. So
the problems we see today were never contemplated by this
committee, and no direction was provided. Now I understand Mr.
Barton said you ought to resign, but Mr. Barton was the chair
of the committee at the time this law was adopted through an
appropriations bill. We tried to get the people who have a
stake in this to work out legislation, and the Democrats were
in power and I was chairman. We had the chemical industry and
others with us. When the Republicans came to power on this
committee, they said let us just extend this for 7 years. We
will just kick this thing down the road for 7 years.
Now, one of the proponents of doing that was the chemical
industry. They were troubled by some of the ideas that we would
have further inspections and we would have further deadlines
and we would make sure that things happened, but while they
participated with us in trying to change the law, they said all
they wanted to do this last year was extend the existing law
for 7 years. Now this existing law doesn't have much of a
requirement on you.
You have established a working group, Mr. Beers, in the
Department to look at legislative and regulatory changes and
whether they are necessary, is that correct? Speak into the mic
and be sure it is on.
Mr. Beers. I am sorry. Yes, sir, with respect to the
entirety of the Department.
Mr. Waxman. And the November report identified several
statutory limitations on the program that limits effectiveness
and includes a rigid and limited enforcement authority. For
example, a facility could violate requirements 20 times and
they would--and you wouldn't have the authority to take any
more action based on repeat violations. That means that they
can repeat these violations over and over again, and you
couldn't do anything about it. Is that right?
Mr. Beers. Sir, that is an element of the report that we
have looked into as a result of the report. While it is true
that just on the face of it the answer to that is yes, we
believe we could use our administrative order authority to have
some action against----
Mr. Waxman. Excuse me, you are going to have to use your
regulatory authority to do something that should have been said
in the law by Congress. I hope this working group will examine
that.
The report calls into question the adequacy of the
program's performance standards. That memo said ``Without
testing to evaluate the effectiveness of the performance
standards, adequacy of the standard often is more a matter of
opinion or fact.'' Will your working group give us some
recommendations on that issue?
Mr. Beers. Sir, as we come to recommendations, yes, we will
give those to you. We, as you know, have to go through a very
formal process.
Mr. Waxman. Are you going to examine that issue, I presume?
Mr. Beers. We will.
Mr. Waxman. Well Congress should have examined it as well.
So my point to you is, well, we are pointing fingers at you
and you are saying you have excuses and everybody says we are
going to do better. I think we all have a burden to bear in the
failure, and Congress didn't do its job and we hoped you would
have taken up the slack and done the job that Congress should
have directed you to do, but I think it is awfully premature
for members of this committee to try to put the whole blame on
you and say you ought to quit. Maybe some members of Congress
ought to quit if we aren't doing our job, or be replaced.
I yield back my time.
Mr. Shimkus. The gentleman's time is expired.
The chair now recognizes the gentleman from Colorado for 5
minutes, and we are going to try to get this done and then
adjourn the hearing after he is through. They did just call
votes.
Mr. Gardner. I thank the chairman for the recognition, and
thank you as well to the witnesses for being here today.
When I first read this memo, it was a little bit like Jerry
McGuire meets the Titanic. You have got--just some of the words
and phrases used in this memo: unnecessary expenses,
unqualified personnel, unsuited for the work, problems with how
money spent, foul language, ineffective hiring, unauthorized
expenses, inappropriate work behavior, catastrophic failure,
perceived cronyism, favoritism. How would you grade your
performance on a scale of 1 to 100?
Mr. Beers. I think this report is a clear indication that
the program needs a whole lot of work on it, but I don't think
it entirely recognizes what we have done, and I am not being an
apologist, but I do think that it indicates that we have some
major challenges which we are prepared to address.
Mr. Gardner. Unauthorized use of money, problems with how
money is spent, are criminal activities taking place here?
Mr. Beers. Sir, those are issues that we are looking into.
When we discovered them----
Mr. Gardner. You are looking into criminal--possible
criminal activity?
Mr. Beers. If that turns out to be the result of these
reviews, the answer to that, of course, is yes. We have an
obligation to you and to the American public to do that.
Mr. Gardner. Do you--I mean, in terms of what you are
facing, what else are we missing from this memo? I mean, is
this a comprehensive memo or are there other issues that you
are finding, other issues that need to be addressed?
Mr. Beers. Sir, you are asking me to say what the unknowns
are here. I am not saying that this memo is the entirety, and I
don't think that David would say that. But it does represent a
commitment to make sure that we understand the problems as we
know them and to come up with solutions to fix that. David?
Mr. Wulf. I would just add that I would echo the Under
