1997 Congressional Hearings
Intelligence and Security

       TOP OF DOC   


 Page 159       PREV PAGE       TOP OF DOC    Segment 1 Of 2  












 Page 160       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
Opening Comments from Chairman Kolbe

    Mr. KOLBE. The meeting of the subcommittee will come to order.

    I welcome our witnesses who are here to testify on United States Customs Service.

    I thank my Ranking Member, Mr. Hoyer.

    We have had an informal subcommittee meeting before to introduce our staff, so I won't go through that today.

    Since the Under Secretary is here, I would like to take just a brief moment for a small housekeeping matter.

    Mr. Under Secretary, as you know, it is the Committee's policy to ask for testimony a week in advance. The schedule for the hearings has been set for at least a month and, in most cases, well over a month in time. The purpose of this is so that we can adequately prepare the questions that we ask, and that we then submit to you so you are not caught unawares of the questions.

    Unfortunately, in the case of the witnesses today, the testimony was 4 days late, and in the case of tomorrow, with the Secret Service and Under Secretary Kelly, the testimony was 6 days late in coming to us. My understanding is that this was because the testimony was being reviewed by Treasury. I certainly don't mean to micromanage your affairs, but it is very important for us, Majority and Minority, if we are going to do our job correctly and work with you, that we have that testimony in advance so we can prepare our questions. And I would ask you to take that message back to the Department and urge them to be a little swifter in their review, or perhaps you need to submit it earlier to them.

 Page 161       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. KELLY. Yes, sir. I take responsibility for that. I think it has to do with my newness in the position, but I can assure you it won't happen again.

    Mr. KOLBE. Thank you.

    With that, let me begin with a brief opening statement, and again, welcome Under Secretary Kelly, Commissioner Weise, to this first hearing for the fiscal year 1998 before the Treasury, Postal Service and General Government Subcommittee.

    My predecessor, Jim Lightfoot, left some pretty big shoes for me to fill, but I am looking forward to working with all the agencies that come under the jurisdiction of this subcommittee and continue much of the work that is already under way.

    I hope that, in addition, I will be able to bring some new and fresh ideas to the Subcommittee to keep us on the glide path towards a balanced budget, make government more efficient and responsive, and to produce an appropriation bill that both the Congress and the administration can support and can ultimately sign into law.

    I especially want to say how pleased I am to work with the Ranking Member, Mr. Steny Hoyer, who has served with this Subcommittee with distinction for some years, and I fully concede I have a lot to learn from him about it. As Chairman of the Subcommittee for many years, he left behind a very impressive legacy of many initiatives that he started.

    Today we are going to focus on the United States Customs Service, and for the next several hearings we will be focusing on law enforcement. Obviously, this is an Agency in which I have a lot of personal interest. In representing a border district, I have been very actively involved with trade matters and with border issues, and I have always argued that I think that Customs, and INS, as well, have contradictory missions.

 Page 162       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    In one sense, customs job is to keep illegal goods from coming across the border, while INS keeps illegal people from coming across the border. But there is another part of the process, which is to facilitate the free flow of goods across our borders. And I think sometimes we may not keep that second mission in mind as much as someone who lives on the border might wish.

    I know this is not an easy mission and we don't make it easier with the laws that we give you. Customs plays not only a substantial role in the war on drugs, but in a sense, the primary role. And upon looking at the President's budget request, I am concerned that Customs interdiction efforts seem to be lagging in terms of the attention by the administration, and I will have some questions in that area.

    I am pleased to see a continued emphasis on innovative technologies along the border, which help to provide greater automation along the ports of entry. I am concerned about the lack of a master architectural blueprint or operating investment process to guide these efforts. I think we ought to try to learn from the failure of IRS, with regard to their tax systems modernization that has cost the taxpayers $4 billion, which IRS now concedes has given us absolutely nothing in return. We need to make sure that is not—on a lesser scale, admittedly—that that is not going to be repeated here with Treasury law enforcement, most notably Customs or any of the agencies that come under the jurisdiction of this committee.

    I will have questions for the witnesses concerning these and other topics, and I look toward to hearing the answers.

 Page 163       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Before I call on you for an opening statement, I would like to see if Mr. Hoyer would like to make an opening statement.

    Mr. HOYER. Just briefly.

    First of all, I want to say to the Under Secretary, you are new, so you don't have experience with those on the committee, but Mr. Weise is not new and he does have that experience. This committee is very fortunate to have as its new Chair, Mr. Kolbe of Arizona. Mr. Kolbe is one of our most thoughtful and ablest Members of the Congress, and you are going to find a very fair hearing before this committee. And while some of us may differ from time to time, I want you to know that this side of the aisle has the utmost confidence in the Chairman's fairness. We were blessed to have a very fair and open and bipartisan Chairman that preceded Mr. Kolbe, and we were fortunate to get somebody equally committed to working together for the best product that this committee can produce for the taxpayers and for this country.

    So I want to welcome him as the Chairman publicly, I have said this privately and with our committee Members, but we are very fortunate to have him as our chair.

    Mr. KOLBE. Thank you, Mr. Hoyer, I will make that statement appear in my next campaign brochure.

    Mr. HOYER. And he is almost as good as his future opponent, as good as that may be. You can bracket that, ha-ha.

    Mr. Secretary, the Director of Customs, of course, is no stranger to the Congress of the United States. He had a distinguished career here as a high-ranking staff member on the Ways and Means Committee, and is well-respected. In addition, the law enforcement agencies in Treasury, as you well know, from your law enforcement experience are outstanding. The New York bombing, of the World Trade Center, where ATF made such an important discovery—in fact, it was ATF that led to the breaking of that case, and, of course, your work in NYPD and the work of others both at the Federal and local level.

 Page 164       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    This committee has historically been and continues to be a strong supporter of the law enforcement components of Treasury. Customs, of course, is the largest, with about a $1.7 billion and 17,000 FTEs in its budget, but also ATF and, Secret Service, which has, as you know, many law enforcement duties, in addition to the more publicly known protective responsibilities has it has.

    Mr. Secretary, I want to tell you, you have some of the most able law enforcement officials in the country heading up those agencies in Customs and ATF and Secret Service. And this committee has continually funded those agencies so that they could accomplish their objectives.

    In fact, administrations of both parties have not been as generous as this committee has historically been. In the area of Customs, particularly in the 1980s, we had to keep fighting to keep Customs at FTE levels we thought were appropriate to accomplish their objectives. You have a distinguished career in law enforcement.

    I will ask questions, I am sure other Members of the committee will ask questions. I am very concerned, as I know you are, and I am going to be talking to General McCaffrey, about the assertions that are made daily now in the press with reference to Customs. Any Agency that has that many people, obviously, from time to time may have a bad apple, as you had in the NYPD. But the Mexican performance is one I think we are all concerned about, I am sure we are going to go into it, and I know the Chairman is concerned about it. I am going to be asking questions about your relationship with General McCaffrey in terms of our coordination of this effort.

 Page 165       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Obviously, Justice is very much involved in INS, FBI, DEA, but I am pleased to have you here for your first time. I want to welcome you.

    I am pleased that we have a Chairman, as I said, who is going to pursue these issues, which I think are very serious ones, with a great deal of vigor, but also with a great deal of integrity and fairness.

    Mr. Lightfoot and I were Chair and Cochair during the 4 years that we looked at Waco. This committee, frankly, developed all of the information in our hearings that was ultimately discovered in the last Congress by the extensive investigations. They spent a lot of money, a lot of time, they didn't find anything more than we did.

    In particular, the Treasury Department did an outstanding job, a much better job than Justice, in self-criticism and corrective action. Quite obviously, significant mistakes were made at Waco by the ATF, and they admitted those mistakes. They have corrected them and completed some personnel actions. But you are going to find as you enter into this responsibility, you have an Agency that has some of the best people in the world working for it, and we can achieve great results working together constructively.

    Again, we are pleased, on this side of the aisle, and the country is very fortunate to have a Chairman with the kind of fairness and integrity that we have.

    Thank you, Mr. Chairman.

 Page 166       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. KOLBE. Thank you, Mr. Hoyer, for your kind remarks.

    Mr. Kelly, we would like to begin with your statement.

    As you know, the full statement will be placed in the record, we would appreciate it if you would summarize your statement so we will have as much time for questions as possible.

    Mr. KELLY. Yes, sir. Thank you very much.

    Mr. Chairman, Congressman Hoyer and Members of the committee, it is a pleasure to appear before you today to present the Department's antinarcotics work and join in presenting the Customs Service's requirements for fiscal year 1998. Treasury's enforcements, achievements and initiatives being discussed this week and next week are due in large part to the guidance and support of this committee. I am confident that the Department and its enforcement bureaus will work diligently to build on this relationship in the coming fiscal year.

    I would also like to note the support and leadership that we have received from Secretary Rubin. Whether in support of Customs antismuggling efforts, our financial crimes enforcement, or antiviolent crimes initiatives, the Secretary has been an invaluable ally to the men and women of the Treasury law enforcement.

    Accompanying me today are Assistant Secretary James Johnson and Deputy Assistant Secretary Liz Brazee and other members of my staff, and, of course, Commissioner Weise and his staff, which he will introduce.

 Page 167       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    And subsequent to my remarks, Commissioner Weise will provide greater insight and detail into their efforts. While I will defer to Commissioner Weise on the specifics of the Bureau's work, I would like to call to your attention the vital and broad-based nature of the Customs mission.

    Customs maintains critical overflight operations in the drug source and transit zone areas, antismuggling initiatives at the border, and investigative and intelligence-gathering operations. It also conducts investigations of money-laundering rings linked to narcotics smuggling.

    Largely because of its role as the Nation's primary border enforcement Agency, Customs antinarcotics efforts have been most pronounced at the Southwest border and the Caribbean. This work has been significantly enhanced over the past few years through Operation Hard Line and Gateway. Operation Hard Line, which began 2 years ago on the Southwest Border, continues to yield positive results. The total number of narcotics seizures increased by 29 percent, and seizures measured by total weight increased by 24 percent.

    With the support of this committee, Customs is building further on this program during the current fiscal year. For example, in addition to the 165 experienced Special Agents and intelligence analysts who have been relocated to the Southwest Border, $65 million in fiscal year 1997 funding will allow for an additional 650 positions for drug interdiction. These additional positions will allow us to extend the Hard Line from the Southwest Border to other parts of the Southern U.S., including the Miami area.

 Page 168       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    A focus on the entire border is absolutely essential given the likelihood that traffickers will alter their attempts in response to the heightened enforcement in any area. In fact, Customs already has detected such a shift in response to Hard Line with the crackdown at the Southwest Border, forcing traffickers to look for additional smuggling routes, particularly in the Caribbean.

    In response to this shift, Customs has implemented Operation Gateway. Since the initiation of Operation Gateway last March, Customs narcotics enforcement activities in Puerto Rico have increased dramatically. From March to December 1996, heroin seizures increased by 28 percent and cocaine seizures by 37 percent. Customs consistently seizes more illicit narcotics than all other Federal agencies combined. We will continue to play a principal role in this fight.

    Our counternarcotics efforts also extend to money-laundering, which is both the life support system and the Achilles heel of narcotics traffickers. The better we are at tracking dirty money, the better our chances at unraveling the criminal enterprises that depend on it.

    We have developed counter-money laundering initiatives that focus on effective enforcement, flexible regulatory measures and an aggressive training and advisory program for our foreign counterparts. We continue to focus efforts on deterring and detecting money-laundering internationally.

    Last year the Customs Service seized over $232 million as a result of money-laundering and drug-smuggling investigations. In addition, Customs, along with the Internal Revenue Services Criminal Investigative Division, the FBI and the DEA successfully concluded investigations of numerous money-laundering organizations linked to major trafficking organizations, such as that which resulted in the capture, extradition, and conviction of Juan Garcia Abrego, one of Mexico's most notorious drug kingpins.

 Page 169       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    In addition, Treasury has been working in partnership with financial institutions to reduce burdensome paperwork in order for them to focus on reporting of suspicious activity. Under the Suspicious Activity Reporting System, banks report suspected criminal activity to one collection point that provides the information to law enforcement.

    This single filing point provides easier access to the information by the law enforcement and regulatory agencies. The result, better information about trends and patterns which is vital to law enforcement and banks in their efforts to combat money laundering.

    Another example of how a flexible approach to regulation leads to better enforcement is Treasury's recent Geographical Targeting Order, or GTO. It is designed to prevent money laundering through a specific group of money remitters in the New York metropolitan area who are suspected of funneling drug proceeds back to Colombia.

    As a result of this order, the flow of drug money through remitters in New York City to Colombia has been reduced dramatically. The GTO has forced the drug traffickers to attempt riskier schemes to move their profits back to Colombia. Customs has seized an additional $40 million in currency over a comparable period last year, as traffickers tried to smuggle cash out of the country through JFK and other East coast ports and airports in Miami, Newark, and Boston.

    Of course, making the U.S. financial channels less user-friendly to criminal enterprises is just half the battle. Since organized crime is increasingly a transnational phenomenon, a truly effective attack requires that controls over the movement of their funds be implemented by all nations. The U.S. has made important strides in this area over the past 6 or 7 years, particularly through multilateral antimoney-laundering organizations, such as the Financial Action Task Force and the Summit of the Americas Process, led by Secretary Rubin, as well as through bilateral initiatives.

