Coleman-Levin Caution that U. S. Still Vulnerable to Smuggling Threat in Ports

COLEMAN-LEVIN CAUTION THAT U.S. STILL VULNERABLE TO SMUGGLING THREAT IN PORTS

Hearing highlights blindspots and gaps in America's programs that secure the global supply chain; annual GDP cost of attack at ports could exceed $70 billion

Senators Norm Coleman (R-MN) and Carl Levin (D-MI) today held the second of a two day Permanent Subcommittee on Investigations (PSI) hearing to examine the threat of nuclear terrorism and assess various programs to secure, detect and interdict nuclear and radiological materials domestically and abroad. During the hearing, titled "Neutralizing the Nuclear and Radiological Threat: Securing the Global Supply Chain," the Subcommittee released a report assessing the state of global supply chain security, the projected cost analysis of an attack by the Congressional Budget Office (CBO), and offered recommendations based on their independent investigation of the issue. The Subcommittee outlined a number of troubling findings that reveal America's vulnerability to the potential smuggling of nuclear or radioactive material across U.S. borders.

"We are safer today than we were yesterday," said Coleman. "But it is still not enough. My three year investigation into America's programs that secure the global supply chain identified numerous weaknesses. It is clear we have many gaps in the systems. If we think that the terrorists are going to ignore our vulnerabilities and not find the kinks in our supply chain, we are mistaken. We must change our pre-9/11 mindset to fit a post-9/11 reality. We have the potential. When visiting Hong Kong in December, I witnessed a promising concept that demonstrates the potential to screen 100 percent of maritime containers with both an x-ray and radiation detection equipment without impeding commerce. I urge DHS to make system must become a reality."

"While 24 million containers come into this country each year by ship, truck, and rail, the vast majority of these containers are never inspected, and the challenge facing our country is what to do to address the national security threats posed by them," Levin said. "The Subcommittee's report lays out the weaknesses in our current inspection systems -- including the inadequate inspection of trash trucks entering the country -- and makes some recommendations that would help to enhance the security of our entry points and our nation. The Department of Homeland Security must act quickly to fix the problems and adopt the recommendations outlined in our report."

Throughout the course of its three-year investigation, the Subcommittee has identified numerous weaknesses in America's programs that secure the global supply chain:

* In the Container Security Initiative (CSI), a critical program designed to inspect high-risk shipping containers before they enter U.S. ports, the Subcommittee found that only a small number of such high-risk containers are actually inspected. In fact, the vast majority of high-risk containers are simply not inspected overseas. To make matters worse, the U.S. Government has not established minimum standards for these inspections.

* Under the Customs-Trade Partnership Against Terrorism (C-TPAT), the U.S. Government grants benefits to private-sector companies that make specific security commitments. The Subcommittee found, however, that an overwhelming proportion of participating companies receive benefits prior to having their security profile validated. Only 27 percent of the participating companies have been subjected to a validation. Therefore, 73 percent of companies have not been subjected to any legitimate, on-site review to ensure that their security practices pass muster.

* The targeting system employed by the U.S. Government to identify high-risk shipping containers entering U.S. ports is largely dependent on "the least reliable" form of data for targeting purposes. Moreover, the Subcommittee has found that this targeting system has never been tested or validated, and may not discern actual, realistic risks.

* Less than 40 percent of cargo containers entering U.S. ports are screened for nuclear or radiological materials. One part of the problem is that the deployment of radiation detection equipment is woefully behind schedule. As of March 2006, the Department of Homeland Security has deployed only 30.8 percent of the necessary radiation monitors.

To further highlight the severity of this potential threat, Senator Coleman requested that the Congressional Budget Office (CBO) initiate a study of the economic consequences of an attack on the Ports of Los Angeles and Long Beach. This study found that the United States' gross domestic product (GDP) would decline by about $150 million per day for each day that the ports were closed and that the annual cost would be approximately $70 billion.

"Although CBO did not analyze the cost to human life and property of such a terrorist attack, the economic impact of closing the ports could be comparable to both the attacks of 9/11 and Hurricane Katrina," continued Coleman. "We cannot afford the devastation these findings imply. We must secure our supply chain before we pay the high price of an attack."

The hearing today listened to the testimony of two panels that spoke on the issue of global supply chain security. The first panel consisted of The Honorable Michael P. Jackson, Deputy Secretary of the Department of Homeland Security, while the second panel was comprised of 1) Mr. Christopher L. Koch, President and CEO of the World Shipping Council, 2) Mr. Gary D. Gilbert, Senior Vice President of Hutchinson Port Holdings and 3) Mr. John P. Clancey, Chairman of Maersk Inc. Agency.

This was the second part of a two-day hearing that began on Tuesday March 28, 2006. The first hearing released a Government Accountability Office (GAO) report on their findings of their investigation into the security of the global supply chain. The Subcommittee held an earlier hearing on May 26, 2005 to examine potential vulnerabilities in the global supply chain system: "The Container Security Initiative and Customs Trade Partnership Against Terrorism: Securing the Global Supply Chain or Trojan Horse?"

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