[Senate Hearing 108-171]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-171

      NOMINATIONS OF C. STEWART VERDERY, JR. AND MICHAEL J. GARCIA

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


                                HEARING

                               before the


                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                 ON THE

 NOMINATIONS OF C. STEWART VERDERY, JR., TO BE ASSISTANT SECRETARY FOR 
 POLICY AND PLANNING, BORDER AND TRANSPORTATION SECURITY DIRECTORATE, 
DEPARTMENT OF HOMELAND SECURITY, AND MICHAEL J. GARCIA, TO BE ASSISTANT 
   SECRETARY FOR IMMIGRATION AND CUSTOMS ENFORCEMENT, DEPARTMENT OF 
                           HOMELAND SECURITY

                               __________

                              JUNE 5, 2003

                               __________

      Printed for the use of the Committee on Governmental Affairs


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                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania          RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Deleware
PETER G. FITZGERALD, Illinois        MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire        FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama           MARK PRYOR, Arkansas
              Michael D. Bopp, Staff Director and Counsel
                    Johanna L. Hardy, Senior Counsel
                  Rob Owen, Preofessional Staff Member
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                    Kevin J. Landy, Minority Counsel
                   Susan E. Propper, Minority Counsel
           Jennifer E. Hamilton, Minority Research Assistant
                     Darla D. Cassell, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Collins..............................................     1
    Senator Levin................................................    15

                               WITNESSES
                         Thursday, June 5, 2003

Hon. John W. Warner, a U.S. Senator from the State of Virginia...     2
Hon. Don Nickles, a U.S. Senator from the State of Oklahoma......     3
Hon. Saxby Chambliss, a U.S. Senator from the State of Georgia...     4
C. Stewart Verdery, Jr., to be Assistant Secretary for Policy and 
  Planning, Border and Transportation Security Directorate, 
  Department of Homeland Security................................     5
Michael J. Garcia, to be Assistant Secretary for Immigration and 
  Customs Enforcement, Department of Homeland Security...........     7

                     Alphabetical List of Witnesses

Chambliss, Hon. Saxby:
    Testimony....................................................     4
Garcia, Michael J.:
    Testimony....................................................     7
    Prepared statement...........................................    76
    Biographical and professional information....................    82
    Pre-hearing questionnaire....................................    87
    Post-hearing questions and responses from Senator Lieberman..   141
    Post-hearing questions and responses from Senator Levin......   184
    Post-hearing questions and responses from Senator Durbin.....   189
Nickles, Hon. Don:
    Testimony....................................................     3
Verdery, C. Stewart, Jr.:
    Testimony....................................................     5
    Prepared statement...........................................    24
    Biographical and professional information....................    27
    Pre-hearing questionnaire....................................    36
    Post-hearing questions and responses from Senator Lieberman..    72
    Post-hearing questions and responses from Senator Levin......    73
    Post-hearing questions and responses from Senator Durbin.....    74
Warner, Hon. John W.:
    Testimony....................................................     2
    Prepared statement...........................................    23

 
      NOMINATIONS OF C. STEWART VERDERY, JR. AND MICHAEL J. GARCIA

                              ----------                              


                         THURSDAY, JUNE 5, 2003

                                       U.S. Senate,
                         Committee on Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:37 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Susan M. 
Collins, Chairman of the Committee, presiding.
    Present: Senators Collins and Levin.

             OPENING STATEMENT OF CHAIRMAN COLLINS

    Chairman Collins. The Committee will come to order.
    Good morning. Today the Committee on Governmental Affairs 
is holding a hearing to consider the nominations of Charles 
Stewart Verdery to be Assistant Secretary for Policy and 
Planning in the Border and Transportation Security Directorate 
of the Department of Homeland Security, and Michael J. Garcia 
to be the Assistant Secretary for the Bureau of Immigration and 
Customs Enforcement at the Department of Homeland Security.
    The Department of Homeland Security was officially born on 
January 24 of this year. It is however, still far from being 
fully staffed. That is why it is so important for this 
Committee and the Senate to move quickly to fill the openings 
at the Department so that it can move forward with its mission 
of protecting our country from terrorist attacks.
    I think I know how a minister or a priest feels now. But 
let me say that we are absolutely delighted to have family 
members present so that they can participate in this hearing.
    Mr. Verdery will face many challenges as Assistant 
Secretary for Policy and Planning. The Border and 
Transportation Security Directorate is charged with the 
responsibility for securing our Nation's borders and 
transportation systems. To accomplish this daunting task, the 
functions of the U.S. Customs Service, the Immigration and 
Naturalization Service's enforcement functions, the Animal and 
Plant Health Inspection Service, the Transportation Security 
Administration, the Federal Law Enforcement Training Center, 
and the Federal Protective Service have all been transferred to 
this directorate.
    Streamlining and better coordinating their functions are 
critical steps in improving security. As the Department acts to 
improve security at our borders and transportation systems, it 
must balance those efforts with other national interests. In 
securing our borders, the Department must be careful to ensure 
that the flow of legitimate commerce is not unduly impeded. 
Families and businesses in border communities know particularly 
well how important it is for many Americans to be able to 
travel back and forth without undue restrictions.
    The Department also must balance security with privacy 
concerns and civil liberties. For example, concerns have been 
raised regarding programs such as CAPPS-II. The department must 
strive to develop screening processes that will be effective in 
identifying and preventing terrorists from entering our country 
but which do not unduly invade the privacy of law-abiding 
citizens.
    As the past Acting Director of the Immigration and 
Naturalization Service, Mr. Garcia knows these issues well. He 
knows the issues and the battles that lie in front of him. The 
Bureau of Immigration and Customs Enforcement brings together 
some 14,000 employees to focus on the enforcement of 
immigration and customs laws and the protection of Federal 
buildings. It encompasses the immigration and customs 
investigations and intelligence functions, Custom's air and 
marine interdiction, immigration detention and removal, and the 
Federal Protective Service.
    One of the major challenges awaiting Mr. Garcia may be from 
within the Department itself, ensuring proper cooperation, 
communication, and coordination among key components of the new 
Department.
    The two nominees before us today will be charged, if 
confirmed, with carrying out extraordinarily important missions 
and taking on the many challenges confronting the new 
Department. The experience and background that they bring to 
the Department, I believe, will serve them well as they tackle 
their new responsibilities.
    It is now my great pleasure to recognize my colleagues who 
are here today. I think it speaks extremely well for these 
nominees that they have with them such distinguished members of 
the U.S. Senate who are willing to take time from their busy 
schedules to introduce them.
    I am trying to figure out who has seniority here, but I 
think I will go with my Chairman on the Armed Services 
Committee, always a wise choice, and I will call on the 
distinguished senior Senator from the Commonwealth of Virginia, 
Senator John Warner.