 Page 170       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    As a result, nations increasingly are adopting the necessary legislative and enforcement tools to address money-laundering and to facilitate transnational investigations. At times, however, all the diplomatic efforts in the world will not accomplish what certain well-targeted enforcement measures will. In October 1995, President Clinton announced a major new international organized crime initiative that also targets narcotics traffic.

    As a first step towards accomplishing this goal, he issued an Executive Order invoking his powers under the International Emergency Economic Powers Act to block assets and prohibit transactions with the Cali Cartel in Colombia and people in businesses associated with the cartel. The President's order delegated to Treasury's Office of Foreign Asset Control, working with the Department of State and Justice, the authority to identify the individuals and businesses that act for them or on their behalf and to block the assets of the traffickers and their front companies in the U.S.

    This action bars U.S. citizens and companies from doing business with them. The initial list included the four kingpins of the Cali Cartel and 80 companies they own or control. OFAC has since added over 300 names of persons and companies to that list.

    Finally, our antidrug efforts also include the work of the Bureau of Alcohol, Tobacco and Firearms which has made reducing drug-related violent crime a priority through its participation in OCDETF and HIDTA task forces, as well as its own Achilles program. Since its inception, Achilles has resulted in the recommendation of 20,000 defendants for prosecution as well as the issuance of 35 life sentences and 30,000 cumulative years of prison sentences in connection with drugs offenses.

 Page 171       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    ATF also participates in vital demand reduction efforts chiefly through its Gang Resistance Education and Awareness Training Program, or GREAT as it is called. Working with the Federal Law Enforcement Training Center and local police forces throughout the country, ATF uses the GREAT program to reach school-age children and help them reject gangs and drugs. With the invaluable support of this committee, ATF has been able to extend GREAT's reach to over 2 million children since 1992, and to include the participation of 1,300 police officers from across the country.

    As impressive as our Bureau's efforts have been, we recognize we must continually reevaluate them. To this end the Department intends to enhance its own oversight of some of the issues and areas addressed today, with an eye toward improving the quality of Treasury enforcement's in-service training, improving the internal investigative capability of Treasury's enforcement bureaus and enhancing and further coordinating departmental antimoney-laundering initiatives.

    We look forward to working closely with you, Mr. Chairman, Congressman Hoyer, and other Members of the this committee as we move forward in these and other areas.

    Thank you very much.

    [The information follows:]

    "The Official Committee record contains additional material here."

 Page 172       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. KOLBE. Thank you very much, Mr. Secretary, for your comments.

    Commissioner Weise.

    Mr. WEISE. Thank you, Mr. Chairman.

    Mr. Chairman, Mr. Hoyer, Members of the committee, it is a real pleasure to appear before you once again.

    Mr. Kolbe, as you have indicated, if my full statement could be submitted in the record, I would like in the interest of time to summarize, because we have some people here, as you might notice, some people from the front lines of Customs, which have some information they would like to share with the committee in terms of actual experiences from the border.

    Mr. Chairman, I take to heart the comments you have made in your opening statement about the difficult challenge that the fine men and women of the Customs Service face in trying to balance the very delicate interest in ensuring that we do everything in our power to keep drugs from entering this country, while also dealing with the fact that we have an important commercial responsibility.

    The people you will be hearing from in a few moments make that balance every day, and we know from our prior experience as we have been working together in the commercial aspects of this in this past, it is something we shouldn't lose sight of. But having said that, my entire experience before assuming this position was in the commercial arena.

 Page 173       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I will tell you, as the parent of two teenage daughters, it is very clear to me that there is no mission that we have in the Customs Service that is more important than keeping drugs from entering this country. We have all seen the tremendous devastation that has occurred in our streets and society with our teenagers and our youth. So we try our best to do the best job we can.

    I think we have, with the great support of this committee over many, many years—and I appreciate Mr. Hoyer's comments—on a bipartisan basis, you have been there for the Customs Service, and as a result of that, I think we have demonstrated to you and the American taxpayer that they are getting the value for the dollars you have helped invest in the Customs Service.


    If I could back a couple of years, just before we got the support of this committee to implement Operation Hard Line, we were facing tremendous stress on those ports of entry down along that Southwest Border. The Immigration and Naturalization Service had put in some significant operations to really clamp down on smuggling of illegal aliens between the ports of entry. They had two major operations, Operation Hold The Line and Operation Gatekeeper in California and Texas.

    There had not been a lot of preplanning in terms of what the impact might be, but the impact clearly was at those 38 ports of entry, along that 2,000-mile span, as the pressure mounted and overwhelmed us to a certain extent at the ports of entry. We saw instances of port-running, which increased to over 900 instances in a single year. Port-running is when a vehicle pulls up to the primary inspection booth, the Customs officer in the booth asks the individual to open its trunk; instead of doing so, the individual hits the accelerator, at great speed and great peril, not only to the Customs officers, to other innocent bystanders and vehicles and pedestrians in the area, and at great risk to the local community. We had over 900 instances of that.

 Page 174       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    What we were seeing were such brazen techniques of smuggling that they weren't even resorting to hidden compartments or to trying to find any subterfuge. The drugs were just loaded into the trunks, and when they got to the booth, they would fly through.

    Well, with the committee's help and the help of the administration, we were able to implement Operation Hard Line. In the early going, it was an investment of about $55 million, it was a combination of a number of investments in terms of technology, some very basic technology of putting some barriers in and around and configuring them in such a way you couldn't move directly through and around the inspection booth.

    We were able to put a lot more overtime, people in the area so they could roam with their canine and with their teams, so in the area before you actually got to the primary inspection booth, we would know we had a suspect before they got the opportunity, with all the traffic in front of and behind them, to move forward.

    Looking back 2 years later, we have seen tremendous success. We have reduced the instances of port-running by almost 60 percent in that 2-year period. We have also seen in the course of the last 2 years with Operation Hard Line and its supplement to that, Operation Gateway in Puerto Rico, we have for the first time in the history of the Customs Service seized more that 1 million pounds of narcotics in the past year. Now, that is something we can be proud of, but it also is a reflection of the challenge we face.

    [CLERK'S NOTE.—The agency later change ''more than'' to ''approximately.'']

 Page 175       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We know that we can't be comfortable with what we are doing. We know we have much work to do and have to work in close consultation with other organizations, with the DEA, FBI, Immigration and Naturalization Service, and so many others, to ensure that we are doing everything in our power to carry out that important responsibility to keep drugs out of the country, and also ensure that we are not stopping commerce. We do have a responsibility to do that.

    I think through a lot of the technology and information we have been able to gather, and the intelligence we been able to put forward, we have been able to be more strategic in our focus. We have also worked with the local business communities, and there is an initiative, I am sure you are aware of, Mr. Chairman, that started in California, but which is going to grow. It is called the Business Anti-smuggling Coalition, or BASC, and it is a number of businesses taking upon themselves to work to ensure that they are doing careful background checks, criminal background checks with the people they are dealing with in Mexico, making sure that the loading sites where their merchandise is put into the trucks in Mexico are clean and clear and that they are doing what they can to reduce the possibility that drugs are going to be put into vehicles unbeknownst to them. So there are a number of things we are trying to do to make that delicate balance.


    Now, we can't talk about the difficult challenge we face in the Southwest and in the United States without talking about the issue that you raise, Mr. Hoyer, and that is the integrity of the Customs worker. And the one thing I would like to make as clear as I possibly can on the record in this public arena, is that I believe strongly in the integrity of the U.S. Customs work force.

 Page 176       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I knew when I took this position, one of the things I knew is if I wasn't going to be able to understand the issues facing us on the Southwest Border, I couldn't lead this organization. So my very first visit as Commissioner of Customs was to the Southwest Border, and I have since made about 22 additional visits down there.

    I have met with these front-line people, I have walked alongside them, and seen how they risk their lives day in and day out. It is a very difficult challenge with unbelievably poor working conditions. You know what the weather is like along that border, 120-degree temperatures, and they have a great deal of integrity.

    Now, does that mean we don't have corruption problems in the Customs Service? Absolutely not. I know with the mission that we have and the resources available to the drug smugglers, that in one payoff they can pay an individual more than they can make in an entire year, that we have to be forever vigilant about the fear of corruption.

    But I am very frustrated, as is our work force, that numerous articles are painted with a broad brush implying the Southwest Border is rampant with systemic corruption. Virtually every instance where we have had either ourselves or outside interests come in and take a comprehensive look at the situation has come to the same conclusion, that there are individual instances, we pursue them vigorously, we take a number of steps to minimize the risk of corruption, but there is not, in my judgment, systemic corruption in the Customs Service, and we all owe it to the fine men and women of the Customs Service to ensure that we understand that.

    We can get into the question and answer period, Mr. Chairman, about the number of steps we take to minimize the risk of corruption within our work force. Some of the things we need to talk about we perhaps will need to talk about on Thursday in the closed session, about some of the proactive efforts we are taking to minimize this risk.

 Page 177       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Finally, before introducing these fine gentlemen to my right to the Members of the committee who do not live on the border, and have your personal experience of living on the border, to get a feel for some of the important cases we work on there, I would like to mention some of the other activities of the Customs Service.

    I think you were right to focus the subject matter of this hearing on drugs. It is the area, as I said, that is more important than perhaps anything else we do. I am proud of what we have been able to accomplish in the last few years with the support of this committee.

    We have completely restructured the Customs Service. We have reduced the size of our headquarters operation, eliminated regions and districts. We have reinvested our resources into the front lines. We have been the recipient of 16 Hammer awards from the Vice President's National Performance Review, because we have been working to make an organization that works better and costs less, again with the full support of this committee.

    We are trying to, as you alluded to in your statement, not make the mistakes that other organizations have made in the past in terms of our automated systems. We have the tools that this Congress gave us in the Customs Modernization Act that was enacted as part of the NAFTA implementation bill, to now have a system that will allow us to work more closely with the business community to try to assure that we achieve the highest level of compliance with U.S. laws.


 Page 178       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We have for the first time in the Customs Service's history, have a system in place where we can actually measure the level of compliance. And we have increased that level of compliance to 82 percent, and we are striving to work through the concept of informed compliance and inform the business community of what is expected of them to work together to bring that compliance level up even higher.

    An important number that the committee should be aware of, even though the overall compliance rate is only at 82 percent, although I think that is quite good, the actual revenue gap, in terms of the revenue that we should be collecting, is 99 percent. There is only a 1-percent revenue gap. So of that 18 percent shortfall in terms of reaching 100-percent compliance, we are still achieving only a 1-percent revenue shortfall.

    What that means is a lot of errors that we are finding are related to wrong marking, country of origin, issues that do not relate specifically to the revenue owed to the government. So I think that is something we all should be proud of and we could not have done without the clear support of this committee.

    With that, Mr. Chairman, I would like to introduce the individuals to my right who have come up from the border States. We have one actually from Arizona, and we would like to have them speak to the committee about some of the cases they have been working on.


    First of all, Senior Inspector Rick Davis, who is from Nogales, Arizona. Then secondly, we have Inspector Lance Lueck and Senior Special Agent Brad Bench from Otay Mesa, California, who would like to share experiences they have had in terms of challenges on the border and the success they have had.

 Page 179       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. HOYER. Who is the second individual, I am sorry?

    Mr. WEISE. Lance Lueck, L-U-E-C-K.

    Mr. HOYER. Okay. And he is from where?

    Mr. KOLBE. Both from Otay Mesa—it is Nogales.

    Mr. DAVIS. I am Inspector Rick Davis from Nogales, Arizona.

    On August 3, 1996, I was working at the Nogales commercial facility——

    Mr. KOLBE. Just turn one of those microphones so this can be recorded here.

    Mr. DAVIS. On August 3rd, five transformers came in to the commercial facility in a refrigerated trailer. The five transformers were selected for intensive inspection, and due to my expertise in compartments and concealment, I was given the task of inspecting the transformers.

    The transformers create quite a few problems with their size alone. This one here is probably 2.5 feet wide, about 4 feet long, and probably 5 feet high. They also contain oil for a coolant.

 Page 180       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Oil in the transformers sometimes has PCB, which is carcinogenic. Therefore, until we get the oil tested we do have to consider it as a hazardous material. So the initial inspection of this is going to be minimal and as nonintrusive as possible to keep from dealing with a HAZMAT problem.

    In this particular transformer load, three were not loaded, they were legitimate transformers. The other two were both loaded with 1,146 pounds of cocaine. The inspection, initial inspection was performed with a buster. That is a portable contraband detector, a hand-held item. And the buster showed a difference in density between this area and this area.

    There were other inspection techniques that were performed by myself, and through these special techniques, it was determined it was a very good possibility that a compartment had been built in the transformer in about this area here. To try to confirm that, we opened the—there is an inspection plate on the top up here and you can open that very small portal, and utilizing some techniques we determined that indeed there was a box in the two transformers.