Secretary's sentiments. I would say that the report was
focused, you know, as it was intended to be, an internal candid
assessment. It was focused very much on the challenges side of
the equation. It did not focus as much on the program's
successes and opportunities. You know, I would add, too, that
we have a very talented and committed workforce within ISCD. We
have very committed folks at both headquarters and in the
field, all eager to move the program forward. And I think, as I
mentioned earlier, you know, the problems we identified in the
report are certainly not insignificant, but they are by no
means insurmountable, and we are looking forward. We have a
nearly 100 point action plan that is in progress. We are
meeting on a weekly basis with Deputy Under Secretary Spalding
to review progress on those items, and you know, we anticipate
continued progress.
Mr. Gardner. The report identifies several issues with the
unionization, the challenges you faced with the union. Can you
name any other agencies or offices who deal in anti-terrorism
security, national security, who placed a union in the picture
before most accountability measures were put in place?
Mr. Wulf. I am not aware of any, but----
Mr. Gardner. OK. Let us talk a little bit about the budget.
The memo talks on page 15, and I quote, ``ISCD lacks a system
for tracking the usage of consumable supplies, which creates an
environment for fraud, waste, and abuse.'' This isn't an
Inspector General report, it is not the GAO saying this. It is
the program managers describing their own program. So how can a
member of Congress choose to fund a program that is so self-
described?
Mr. Wulf. We recognize some administrative shortcomings in
the tracking of funds, and recognizing, too, that this is a
relatively new program, relatively new organization, we have
put into place safeguards relating to the receipt of goods. As
I mentioned earlier, we didn't identify actual fraud, waste, or
abuse, just that there were additional processes that needed to
be put into place to ensure that that does not----
Mr. Beers. And sir, a point of clarification here. That
part of the report is actually taken from another review that
was accomplished during, started before, and finished during
the period in which they prepared that, and it was our own
compliance unit that did that, that discovered that. They
didn't discover any charges to be laid, but they said that the
procedures were inadequate, as the report correctly says.
Mr. Gardner. Is there--DHS has an Inspector General,
correct?
Mr. Beers. We have an Inspector General and we have also--
for the whole department, and we have an office of compliance
and security within our own NPPD, and that is who looked into
this issue at the Assistant Secretary and my request.
Mr. Gardner. So the Inspector General has looked into this?
Mr. Beers. The Inspector General has access to these
reports, yes, sir, but this was not done by----
Mr. Gardner. Have you had conversations with the Inspector
General?
Mr. Beers. With respect to this report?
Mr. Gardner. Yes.
Mr. Beers. I can't speak to that. I have not personally had
that conversation.
Mr. Gardner. But he has this memorandum?
Mr. Beers. As with all of these kinds of reports, yes, they
are available.
Mr. Gardner. They are available or he has them? I mean,
have you sent it to him?
Mr. Beers. I will have to confirm that to you, sir.
Mr. Gardner. Thank you. And another question I would have,
just based on the authorization, would a multi-year
authorization give you the surety that you need to pursue
programmatic improvements? Would it be helpful for you to be
assured that legislatively the program can't change?
Mr. Beers. As the report says and as we have said for some
time, a long-term authorization of this program is vital, both
to the workforce and to our security partners and stakeholders
in this program. It gives us a longer term stability that a
year-to-year unfortunately doesn't provide us.
Mr. Gardner. On the issue of re-tiering, there are a number
of sites that were tiered last fall----
Mr. Shimkus. I would remind my colleague that we are
getting close to the votes being already called.
Mr. Gardner. I have some additional questions I will get
over to you. I yield back my time.
Mr. Shimkus. Gentleman yields back his time, and I
appreciate that.
Let me just say in follow-up, I think Mr. Beers testified
he would like the law to have been made permanent at the last--
at the March hearing, so--but let me also just again thank you,
Mr. Beers, for your long career of public service. And this is
a part of your portfolio, not your entire portfolio: Marine
Corps officer in Vietnam, foreign service, obviously did stuff
at the Department of State, Middle East, Persian Gulf,
international narcotics and law enforcement. We get caught up
in the heat of battle. We expect you to address these issues
and fix them, and that will make further hearings go well.
And just in response to my friend, Mr. Waxman, I love his
founding father quote, ``Where good laws do well, good men do
better.'' So you can't pass a law for total compliance. It is
really the people that make things work, and I think you are
going to get a handle on it. I just wish that the people who
have left the Department did not get a move, but probably would
have been held more accountable to their activities.
With that, I would like to adjourn this hearing. Thank you
for your service.
Mr. Beers. Thank you.
[Whereupon, at 11:17 a.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]