 STATEMENT OF HON. JOHN W. WARNER,\1\ A U.S. SENATOR FROM THE 
                       STATE OF VIRGINIA

    Senator Warner. I thank you very much, Madam Chairman. I 
guess this is my 25th year, quarter of a century, in this 
institution. So maybe I have a year or two on some of my 
colleagues. Not too much on Senator Nickles, but I do see a 
freshman at the end, and he is a powerful voice already in this 
body.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Warner appears in the 
Appendix on page 23.
---------------------------------------------------------------------------
    But we are here for very important business, Madam Chairman 
and hearing these young voices of the children just reminds me 
of when I came before a committee so many years ago for advise 
and consent, and my children were small. And it is very 
important that the families join. So I would like to start by 
asking Stewart Verdery, who is a part of my family in the 
Senate, and I look upon my staff as a family, would you 
introduce your family?
    Mr. Verdery. Sure, of course, Senator. Thank you.
    My mother, Linda; my wife, Jenny; my father, Charlie; my 
step-mother, Marty; father-in-law, Harvey; my daughter 
Isabelle; my son Chase who is out in the hall. My mother-in-
law, Phyllis; and sister-in-law, Lisa.
    Chairman Collins. Thank you.
    Senator Warner. Given that we have so many colleagues 
waiting, I will put my full statement in the record.
    Chairman Collins. Without objection.
    Senator Warner. But this fine nominee, selected by the 
President and the Secretary of Homeland Security, has had a 
broad and extensive career. And each challenge he has met and 
succeeded and left a record of accomplishments. They are all 
documented in here very carefully.
    And it is my privilege to put my complete credibility 
behind this man, such as it is in this institution, to say that 
he will do extremely well in this position.
    As chairman of the Rules Committee at one time, Stewart 
worked for me and performed a number of very important 
legislative tasks and the Committee has investigation 
responsibilities, as this Committee does, all of which were 
performed wonderfully.
    As a matter of fact, he performed so well that the 
leadership stole him. And I will let the Senator from Oklahoma 
explain the circumstances under which he was hijacked out of my 
office.
    I thank the Chairperson, and you are on your own.
    Chairman Collins. I thank the Senator from Virginia.
    I am very pleased to call on my friend and colleague, the 
senior Senator from Oklahoma and the Chairman of the Budget 
Committee, for his remarks.

STATEMENT OF HON. DON NICKLES, A U.S. SENATOR FROM THE STATE OF 
                            OKLAHOMA

    Senator Nickles. Madam Chairman, thank you.
    I wish to join with Senator Warner in urging the speedy 
confirmation. I very much appreciate your having this 
confirmation hearing and I would urge colleagues on this 
Committee to vote in the affirmative as soon as possible for 
the confirmation of Stewart Verdery to be Assistant Secretary 
for Border and Transportation, Department of Homeland Security.
    I have had the pleasure, Senator Warner mentioned he is 
part of the family, and Stewart Verdery is. He and his wife, 
Jenny, were married while they were on my staff, or he was on 
staff and we wanted to have Jenny on our staff. So I have been 
friends with both for a long time. I knew Stewart when he was 
counsel to the Rules Committee. Also, he served as counsel on 
the Judiciary Committee, and did an outstanding job in those 
capacities.
    He has experience in the private sector, as well, before 
coming to the Senate, graduating from the University of 
Virginia.
    I have had the pleasure of working with him when he was 
general counsel to me as Assistant Majority Leader. He just did 
a fantastic job.
    He not only worked for me, but frankly worked for the 
entire U.S. Senate, and in that capacity performed a number of 
functions. As all Senators do, we deal with a lot of issues, a 
lot of legal issues. And Stewart Verdery was my legal counsel 
and he did a good job not only for me but for the entire 
Senate.
    So Madam Chairman, it is with great pleasure and honor that 
I recommend to this Committee and to the full Senate a friend 
and a person who I know will do an outstanding job as Assistant 
Secretary of the Department of Homeland Security.
    Chairman Collins. I thank the Senator very much for his 
comments. I know that he has a busy schedule and I would be 
happy to excuse him if he needs to leave.
    It is now with great pleasure that I turn to an outstanding 
new Member of the Senate, Senator Saxby Chambliss, who 
represents the State of George so ably. We are very pleased to 
have you here today to introduce Mr. Garcia.

  STATEMENT OF HON. SAXBY CHAMBLISS, A U.S. SENATOR FROM THE 
                        STATE OF GEORGIA

    Senator Chambliss. Thank you, Madam Chairman.
    It is indeed a privilege and a pleasure for me to be here 
appearing before you, and I appreciate and thank you for the 
great work that you do on this Committee. You and I serve on 
the Armed Services Committee together and it is a pleasure to 
serve there with you.
    I am pleased to introduce Michael Garcia as the President's 
nominee to be Assistant Secretary for the Bureau of Immigration 
and Customs Enforcement within the Department of Homeland 
Security.
    I would also like just to take a minute to recognize his 
wife, Liana, and their three children, Manuel, Sophia, and 
Michael. And those of us who have children know and understand 
that two out of three is not bad, when you get them in a 
scenario like this. They are certainly beautiful children, and 
a beautiful and very supportive wife. They will be a great 
asset to Michael in his position.
    I want to say some things about Michael specifically, but 
one thing that really pleases me about this nominee to the 
Department of Homeland Security is the fact that I have had the 
opportunity to work with Secretary Ridge from the very first 
day the President considered him for his original position, and 
I have been extremely impressed with the fact that the first 
thing he did was to surround himself with good people.
    Michael is one of these folks who comes from the private 
sector, and that always impresses me, when somebody is willing 
to come from the private sector into the public sector and make 
a commitment to public service. This young man has done that 
and he has distinguished himself significantly during his years 
in public service.
    He served as Acting Commissioner of the Immigration and 
Naturalization Service from December 2002 to February 2003. In 
his new role at the Enforcement Bureau, I am confident he will 
continue to improve the security of this country from the 
threat of terrorism.
    Mr. Garcia previously served as an Assistant Secretary of 
Commerce for Export Enforcement from August 2001 to November 
2002. He is a distinguished Federal prosecutor who has worked 
in counter-terrorism and national security issues for 10 years. 
In fact, he is the only nominee who has successfully prosecuted 
and convicted a terrorist to date.
    His prosecutions include the defendants who bombed two 
American embassies in East Africa, the defendants in the first 
World Trade Center bombing, and the defendant in the conspiracy 
to plant bombs aboard 12 American passenger airlines in the Far 
East. For these cases and his prosecution thereof, Mr. Garcia 
received the Attorney General's award for exceptional service, 
the Department of Justice's highest reward.
    Madam Chairman, it is indeed a great privilege and a 
pleasure for me to recommended and to introduce to you Michael 
Garcia this morning. Thank you.
    Chairman Collins. Thank you very much, Senator. We very 
much appreciate your taking time to be here today, and it 
certainly speaks well of the nominee, that you are willing to 
do so. So thank you for your testimony.
    Both nominees have filed responses to biographical and 
financial questionnaires, answered pre-hearing questions 
submitted by the Committee, and had their financial statements 
reviewed by the Office of Government Ethics. Without objection, 
this information will be made part of the hearing record with 
the exception of the financial data, which are on file and 
available for public inspection in the Committee's office.
    Our Committee rules require that all witnesses at 
nomination hearings give their testimony under oath, so I am 
going to ask that you each stand and raise your right hand.
    [Witnesses sworn.]
    Chairman Collins. Thank you. You may be seated.
    Mr. Verdery, do you have a statement that you would like to 
make at this time?

 TESTIMONY OF C. STEWART VERDERY,\1\ TO BE ASSISTANT SECRETARY 
  FOR POLICY AND PLANNING, BORDER AND TRANSPORTATION SECURITY 
          DIRECTORATE, DEPARTMENT OF HOMELAND SECURITY