    Our problem now came up with getting the oil from the transformers so that we could have access to the compartments. The first thing that we decided to do was make sure that it was clean oil and did not have the PCBs so we wouldn't have any HAZMAT problem. We did get it tested and it was clean oil.

    The second problem was they are very big and very heavy, and we have no equipment to move them. This one we could barely get out with a forklift. The other we could not even get off of the truck with a forklift. So we had to drain the oil on the truck. That is what we drained it with, a garden hose, siphon method, into 55 gallon drums.

 Page 181       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    The removal of the lid itself, it weighed several hundred pounds, and we did get that off. Once we got inside, it had a portion of about 2 feet of legitimate transformer parts that had been placed back in; they had been removed, a box built in the bottom and the transformer parts placed back in. The oil is very dense and you can't see through it. We dropped a flashlight in it and the flashlight just disappeared. This one here, you can see we finally removed the entire top. It took a forklift to bring it off.

    This is the second transformer. You can see this one is almost 7 feet tall here, and this one we have got the oil drained out of this.

    The top of this one is off, the top of this one also weighed several hundred pounds. The compartment was built in about this area, about 3 feet down from the top, so in-between there and the top of the compartment you did have legitimate transformer parts. All these had to be removed before we could get to it.

    As you can see, the inspector here is wearing a mask, a face mask and goggles. During the cutting process, the oil, the flash point is pretty low so the fire hazard is not there, but it does create a lot of fumes and can make you sick. So we take precautions on the inhalant problem also.

    This is a coil of copper wire that had been placed on top of the boxes the compartments of the cocaine was in. This coil of wire, the only purpose we could figure it being there for was to defeat the fiberoptics scope which we occasionally use, and if you drop the scope into the transformer and try get a view of it, this is going to look like a legitimate shipment right down to the top of the compartment.

 Page 182       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    This is the compartment itself. You can see this individual is standing in the compartment, in the transformer, I should say. The compartment is, like I said, about 5 feet tall. It was completely surrounded by oil, as you can see there, and the copper wiring was all the way to the ground, completely encased it.

    The problem, once we got it open here, arose with getting the cocaine out of it. It was physically impossible for us to get in, so what we ended up doing was using a forklift and knocking it over on its side and crawling into it that way.

    This is the second transformer, the box, the square one again. Again, you can see that the coils, all the way around the box, all the way to the bottom, so if you run the scope all the way to the bottom, you just saw copper wires all the way to the bottom, again surrounded by oil, preventing us from drilling any portion into the transformer itself.

    And this is a view in the compartment itself, on the rectangular one. This is the bottom of it after the cocaine has been removed. Hindsight, you can see that there is a cut in the floor there, a weld. If we had the equipment to have lifted this thing up and got it above where we could look under it or put it on a pit or something, we would have actually been able to see the trap door which came in from the floor. But we never did get this high enough to look. That was a net of 1,164 pounds of cocaine.

    Thank you.

    Mr. KOLBE. Thank you very much. That is good detective work.

 Page 183       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    [CLERK'S NOTE.—Due to difficulty with reproduction, photographs of the visual presentation are maintained in the subcommittee official files.]

    Mr. DAVIS. Thank you, sir.

    Mr. BENCH. My name is Brad Bench, I am a Special Agent out of the Office of Investigations. This is Customs Inspector Lance Lueck, who works at the Otay Mesa Cargo Facility.

    I am the Program Manager for the Cargo Analysis Research Investigative Team that Lance works on down in Otay Mesa, and we put this presentation together to show what can be achieved when all the entities within Customs work together towards a common goal.

    Lance is going to be telling you a little bit about the enforcement programs they have down at the Otay Mesa Cargo Facility, then I am going to tell you about a case we worked just last month, Lance and I, where we netted over a ton and a half of marijuana in a one-week time period.


    Mr. LUECK. I am a member of a Cargo Analysis Research Investigation Team, we call it the CARIT. This is a multidiscipline enforcement team made up of all entities of Customs. We have inspectors, agents, Intel research analysts, operational analysis specialist, National Guard, Intel, and other entities as we could gather them. Canines also.

 Page 184       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    The CARIT acts as a command post for such units as the cargo rovers. They perform inspections in the cargo environment on a random and spontaneous nature. We also have the enforcement rotational team. They do specialized inspection. They are self-directed and work independently within all the cargo facilities.

    We also utilize heavily the Canine Enforcement Officers and their animals. They screen crates and vehicles for narcotics. And Otay Mesa has a full-time x-ray. It is interesting that last Wednesday we intercepted another front-wall compartment and netted a load of 966 pounds of marijuana while Congressman Packard and Kim were there. They saw that happen. Through all our inspections and enforcement activities, we have the assistance of California National Guard to help us everywhere in the facility.

    We use a lot of different tools. The buster-density detector, laser-range finders. We have encrypted secure radio, various hand drills and hand tools, and when these teams go mobile, we have an enforcement support vehicle dedicated to us.

    Mr. BENCH. Prior to fiscal year 1997, we were getting unconfirmed reports that smugglers may be trying to use front-wall compartments in empty trailers. And starting with fiscal year 1997, we decided to have a combined effort between the Office of Investigations, Field Operations, and the Office of Intelligence, to try to target some of these front-wall compartments and see if we could confirm it.

    We had Special Agents begin debriefing all their sources of information. And in one instance, we got some solid information about a warehouse in Los Angeles.

 Page 185       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We took Special Agents up to Los Angeles in conjunction with the Los Angeles Office and State and locals that were helping us out. We served a search warrant on this warehouse.

    Inside, we found a trailer with a front-wall compartment. There was no narcotics at the time, but we were able to identify the trailer fully, and we provided photos, sketches and information to Customs Intel specialists. They in turn created intelligence reports that went out to the front-line Inspectors and other Southwest Border units to watch for this trailer and this particular smuggling method.

    At the same time, once they received the reports, Inspectors, Canine Enforcement Officers and the National Guard intensified their efforts to identify this trailer and other front-walled compartments. The intelligence began to pay off as we began to see the first of many front-wall compartment seizures.


    This is the case I was talking about. It happened one week in January, just last January. On January 21st, Customs Inspectors and Canine Enforcement Officers at the Otay Mesa Cargo Facility intercepted a front-wall compartment in an empty trailer.

    The cargo Analysis Research Investigative Team coordinated the follow-out of the trailer, and they do this by telling the driver a untruth we make up so he feels Customs is not suspicious of his trailer. This creates a window of opportunity that lets Special Agents and Customs surveillance to respond to the cargo facility where we can conduct surveillance.

 Page 186       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    This is the helicopter that helps us on our surveillance down at San Diego. It is outfitted with a forward-looking infrared system for night follow-outs. It has also got about a 10 million power Night Sun on it. It carries two pilots and can carry three passengers. At the same time the helicopter is in the air, Special Agents on the ground from the San Diego Office initiated the ground portion of the surveillance. This truck was followed.

    This is a map of the area. The red dot is about where the Otay Mesa Cargo Facility is. This is 905, the freeway that comes out of Otay Mesa. The trailer took this route and went up to a empty truck yard in the Chula Vista area right there.

    The trailer was dropped in that yard, and then the tractor disconnected from the trailer and returned to Mexico, and we allowed it to return to Mexico without stopping it while we maintained surveillance on the trailer.

    During the surveillance we have Intel specialists that we are in contact by phone and radio and they are able to run data checks for us on just about anything we have in question, and it gives us a lot of help on the ground during the surveillance. In the meantime, back at the Otay Mesa Cargo Facility, Inspectors intercepted another front-wall compartment, this is about 2 hours into our initial surveillance, and found another front-wall compartment in the trailer that we had seen in the warehouse in Los Angeles.

    The Cargo Analysis Research Investigative Team coordinated a second controlled surveillance for us. We had to divide our manpower in half from our first surveillance. Since it was stationary, we were able to do that and we also took the helicopter with us so we could do a second follow-out on this second trailer.

 Page 187       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    At one point we decided to concentrate the full efforts onto the second trailer, the one we had seen in the Los Angeles warehouse. We did this because it was an identified smuggling operation and we had some prior intelligence on this. So we seized the marijuana from the first truck in the truck yard and left the trailer empty in the truck yard. We seized approximately 1,113 pounds of marijuana from that trailer.

    The next morning, the smugglers picked up the now empty trailer and we allowed them to return to Mexico. We continued surveillance on the trailer we had seen in Los Angeles for approximately 2 days; there was no activity on it. We terminated the surveillance and seized the trailer.

    When we seize a trailer like that, we take it down to the Otay Mesa Cargo Facility, we allow the Canine Officers to run the dogs on it as a training aid, and we also allow the X-ray Inspectors to take X-rays of it so they can refer to it later as a training vehicle. That right here, that is the front-wall compartment and the darkened area is the actual marijuana in the front-wall compartment area, and that is what the X-ray Inspectors see.

    After that we unload the marijuana with seized property specialists, inspectors and agents, and from that trailer we seized 1,076 pounds of marijuana. So after 48 hours, we had seized 2,189 pounds of marijuana, seized one trailer, and at that point there were three tractors that were subject to seizure.


 Page 188       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Approximately one week later, at the Tecate Port of Entry on January 28th, the smugglers attempted to cross a load of marijuana in the same trailer that we had allowed to return to Mexico a week earlier in the same front-wall compartment. The Inspectors and National Guard were ready for this because they had received the intelligence report that the Intel specialists created for us. The cargo Analysis Research Investigative Team was notified and they again coordinated a controlled follow-out.

    Again, they have to give an artificial reason to the driver so he is not suspicious as to why he is being detained at Customs. This is an overhead shot of the Tecate Port of Entry. It is in the remote Otay Mesa mountains, and it is unique in the fact that it has a very small town on the United States side and actually quite a large town on the Mexican side.

    It is about 45 minutes outside of San Diego. This is the road that leads down from Tecate to San Diego and it is very difficult to do a ground-only surveillance from Tecate. It is important for us to have the surveillance helicopter to do the surveillance on this winding road.

    It increases our chance of success on a follow out about tenfold. After a 3-hour surveillance down from Tecate, the trailer was dropped at this auto-wrecking yard which is in National City, California. It was backed into a bay which obstructed both the helicopter's view from the air and agent's view on the ground.

    We had to terminate the surveillance and went into the yard, made three arrests and seized the tractor and trailer. In addition to the three arrests and seizure of tractor and trailer, that business also becomes subject to forfeiture.

 Page 189       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Out of that trailer we seized 1,173.5 pounds of marijuana. And the results of this case to date, we have made four arrests, two trailers were seized, three tractors were seized, one tractor is still subject to seizure, one business is subject to forfeiture, and we seized a total of 3,162.5 pounds of marijuana.

    All of the entities within Customs worked well together on this case and without the cooperation and coordination of all of them together, it wouldn't have been a success, the Office of Investigations, the Southern California CMC, and Inspectors Office of Intelligence Specialists who put together the briefs for us, the San Diego Air Branch which supports us in our surveillance, the Operational Analysis staff and their expertise in the various computer databases, and the California National Guard which assist the Inspectors.

    Since we started targeting these front-wall compartments at the Otay Mesa Cargo Facility, in fiscal year 1997, we have made eight narcotics seizures totaling 8,669 pounds of marijuana. These seizures have an estimated street value in San Diego County of about $12,400,360.

    Thank you.

    Mr. KOLBE. Thank you, very, very much, Inspector Bench, Inspector Davis.

    Does that complete the presentations?

 Page 190       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    [The information follows:]

    "The Official Committee record contains additional material here."
    Mr. KELLY. Yes, sir.

    Mr. KOLBE. Let me begin the questions. We don't have all the Members here, but, first of all, we will try to adhere to the 5 minute rule and that will apply to the Chairman as well in asking the first round of questions.


    We will also be going to the Ranking Member next and following that we will alternate between Majority and Minority Members that are here at the time the gavel goes down. And after that we will go to Members as they come in.

    Let me begin by asking, we have heard some very impressive information. Your testimony and written statements are very impressive, what we have heard from the Inspectors is very impressive, but the bottom line is, can either of you tell us that we are winning the war on drugs today?

    Mr. WEISE. I would never say we are winning at this point in time.

    Mr. KOLBE. Are we making any progress?

 Page 191       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. WEISE. I think we are making progress, but clearly this is a very serious problem and going to take a long, long commitment to resolve it. We have an important responsibility in the Customs Service, and interdiction is, in my opinion, a key component in dealing with this problem. But it is only one component.

    Mr. KOLBE. What gives you hope that we are making progress here? I want to believe it.

    Mr. WEISE. I guess the fact that we are seeing the kind of cooperation between the various organizations that are involved in this effort that we have over the last 3 or 4 years. It gives me some sense of hope that we can work better together than we have in the past and deal with the supply side of this.

    But clearly, I think one of the things that is obvious from the President's commitment and General McCaffrey and others, is that this can't be done with just one side. Unless we can work comprehensively to reduce the demand, we can't resolve it alone. But it is an important component, and as long as we have a bipartisan commitment that we are going to do everything we can to resolve this problem, I think we can make progress. Whether we can solve it overnight, that is not something that is likely. This problem has been too many years in the making. But I think we have a need to have a collective resolve, and I can tell you from seeing the kind of people you heard from today, we have a resolve to do everything we can to keep the drugs from flowing across our borders.

