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	<title> - THE HOMELAND SECURITY ADVISORY SYSTEM</title>
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	[House Hearing, 108 Congress]
	[From the U.S. Government Publishing Office]




	THE HOMELAND SECURITY ADVISORY SYSTEM

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

	HEARING

	before the

	SELECT COMMITTEE ON HOMELAND SECURITY
	HOUSE OF REPRESENTATIVES

	ONE HUNDRED EIGHTH CONGRESS

	SECOND SESSION

	__________

	FEBURARY 4, 2004

	__________

	Serial No. 108-35

	__________

	Printed for the use of the Select Committee on Homeland Security


	Available via the World Wide Web: http://www.access.gpo.gov/congress/
	house

	__________







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	22-132 WASHINGTON : 2005
	_________________________________________________________________
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	SELECT COMMITTEE ON HOMELAND SECURITY



	Christopher Cox, California, Chairman

	Jennifer Dunn, Washington Jim Turner, Texas, Ranking Member
	C.W. Bill Young, Florida Bennie G. Thompson, Mississippi
	Don Young, Alaska Loretta Sanchez, California
	F. James Sensenbrenner, Jr., Edward J. Markey, Massachusetts
	Wisconsin Norman D. Dicks, Washington
	W.J. (Billy) Tauzin, Louisiana Barney Frank, Massachusetts
	David Dreier, California Jane Harman, California
	Duncan Hunter, California Benjamin L. Cardin, Maryland
	Harold Rogers, Kentucky Louise McIntosh Slaughter, New
	Sherwood Boehlert, New York York
	Lamar S. Smith, Texas Peter A. DeFazio, Oregon
	Curt Weldon, Pennsylvania Nita M. Lowey, New York
	Christopher Shays, Connecticut Robert E. Andrews, New Jersey
	Porter J. Goss, Florida Eleanor Holmes Norton, District of
	Dave Camp, Michigan Columbia
	Lincoln Diaz-Balart, Florida Zoe Lofgren, California
	Bob Goodlatte, Virginia Karen McCarthy, Missouri
	Ernest J. Istook, Jr., Oklahoma Sheila Jackson-Lee, Texas
	Peter T. King, New York Bill Pascrell, Jr., New Jersey
	John Linder, Georgia Donna M. Christensen, U.S. Virgin
	John B. Shadegg, Arizona Islands
	Mark E. Souder, Indiana Bob Etheridge, North Carolina
	Mac Thornberry, Texas Ken Lucas, Kentucky
	Jim Gibbons, Nevada James R. Langevin, Rhode Island
	Kay Granger, Texas Kendrick B. Meek, Florida
	Pete Sessions, Texas
	John E. Sweeney, New York

	John Gannon, Chief of Staff
	Uttam Dhillon, Chief Counsel and Deputy Staff Director
	Steven Cash, Democrat Staff Director
	David H. Schanzer, Democrat Staff Director
	Michael S. Twinchek, Chief Clerk

	(ii)



















	C O N T E N T S

	----------
	Page

	STATEMENTS

	The Honorable Christopher Cox, a Representative in Congress From
	the State of California, and Chairman, Select Committee on
	Homeland Security.............................................. 1
	The Honorable Jim Turner, a Representative in Congress From the
	State of Texas, Ranking Member, Select Committee on Homeland
	Security
	Oral Statement................................................. 22
	Prepared Statement............................................. 7
	The Honorable Benjamin L. Cardin, a Representative in Congress
	From the State of Maryland..................................... 36
	The Honorable Donna M. Christensen, a Representative in Congress
	From U.S. Virgin Islands....................................... 42
	The Honorable Jennifer Dunn, a Representative in Congress From
	the State of Washington........................................ 33
	The Honorable Kay Granger, a Representative in Congress From the
	State of Texas................................................. 24
	The Honorable Jane Harman, a Representative in Congress From the
	State of California............................................ 25
	The Honorable Sheila Jackson-Lee, a Representative in Congress
	From the State of Texas
	Oral Statement................................................. 46
	Prepared Statement............................................. 9
	The Honorable Nita M. Lowey, a Representative in Congress From
	the State of New York.......................................... 44
	The Honorable Edward J. Markey, a Representative in Congress From
	the State of Massachusetts..................................... 31
	The Honorable Loretta Sanchez, a Representative in Congress From
	the State of California
	Prepared Statement............................................. 9
	The Honorable John B. Shadegg, a Representative in Congress From
	the State of Arizona
	Prepared Opening Statement..................................... 8
	The Honorable Christopher Shays, a Representative in Congress
	From the State Connecticut..................................... 38
	The Honorable John E. Sweeney, a Representative in Congress From
	the State of New York.......................................... 28