    Mr. Verdery. I do, Madam Chairman. I will try to keep this 
relatively quick.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Verdery appears in the Appendix 
on page 25.
---------------------------------------------------------------------------
    Madam Chairman and the Governmental Affairs Committee, it 
is a great honor to be before you today as a nominee to be an 
Assistant Secretary for Homeland Security for Policy and 
Planning at the Border and Transportation Security Directorate.
    This is a very unwieldy title but perhaps it is indicative 
of the challenges that this new Department will encounter in 
its first year as the primary face of our country's efforts to 
deter, detect, and defend against acts of terrorism.
    I am grateful for the kind introductions of my two former 
bosses, Senators Warner and Nickles. Senator Warner was kind 
enough to give me my start in public service. And his career, 
especially three decades of leadership on national security 
issues, is a particular inspiration to those of us who grew up 
in Virginia, as I did.
    As Senator Nickles mentioned, he and I worked through 
impeachment and Columbine and campaign finance, and other 
issues and events big and small. And each day in the Capitol, 
working for him, was a day I just loved coming to work.
    The most memorable of those days, of course, were those 
following September 11, 2001. We all remember well the 
bipartisan effort which spawned a host of responses to the 
terrorist attacks, including the Patriot Act, and the creation 
of the Transportation Security Administration, TSA. Those days 
exemplified the kind of public service which is truly 
gratifying. In that spirit, I hope and I believe that this new 
Department of Homeland Security will embody a national endeavor 
to secure our borders, our economy, our freedoms and our lives.
    Thanks to Senator Warner's kind introduction, I have 
already introduced my family members and I just would like to 
say for the record how much I appreciate them being here and 
their support for me and my career. It means a lot, of course, 
and I could not do it without all of them.
    The Office of Policy and Planning, which I would direct if 
confirmed, occupies a key role in DHS, and specifically in the 
Border and Transportation Security Directorate, BTS. The office 
is charged to develop, evaluate, and coordinate policy for BTS.
    In advising the BTS Under Secretary, Asa Hutchinson, the 
Assistant Secretary for Policy is responsible for working on a 
day-to-day basis with the agencies which comprise much of what 
I like to call the meat and potatoes of homeland security. 
Thus, the Policy Office will seek to ensure that the policies 
implemented by BTS component agencies, which are the Bureau of 
Immigration and Customs Enforcement--for which Mr. Garcia has 
been nominated and is actively running--the Bureau of Customs 
and Border Protection, TSA, the Federal Law Enforcement 
Training Center, and the Office of Domestic Preparedness, are 
designed to fulfill BTS' responsibilities.
    This office will also coordinate BTS policy initiatives 
with other agencies within DHS, such as the Bureau of 
Citizenship and Immigration Services, and outside DHS, such as 
Departments of State and Justice. To address these duties, BTS 
is building a top-notch staff of policy professionals with deep 
experience in immigration, customs, transportation, 
international affairs, and strategic planning.
    My full statement, which I will place in the record, goes 
through some of the most important tasks that this office will 
be working on, including identifying and denying entry to those 
trying to enter the country illegally or to do us harm, 
securing our transportation systems, constructing our anti-
terrorism efforts so they enhance and not diminish traditional 
missions of the agencies, such as combating narcotics, and 
fulfilling all of these responsibilities within the bounds of 
the law, with respect for our foreign neighbors, and with 
appropriate communication with the Congress, and with the 
public at large.
    I am confident that if confirmed my experience both in the 
public and private sectors will serve me well in this new 
endeavor, and my full statement goes into some of the 
experiences I have which Senator Warner and Nickles have 
already detailed.
    I joined DHS as a consultant in April while my nomination 
was pending before your Committee. And each day I have seen 
firsthand the skill and determination of dedicated public 
servants such as Secretary Ridge, Under Secretary Hutchinson, 
my colleague Michael Garcia, and the rest of the DHS 
leadership. These officials, of course, are represented in the 
field by over 170,000 professionals dedicated to protecting our 
Nation.
    If I am confirmed, I am extremely excited to travel to our 
border crossings, our ports, our airports, and other sites on 
the front lines to learn from these agents and inspectors who 
form the backbone of our homeland security regime.
    Last, Madam Chairman, having been a creature of the 
Congress, I believe in Congress's prerogative to obtain timely 
and accurate information about Executive Branch activities. If 
confirmed, I will make every effort to work with this Committee 
and those other committees which create the authorities and 
budgets under which we operate.
    Thank you again for the chance to appear before you today 
and I look forward to any questions you might have. Thank you.
    Chairman Collins. Thank you very much. Your full statement 
will be made part of the record. Mr. Garcia.

 TESTIMONY OF MICHAEL J. GARCIA,\1\ TO BE ASSISTANT SECRETARY 
FOR IMMIGRATION AND CUSTOMS ENFORCEMENT, DEPARTMENT OF HOMELAND 
                            SECURITY