    It is not an easy challenge, but we are seeing some impact, at ports of entry where we are responsible for keeping those drugs from flowing. We are seeing impact in terms of smuggling routes going in different places now. It is a balloon effect. We are seeing more smuggling around San Diego and Brownsville. We are seeing more activity between the ports of entry. So we need to have that comprehensive approach.

 Page 192       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    Mr. KOLBE. Well, I agree we are making it more difficult, and that certainly is one of the things we need to do, but it still doesn't tell me that we are winning the war. And I say this from the same frustration I know you feel and your people in the field feel and probably a lot of Americans feel. This wasn't going to be my first line of questioning, but I notice in terms of the performance indicators that you have, you have some interesting performance indicators—but one that seems the most logical to me is, what is the street price of drugs? You don't even use that. Wouldn't that tell you what is happening to supply and demand?

    Mr. WEISE. There is no question that the street price is a relevant criteria for the success of the overall program. And that is something we are working on with ONDCP to come up with a new measurement. Because to be candid, and I don't want to seem bureaucratic, but in terms of Customs, looking at seizures as a measurement of success is ultimately going to come back to bite us. Because if we are successful in basically making it impossible to smuggle drugs, what is going to happen to our seizures?

    The seizures are going to be way down because they are going to try to go through other routes. So we recognize that seizures alone, arrests, they are relevant factors of measuring performance, but they aren't sufficient. And we are working both internally and collectively with General McCaffrey and others to try to come up with more measures of the success of the overall program. But we can't individually control the price of drugs on the street. It also involves a lot of other organizations that have a piece in that. So we won't be able to measure Customs success purely on that, if you just use that as a Customs' measure of success.

 Page 193       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. KOLBE. I agree, from a Customs' measure. I am looking at the overall thing. In the very brief time that is remaining, let me return and get started on what I wanted to be at least the initial line of questioning, and that is this issue of corruption. And there is kind of a rule of thumb that if there is smoke, maybe there is some fire. And I want to make clear in my dealing with Customs, with people along the border and in my region, I have great respect, and I believe the overwhelming majority of them are honest. But corruption has got to be something that worries all of us, because it absolutely undermines the credibility of any law enforcement agency. One bad apple can do that.

    And I just want you to tell me why you think there has been more attention to this Agency, or allegations, I think that is fair to take, more allegations of corruption than there have been with other law enforcement agencies, and how serious do you think the problem really is?

    Mr. WEISE. Well, it is a very difficult question, Mr. Chairman, and one that has been my greater bone of frustration over the past 4 years. I will just give you a few illustrations.

    When I became Commissioner in May of 1993, there was an instance that had occurred several years earlier that many, both the current Customs employees and some former Customs employees felt was a clear indication of corruption in the Customs Service. This matter had been thoroughly investigated on two prior occasions, once by the Treasury IG's Office and once by the Internal Affairs Office.

 Page 194       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Notwithstanding that, allegations were made not only in that instance but a whole host of people who had information with regard to that one were alleging that there was rampant corruption and they didn't trust the Customs Service to get to the bottom of it. We took the unprecedented steps of obtaining a Memorandum of Understanding with the Justice Department, Treasury Department, FBI and Customs. We asked for a complete review of all those allegations. And they took almost 18 months with a Grand Jury that sat in San Diego, and they came to the same conclusion that the first two did: There was no evidence of corruption on the part of those individuals.

    We have had instances where we have worked cooperatively with the FBI and others, and there are individual cases. It seems to me that there are a lot of folks who jump to the conclusion that because the drugs are getting in, and because they see Inspectors in uniform at the ports of entry, they come to the conclusion that the only way to get it in was to bribe an inspector.


    One of the things we have attempted to do from an operating standpoint, that I touched on, we try to make it as unlikely as possible that a single individual, an inspector or otherwise, will have the final say as to whether a load is going to come in or not. We do that through a number of steps we take.

    I have already talked about doing more activity in the preprimary area. Instead of waiting for that load to get to an inspector in a booth, we have whole teams of people with canines that are roaming.

 Page 195       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    You have seen them along the border before. We do something called a post-primary blitz, where just on a random basis, no matter what the inspector said in that booth, the next 25 vehicles are going over here and going to be lined up, and another team is going to come in and look at them from beginning to end.

    We rotate the people in the booths, not on a very, very frequent but irregular basis, so it is not predictable, so it is very unlikely of being able to predict what inspector is going to be in what booth at which time. Like I said, we can discuss in closed session about a number of things I can't discuss in a public arena.

    Yes, there are continued instances of problems, but it is not systemic. We are looking at new approaches and Under Secretary Kelly has brought somebody in as a consultant, too. He had experience with this individual in the New York City Police Department, and I think that it is a positive step.

    We are looking at other approaches we can take in the Customs Service to not only deal with the actual corruption but this perception of corruption, which is demoralizing to the Customs Service.

    Mr. KOLBE. My time has expired.

    Mr. Hoyer.

    Mr. HOYER. I won't pursue that. But I mentioned in my opening statement, Mr. Secretary, coordination with General McCaffrey. I was very pleased with General McCaffrey's appointment. Because of his training and reputation I think he is very able to help coordinate, obviously not in the line capacity, because we haven't set up the so-called SARS with any real authority, but in a coordinated capacity, all of our law enforcement efforts as well as rehabilitation efforts and other efforts related to the demand side.

 Page 196       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    But in terms of the supply side, the Chairman asked: Are we winning the war? I don't think anyone thinks we are winning the war in the sense that the other side is going to give up as long as there is billions of dollars to be made in this market.

    Having said that, however, the publicity such as, ''The Bleeding Border,'' published in U.S. News and other reports like this, is very concerning to the public in that they think we are not stemming the supply or staunching it with any degree of effectiveness. Toward that end, I am going to talk to General McCaffrey. I would hope that you and General McCaffrey and others in law enforcement coordinate on a very, very regular basis and let the public know the efforts we are taking. Let the bad guys know the efforts they are going to confront.

    When you read stories, as I am sure you both read these articles, of the blatant intimidation and bribery that is occurring in Mexico, the killing of the prosecutor in Tijuana, I think it was the prosecutor, you realize this is a war. I know General McCaffrey doesn't like to refer to it as the War on Drugs, but in this instance, it is a war. It was a war in Colombia and continues to be; it is a war in Mexico and continues to be; it is a war in America.

    I just read that in this city we have more hits on law enforcement officials than any other city in America—targeted killings of law enforcement officials. Unfortunately, too many people don't believe we are as serious—historically it has been unthinkable to take out purposely a law enforcement official because of the consequences if that were to occur. So I think we need to escalate the effort both in actuality of coordination, but also in letting the public know what we are doing, to give them a greater degree of confidence that this government, this administration, this country is determining that we are going to protect ourselves from this assault.

 Page 197       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I didn't mention one agency, but I want to mention FinCEN, a critically important agency. I have been over there and seen their capability in terms of tracking money. Ultimately the goal of all this is to make money. If you track the money and make it more difficult to utilize, we are going to have some success.


    Let me ask you a question that is somewhat specific and deals with hazardous materials. In our conference report we directed Customs to, and I quote, ''work with Operation Respond Institute, the Federal Highway Administration, and the Federal Railroad Administration, in enhancing and implementing computer software to identify HAZMAT crossing the borders of the United States.'' The purpose, of course, in part was to assist fire and emergency response teams when something happens as we see greater NAFTA-related travel, truck travel, train travel.

    Tell me how that is going?

    Or does anybody know?

    Mr. WEISE. I am looking quickly here. I will get a response to you.

    [The information follows:]

 Page 198       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    In the United States, the national North American Trade Automation Prototype (NATAP) processing system displays a HAZMAT indicator at both primary and secondary processing workstations so that federal personnel are aware immediately upon arrival that a vehicle contains such material. In addition, the secondary workstations provide full commercial data on each shipment including the exact description of the goods on board and information on the producer/manufacturer in the event it is necessary to contact them in the case of accident regarding the handling of such goods.

    The NATAP process is also testing a simulation of the proposed ''International Trade Data System (ITDS) which the U.S. is designing to standardize U.S. data requirements and permit U.S. agencies to share prefiled data from a system, like NATAP, for purposes of assessing risk, identifying special needs cargo, as well as those shipments requiring permits, licenses, etc. In this vein, ITDS officials are currently discussing with the Environmental Protection Agency and Department of Transportation the possibility of those agencies participating in designing criteria and interfaces which would effect appropriate treatment for such goods.

    Mr. HOYER. All right. That was somewhat esoteric, I know.

    Mr. Weise, you said the number one priority is narcotics interdiction. Would you clarify where the seizures occur?

    We have had some specific instances today of, excellent work. I congratulate the agents involved. They are a credit to the Service and this committee's confidence in them and funding.

 Page 199       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Would you say these are random or long-term investigations? In other words, how good is our intelligence?

    I know we are going to have a private hearing, you may want to go more definitively into this, but and you've got to be somewhat lucky, we all understand that, but if we have intelligence, if we have got people inside letting us know that those trucks or planes or boats are coming or the people carrying drugs are coming, we are obviously in better shape. How is our intelligence doing?

    Mr. WEISE. Our intelligence is better than it was but not nearly good enough. We have done some things on the Southwest Border, put together what is called ICAT teams. They are interdisciplinary, with intelligence analysts, agents, and inspectors, working with a number of different institutions, that try to get the most appropriate intelligence they can gather but make it tactical and get it into the right hands. But there is absolutely no question in anyone's mind that this is an area that needs a lot more work.


    We now have a restriction, for example. About 6 years ago, a policy was changed in the aftermath of the Camarena killing in Mexico. We had been able to use confidential informants within a 26 kilometer range within the Mexican border.

    We have not been able to do that for the last 6 or 7 years. That has put a real crimp in some of the operable intelligence that would have helped us target some of these containers before they arrived. We are working with intelligence-gathering agencies, DEA and others to try to do better than we have done in recent years, but this is an issue that is on the table of the Mexican authorities. We have requested the ability to go back to using that confidential informant, and it is under advisement now, and we are hoping that it might come to fruition. But it is a problem that does need to be addressed.

 Page 200       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. HOYER. Thank you.

    Mr. Secretary, could you respond to my assertion that we need to have as much coordination as possible?

    Mr. Chairman, it is something I know you are familiar with, but my local law enforcement officials believe that the Baltimore Washington HIDTA, major contribution, is not so much the resources that they get, but the psychology it has created in terms of cooperation between national, State, and local law enforcement. How are we doing in terms of not only law enforcement but DOD and other resources available in this drug fight?

    Mr. KELLY. I think we are doing better than ever before. I have been in law enforcement a long time, and State, local, and Federal enforcement agencies are working better now than ever before. People have realized that you just can't do it alone.

    In New York City, we had, literally, agencies who were not talking to each other in the early 1980s. We put together a Terrorist Task Force which ultimately was the agency or the organization involved with the World Trade Center bombing investigation and other events that happened since that time. So I think there is a recognition throughout the law enforcement community that we have to work together. We are working, I think, much more effectively, you will hear tomorrow, for instance, Secret Service is involved in some 133 task forces throughout the country.

    I think that HIDTA is working well. I had experience with HIDTA in New York City. We have the OSADEF task forces from the several hundred FTE positions in Customs.

 Page 201       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    As far as other DOD, we, quite frankly, are not working probably as close to DOD as we can. There are certain posse comitatus issues that surface with DOD.

    I think Customs is using very effectively the National Guard. I was out on the Southwest Border and, quite frankly, they would be hard-pressed to do what they are doing without the National Guard involvement. So as far as cooperation, working together, there are probably always going to be some turf issues that are human nature, but having worked with Federal agencies throughout my career, it is better now and there is much more recognition now than ever before.

    Mr. HOYER. Thank you, Mr. Chairman.

    Mr. KOLBE. Thank you.

    Mrs. Meek.

    Mrs. MEEK. Thank you, Mr. Chairman.

    I have some detailed questions, and I request unanimous consent from you to submit them for the record.

    Mr. KOLBE. Absolutely.

    Mrs. MEEK. I would like to ask a more general question now, and I certainly welcome Mr. Weise, with whom I worked in Miami.
 Page 202       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We all know that international trade and tourism are growing very rapidly, and Miami, my home city, is a major port and a major airport for both cargo and passengers. Miami International Airport is now the largest international cargo airport in the country, and by most estimates it will be the largest in the world by the year 2000.

    I know that Customs has a lot of responsibilities and that they are a special interest to us in South Florida. What is most troubling to me is a situation I have brought before this committee on the first day it met, and it may not be within your purview, but I think it is within the purview of Customs and DEA and any other Federal agencies that may have some concern over this. What is troubling to me is why do we have the existence of such wide-scale drug sales in the inner-city minority communities?

    It is very wide-scale, pretty much focused or centered in those areas, and it appears to me—I would like to know what kind of studies have you done, what kind of intelligence have you done, to see why that keeps occurring?

    Now, if this is something societal that has happened, and it still is happening, I just cannot get any answers to why there is such a reflow and redistribution. I know Customs is primarily concerned with the border and concerned when the supply comes in from the outside; I think I am talking about within the parameters of the inside where these drugs are. That is my first concern, and I hope a little bit later you can address that for me.