	WITNESSES

	The Honorable James Loy, ADM, Deputy Secretary, Department of
	Homeland Security
	Oral Statement................................................. 11
	Prepared Statement............................................. 14
	Mr. John O. Brennan, Director, Terrorist Threat Integration
	Center
	Oral Statement................................................. 17
	Prepared Statement............................................. 18

	APPENDIX
	Material Submitted for the Record

	Responses and Questions from The Honorable Loretta Sanchez....... 63
	Responses and Questions from The Minority Staff.................. 64















	THE HOMELAND SECURITY ADVISORY SYSTEM

	----------


	Wednesday, February 4, 2004

	House of Representatives,
	Select Committee on Homeland Security,
	Washington, DC.
	The committee met, pursuant to call, at 12:38 p.m., in room
	2175, Rayburn House Office Building, Hon. Christopher Cox
	[chairman of the committee] presiding.
	Present: Representatives Cox, Dunn, Shays, Camp, Linder,
	Shadegg, Gibbons, Granger, Sweeney, Turner, Sanchez, Markey,
	Frank, Harman, Cardin, Slaughter, DeFazio, Lowey, Norton,
	McCarthy, Jackson-Lee, Pascrell, Christensen, Etheridge, and
	Lucas.
	Chairman Cox. [Presiding.] Good afternoon. A quorum being
	present, the Homeland Security Committee will come to order.
	This committee is meeting today to hear testimony on the
	Homeland Security Advisory System.
	I would like to thank the members in attendance, and thank
	both our distinguished witnesses--Admiral James Loy, the deputy
	secretary of Homeland Security, and John Brennan, director of
	the Terrorist Threat Integration Center--for their willingness
	to share their expertise with us.
	This marks Admiral Loy's first testimony before the
	Congress in his new capacity as deputy secretary of Homeland
	Security.
	Admiral Loy, we are honored to welcome you and look forward
	to working closely with you in guiding the department's
	progress, in meeting its Homeland Security Act mandate.
	John Brennan has been with us before, and we welcome you
	back.
	Since September 11, 2001, we have made dramatic, undeniable
	progress in securing the American territory. Everyone here
	agrees on that.
	The president and the Congress have joined forces to lead a
	fundamental transformation in the way the Federal Government
	views the national security and how it should relate to state
	and local governments, as well as to the private sector, in
	order to promote the security of the American people and our
	territory.
	The Department of Homeland Security is one important
	product of that dynamic policy reorientation. While the
	Terrorist Threat Integration Center was, like the Homeland
	Security Advisory System itself, called into existence without
	benefit of congressional action, the Congress are nevertheless
	delighted to note the constructive work it is doing in bringing
	together information and analysts to form a comprehensive
	picture of the terrorist threats we face.
	In fact, TTIC is doing such good work, we are inclined to
	think it might be best internalized in the department and made
	answerable to the secretary of homeland security. That,
	however, is discussion for another time.
	Today we want to get a better understanding of the Homeland
	Security Advisory System itself--our color-coded national
	warning system, it is purpose, how it actually works, and its
	potential, including how it could be improved.
	The system's color-coded warnings have become the primary
	means by which the Federal Government communicates directly to
	the public, its bottom-line judgment on the risk of terrorist
	attack at any given time.
	It is our inescapable reminder that the Nation is engaged
	in a global war on terror and that we ourselves may be at risk
	of attack.
	The president's directive establishing the system puts it
	plainly, ``The higher the threat condition, the greater the
	risk of a terrorist attack.''
	Adjusting the threat condition up or down is, in short, a
	very significant public statement to the American people by
	their government. As a result, we have learned that raising the
	national threat level can have direct implications, not only
	for personal safety, but also it may entail widespread changes
	in personal behavior, including travel and spending patterns,
	with corresponding if temporary effects on the nation's
	economy.
	Government and private sector entities, too, must take
	appropriate measures to increase their security posture every
	time the threat level is raised. And those measures are costly.
	I will get to that in a minute.
	They key point is that the reliability and timeliness of
	the advisory system's national threat warnings must be
	unquestioned.
	I want to stress at the outset the public nature of the
	color-coded warning system.
	The Homeland Security Act provides, in Section 201, that
	the department's Homeland Security Advisory System
	responsibilities include, ``Exercising primary responsibility
	for public advisories related to threats to homeland
	security''--that is Section 201(d)(7)(a) of the Homeland
	Security Act.
	I think it follows that what we use the system's public
	advisories--that is, its color-coded warnings--to say, we
	should be willing to say and to explain publicly. Because the
	Homeland Security Act goes on to note that the department's
	responsibilities have a second element that need not be public,