    Mr. Garcia. Thank you. Good morning, Madam Chairman.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Garcia appears in the Appendix on 
page 77.
---------------------------------------------------------------------------
    Let me thank you for the gracious welcome that you have 
given to my family here today. Their support, obviously, is so 
important as well as their sometimes quite vocal support today.
    It is an honor to appear before the Committee as the 
nominee for the position of Assistant Secretary for the Bureau 
of Immigration and Customs Enforcement, or BICE, within the 
Department of Homeland Security.
    I would like to thank the President for the confidence he 
has shown in me by again nominating me to serve as a leader of 
a critical law enforcement agency within his administration.
    The leadership demonstrated by Congress in swiftly passing 
the Homeland Security Act, and the President's commitment to 
expeditiously implement the Act, are monumental achievements in 
the defense of our Nation against the threat of terrorism.
    If confirmed, I will continue to implement the Act 
consistent with its intent and will remain focused on its 
overarching mission of providing greater security to our 
country.
    For the past 10 years, my career in public service has been 
devoted to counter-terrorism and national security issues. This 
experience provides me with a unique perspective regarding the 
threats confronting our homeland and the tools and capabilities 
required to effectively meet them. I would bring this 
perspective and experience to the job of Assistant Secretary 
for Immigration and Customs Enforcement should I be confirmed 
in this position.
    I would like briefly to describe my career in public 
service. After completing a clerkship for Judith Kaye on the 
New York Court of Appeals, I had the privilege of joining the 
U.S. Attorney's Office for the Southern District of New York. I 
joined that office at a unique time in its history. Six months 
after my appointment as an Assistant U.S. Attorney in February, 
1993, the first attempt to topple the World Trade Center took 
place. It was, at the time, the single most devastating act of 
terrorism ever committed on U.S. soil. I was one of the 
prosecutors assigned to lead the investigation into that 
attack.
    This was new territory for law enforcement. From the 
investigative techniques brought to bear to the laws used to 
bring the terrorists to justice, the case was a new model for 
terrorism prosecutions. All available tools were used, 
including statutes covering violations of the immigration law.
    Agents from every Federal law enforcement agency brought 
their authorities and expertise to the case. As a member of the 
prosecution team, I was responsible for guiding this effort, 
presenting evidence to gain indictments, and presenting the 
case in court. All four defendants were convicted on all counts 
in that case, and I received the Attorney General's Award for 
Exceptional Service, the highest award presented by the U.S. 
Department of Justice, for my work.
    My work on the World Trade Center bombing case would define 
my career in government service. Less than 1 year after the 
verdict in the World Trade Center case, an explosion took place 
halfway around the world in Manila, where Ramzi Yousef, the 
mastermind of the World Trade Center attacks, and his 
associates were mixing chemicals in an apartment in preparation 
for attacks on 12 U.S. airplanes. Their plan was to detonate 
bombs aboard those planes while they were airborne and filled 
with passengers on their way from Asia to the United States. I 
flew to Manila and directed the investigation and prosecution 
of that terrorist conspiracy. I oversaw a case that, unlike the 
1993 World Trade Center bombing, involved terrorist activity 
outside the United States aimed at this country's national 
security.
    In bringing charges against Yousef and his co-conspirators, 
including then-fugitive Khalid Sheikh Mohamed, I was the first 
to use some of the antiterrorism statutes passed by Congress 
after the Trade Center bombing.
    I also coordinated the cooperation in the trial of a number 
of foreign governments. In 1996, Yousef and two other 
terrorists were convicted on all counts. I again received the 
Attorney General's Award for Exceptional Service for my work on 
that case.
    In 1998, followers of Osama Bin Laden bombed our embassies 
in Nairobi, Kenya and Dar es Salaam, and Tanzania. More than 
200 persons were murdered in these attacks. I was assigned as 
one of the lead prosecutors on the case against four al Qaeda 
operatives who stood trial in New York on charges related to 
those attacks.
    In preparing this case, I managed and led a team of 
investigators and staff in a worldwide effort to gather 
evidence, return terrorists to the United States, and 
coordinate efforts with the intelligence community. The jury 
returned guilty verdicts in this trial on all 302 counts.
    The case raised a number of issues of first impression with 
regard to crimes committed against U.S. interests overseas and 
the intersection of criminal investigations and intelligence 
gathering.
    In addition to the Attorney General's Award for 
Distinguished Service, I was awarded the CIA's ``Agency Seal 
Medallion'' for my efforts in coordinating our criminal case 
with the intelligence community.
    My extensive management of complex counter-terrorism 
prosecutions has taught me important lessons about counter-
terrorism that I would bring to my role in BICE if confirmed. 
Three of the most important are: First, the need to use all of 
our enforcement tools and authorities in support of our 
counter-terrorism efforts.
    Second, the importance of coordination across agencies and 
with the Intelligence Community.
    And third, that prevention and disruption need to be vital 
components of our counter-terrorism strategy.
    After the guilty verdicts in the embassy bombing case, I 
was nominated by the President and confirmed by the Senate as 
Assistant Secretary of Commerce for Export Enforcement. In this 
position, I led an enforcement agency with a national security 
mission, preventing sensitive technology from falling into the 
hands of those who would use it to harm U.S. national security.
    In December 2002, the President designated me Acting 
Commissioner of the INS. As Acting Commissioner, I was honored 
to lead the transition of that agency into the Department of 
Homeland Security, while at the same time ensuring that the 
critical day-to-day work of the Agency continued uninterrupted. 
This was a monumental task, involving dissolution of a 36,000-
person Agency.
    After the creation of DHS and the transfer of INS functions 
to that department, I was named Acting Assistant Secretary of 
DHS for the Bureau of Immigration and Customs Enforcement. 
BICE, with 14,000 employees and 5,500 special agents, is the 
second largest investigative Federal law enforcement agency. On 
March 1, that agency stood up a management structure that 
enabled all BICE employees to continue on with their critical 
enforcement missions while seeking to take advantage of the new 
opportunities presented by having the tools and authorities of 
the legacy components of INS, Customs, and the Federal 
Protective Service.
    This is the challenge of BICE, to create a unified law 
enforcement agency capable of bringing all its law-enforcement 
tools to bear in an efficient and effective manner on the 
vulnerabilities to our homeland security. We are in the process 
of a reorganization that will provide BICE with a unified 
investigative structure, both in the field office and at 
headquarters.
    The reorganization will also create one unified 
intelligence division from the Agency's legacy components. If 
confirmed, I would bring to the task of leading this new 
enforcement agency a perspective gained from a career dedicated 
to antiterrorism and national security. I would use this 
experience to guide my vision of a unified Agency, committed to 
a partnership with its Federal, State and local counterparts, 
and committed to full and fair application of the tools and 
authorities given to BICE.
    Madam Chairwoman, in conclusion, I would again like to 
commend Congress on its efforts to protect the American people 
from those who seek to do us harm. It is an honor to be 
nominated as the Assistant Secretary to lead dedicated law-
enforcement officers in this unprecedented time.
    If confirmed, I vow to work together with this Committee 
and with Congress to strengthen our Nation's defense and 
protect the American people.
    Thank you again for your consideration, and I look forward 
to answering your questions.
    Chairman Collins. Thank you very much, Mr. Garcia.
    I am going to begin my questioning this morning with 
standard questions that we ask of all nominees for the record. 
There are three of them.
    First, is there anything that you are aware of in your 
background which might present a conflict of interest with the 
duties of the office to which you have been nominated? Mr. 
Verdery.
    Mr. Verdery. Madam Chairman, as part of my written answers, 
I have detailed several issues I have discussed with the 
designated ethics officer. I do not feel that any of them are 
an actual conflict of interest, but they have been disclosed in 
the written answers to your questions.
    Chairman Collins. Mr. Garcia.
    Mr. Garcia. None that I am aware of.
    Chairman Collins. Second, do you know of anything personal 
or otherwise that would, in any way, prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated? Mr. Verdery.
    Mr. Verdery. I do not.
    Chairman Collins. Mr. Garcia.
    Mr. Garcia. I do not.
    Chairman Collins. And third, do you agree without 
reservation to respond to any reasonable summons to appear and 
testify before any duly constituted committee of Congress if 
you are confirmed? Mr. Verdery.
    Mr. Verdery. I do.
    Chairman Collins. Mr. Garcia.
    Mr. Garcia. Yes, I do.
    Chairman Collins. Well, you passed those very well. Now we 
will turn to some substantive questions.
    Mr. Garcia, an issue that has arisen in my home State of 
Maine lately has affected many of the residents in border 
communities where there are very small numbers of people living 
but they cross freely back and forth through border crossings 
to Canada. The Immigration Service and Customs have closed or 
restricted the hours of some of these border crossings, which 
has created a number of difficulties for many of my 
constituents.
    Just to give you a fuller understanding of the border 
communities, frequently family members live on the Canadian 
side of the border. People cross the border to go to church, 
for medical care, to buy groceries, to visit friends, even to 
work. So the crossings are very routine and occur literally 
daily.
    What has happened with some of these smaller crossings is 
the Federal Government has greatly restricted the hours that 
the crossings are open. For example, they may be closed from 
Friday at 4 o'clock until Monday at 8 a.m. Thus, in one 
community's case, restricting the ability of citizens to cross 
the border to go to church on the Canadian side.
    Could I have a commitment from you to work with my office 
to try to come up with solutions that respect the traditions of 
these communities while at the same time recognizing the new 
security considerations that we face in a post-September 11 
environment?
    Mr. Garcia. Absolutely, Madam Chairman. And in fact, you 
have my commitment, it is also one of the objectives of the 
enabling legislation, the statute creating the Department of 
Homeland Security. One of the missions of this Department is to 
protect national security but also to protect, and not 
interfere with, the free and lawful flow of goods and people 
across our borders. We are committed to that mission and I look 
forward to working with you, and with my colleagues in the 
other bureaus and agencies in affecting that very important 
part of our mission.
    Chairman Collins. Mr. Garcia, I do appreciate that 
commitment.
    Last month a terrible tragedy occurred in Victoria, Texas 
in which 19 illegal immigrants died in a tractor-trailer as 
they were being smuggled across the border into the United 
States. Could you talk to us about how this case was 
investigated by your Department? How were resources allocated? 
Because I think it would help the Committee understand how the 