    The other one is the flower industry, which is very, very big in Miami, and the Tomato Agreement, I have had quite a bit of problems in these two areas. Flowers, tomatoes, and most of all drugs, because Miami is pretty much one of the capitals of drugs in this country.

 Page 203       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I have been beaten over the head by voting for NAFTA, but I guess I will continue to be doing that. But the Tomato Agreement involves the Mexican tomatoes that enter into this country. I am told that the number of Customs employees in South Florida has declined, about 13 percent in recent years. And this combination of a rising need for Customs and declining Customs resources has very serious and negative implementations for South Florida. The crime there is escalated by it.

    I am glad to hear Mr. Kelly has worked in New York. Your budget only asks for an overall increase of 1 percent in employment, and 3 percent in funding. No one on this committee will like the question I am asking.

    I am just wondering why is it that we have different parts of the country fighting over such a very small piece of pie. It will end up with a diminution. So my question, my second question is could you provide this committee with examples of how you would provide better service with legitimate international cargo and passengers if you had more resources than you are now asking for, 3 percent and 1 percent?

    Mr. KELLY. If I can just address your first questions, and Commissioner Weise will address the second.

    I was heartened today with the drug strategy that was announced, because it made a major commitment to education, to prevention. The President talked about a $175 million package to involve advertising for young people, but the focus of this 5-prong program, I would say the main piece was education. And I think that is how ultimately they are going to make a difference. We are never going to arrest our way out of the drug problem.

 Page 204       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    You talk about the inner-city situation. I can tell you that in some cities in this country, there has been success, New York being one. And people don't know all the answers as to why things change in various cities, but we did see and have seen shifting drug patterns in New York City.

    For instance, the use of crack is way down in New York City. In other cities—crack seems to be like a 5-to-7-year phenomenon that hits urban areas then leaves, and New York has experienced that.

    There are other cities in this country that are in the middle of that. Now there are signs that it is going down. There are some things that the police can do, and New York was fortunate, had a 25 percent increase in manpower to target certain areas, flood certain areas. So I think there are things that local law enforcement, Federal law enforcement can do, but there is a larger issue here as far as drug use that I think education of our young people is going to be the primary way that we are going to get a handle on the problem of drugs, particularly in the inner cities.

    Mrs. MEEK. I know I don't have much more time. I wish I could agree with you, and perhaps we will have more of a chance to dialogue on this in the future.

    Mr. KOLBE. Thank you, Mrs. Meek.

    Mr. Price.

 Page 205       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. PRICE. Thank you, Mr. Chairman.

    I would like to welcome our guests today and thank them for their testimony, and I would like to turn to some of these trade issues and particularly to focus on the Customs Service monitoring of peanut imports. If I could just take a minute to outline the situation as I understand it, and then ask you to comment.

    You know, of course, that American peanut growers were reluctant to support NAFTA and GATT after their experience with the Canadian free trade agreement some years ago. That agreement did not restrict peanut exports from Canada, because there is no peanut production in Canada, but Chinese exporters realized they could penetrate the U.S. market by transshipping peanuts through Canada.

    When NAFTA and GATT negotiations got under way, domestic peanut growers were insistent on the inclusion of a rule of origin and ensuring that imported peanuts be subject to the same quality controls imposed on domestically produced peanuts, that is, USDA marketing order 146.

    As I understand it, the Customs Service at that time committed to ongoing efforts to ensure enforcement of the import quotas and compliance with the rule of origin and marketing order 146, which would include 10 visits to agricultural processing sites in Mexico, continuing audits of the 10 major Mexican agricultural product exporters and investigations of suspected violators. The service also agreed to assign some 350 employees, including 100 new employees, to country-of-origin enforcement under NAFTA.

 Page 206       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Last year, however, peanut growers got wind of at least seven shipments of peanuts that were not inspected and might have contained peanuts that were grown outside of Mexico. At that time it became clear that Customs agents were enforcing neither the rule of origin requirements nor marketing order 146, because regulations had not been promulgated. I understand the Service undertook what appears to have been a very productive dialogue with domestic growers and that appropriate regulations are now in place. I also see that your budget request contains $5.7 million to bring new technologies into your laboratory and help enforce the country-of-origin rule, so it sounds like some progress has been made.

    I am concerned about this apparent 3-year period of noncompliance and would appreciate anything you could tell me about Customs enforcement of the peanut quotas, rule of origin and marketing order 146.

    Mr. WEISE. Yes, Congressman. We take this issue very, very seriously. We have tried to focus our resources where they can do the most good to the American people and identify the primary focus industries. There are about 8 to 10 industries, one of which is clearly the agricultural sector, where we really do need focus, whatever resources we have on those key areas.

    I can't really respond to you on the record now, but I will, about what has happened in the past.

    I will tell you, as you have indicated and I appreciate your comment to this effect, we are working closely with the peanut industry. We have a number of initiatives, including improving our ability to do laboratory analysis with them. We are working with the U.S. Department of Agriculture on the implementation of the quality of standard order 146 and basically trying to assure that we will not release the shipment until USDA has looked to see that that order has been complied with.

 Page 207       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    So we perhaps have not done as good a job as we should have at the start, but we are on the issue now and working very closely with a wide range of domestic interests. And hopefully you will keep our feet to the fire to make sure we follow through to the satisfaction of the people impacted by these regulations.

    Mr. PRICE. Could you give me information about the status of that commitment made in 1993 to make site visits and to devote at least 350 FTEs to rule-of-origin enforcement?

    Mr. WEISE. Specifically with respect to enforcement, where we have the 350 people, we have fulfilled that commitment. With regard to the specific number of visits on this particular commodity, I would like to get that and submit it to you and be more than happy to sit down with the appropriate staff and discuss it. I don't have that at my fingertips in terms of how many visits we have made.

    Mr. PRICE. Do you have any estimate of the percentage of peanut shipments you are inspecting?

    Mr. WEISE. Again, I will try to get that for you.

    Mr. PRICE. I think it would be helpful to have that information, both the history of your efforts and the current enforcement.

    [The information follows:]

 Page 208       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    Prior to the House vote on NAFTA, the Customs Service met with peanut grower representatives to discuss their concerns on the threat of transshipment of both Chinese and Argentine peanuts and peanut butter through Mexico. As part of these discussions, the Customs Service agreed to perform NAFTA verifications as well as examine shipments of peanuts and peanut butter from Mexico.

    In 1995, NAFTA verifications were done by Regulatory Audit on two exporters of Mexican peanuts. These exporters accounted for 95% of all shipments of peanuts from Mexico. At that time, these companies were found to be compliant.

    Three NAFTA verifications are scheduled for March-early April 1997.

    There is one open investigation on an exporter for transshipping peanuts through Mexico and claiming NAFTA.

    There have been no shipments of peanut butter from Mexico.

    Customs has developed, with the assistance of industry, a problem-solving initiative regarding the transshipment of peanuts. This initiative was begun in January.

    The Office of Laboratories and Scientific Services has been working with industry and our officers in foreign locations to obtain samples of peanuts in order to develop the baseline required to perform trace-element testing in order to determine the true country of origin.

 Page 209       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    This baseline has been developed and this initiative began in January. Our officers have been obtaining samples from imported peanut shipments for the testing and country of origin determinations.

    Mr. PRICE. The main figure in the budget relevant to this, as I understand it, and one of the main increase in your request, has to do with the lab modernization. Could you explain the breakdown of that $5.7 million? What are those expenditures going to be used for and how, precisely, is this related to country-of-origin enforcement?

    Mr. WEISE. Again, I will provide a detailed analysis of that. Apparently, staff has been asked; and we are working on that and will get it to you as quickly as we possibly can.

    [The information follows:]

    "The Official Committee record contains additional material here."
    Mr. PRICE. Am I correct in assuming that the bulk of that $5.7 million pertains to country-of-origin enforcement?

    Mr. WEISE. A significant portion—again, I don't have the breakdown, but a significant portion relates specifically to our ability to carry out the country-of-origin enforcement.

    Mr. PRICE. Thank you, Mr. Chairman.

 Page 210       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mrs. MEEK. Mr. Chairman, will you please go back to Mr. Weise so I can get some answers to the latter part of my question——

    Mr. KOLBE. Mrs. Meek, yes. Ms. Northup is next, but it is true that you did not—the second part of your question did not get answered by Mr. Weise; and I would like him to address the staffing issue. Then we will go to Ms. Northup.

    Mr. WEISE. Thank you. I was just given the data with regard to the staffing. There is no question that we have had to make some difficult choices in terms of allocation of our resources over the last number of years.

    As budgets are getting tighter, obviously, we are all working together to try to get the fiscal deficit in order. We have reduced some of the resources in the narcotics area in south Florida over the course of the last decade or so. It hasn't been a very sharp decline. It has been sort of a gradual decline. And we have been—as resources have been becoming available, as the threat has risen so much on the Southwest border, we have been putting a lot more new resources there.

    One of the things that will help as far as the passenger clearances, is that we have a mechanism under the COBRA reimbursement, the user fees, that we are able to maintain a high level of the resources even in Miami and virtually all of our airports through that COBRA account, where we can not only fund overtime but fund actual additional inspectors when the work is commensurate with it.

 Page 211       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    I think, hopefully, you will find in talking to your people in Miami that at the airports we are pretty well staffed because of this ability to have reimbursement through the COBRA account. We are less able to do it in some of the smuggling arenas as well as the cargo arena.

    We will be—with this budget that is before the committee be able to invest 119 additional positions in south Florida, and we will move as swiftly as we possibly can if the committee and the Congress approve the appropriation request that is before them to get those 119 positions down there.

    We certainly will constantly attempt to work with you, Ms. Meek, on trying to ensure that we are investing our resources as effectively as we possibly can; but, clearly, we do not have the capacity to give all the various areas of the country the resources that they would always like. But we are trying to be held accountable that we are making wise business decisions in terms of prioritizing the demands on our resources.

    Mrs. MEEK. If I may respond.

    Mr. KOLBE. Very quickly, if you might.

    Mrs. MEEK. I just want to call your attention specifically to the floral importers and the tomatoes that has caused us quite of bit of problems, and I wanted to have you understand that and address that today.

    Mr. WEISE. Okay, I am very familiar with the tomato agreement and very familiar with floral imports into south Florida, but I am not sure on the floral imports what specifically you want me to comment on.

 Page 212       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mrs. MEEK. The inspection.

    Mr. WEISE. The inspection process and the delays caused by it?

    Mrs. MEEK. Yes.

    Mr. WEISE. Okay. One of the problems we face, as you know, in south Florida is smuggling cocaine in flower imports from Colombia became a popular method of smuggling. We have worked very closely with the floral industry to try to ensure that we can do our job of ensuring that drugs are not entering this country without unduly impacting their business interests, and what we have done is entered into a partnership where they have taken it upon themselves to do a lot more of the investigation and the inspecting and the x-raying of the flowers as they go into their shipment, as it is loaded onto the plane.

    We work very closely with them to ensure that they have sufficient quality controls, and we still do random and spot checking on that, but we are now able to allow most flower imports to come through Florida more quickly than we were able to in the past. We still have to be cognizant of the threat of smuggling in flowers.

    The tomato agreement is an agreement the United States entered into with Mexico. We are not policy makers in Customs. We have the responsibility of enforcing that agreement, and we are trying to do the best job that we can to carry out the spirit and the intent of the tomato agreement.

 Page 213       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mrs. MEEK. Thank you.

    Mr. KOLBE. Thank you.

    Mrs. Northup.

    Mrs. NORTHUP. I would like to get back to our relationship with Mexico and ask you some specific questions about what your relationship is with the overall administration in their effort to deal with Mexico on the drug questions.

    I think it is pretty clear that we have done a lot on this side of the border to help Mexico, to be a partner with Mexico, to deal with the fact that they have a lot of drugs that are coming into this country, and I could not agree more that we have to reduce the demand. Luckily, I am on a different committee where we are talking about what those appropriations are to reduce the demand, but I want to talk to you about reducing the supply, which is the other side of the equation.

    Unless Mexico wants to be a partner with us, all of our efforts, it seems to me, get to be—have a declining amount of significance. They have—I understand when we were training some of their people in drug enforcement, and we had to stop that, when they no longer allowed our agents and officials to carry a gun when they were on the other side of the border. They have failed to extradite and to actually arrest people, notwithstanding the fact that we have incurred the cost and the effort to identify the agents on their side and asked them to extradite those people into this country. So it seems like the real effective measures, the way they could show us concretely that they are going to cooperate, they have failed to take those actions.

 Page 214       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    It is hard when you are talking about numbers—well, you know, is it more? Is it less? That is hard to know. But it is clear that their actions, they failed to take the exact steps they could take to be a cooperative partner. What does that say in terms of whether or not we cooperate with them in terms of NAFTA or, you know, even if we go on and allow still the free trade to flow, there is—we could do it through a waiver process. Are you involved in those discussions with the administration?

    Mr. KELLY. We are involved to the extent that we provide information from our bureaus. We are talking specifically now about the certification process.