[GRAPHIC] [TIFF OMITTED] T5573.015

[GRAPHIC] [TIFF OMITTED] T5573.016

[GRAPHIC] [TIFF OMITTED] T5573.017

[GRAPHIC] [TIFF OMITTED] T5573.018

[GRAPHIC] [TIFF OMITTED] T5573.019

[GRAPHIC] [TIFF OMITTED] T5573.020

[GRAPHIC] [TIFF OMITTED] T5573.021

[GRAPHIC] [TIFF OMITTED] T5573.022

[GRAPHIC] [TIFF OMITTED] T5573.023

[GRAPHIC] [TIFF OMITTED] T5573.024

[GRAPHIC] [TIFF OMITTED] T5573.025

[GRAPHIC] [TIFF OMITTED] T5573.026

[GRAPHIC] [TIFF OMITTED] T5573.027

[GRAPHIC] [TIFF OMITTED] T5573.028

[GRAPHIC] [TIFF OMITTED] T5573.029

[GRAPHIC] [TIFF OMITTED] T5573.030

[GRAPHIC] [TIFF OMITTED] T5573.031

[GRAPHIC] [TIFF OMITTED] T5573.032

[GRAPHIC] [TIFF OMITTED] T5573.033

[GRAPHIC] [TIFF OMITTED] T5573.034

[GRAPHIC] [TIFF OMITTED] T5573.035

[GRAPHIC] [TIFF OMITTED] T5573.036

[GRAPHIC] [TIFF OMITTED] T5573.037

[GRAPHIC] [TIFF OMITTED] T5573.038

[GRAPHIC] [TIFF OMITTED] T5573.039

[GRAPHIC] [TIFF OMITTED] T5573.040

[GRAPHIC] [TIFF OMITTED] T5573.041

[GRAPHIC] [TIFF OMITTED] T5573.042

[GRAPHIC] [TIFF OMITTED] T5573.043

[GRAPHIC] [TIFF OMITTED] T5573.044

[GRAPHIC] [TIFF OMITTED] T5573.045

[GRAPHIC] [TIFF OMITTED] T5573.046

[GRAPHIC] [TIFF OMITTED] T5573.047

[GRAPHIC] [TIFF OMITTED] T5573.048

[GRAPHIC] [TIFF OMITTED] T5573.049

[GRAPHIC] [TIFF OMITTED] T5573.050

[GRAPHIC] [TIFF OMITTED] T5573.051

[GRAPHIC] [TIFF OMITTED] T5573.052

[GRAPHIC] [TIFF OMITTED] T5573.053

[GRAPHIC] [TIFF OMITTED] T5573.054

[GRAPHIC] [TIFF OMITTED] T5573.055

[GRAPHIC] [TIFF OMITTED] T5573.056

[GRAPHIC] [TIFF OMITTED] T5573.057

[GRAPHIC] [TIFF OMITTED] T5573.058

[GRAPHIC] [TIFF OMITTED] T5573.059

[GRAPHIC] [TIFF OMITTED] T5573.060

[GRAPHIC] [TIFF OMITTED] T5573.061

[GRAPHIC] [TIFF OMITTED] T5573.062

[GRAPHIC] [TIFF OMITTED] T5573.063

[GRAPHIC] [TIFF OMITTED] T5573.064

[GRAPHIC] [TIFF OMITTED] T5573.065

[GRAPHIC] [TIFF OMITTED] T5573.066

[GRAPHIC] [TIFF OMITTED] T5573.067