new organization of the Department is being brought to bear 
when you have a terrible tragedy such as that one.
    Mr. Garcia. Yes, Senator. The case in Victoria, Texas, is a 
terrible tragedy, 19 people murdered in the back of a tractor-
trailer near our Southern border.
    Our response to that tragedy, I think, exemplifies what we 
bring now as one unified agency within BICE, within the 
Department of Homeland Security. Approaching that case, instead 
of the traditional way of approaching it, which would be to 
send experienced investigators in anti-smuggling to the scene, 
we did that. But in addition, we sent assets from our other 
legacy components.
    So in the Victoria case, we sent immigration investigators 
trained in anti-smuggling. We sent Customs investigators, 
trained in financial crimes, to bring that expertise to the 
smuggling field, something we could not do in the past. We 
brought technical experts from what was the Customs Service, 
now part of BICE, to the location in Texas to bring their 
expertise to bear in tracking telephones and other follow up of 
technical investigative avenues.
    As a result of that effort, which involved incorporation of 
all our enforcement tools, we saw tremendous success working 
with the U.S. Attorneys Office. Within a matter of days there 
were 11 charges filed against defendants, and I believe eight 
individuals are in custody charged with crimes related to that 
terrible tragedy.
    In fact, the U.S. Attorney Shelby from Houston has made 
statements in Houston to the effect that this is the model for 
going forward that he would like to see. That in fact, BICE's 
response to this terrible crime is what the Department of 
Homeland Security should be doing to bring all our assets to 
bear in new ways, in more effective ways, on the crimes that 
are within our jurisdiction.
    We are going to take our model from Victoria and use it to 
go forward as best practices to approach anti-smuggling and to 
approach other criminal acts within our jurisdiction. So, I 
think Victoria showed that BICE could respond as a unified 
agency and showed us the road map for going forward and being 
an effective and unified law enforcement agency.
    Chairman Collins. Thank you.
    Mr. Garcia, immigration issues are being dealt with in 
three separate bureaus within the new Department, the Bureau of 
Immigration and Customs Enforcement, the Bureau of Customs and 
Border Protection, and the Bureau of Citizenship and 
Immigration Services.
    The Immigration and Naturalization Service historically has 
been a troubled agency and one that has had difficulties in 
reconciling its service functions with its enforcement 
functions. In fact, I would say that if you talked to Members 
of Congress, you will hear more complaints about INS than 
virtually any other Federal agency.
    How do you plan to improve the performance of these bureaus 
and also ensure that they coordinate their efforts better and 
not duplicate each other's efforts, given the three separate 
bureaus with joint responsibility.
    Mr. Garcia. I have heard a number of complaints from 
Members of Congress. It is obviously one of our top priorities. 
I think first, the structure that we have been given by 
Congress, the enabling legislation, addresses a number of the 
issues that INS had in the past. By breaking us into basically 
three separate components, we are able to focus on our specific 
missions more effectively, more efficiently, inspectors with 
inspectors at the border, investigators with our investigators 
within BICE, our important service groups reporting directly to 
the Deputy Secretary.
    The challenge for us now, given that advance in our ability 
to function, is to continue to coordinate and cooperate among 
those agencies so we do not have duplication, so we do not have 
people going at cross-purposes, so we coordinate policy and the 
way policy is implemented.
    We have done a number of things to make sure that this 
happens. I touched on them in detail, I believe, in my written 
responses to the Committee's questions, but I have a strong 
relationship with Commissioner Bonner and with Acting Director 
Aguirre. And I am in communication with them directly.
    We have established working groups at very high levels to 
address specific issues and implement procedures. And we have 
designated very high-level persons within our front offices to 
act as liaison, involved in issues that are interagency, 
involved in the issues of our colleagues as they go forward as 
BCIS and BCBP. And we are doing all of those things to bring to 
bear our tools in an effective way, but also to make sure that 
we are coordinating as we go forward. And I believe that is the 
challenge, now that we have gone forward as separate agencies, 
the challenge is to also maintain good communication and good 
coordination.
    Chairman Collins. The Department of Justice's Inspector 
General released a report recently that criticized the handling 
of hundreds of immigrants who were taken into custody by the 
Federal Government in the months following September 11. The 
report highlighted some 21 recommendations dealing with issues 
such as the need to develop uniform arrest and detainee 
classification policies, methods to improve information sharing 
among Federal agencies, and improving the oversight of 
detainees housed in contract facilities.
    I realize that the report has only been out for a brief 
time, but could you give us your comments on it? And what role 
will you play in ensuring that these recommendations by the 
Inspector General will be implemented?
    Mr. Garcia. I have seen the report and I have read it. We 
are committed at BICE to working to respond to the 
recommendations made by the Inspector General in that report, 
obviously very serious and important issues raised in that 
study. We have already begun work with our colleagues, both 
within BICE, within the Department of Homeland Security, and 
also within the Department of Justice and government in 
responding to the IG's concerns and to the recommendations and 
the issues raised there.
    I think it is a very important study properly done, to look 
at a time in our history that was unique. And it is important 
for us now to look at that, look at the IG's recommendations, 
and go forward.
    Chairman Collins. Mr. Verdery, the Office of Domestic 
Preparedness is currently within the Border and Transportation 
Security Directorate. And that has never made a great deal of 
sense to me. As you know, ODP is responsible for allocating the 
homeland security grants through the States to our first 
responders.
    I have introduced legislation that moves the Office of 
Domestic Preparedness from the Border and Transportation 
Security Directorate to the Office for State and Local 
Government Coordination within the Secretary's office.
    Do you agree that ODP should be moved out of the 
Directorate that you are going to be involved with? And has 
there been any discussion at DHS about this transfer?
    Mr. Verdery. It is my understanding that the Bush 
Administration and the Homeland Security Department officially 
support your legislation and are anxious to get it moving, and 
get it passed. I agree with that position.
    The one thing I would add to that is ODP, while it is 
within BTS, is actively working to evaluate grants, to get 
money out. Billions of dollars are flowing out to first 
responders through the States. And so we are actively 
fulfilling our responsibilities now while supporting your 
legislation to move that office to the Secretary's office.
    Chairman Collins. A major project for BTS is the 
development and implementation of the U.S. VISIT System. I 
believe that it is very important that we secure our borders. 
But, as I indicated in my earlier remarks, we must also ensure 
that the United States remains open for business. And I would 
be concerned if this new system were to somehow hamper the 
ability of legitimate visitors and commerce to enter the United 
States.
    What policy issues do you believe need to be addressed to 
ensure that the U.S. VISIT System, or any other entry/exit 
system, would be able to do the job that it is intended for 
without causing long delays or problems at our border 
crossings?
    Mr. Verdery. The U.S. Visit System, which is now the name 
for the entry/exit system which was mandated by Congress in 
several different pieces of legislation, is a top priority for 
the Department and for the Under Secretary. The program office 
for the U.S. Visit System reports directly to Under Ssecretary 
Hutchinson as of about a month ago. I cannot think of anything 
the Department spends more time on, especially the Under 
Secretary, than on this issue.
    As you know, the U.S. Visit entry/exit system will be 
phased in over several years, with it applying to air and 
seaports for the end of this year, and land entry facilities 
and exit facilities in following years. That phase-in gives us 
time to build systems, both hardware, software, and 
infrastructure, to try to alleviate any kind of backlogs that 
would be created by the checks that passengers will undergo as 
they enter and exit the country.
    We are working feverishly to make sure that the checks of 
passengers are done quickly, that they had access to relevant 
databases, and that it does not slow down traffic. Again, for 
this year that means airports and seaports.
    We are anxiously moving a spending plan to the Congress to 
get money flowing for this year's deployment. And it is my 
understanding your Committee has asked for a briefing on this 
issue, and we would be happy to do that as soon as we can get 
it scheduled.
    Chairman Collins. Thank you.
    Mr. Verdery, I recently learned that the Transportation 
Security Administration has submitted a proposal to the 
Appropriations Committee to reallocate some 40 percent of the 
funding that is appropriated for port security grants. This is 
a huge concern to me personally, and to many Members of this 
Committee. We have held hearings which indicated, from many 
experts, that port security remains, if not the biggest 
vulnerability facing the United States, certainly one of them.
    It is obviously much more difficult to secure a seaport 
than an airport, and it is critical that funding appropriated 
for the process of improving port security go forward. In fact, 
the Coast Guard has reported that it believes it will cost more 
than $4 billion to improve port security over the next decade.
    TSA's proposal makes me question whether the new Department 
is giving port security the priority that it clearly warrants. 
I have asked Secretary Ridge for an update of the Department's 
plan, but in your new position I would like to know how you 
plan to ensure that port security receives the attention and 
the funding it deserves?
    Mr. Verdery. Madam Chairwoman, I have seen the letter you 
sent to Secretary Ridge earlier this week. It is clear that the 
Department is doing a lot in the area of port security, 
everything from the Container Security Initiative, which 
attempts to secure the large containers coming into our 
country, to money that the Coast Guard is spending on grants, 
to the vulnerability assessments that are being undertaken by 
the Information Analysis and Infrastructure Protection 
Directorate at DHS. There is a lot going on in this field.
    Now you mentioned specifically the reprogramming issue, of 
money at TSA for port security. It is my understanding that TSA 
has spent, I believe, several hundred million dollars in port 
security money over the last couple of years but that some 
money is being targeted for reprogramming to meet the statutory 
requirements that TSA is under in terms of aviation safety, 
which is obviously a top priority of the administration and of 
the Congress in light of the events of September 11.
    If I am confirmed, though, I will be happy to work hard 
with our budget folks to try to come up with additional 
resources for port security. I will be taking a look at TSA's 
spending. As you know, I was not part of the development of 
last year's budget but I am anxious to get over there and begin 
working on this year's and next year's budget plans.
    Chairman Collins. Thank you. Senator Levin.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Thank you, Madam Chairman. I will try to be 
relatively brief. It looks like the kids are ready for lunch, 