    Mrs. NORTHUP. I am talking about recertification, right.

    Mr. KELLY. We provide information to the State Department, which is the lead agency that compiles this information; and, of course, it is given to the President for a decision with a recommendation. We don't have all—the totality of the information; but as far as Treasury's operations are concerned, we have seen cooperation in the area of money laundering where we have criminalized money laundering. We are in the process of helping them, installing a suspicious transaction reporting system with some computerization.

    We are concerned about the fact that, yes, agents are not allowed to be armed in Mexico, our agents. We are also concerned about——

    Mrs. NORTHUP. So we are no longer helping to train them, is that right?

 Page 215       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. KELLY. To the best of my knowledge, no.

    We are also concerned about the fact that our pilots, Customs pilots are not able to be armed in the area. These things have been put on the table with the Mexican government. They are in the process of being discussed. But as far as the totality of information that is involved in the certification process, I am simply not privy to it.

    Mrs. NORTHUP. Well, the problem is, you can put everything into place, but when you have official corruption to the extent and level you have in Mexico, it is not being carried out.

    I think that actually they have extradited three. There are 150 people they have that they have refused to extradite. That is a concrete, measurable action.

    When you have official corruption at the levels they do with respect to drugs, unless we can help carry out policies on the other side of the border, in effect they are not doing everything that recertification requires. And I am just—you know, I am concerned that we have an agency that is out there every day on the front line trying to solve this problem and where we need—the question is, are we going to have the political support to see this through?

    I am interested in knowing what your agency has to do with carrying out or discussing the actions at the highest level. If you are down here in your slot and you are working every day, that doesn't necessarily bring on the political support you need to be effective.

 Page 216       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. KELLY. Well, as far as certification is concerned, you raise some legitimate issues. This issue of corruption and violence and some of the authorities that we want as far as immunity for our people who are operating in Mexico, all of these things are in the equation; and I am not privy to where this decision will ultimately go.

    Mr. KOLBE. Mrs. Northup, I might just suggest that these are questions you might want to repeat for General McCaffrey.

    Mrs. NORTHUP. I will.

    Mr. KOLBE. On the second round, let me defer to Mr. Hoyer. I know you have got another appointment.

    Mr. HOYER. I am going to be here through your time. Thank you.

    Hard Line and Gateway, Southwest border, south Florida, Caribbean, you have a new initiative. You were asking $23.4 million for south Florida. How does that compare, to or supplement Gateway? Tell us about that.

    Mr. WEISE. It complements the two operations. As we started hardening the Southwest border, what we saw—and we have to be careful of drawing any causal link,—but we saw in south Florida a doubling of our seizures of cocaine over the previous year as we have tried to clamp down in various areas.

 Page 217       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    In Puerto Rico we have Operation Gateway, because Puerto Rico is part of the Customs area of the United States. Once you get the narcotics into Puerto Rico, it is like getting it into a State in the mainland United States.

    So those are the areas we had to clamp down. As we clamped down, we noted that we shouldn't lose sight of the fact that the smuggling has never left south Florida. A lot of people were frustrated by hearing it had moved to the southwestern United States. It has always been fairly rampant, but it is even larger now, that dramatic increase——

    Mr. HOYER. Chairman, let me just interrupt for a second, to note that this is one of the reasons this committee put HIDTA in Puerto Rico.

    Mr. WEISE. Exactly. We call this our southern tier strategy. It links Hard Line with Gateway, and covers the southern tier from San Diego to San Juan. We want that to be one hardened area, so that we can manipulate, have flexibility, move our resources as quickly as we possibly can to be able to be responsive to where the threat is coming and try to have that as locked down, as hardened as we possibly can, throughout the entire southern tier. So they are very much linked and very complementary.

    Mr. HOYER. I would like to hear how our officers are faring in terms of their own safety. Obviously, Hard Line—you mentioned some things we have done in terms of the obstacle courses like here at the Capitol so you can't go straight through. Tell me about officer safety. Has it been enhanced?

    Mr. WEISE. Yes, indeed it has. And I guess we should ask them if they disagree with anything. I say to shake their head violently. Otherwise we will call them to the table, whatever you prefer.

 Page 218       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    But one of the things we did with the expenditures from Hard Line was provide bulletproof vests for virtually every inspector along that border.

    Another thing is we put in increased lighting. Because part of Operation Hard Line was to move more into what we call the preprimary area, before you get to the inspection booth. We have enhanced the lighting in that area to meet concerns about officer safety in a number of different locations.

    Unfortunately, we have another experiment—you have the bollards here in the Capitol that seem to work quite well for you with the amount of times they go up and down. We experimented in El Paso with pneumatic and hydraulic bollards, so the vehicle could not move forward until the bollard went down. Unfortunately, we impaled a number of innocent vehicles.

    Mr. HOYER. We have had a senator or two and representative or two that have had that same experience.

    Mr. KOLBE. But they learned. It hasn't happened in the last several years.

    Mr. WEISE. But we take officer safety very, very seriously; and we are working for an environment in which they can excel and can be as safe as they possibly can. Just having a reduction in the instances of port runners has had a tremendously positive effect on officer safety when we eliminated that as a mode of smuggling. It has helped tremendously.

 Page 219       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. HOYER. The last question relates to Mrs. Meek's question. You have FTE cuts. Those are basically vacant positions.

    Mr. WEISE. Yes, for the most part.

    Mr. HOYER. They are vacant, because you don't have the resources to fill them.

    Mr. WEISE. That is correct.

    Mr. HOYER. So they are a cut of no people.

    Mr. WEISE. That is correct.

    Mr. HOYER. What is the relationship between—and I should perhaps know—resources in terms of people, Mr. Commissioner, available and your operational infrastructure, your infrastructure? Are we shifting any priority? Will you consciously be spending money on infrastructure capital expenses as opposed to people expenses?

    Mr. WEISE. The significant portion of our budget is people. That is the heart and soul of our budget. That really is where most of our expenditures are.

    We know if we are going to be able to face the challenge of a tremendously increasing workload—no matter how you measure it, passengers, entries, commercial entries or the threat of drugs, the threat is going up, the volume of work is going up, and the dollars are not likely to go up commensurate with that. So we know we have to invest in technology. We know we have to find new ways and new approaches to do the job more efficiently and more effectively.

 Page 220       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    One of the examples of that, on the Southwest border and Northern border as well, are automatic license plate readers which are going to be helpful in doing a more effective job. It doesn't require the inspector to key the license plate number in each time the vehicle pulls in. That not only reduces the time for the inspector but allows him—instead of going through the exercise for each car that pulls up keying it in, he can from the beginning, as that is being done automatically, begin to make eye contact with the driver, begin to look at some of the enforcement issues.

    That is going to be helpful to us in the long run, and that is the kind of thing that we are trying to complement our resources and investment and people with technology so we can help them do the job more effectively and safer.

    I can get you the detailed breakdown between the people and the equipment.

    [The information follows:]

    "The Official Committee record contains additional material here."
    Mr. HOYER. Thank you.

    Mr. KOLBE. Mrs. Meek, do you have another question?

    Mrs. MEEK. Yes, sir. I don't think the Commissioner—at least, maybe I did not communicate it well, but I don't think you understood what I meant in terms of the flowers and the tomatoes.

 Page 221       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    I will just take the flowers as an example. I am very concerned about the dumping that happens in south Florida with the flowers. For example, you have a levy that you placed on, according to what my people tell me, on importing goods that come into south Florida from places that have been guilty of dumping before.

    Mrs. MEEK. In 1986 Commerce found out that carnations, imported carnations, were being dumped; and because the government found this out, the government had to determine the amount of dumping each year for each import transition.

    Now, in south Florida, it is my understanding, there are 50,000 to 60,000 flower import transportations a year. So you place a levy on that, those transportations, and so what happens? You have the deposit with Customs, the importer does, at the time the carnations are imported to cover the potential anti-dumping tariff that Commerce has. After the correct amount of anti-dumping tariff is calculated for each carnation transaction, the excess funds are returned to the importer.

    Now, I am told that in south Florida, importers of carnations have been waiting for many years to get this excess amount deposit returned, because Customs does not have enough resources to calculate just how much each refund should be.

    Would you clarify that or explain when they will get their money or if they will ever get it?

 Page 222       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. WEISE. Congresswoman, the only thing I can commit to you, I was not aware of that as an issue. I promise you I will look into that immediately and get back to you with a response. I was not aware that we are being dilatory in collecting the dumping duties on those flowers. I will look into that immediately and get back to you on it.

    [The information follows:]

    "The Official Committee record contains additional material here."

    Mrs. MEEK. Thank you. Mr. Chairman.


    Mr. KOLBE. Let me, if I might, go back to where I left off on the corruption issue, just pick that up in here. Let me just ask you about your internal affairs operation, that you have, and I will follow up on this with Mr. Kelly on the Office of Professional Responsibility. Tell me a little bit about how you staff and how you pick people for that. Do you think it is sufficiently independent and divorced from the Customs Service as a whole so that it can act in an independent fashion?

    Mr. WEISE. I do Mr. Kelly and I spoke, and I welcome a full review of someone who has a strong history in an internal affairs operation to take a comprehensive look at our operation and make recommendations.

 Page 223       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    But I have given an awful lot of thought to this. Early on, when I first became Commissioner, there was an issue as to whether or not we ought to change the way the internal affairs office has historically been staffed and that is by, bringing in experienced investigators from the Office of Investigations or whether we ought to change that policy and practice and move to setting up a completely independent, autonomous entity that would be staffed by people from the outside. I gave that an awful lot of thought when I first became Commissioner and ultimately decided that this was the right approach for the following reasons:

    One, it seems to me that because of the sophistication that is necessary in order to do a full, thorough investigation of someone who has allegedly been corrupt, particularly someone who is a law enforcement officer themselves, they may well be rather sophisticated. We need to have experienced investigators who have demonstrated on the job that they have the kind of experience to really get the job done and get the job done well.

    There is a disparity in terms of the journeyman grade level. A journeyman investigator in the Office of Internal Affairs is a GS–13; whereas one in the Office of Investigations is a GS–12.

    What we have done over the course of the last 3 years is to work very hard to ensure that there is enough incentive to go into the Office of Internal Affairs, not only with the additional grade and the pay that one can get, but to try to professionalize the operation so that one could decide this would be the kind of career that they would wish to pursue.

    My sense is that the internal affairs office is autonomous and independent notwithstanding the fact that it is staffed with people who had spent earlier portions of their career in another office like the Office of Investigations. I have not seen any evidence that would lead me to believe that they have been anything less than completely impartial as they have reviewed the matters that have been placed before them.

 Page 224       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. KOLBE. But they are taken from within the ranks of the agents?

    Mr. WEISE. Yes.

    Mr. KOLBE. They are. I would be interested in knowing a little bit about the criteria an officer has to meet in order to become an internal affairs agent.

    [The information follows:]


    A criminal investigator must be at or eligible for the senior level (GS–13) to be considered for a Internal Affairs (IA) position. The IA candidate must have a strong investigative background, a background free of serious integrity violations, and the approval of current management within the chain of command.

    Mr. WEISE. I would be more than happy to spell out all the detailed criteria; but suffice it to say, for purposes of right at this moment, that we want them to be the best of our best, the most experienced, the ones with a track record of doing outstanding investigations in their prior experience.

    Mr. KOLBE. The best of the best. They have been around for a while, and they would know the people that they are investigating; right?

 Page 225       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. WEISE. There has from time to time come up—that situation has arisen, but generally what we try to do is there would be a recusal if anybody has been asked to investigate someone that they had any direct involvement with, and so we try to minimize the likelihood of any situation like that developing.

    Often these people, when they get the promotion to go into the Office of Internal Affairs, they don't do it in the same city in which they have been operating. They move from one location to another so that there is less likely to be that situation that you have talked about.

    Mr. KOLBE. That raises just a small question. Your internal affairs are in how many different locations? Do you have them in every location where you have Customs?

    Mr. WEISE. No. We have how many offices?

    Mr. KOLBE. How many Offices of Internal Affairs do you have?

    Mr. WEISE. Twenty different Offices of Internal Affairs. Do we have six—is it six or seven? We have five major offices that have 16 suboffices. So there are 21 separate Offices of Internal Affairs.

    Mr. KOLBE. Last year, last September I think it was, the GAO issued a report about recommendations; and I think they had 51 recommendations. Thirty of them I think you implemented, and I think 19 are still unimplemented. Is that an accurate assessment?

 Page 226       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. WEISE. It is not accurate to say they are completely unimplemented. What that report indicated is that 31 have been completely implemented and 19 are either not fully implemented or unimplemented. I would be glad to provide for the record the specific status of those.

    Some of those have been partially implemented. For example, up to five recommendations that related to this recommended the frequency with which one would do a full inspection of a particular operation. It recommended that we do it every 2 years. For budgetary reasons, we do it every 4 years.

    There are other issues like that that I would like to provide a detailed response to for the record, that we have implemented partially and in our judgment implemented the full spirit of what the recommendation was while being as cost-effective as we could be in carrying out that implementation.

    Mr. KOLBE. In a follow-up, would you give me some indication of those you have found to be the most effective and, also, if there are any you intend not to implement at all because you have rejected them as being ineffective or for whatever reason it was not possible to implement them?

    Mr. WEISE. Yes. I will give you a detailed response on every one of the 19 that have not been fully implemented.

    [The information follows:]

 Page 227       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    "The Official Committee record contains additional material here."

    Mr. KOLBE. I am on record as having said that I think one of the problems with Customs is the fact that you hire and train and place people locally. I know from my own communities along the border that that seems to be an invitation for trouble when you—in small communities, when you have somebody that is hired there and they have family on both sides of the border, as you know. It is an invitation for some kind of trouble, it seems to me.

    I know that rotating Customs inspectors is a costly proposition, but how serious—how much attention are you giving to that issue and do you think that is something we are going to have to do more of?

    I mean, we recruit people into the military, and they may end up close to home, but that is not really a primary consideration of where we assign them and place them. But it seems to be the primary consideration in the hiring of Customs agents. Would you comment on that?

    Mr. WEISE. Congressman, this is an issue that has surfaced over many years. You know, we have already alluded to the cost factor. In order to implement a full rotational policy it would cost roughly $60 million. I look at it as the head of an organization with very scarce resources, and we have to again do a cost-benefit analysis.

    Clearly, without doing a full examination of the issue, it would seem natural that the kinds of relationships that you talked about may lead one to conclude that there may be a higher risk of integrity problems. I don't think that ever has been fully proven. But the bottom line on this is that this issue—I have once again asked for a full review of this. The staff is taking a look at it.

 Page 228       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    But the thing I want to come back to is that there have been reports in the press that this is now under advisement, and certainly I have asked the staff to take a look at it, and already you have seen kind of a demoralizing reaction by a lot of the people in the field. The fact that I am even looking at it somehow has cast an aspersion on the entire workforce along the Southwest border.

    I want to continue to come back to the statement I made earlier. I believe that the integrity of the Customs workforce is a very solid one, that there are again individual isolated incidents of corruption, and this is one of the issues that we ought to take a serious look at. But we should look at it with our eyes open, looking at all the implications of it from a cost standpoint, as well as how much of an effective tool would that be for the dollars that we would need to spend and what would we need to forego to have those dollars available, when we could use them to deal directly with some of the—the drug problem?

    So my bottom line is, I haven't closed my mind to it. We are taking a look at it. But I remain to be convinced that that is worth the cost in terms of the results that we would get. Because I continue to believe that the corruption problem is very small, not very large.

    Mr. KOLBE. Well, I guess that goes to the heart of the issue then. I certainly hope you are right. But if you believe that the corruption problem is isolated and small, then steps to deal with the problem don't seem that important. Do they?

    Mr. WEISE. Well, the frustration that we face is, notwithstanding my belief and the various entities that have come in and looked at it, that have reconfirmed that as a fact, there continue to be portrayals in national magazines and in the press to the contrary. This has a destabilizing, demoralizing effect, so we can't just ignore it.

 Page 229       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We need to continue to work diligently to make sure that we are looking at every avenue on how we can make the situation—reach the point that the fact and the perception is such that we have a workforce with a high degree of integrity. That is my feeling, but we need to work harder to make sure that that is the perception of everyone that is involved in this issue.

    Mr. KOLBE. I don't think you answered my earlier question on that. Why do you think the national media has singled out Customs for this?

    Mr. WEISE. Well, the answer I gave you is not a satisfactory answer because I really don't know the answer to that question. Nothing is frustrating me more.

    I have seen reports with the same old information going back a long way with nothing new, but yet they keep getting repeated over and over and over again without any apparent new factual basis for the reports.

    We had an instance, for example, where a senior official of the Customs Service was maligned in an article that said that he had accepted a bribe. Subsequent to the printing of that article, the individual who made the accusation against the customs individual was subject to a lie detector test on the part of the FBI that was doing the investigation; they found that the individual failed the lie detector test miserably. He later admitted to making up the entire story and was actually arrested for providing false information.

    The subsequent article that came out on that made this individual out to be a hero or something. You know, it didn't come to the defense of the Customs officer who had been falsely accused.

 Page 230       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I can't understand why the press is reporting this issue in this way. Nothing has baffled me more.

    Mr. KOLBE. I have a couple of areas of questioning, including coming back to the Office of Professional Responsibility.

    Mr. Price, we have all had a second go around on questions. Do you have a couple of other questions?


    Mr. PRICE. I would like to raise the matter of child pornography detection. You list as one of your major accomplishments in the past fiscal year a renewed emphasis on child pornography investigations and the establishment of the International Child Pornography Investigation and Coordination Center. This has led, you conclude, to an astounding increase in the detection, apprehension and conviction of international violators.

    I wonder if you could fill that out a bit. What are some of the indicators of this success and what are the implications for your future plans and for this budget request? How is it reflected? How is your experience reflected in this budget request?

    Mr. WEISE. Well, Congressman, this is an area where it is a bit of a stretch of the traditional jurisdiction of the Customs Service. When one thinks of child pornography, they don't readily think about Customs and our association with that issue. But it is one that I am very proud of because we have found that much of this child pornography is being transported across our borders, and that is originating overseas and coming into the United States.

 Page 231       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    We began to take an interest in this, and clearly I can tell you we don't devote nearly as many resources to this issue as we would like. As a matter of fact, we have three full-time people in an operation at headquarters that do this on a full-time basis.

    But in terms of the satisfaction of the people who have been involved in these cases—and these three individuals are kind of a full-time clearinghouse and work with a number of different organizations to get this information, but what we find is a great deal of receptivity. When leads are generated those three send them out to the field, and there is great follow-up and a lot of satisfaction when you bring the perpetrators of this kind of crime to justice. But we have also developed a good deal of expertise, and other organizations, such as the FBI and others, come to some of the people in Customs who have developed an expertise.

    I would be more than happy to provide for you for the record the details on the number of increase of cases, but I am just looking quickly. Dedication of additional resources in the establishment of this effort has resulted in increased arrests, searches and seizures by Customs agents in fiscal year 1996 to this effect: Total searches up to 227, that is an increase of 220 percent; seizures 255, which is an increase of 67 percent; and arrests 120, which is an increase of 186 percent.

    [This information follows:]


    Customs enforces the Child Protection Act and investigates the trafficking of child pornography into and throughout the U.S.

 Page 232       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Child pornography is a priority for Customs that has national impact.

    In FY 1995 and 1996, Customs worked 612 and 809 child pornography cases respectively.

    Customs agents in San Diego arrested an arrival from Mexico for possesson of child pornography which resulted in the seizure of 250 commercial video tapes.

    A mail parcel was intercepted in New York by Customs agents which resulted in the seizure of over 1,500 videos and magazines of child pornography.

    There are currently 5 major child pornography operations ongoing. Three of them involve the Internet.

    Statistics in all areas of child pornography enforcement were up in FY 1996; searches involving computers, total searches, arrests, and man hours were up over 150 percent.

    Customs has established the International Child Pornography Investigation and Coordination Center (ICPICC) which is staffed by special agent experts in child pornography. The ICPICC assists the field with cases and coordinates Customs international efforts to combat child pornography.

    All leads developed from tips, undercover and other investigative work are referred to the appropriate office for action and follows through.

 Page 233       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    But we still are constrained. Because if you have a domestic child pornography issue, it is not within the jurisdiction of the Customs Service to get involved in that. So we work closely with other law enforcement organizations, particularly the FBI, on this very important matter. But we don't have the full jurisdiction on this matter. But the jurisdiction we have, where it is being brought across our borders, we take this issue very seriously.

    Mr. PRICE. And those increases are covering what time period?

    Mr. WEISE. That is in fiscal year 1996, compared to 1995.

    Mr. PRICE. Compared to the previous year?

    Mr. WEISE. Yes.

    Mr. PRICE. Well, how do—those three FTEs, they are all included in this international child pornography investigation and coordination center?

    Mr. WEISE. That is correct.

    Mr. PRICE. That is located——

    Mr. WEISE. We call it part of headquarters; but it is located out in Reston, Virginia.

 Page 234       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. PRICE. How does a case typically get generated?

    Mr. WEISE. There are a number of ways. Primarily, because we have begun—not begun but over the years have developed a reputation for our involvement and interest in these kinds of areas, that more often than not they come from a law enforcement official, domestically or abroad, that comes upon information and then they provide it to us.

    We take a look at the information provided to us, try to do an assessment as to whether it involves our jurisdiction of being—involving any kind of importation. If so, we put it out to our respective field offices to further pursue this. If not, we work very closely and provide it to the FBI or other appropriate law enforcement, State, local or Federal law enforcement organizations, to pursue it.

    I think primarily these cases have grown out of some publicity about some of the positive cases that we have made, and there has been a recognition amongst the law enforcement community that we have some level of expertise in this area.

    Mr. PRICE. You have expertise; but, as you stress, you do not have—you have shared jurisdiction.

    Mr. WEISE. Yes.

    Mr. PRICE. And shared responsibility. Does this experience lead you to believe that you could profitably expand this operation in any way? Is it reflected in this budget request? What are the implications for our deliberations of this success story, as you describe it, the kind of constructive role this small group has been able to play?

 Page 235       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. WEISE. Yes. Well, the budget that is before you, Congressman, does not seek to expand this at this point in time.

    One of the things that I think people lose sight of is the breadth of issues that the Customs Service is involved in. I think often people consider—when they think of Customs, what comes to mind is the inspector in uniform at the airport that is accepting the baggage to check when they are returning to this country. But we like to help people, particularly the people who are involved in shaping our budgets, to understand that there is a much wider area of issues that we are not only involved in but providing some success with, in this case, limited expenditure of resources.

    We are not at this stage asking to beef that up because we are working very closely with the FBI. Our office in Virginia works closely with headquarters and the unit in the FBI that does these sorts of cases, and we are developing a good, solid exchange of information to try to make sure that domestic cases don't go unprosecuted. We try to do our best to investigate thoroughly and prosecute any case that has an international tint to it.

    Mr. PRICE. Thank you. Thank you, Mr. Chairman.

    Mr. KOLBE. Mrs. Meek, do you have another question?

    Mrs. MEEK. No.

    Mr. KOLBE. We have gone past the time we have allotted for this. Can you stand still for two more questions from me?

 Page 236       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. KELLY. Sure.

    Mr. KOLBE. One on the Office of Professional Responsibility. We created this office—this subcommittee created it last year—with a $1.5 million appropriation. The purpose was to ensure that the Treasury's law enforcement bureaus had adequate oversight of the internal operations. Similar—I think it is safe to say, similar to what the Justice Department has in its own Office of Professional Responsibility. At least that is how we envisioned it.

    At the same time, Secretary Kelly, you have indicated that you are going to increase—plan to increase your staff from 34 to 74 FTEs, and it appears that the plan that you submitted would use these funds to do that.

    Now, since that is your area of responsibility, there is nothing inherently wrong with using the money within your organization to do just that; but, as we look at your plan, it doesn't appear to us that it really is doing what we had intended because it is more liaison with the bureaus and very little in terms of direct investigative responsibilities for these people that you had indicated that you would bring on. And I understand you are currently revising the proposed organizational structure for the Office of Professional Responsibility. Is that correct? And, if so, do you intend to submit a revised plan to the subcommittee?

    Mr. KELLY. Yes.

    Just let me correct something, Mr. Chairman. The FTE is—provided by the appropriation is 13 people. We had an increase of 13, not the numbers that you said that were greater.

 Page 237       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. KOLBE. No, but I think you, in discussions with the committee, had indicated you had a plan eventually to increase the FTEs in your offices.

    Mr. KELLY. We had a plan, but obviously it wasn't funded and it wasn't approved by main Treasury. So we are looking to use this component to increase our staff.

    I believe that the immediate plan does do what the committee directed, and that is to pay particular attention to the internal investigative components or processes of the bureaus. As Commissioner Weise spoke about, as a temporary measure we brought someone on to take a look at the issues of the staffing and training and resources for internal investigations in Customs. What we would like to do with—a part of this OPR piece is to have someone permanently on board to do that, to look at training, to look at the crosscutting issues that go across the bureaus.

    If you look at that organization chart, down in the lower left hand corner, those are the positions that we are looking to bring on board. Where you see bureau liaisons——

    Mr. KOLBE. Right.

    Mr. KELLY [continuing]. What I envision that to be is, in essence, almost a special interest desk, not unlike what you have—maybe it is a bad analogy but similar to the State Department. There are so many issues that involve the bureaus that we simply don't have enough information to adequately make policy to deal with other agencies as far as—agencies outside the Treasury, as far as the capabilities of Treasury enforcement entities and also to advocate for our bureaus. We are expected to advocate both internally for bureau programs and externally to OMB and other entities.

 Page 238       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    I see those positions as, in essence, gatherers of information. And if you look down there, the group below that, that would be, in essence, an inspection function. We are very cognizant of the role of the Inspector General. We are not looking to do direct investigations on our own. We are looking to ensure, as best we can, that we are performing oversight and ensuring that the bureaus themselves are properly staffed in critical areas.