but I do have a short opening statement as well as a few 
questions of our nominees.
    With this hearing, we are moving closer to a fully 
functioning Department of Homeland Security. And today's 
nominees, if confirmed, will play crucial roles in U.S. border 
security, immigration policy, with critical implications not 
just for national security but also for law enforcement, 
transportation, trade, and even protecting the public's health 
with issues like SARS.
    It is critical that we get more top level personnel 
confirmed at the Department because right now there is a lot of 
confusion at the Agency, confusion about who is responsible for 
what, who can answer questions, and when needed programs are 
going to get underway. Here are just a few examples.
    For 2 years a number of us have been pushing Customs to set 
up reverse inspection programs, where for example, U.S. 
personnel can inspect cars and trucks before they cross our 
bridges or travel through our tunnels to enter the United 
States. Clearly better for security and for alleviating traffic 
congestion.
    We were able to include language in the 2003 Omnibus 
Appropriations Bill authorizing reverse inspections. And 
Michigan, for example, is ready, willing, indeed eager to set 
up a pilot program in Detroit at the Ambassador Bridge, which I 
believe carries more freight across into the United States and 
Canada than any other single crossing. Indeed, a large 
percentage of the total imports and exports in this is our 
biggest customer.
    Customs has told us, DHS has told us, the Department has 
told us, and Mr. Verdery, you have told us that reverse 
inspections are a good idea. But after 2 years, we have yet to 
get anyone to move even on a pilot program. That is difficult 
to understand given the merits of the issue, the importance to 
our national security and trade, why we have been unable to get 
this acted upon.
    Another example of confusion involves the issue of money 
laundering. For years Customs has taken the lead in complex 
Federal money-laundering investigations, developing an 
expertise that is really unmatched in any other Federal agency. 
Due to this expertise, after the September 11 tragedy, the 
administration directed Customs to set up an interagency effort 
called Operation Green Quest, to take the lead in identifying 
and stopping terrorist financing, which often uses the same 
offshore banks, wire transfers, and transfer pricing techniques 
that other money-launderers use to hide drug money or the 
proceeds of financial fraud.
    This Committee's Permanent Subcommittee on Investigations 
has conducted a number of money laundering investigations over 
the years and become aware of the Customs expertise and ongoing 
work in this area. So it was troubling to me to read in the 
paper that the administration recently approved a plan to shift 
responsibility for money-laundering from Green Quest to the FBI 
section which has much less expertise.
    My concerns are that we are throwing away expertise that 
took literally decades to develop, and that we might lose 
ground not only on terrorist financing investigations, but also 
money laundering investigations in narcotics trafficking and 
financial fraud.
    It is also unclear who at the Department has money-
laundering issues as part of his or her portfolio. Mr. Garcia, 
I know you have experience in money-laundering prosecutions and 
care deeply about this issue, but I do not know if you will 
have the responsibility for this issue.
    Another example of confusion involves Canadian waste 
issues. Every day about 180 trucks come across the bridge from 
Canada into Michigan with Canadian waste--180 trucks a day, 
filling our landfills with Canadian trash. After September 11, 
we pointed out the security risk of allowing large trash trucks 
to do this with minimal inspections. I think all of us can 
picture a scenario in which trash trucks are used by terrorists 
to hide weapons, laundered funds, or hazardous materials like 
radioactive waste.
    Now in January 2003, Customs issued a new directive 
changing its practice and requiring additional inspection for 
trash trucks. But then a month later it reversed course and 
restored the practice of classifying trash trucks as low risk 
imports, requiring minimal inspection.
    I, along with Senator Stabenow and Congressman Dingell, 
sent a letter to Customs asking what happened, but we have 4 
months later not yet received even a response, which I assume 
is more evidence of confusion.
    One last example of confusion was reported to me by my 
Detroit office. It used to be that when we had immigration 
problems, my office would call the Detroit INS officials to get 
an answer. Now they are told they have to call Washington. We 
do not know why.
    Confusion obviously cannot be totally avoided when 
establishing a huge new agency like the Department, but it also 
needs to be tackled. I know that you two will be playing an 
instrumental role in trying to eliminate that confusion.
    I think I have run out of time. Shall I ask a few 
questions?
    Chairman Collins. If you would like to proceed with your 
questions, feel free.
    Senator Levin. As I have said, Congress authorized the 
creation of integrated border inspection areas between the 
United States and Canada. These areas could include conducting 
shared border inspection or reverse customs inspection at U.S.-
Canadian border crossings. So our Customs officers in Canada 
could protect our bridges and tunnels and also would enhance 
and facilitate trade.
    In your answers to questions submitted to you before this 
hearing, Mr. Verdery, you stated that reverse inspections are a 
good thing, and that is good to hear but some of us have been 
hearing that for the last 2 years.
    Now we are just wondering what is it going to take to get 
this thing accomplished? Is it ready to be acted upon?
    Mr. Verdery. It is my understanding, as you said, Senator 
Levin, that the administration does support the concept of 
reverse inspection, that there have been ongoing discussions 
with the Canadian Government through our Customs Service and 
now BCP.
    The hang up, as I understand it, is that there are some 
very tricky legal questions, largely on the Canadian side, with 
interpretations of Canadian constitutional measures.
    In my view, this is the type of issue that is a perfect 
issue for a new policy office within BTS to become involved in, 
and I look forward to working on it. In fact, I would love to 
come up and visit Ambassador Bridge and see exactly how that 
would play out, with a reverse inspection zone, in your State.
    Senator Levin. We would love to have you there, but the 
Canadians have been looking at this for a long time. We need an 
answer. So we would love to have you there, we look forward to 
having you there, but we also look forward to the Canadians 
being told--since there is a river there, I should say fish or 
cut bait. But we need an answer from the Canadians on this.
    Mr. Verdery. I will try to bring answers along with my 
luggage.
    Senator Levin. That would be great. Do you know whether we 
have officially asked Canada to set up that pilot program?
    Mr. Verdery. I do not know if it has been officially made. 
I would be happy to get back to you.
    Senator Levin. Would you let us know that?
    Our Chairman asked whether or not the recent IG report was 
read by you. And I think, Mr. Verdery, you commented on her 
question. I was talking to my staff and may not have heard.
    Chairman Collins. Mr. Garcia was the one who commented.
    Senator Levin. Thank you, Madam Chairman.
    I think that our Chairman asked questions about whether you 
are going to be taking steps to implement some of the 
suggestions in the report. My question is a little bit 
different because I was troubled by these findings, especially 
where the Inspector General pointed to systemic failures by the 
Department of Justice to adhere to the concepts of fairness and 
justice.
    Perhaps what was most disturbing was the clear violation of 
the civil rights of individuals that I raised with officials at 
the Department of Justice over a year ago. Examples of harsh 
treatment from several agencies including the Immigration and 
Naturalization Service, were common. A majority of detainees 
were not provided with the timely opportunity to contact a 
lawyer. Some detainees were held as long as a month before 
being presented with charging documents. Other detainees were 
unable to contact their families because of a ``communications 
blackout.'' Several detainees were physically and verbally 
abused with some being confined to their cells for 23 hours a 
day.
    Rather than my commenting on it beyond that, I would like 
to ask for your reaction to the report. Why don't both of you 
give me your reaction?
    Mr. Garcia. As the report makes clear, it was an 
unprecedented time in the Nation's history. That being said, 
there are certainly findings in that report that are troubling. 
As you mentioned, particularly so are any allegations of 
mistreatment of detainees within the U.S. system. Particularly 
they looked at two institutions, I believe, in that process, 
one which was a contracting facility for the INS at that time.
    I think those issues have to be addressed. My understanding 
is we have a regulation going through the process now that 
would make that more of a formal procedure. I would note that 
in the report, with respect to that Passaic facility, they did 
find that within that facility detainees were provided with 
access to counsel and were provided presentations by groups 
outlining their rights within the system.
    They did conclude that the INS needed to do a better job of 
regularly inspecting and visiting the facility. We are, as I 
said, working with a regulation to make that procedural 
requirement.
    I think it is a timely report. Clearly, it is the 
responsibility of the IG to look at these issues and to make 
the recommendations, the difficult issues, and ones we are 
committed to addressing with the IG and with our colleagues in 
DHS and Department of Justice.
    Senator Levin. Madam Chairman, I am wondering if it would 
be in order for me to request that after Mr. Garcia's 
confirmation, a reasonable period of time, perhaps 60 or 90 
days, that he give us a report on the steps taken in response 
to that report?
    Chairman Collins. I think that would be helpful and I would 
be happy to join in making that an official Committee request.
    Senator Levin. Any comment, Mr. Verdery, on that?
    Mr. Verdery. Senator, as we know, the activities that took 
place, that are the subject of that report, came when INS was 
part of the Department of Justice and many of the issues raised 
in the report were based on decisions taken by the Attorney 
General or the Deputy Attorney General. Some of those were a 
matter of discretion.
    Now that INS has been split up and has been moved into DHS 
and into these various parts, a number of those points of 
discretion now will sit with the Secretary. And I am very much 
looking forward to continuing to read the report, I have seen 
the Justice Department's response to it, and slogging through 
what were apparently some very difficult legal questions and 
discretionary decisions made by the head of the agency, who is 
now Secretary of Homeland Security.
    I met yesterday with our new Officer for Civil Rights and 
Civil Liberties to discuss this. And I know that the 
regulations that were discussed will be moving through BICE, 
then BTS and DHS. And so it would be a timely report for us to 
issue to you all within a few months.
    Senator Levin. Thank you. I have two final questions. My 
red light has been on a long time.
    Chairman Collins. It has. Go right ahead.
    Senator Levin. Thank you. Just two final questions.
    I want to describe a couple of hundred trash trucks coming 
into our State with Canadian trash which is a security issue. 
It is an environmental issue, as well, but a security issue, 
that is the relevance to your positions.
    We sent a letter to Mr. Bonner about this, the we again 
being Senator Stabenow, Congressman Dingell and I, in January. 
We have not received a response.
    First of all, did we send it to the right person? Customs 
is now split up. We have a Bureau of Immigration and Customs 
Enforcement and we have a Bureau of Customs and Border 
Protection. Mr. Bonner has got the Bureau of Customs and Border 
Protection. And Mr. Garcia, I think you are Acting Secretary 
already of the Bureau of Immigration Customs Enforcement. Did 
we send it to the right place, first of all? Should we have 
sent it to you?
    Mr. Garcia. Yes, you did.
    Senator Levin. Is that because you would rather it go 
there, or it should go there.
    Mr. Garcia. Actually Senator, it is obviously a very 
serious matter. Commissioner Bonner, formally Commissioner of 
the U.S. Customs Service, now head of BCBP, is responsible for 
the inspection issues at the border. We are committed to 
working with him on any issues that we can be helpful. 
Obviously, I am happy to go back to him and raise this 
particular issue with them.
    Senator Levin. If it is in the right place, we will 
continue to raise it with him ourselves. We appreciate the 
offer, but we cannot pile that on you, as well.
    Mr. Garcia, just on the money-laundering responsibilities, 
will the anti-money-laundering responsibilities be part of your 
portfolio?
    Mr. Garcia. Absolutely, Senator. As you mentioned earlier, 
I believe, I had experience as a prosecutor doing money-
laundering cases. I recognize what an incredibly important and 
powerful tool that is in the counter-narcotics, counter-
terrorism broad spectrum of crimes.
    The money-laundering expertise in what was Customs 
investigations, I agree, unmatched in their ability to apply 
their tools and authorities they have, in this way, to the 
crimes within their jurisdiction.
    You mentioned an agreement we have with the FBI. It is a 
division of responsibilities agreement. It provides that going 
forward there is formal coordination. There is exchange of high 
level management positions. We cannot afford to be duplicating 
efforts.
    But we cannot afford to lose any of the expertise in our 
program. We are not sending our agents to the FBI that were 
doing Green Quest, or sending them to the task force. We will 
continue with a robust financial money-laundering program that 
looks at the vulnerabilities that BICE is uniquely qualified to 
address. You are familiar with them, bulk currency transfer, 
black market peso, looking at the hubs in Atlanta and other 
places where currency is being exported in violation of our 
law.
    This is uniquely Homeland Security jurisdiction. We are 
committed to it. I personally can give you my commitment that, 
if confirmed, this will be one of my top priorities to not only 
maintain that expertise but to go forward with it as part of a 
new agency in an even more effective manner.
    Senator Levin. Thank you. Thank you both. We look forward 
to your confirmation. I hear you are both well qualified for 
these positions, and we all need your help. Thank you.
    Chairman Collins. Thank you, Senator Levin.
    Mr. Verdery, it has been recently reported that TSA has 
hired some screeners with criminal backgrounds. This is 
extraordinarily troubling to those of us who thought that the 
Federal Government's take over of the screening process would 
ensure high-quality screeners with clean backgrounds.
    According to the Washington Post, for example, at the Los 
Angeles International Airport, airport officials have learned 
that six TSA screeners admitted to serious felonies on written 
questionnaires, including felony gun possession and assault 
with a deadly weapon.
    What specific steps are you going to take to ensure that 
this problem does not reoccur, and that the employees not only 
receive adequate background checks but that someone pays 
attention to the results before they are hired?
    Mr. Verdery. It is my understanding that, as TSA was being 
stood up and hiring an unprecedented number of screeners, close 
to 50,000 within about a 10-month span, they put in an 
innovative methods to do background checks. it is my 
understanding that over 97 percent of the screeners that were 
eventually hired, had that fingerprint check.
    Now we know that a number of people, as the checks came 
back in, were found to have disqualifying criminal histories. 
Those were fired, several hundred, I believe, close to 1,000. 
But again, over 98 percent have had background checks and are 
actively on the job with no criminal problem.
    Chairman Collins. Given the size of the workforce, if you 
have 2 percent that are still slipping through the process with 
criminal backgrounds, that 98 percent figure is not of much 
comfort to me.
    Mr. Verdery. I believe, as Admiral Loy testified in the 
house earlier this week, the 2 percent is not 2 percent with 
criminal background in their history. It is 2 percent who did 
not have the check. So they are actively rushing to finish 
those 2 percent that did not have a full check when they were 
originally hired.
    Now you asked, as a matter going forward, we should not 
have a similar problem because all new applicants are going 
through full checks before they are hired. So this is an issue 
of trying to clean up around the margin where people fell 
through the cracks when TSA was rushing to hire close to 50,000 
people.
    So I think this is a problem that is going to be solved 
within the summer, and people can have complete confidence that 
the screeners that are on the job do not have any kind of 
disqualifying criminal background history.
    Chairman Collins. Another issue that has arisen with TSA is 
the Department's plan to lay off some 6,000 airport screeners 
by September 30. I know, in the case of the plans for the 
airport in Portland, Maine, that the reductions proposed did 
not take into account that there was a third screening lane and 
that the airport was entering its peak travel season, as those 
of you who go to Maine in the summer are well aware.
    I am very pleased that in response to my request, TSA is 
reconsidering its plan for Portland's airport, but I am 
concerned about how this happened in the first place. Could you 
share with us what approach you are going to take to make sure 
that TSA does have adequate staff to do the job and to take 
into account travel fluctuations, as well as the need to avoid 
inordinate delays for passengers?
    Mr. Verdery. As you know, I was not part of the original 
decisionmaking. And as you mentioned, it is my understanding 
that TSA is revising the screener reduction by airport in 
response to reanalysis and other factors, and I believe that is 
going to be announced shortly.
    Again, TSA is trying to respond to changes in passenger 
traffic and also to a decision to go to a different type of 
philosophy where they are going to have more roving law 
enforcement officers throughout the airport and fewer standing 
at particular check-lines. So that new philosophy is going to 
allow them to have some cutbacks without sacrificing the world-
class security and world-class services that they are trying to 
achieve.
    So I am anxious to get on the job, work with TSA on their 
screening plan. As you know, they do face a budget shortfall 
and so they are trying to be as prudent with the taxpayer's 
money as they can with the screener program without sacrificing 
any kind of safety in Maine's airports or anywhere else.
    Chairman Collins. Finally, I want to ask you a question 
about the CAPPS Program, which is the Computer Assisted 
Passenger Pre-screening System. As I understand the CAPPS-II 
program, it will use commercial and classified databases to 
select which passengers should be subjected to heightened 
scrutiny before they board aircraft. Is that essentially 
correct?
    Mr. Verdery. Yes. CAPPS-II is trying to accomplish two 
different things at the same time before a passenger would 
board a plane. One is using commercial sources to do an 
identity verification. Is the person trying to buy the ticket 
the person they say they are? And they are using all kinds of 
commercial databases to do that identity verification. Second, 
CAPPS-II will also generate a risk assessment score that a TSA 
employee could review until the information is deleted which 
will be after the person flies. There is no bleed over into 
other types of checks. No one has any clue what the information 
is other than the risk assessment score.
    Second, CAPPS-II is trying to perform a risk analysis of 
the individual using intelligence information to compare versus 
a person who is attempting to fly. As you know, a lot of that 
information is classified. We would be happy to sit down with 
you in a more appropriate setting and go through some of those 
measures. But that is the basics of what CAPPS-II is trying to 
achieve.
    Chairman Collins. If properly implemented, I could see 
where CAPPS-II could be very helpful in focusing attention on 
passengers that should be subjected to increased screening and 
scrutiny, and that should make travel easier for the low-risk 
passenger ideally.
    However, if the databases on which the new system will rely 
contain faulty or incomplete or inaccurate information, the 
possibility is high that passengers could be selected for 
increased scrutiny who do not deserve that kind of risk 
analysis. I think any of us who have ever had problems with 
inaccurate information being reported on a credit report, for 
example, or with identity theft are very much aware of the 
potential pitfalls of this approach.
    How are you going to ensure that the information on which 
CAPPS is relying is adequate and accurate, as well?
    Mr. Verdery. The CAPPS-II system will be relying on a 
number of commercial databases not a single source. 
Furthermore, if a person has inaccurate information in his 
credit reports, as happens frequently, the fact that that is in 
somebody's report will not affect his ability to fly. Obviously 
it is a separate issue for him, but it is not going to affect 
his ability to fly, the fact that there is inaccurate 
information in their report.
    Obviously, TSA needs to work and make sure that they pick 
the best commercial databases available, and I am happy to sit 
down and work with TSA to make sure that CAPPS-II is designed 
properly, if I am confirmed.
    As you mentioned, the goal is to make it much easier for 
the large majority of passengers to board with no delay. As you 
know, currently people are selected for enhanced screening 
based on a number of factors. This should make it much more 
narrowly tailored who is selected for the additional screening, 
based on that identity verification or risk analysis score.
    Chairman Collins. The final caution that I would give to 
you on the program is that many of us are concerned about the 
Federal Government aggregating large databases with personal 
information on law-abiding Americans. That is just contrary to 
the heritage of our country, with its respect for individual 
privacy. I think this is an area where we have to proceed with 
a great deal of caution in order to respect the privacy rights 
of law-abiding Americans.
    Mr. Verdery. We agree with that completely. The Chief 
Privacy Officer of the new Department has been involved on a 
day-to-day basis with how the CAPPS-II system is being 
developed. Remember, this is still a year away from full 
deployment. The Secretary has said it will not be deployed 
until she approves it. And I think she feels comfortable where 
this is going, remembering that the commercial information that 
is being accessed is a one-time hit. You have a score, it is 
checked. You are either sent onto the plane or given secondary 
screening, and then that score vanishes. The next time you fly, 
on a separate trip, that prior score has no interaction. It is 
just a one-time check. There is no retention of the data once 
your flight plan is completed.
    Chairman Collins. Thank you, Mr. Verdery.
    Mr. Verdery, Mr. Garcia, I want to thank you both for your 
testimony today.
    I also want to thank you for your willingness to serve your 
country. It is a sacrifice for many families to enter the 
public arena, and we need people with your ability, your 
integrity, and your commitment to be willing to serve in 
Federal Government. So I want to express the gratitude that I 
feel toward both of you for your willingness to serve.
    It is my hope that we can move very expeditiously on both 
of your nominations to get you confirmed quickly by the full 
Senate, and on the job as soon as possible.
    Without objection, the hearing record will be kept open 
until 5 p.m. today for the submission of any written questions 
or statements for the record. This hearing is now adjourned.
    [Whereupon, at 11:51 a.m., the Committee was adjourned.]