    Mr. KOLBE. Well, I think your comments then confirm exactly the concerns this subcommittee or this committee has had. Advocating for the agencies, gathering information is clearly not what we had thought of as the Office of Professional Responsibility.

    Do you think that is consistent with what we had established?

    Mr. KELLY. If you read the report language, I think it is consistent.

    Mr. KOLBE. Well——

    Mr. KELLY. But it is also something, I believe, that we need to properly perform our oversight function, that information. The premise——

    Mr. KOLBE. You used the word ''advocating'' though.

    Mr. KELLY. Sir?

 Page 239       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. KOLBE. You used the word ''advocating.''

    Mr. KELLY. Well, advocate in the sense that we need knowledge both to perform oversight but also, where it is necessary, to bring arguments or bring positions to the fore.

    Mr. KOLBE. Well, as I—I have read the report language and the recommendation language, and I don't think it is consistent. This is something you and I are going to have to thrash out, obviously. But we will have some more discussions about that with the Minority Members as well, the Ranking Minority Member.

    But then, based on what you have just said, it doesn't sound like you are going to revise the organization.

    Mr. KELLY. Well, we revised the organization.

    Mr. KOLBE. That organization?

    Mr. KELLY. That is a revision.

    Mr. KOLBE. This is the revision?

    Mr. KELLY. What we have not done is the position description submission of those.

 Page 240       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Mr. KOLBE. We have to see that then before we have further discussions.

    Let me just ask you this then—maybe this will help clarify it for me. With regard to the allegations of corruption—let me make it clear I am saying allegations of corruption—in Customs along the Southwest border, how would you see this office dealing with that or having anything to do with that?

    Mr. KELLY. Yeah. First, I would use the office to do an examination of the capability of the internal investigative organization, say, in Customs, which is what, as I say, through a consultant we are doing now. But I see that as a permanent position.

    I don't see ourselves doing investigations. In fact, we are—as you state in your report language, we are not like the Justice Department, which has lots of attorneys in a criminal division and the civil rights division. We don't—the Office of Professional Responsibility in Justice looks only at attorneys and misconduct of attorneys. It doesn't do broad-based investigations and, indeed, in the report language it talks about the—to be sensitive to the IG's role. So I would not look to do investigations.

    However, one of the concerns that was voiced in the report is that we didn't have a body of people to do in-depth investigations. Waco, good old boys, required bringing people on board.

    So in the event that a major investigation of that sort was needed, then you would have, in essence, what I see as the OPR component, able to do those types of investigations.

 Page 241       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. KOLBE. It doesn't appear then, from your description or this chart, that you would have anything that would be devoted really to the issue of the Southwest border. I mean, they are liaisoning with each of the agencies; but you wouldn't take a portion of this and really focus it on where a particular problem might be in the law enforcement area?

    Mr. KELLY. Well, we could. We would do that perhaps through this internal investigative inspector that we would have. But it doesn't envision a geographical focus at this point in time.

    Mr. KOLBE. Two other questions. I said I had two, and I have thought of one other, I will make them very quick.

    You know, your statement makes the point that Customs is the front line of the war on drugs, and I think that is true. But you look at the funding, and it doesn't reflect that.

    I mean, when you look at what Justice gets, it is—in every case if you look over the last 3 years it has doubled, in almost every line item it has doubled what we have given to Customs. And over the last year, in this budget, you are up 5 or 7 percent. Well, INS is up, under the goals, by 21 percent, 11 percent, 13 percent, 15 percent; double that amount.

    How do you explain this? I mean, if Customs is at the front line, are you losing in the fight within OMB? Maybe Mr. Kelly is the one to discuss this; but, Mr. Weise, let me ask you: Are you losing the fight with OMB to get more of the resources directed here? I am not sure you can answer that question.

 Page 242       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. WEISE. I am thinking real hard, Congressman.

    We have tried to act responsibly in putting forth budgets. We know that there are efforts under way, a commitment between the administration and the Congress, to try to reduce the fiscal deficit; and we have tried to act responsibly. We have tried to, in effect, take a look at our organization and find out where we could create greater efficiencies within our organization that would motivate us to completely restructure, reorganize ourselves, look at more technology, look at ways we could do a more effective job even with static or marginally increasing resources. We feel that we have done a credible job at that.

    We have not been, frankly, putting forth requests for large expansions of our workforce because we have been cognizant of the environment, the budgetary environment in which we are operating. Clearly——

    Mr. KOLBE. But this Congress and now this administration has made a very clear commitment to law enforcement and particularly the drug interdiction effort.

    Mr. WEISE. Well, it has been fairly clear that, you know, in the political environment, both in the Congress and in the administration, the issue of illegal immigration has been a very, very hot issue; and so I can't begrudge—the Immigration and Naturalization Service, as the Border Patrol has been beefed up significantly. They are primarily responsible, for the Southwest border, between the ports of entry. There is a vast expanse of 2,000 miles that needs to be addressed.

 Page 243       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    It would have been nice to have us go right along with them, but we have tried to act responsibly and do the best we can with the resources we are provided. We think we have had responsible budgets, and we are trying to do the best we can.

    Mr. KOLBE. How many new agents will you add in this coming fiscal year with this budget?

    Mr. WEISE. Well, in the current year, fiscal year, we have 657 positions that we are in the process of putting on, from the fiscal year 1997. From this one, it is 119 additional ones.

    [CLERK'S NOTE.—Agency later submitted ''some of which are agents'' for ''from the fiscal year 1997.'']

    Mr. KOLBE. 119?

    Mr. WEISE. 119. Those are inspectors.

    Mr. KOLBE. Mrs. Meek.

    Mrs. MEEK. I just want to agree with you on the question you are asking. I guess you will call me the tomato lady after this hearing is over, but I have a strong interest because the United States signed the suspension agreement with Mexico, if you remember. We had quite a bit of trouble throughout the years with the department of Commerce and Secretary Kantor trying to be sure that the suspension agreement was done properly.

 Page 244       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Now, Customs, they come in—you have a station in Arizona—I can't pronounce it—Nogales.

    Mr. KOLBE. Nogales.

    Mrs. MEEK. Nogales. That sounds southern to me. Well, Nogales.

    Mr. KOLBE. I forget that city down in south Florida, is Me-am-mi?

    Mrs. MEEK. The natives call it Miami.

    But, anyway—I forgot our Chairman was from Arizona.

    Mr. KOLBE. I grew up 50 miles from Nogales.

    Mrs. MEEK. I see.

    The key to the suspension agreement being successful is Customs, and I am interested in what kind of inspector staffing you have there.

    I do have an ulterior motive. I told you the tomato farmers beat up on me. So I am concerned about what kind of staffing you have there, what kind of training they have. Do they understand the suspension agreement? If you could tell me in a short answer.

 Page 245       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    Mr. WEISE. In terms of the number of staff, I would like to submit that to you for the record.

    Mrs. MEEK. Yes.

    [The information follows:]

Table 1


    Training has been given to the inspectors on the tomato suspension agreement. They have been verifying weights and have verified the presence of a declaration and grading certificate with each tomato signatory shipment. Criteria have been developed for those known non-signatory shippers and intensive examinations are completed on the few here in Nogales.

    Mr. WEISE. We have worked very closely with the Commerce Department to try to ensure that we fully understand the obligations and the responsibilities that we have to enforce that agreement. We have sat down with the industry and our people to make sure that they do have a grasp of what is expected of them.

    To be candid with you, we would have preferred earlier in the process to have been called in for consultation; and we tried—we got wind of this kind of very late and said, look, we are the organization that has to implement this. We would like to make sure that we are a part of the solution. And we did have some opportunity at the 11th hour to try to see if we could get the administratibility of this agreement taken into account, and it was kind of late to make much in the way of modification of the agreement.

 Page 246       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    But, notwithstanding that, it is an administration commitment; and we are the organization responsible for enforcing it; and we are going to do the best job we possibly can to work with the domestic industry to ensure we carry it out fully in the long term.

    Mrs. MEEK. Thank you.

    Mr. KOLBE. Mrs. Meek, I don't know that I am going to call you the tomato lady; but I know you are going to give me real heartburn if you keep talking about these tomatoes. We have a very different view coming from Arizona about this issue, and the administration has given me real heartburn on this issue, but I won't get into that area here.

    My final question, really more of a comment than anything else, is to just raise a red flag on this whole issue of the technology and the automation. I made some reference to this in my opening comments.

    But it seems to me that you have got bits and pieces that are coming together here in your Customs modernization, the conformed compliance act of 1993, the NAFTA act. You have got whole issues about border—the development and acquisition of border port inspection, your automated targeting systems, your nonintrusive x-ray inspection technologies. What I see here is you are buying a piece here, you are buying a piece there, you are starting this and starting that.

    I don't see anybody that is taking an overall look at the architecture, which is exactly what happened to the Internal Revenue Service. There was nobody in there saying, how does all of this go together here and how does all of this fit, instead of just buying this and buying that and putting this kind of piece there?

 Page 247       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    You have an investment review board——

    Mr. WEISE. Right.

    Mr. KOLBE [continuing]. That has been established. I think it is, at least in part, supposed to do this.

    Mr. WEISE. Yes.

    Mr. KOLBE. I don't know that it really does the architecture of this thing, but it is certainly supposed to look at this whole thing, and it has been created, as I understand it. But you still at this point haven't—there are no policies or procedures in place for it to use at this point. Would you just comment on that?

    Mr. WEISE. Mr. Chairman, I would love to have the opportunity to sit down with you and your staff and talk a little bit about this, and certainly perhaps Thursday we can at least begin the process and maybe do a follow-up meeting.

    We are aware of the concerns that have been raised as to how it all fits together. We obviously, in looking back, see that we maybe have made some slight mistakes along the way. But we have an outside consultant now that is taking a complete look at all of the architecture issues and will complete its analysis by June of this year. That input, as well as the input of GAO that is taking a hard look at what we are doing, I think has been very positive and very constructive. Certainly there are mistakes, but they are not mistakes nearly of the magnitude that have been made by the organization you alluded to, and I think that we are not far off the mark.

 Page 248       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    One of the things that I brought to this position from my prior experience is the essential nature of making sure that we don't rush headlong into implementing programs, that we are not fully cooperating with the entities in the private sector that need to interface with us in automation. We can document to you, we have had extensive, numerous consultations with virtually every potential stakeholder or anyone that interacts with us on these systems; and that has been a slow, long, deliberative process to make sure that we are taking these issues into account and that we are doing it right the first time.

    I acknowledge, before the investment review board had been put in place, we did have a process board of directors in terms of the trade compliance process which in effect acted as that coordinating body. So I would like to have the opportunity to sort of spell out the steps we have taken. I don't think it is anything that you or the committee need to be alarmed about in terms of where we are taking this.

    I feel very comfortable that we have given it that kind of a look. It hasn't been done in quite the way of having the investment review board in place, you know, several years ago. But we will work very closely with you and your staff every step of the way and show you the steps we are taking.

    Mr. KOLBE. Just let the record show that this subcommittee has raised this issue and that, if we have another catastrophic failure as we did with the IRS, I am going to have you back here for some other questions.

    Mr. WEISE. Understood.

 Page 249       PREV PAGE       TOP OF DOC    Segment 1 Of 2  


    Mr. KOLBE. On that point, I am puzzled by why there is a 72 percent cut in your research budget. Has all technology been developed that there is to be developed?

    Mr. WEISE. No.

    Mr. KOLBE. It sounds drastic. It is down to $500,000.

    Mr. WEISE. My recollection of that—Mr. Mintz, can you kind of come up here and respond to that?

    Mr. KOLBE. This is related to drugs, I think. But doesn't this include the technology, the technology that we are talking about or is this just drug research?

    Mr. WEISE. This is Ray Mintz, the head of our Office of Technology.

    Mr. KOLBE. Would you come forward so your comments can be heard here?

    Mr. MINTZ. I guess I can't speak to the exact change in the budget, but I would point out that a lot of our research for nonintrusive inspection technology at this point is being done for us by the Department of Defense. So that our requirements for research are somewhat lessened, and we will go ahead and acquire that technology based on their development effort.

 Page 250       PREV PAGE       TOP OF DOC    Segment 1 Of 2  

    That is the best answer I can give to your question at this point.

    Mr. KOLBE. I might want to take a look at some of the specifics about how that is being done.

    Mr. MINTZ. Yes, sir.

    Mr. KOLBE. Is it subcontracting with DOD?

    Mr. MINTZ. The Department of Defense uses their funding, awards the contracts. We work very closely with them, often as the technical representative on the contract in a partnership arrangement.

    Mr. KOLBE. Thank you very much.

    Mr. MINTZ. You are welcome, sir.

    Mr. KOLBE. Since I am the last one here, obviously there are no more questions.

    I want to thank our witnesses today for their testimony. I want to thank the agents who came from the field today to give us the testimony that they did and our thanks to the work that you do every day for our country out there. We appreciate it very much.

 Page 251       PREV PAGE       TOP OF DOC    Segment 1 Of 2  
    Secretary Kelly, Commissioner Weise, thank you very much for being with us today.

    This subcommittee is adjourned.

    [Questions for the record and selected budget justification materials follow:]

    "The Official Committee record contains additional material here."