                            A P P E N D I X

                              ----------                              

                  PREPARED STATEMENT OF SENATOR WARNER
    Chairman Collins, and my other distinguished colleagues on the 
Senate Governmental Affairs Committee, it is my honor to come before 
the Committee today and introduce Stewart Verdery to serve as the first 
Assistant Secretary for Policy and Planning at the Border and Security 
Directorate at the Department of Homeland Security.
    I am pleased to welcome his family and friends in attendance today, 
including his wife Jenny, his children Isabelle and Chase, and his 
parents, Charles and Linda Verdery.
    Mr. Verdery has a vast and distinguished career in public and the 
private sector. I know that with his strong leadership skills, 
meritorious academic and professional credentials, Mr. Verdery will be 
an asset to the Department and its mission to protect the nation 
against further terrorist attacks.
    The Border and Transportation Security Directorate, where Mr. 
Verdery currently serves as a Senior Advisor to Under Secretary Asa 
Hutchison, is the largest of the Departments five major divisions. Many 
new and unforeseen challenges lie ahead for this Directorate.
    I am a personal witness to the abilities of Mr. Verdery. During his 
service as Counsel on the Senate Rules Committee when I served as 
Chairman, he adeptly directed a challenging investigation of the 
contested 1996 Louisiana Senate election.
    As Counsel on the Committee, he was also responsible for drafting 
some of the initial versions of campaign finance reform legislation. 
Many of the concepts from his work are reflected in the campaign 
finance legislation enacted in 2002.
    With his experience on the Senate Judiciary Committee, serving as 
lead Counsel for the Crime and Drug Policy Unit, Mr. Verdery is aware 
of the intricate complexities of dealing with security of our nation's 
borders and transportation infrastructure.
    I look forward to working with Mr. Verdery as he takes on this new 
task in public service. I commend his qualifications to you and urge 
the Committee's favorable consideration of his nomination.

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