	the responsibility, ``in coordination with other agencies of
	the Federal Government to provide specific warning information
	and advice about appropriate protective measures and
	countermeasures to state and local government agencies and
	authorities to private sector, other entities and the
	public''--that is Section 201(d)(7)(b) of the act.
	So we need to make sure that we use the public threat
	advisory system to advise the American public of threats that
	are truly national in scope, or to warn of region or sector-
	specific threats that we are able and willing to identify and
	discuss in public, including as a means of diverting or
	delaying potential attacks.
	That is to say, we should not be using the public color-
	coded threat advisory system to warn of terrorist threats that
	are not national in scope if we are not willing to discuss them
	publicly. For them, we should be using the second element of
	the statutory provision I just quoted.
	That brings me back to the cost issue.
	Securing the homeland is expensive. Every national
	terrorist threat warning triggers a massive chain reaction
	throughout our society. Government officials at all levels,
	businesses of all sorts and sizes, as well as individual
	citizens are left with the fundamental question: What does code
	orange mean for me?
	The answer in the absence of specific guidance as to the
	nature, potential targets and likely timing of the threat has
	been a nationwide piling on of enhanced security measures,
	breaking state and local overtime budgets and redirecting their
	personnel from their other duties. If we can avoid or diminish
	that effect, we should, and soon.
	It is, after all, a fundamental part of the terrorist
	strategy to destroy our economy and our way of life. We must
	not, through our well-meaning efforts, give them any help.
	All across America, in our public and private institutions,
	we are spending considerable sums of money to enhance our
	security, and we must do it wisely.
	It is enormously intrusive and unnecessarily expensive to
	call a heightened state of alert across the Nation when hard
	intelligence shows that only certain parts of the country or
	certain sectors of our critical infrastructure are at increased
	risk.
	This committee will soon be marking up H.R. 3266, the
	Faster and Smarter Funding for First Responders Act, voted
	unanimously out of our Emergency Preparedness and Response
	Subcommittee late last year. That bill contains a provision
	that requires the secretary of homeland security to revise the
	advisory system so that warnings can be issued to the
	geographic regions or economic sectors which analysts believe
	are actually at risk.
	The case for such reform is in the numbers. Reports
	describing code-orange-related expenditures include, just by
	way of example, a January 23 Los Angeles Times article that
	cites LAX officials reporting that during the most recent rise
	to orange, their security costs amounted to more than $3.8
	million since December 21st; an Associated Press report that
	officials in New Orleans spent between $200,000 and $300,000 a
	week in police overtime because of the latest orange alert; a
	U.S. Conference of Mayors' survey that shows cities spent about
	$70 million per week in orange-alert-related expenses.
	Phoenix, for example, spent $154,000 on a weekly basis. Los
	Angeles spent $2.5 million each week. And New York City racked
	up $5 million each week in additional expenses.
	We cannot expect states and localities to sustain such
	unbudgeted expenditures indefinitely.
	To take a closer and more comprehensive look at the
	incremental costs incurred by Federal, state and local
	government agencies in responding to the last three code orange
	alerts, this committee made a bipartisan request for a GAO
	study. Initial findings reported to the committee last week
	show that state and local officials would like to receive more
	detailed guidance to help them determine what protective
	measures to take in response to orange alerts.
	They also want DHS to provide more information on region
	and industry-specific threats.
	They are right. Responding aimlessly over and over to a
	generalized warning draws down resources without any assurance
	of enhancing anyone's safety.
	It may over time actually contribute to a degradation of
	this nation's vigilance, so-called warning fatigue, and so
	diminish the utility of the Homeland Security Advisory System.
	There are encouraging signs. This week and late last month,
	I think we did a good job of identifying aircraft and routes
	our analysts believe were subject to heightened risk.
	Preventive measures were tailored to the apparent threat. In
	the process, DHS demonstrated its ability to use hard
	intelligence in directing a clear warning message only to where
	it was needed.
	Responsible suggestions for canceling flights enabled the
	airlines to respond effectively.
	Alerts to the public should, by contrast, be made only
	where they can be publicly explained or when the increased risk
	is truly national in its scope.
	Keeping the American people at a high level of anxiety is
	not a sustainable strategy. Throughout most of the heightened
	alert periods, including increasing the alert level from yellow
	to orange and back again, the public has been told at the same
	time to go about their normal everyday lives. The question
	remains: Why issue, then, a public threat advisory at all?
	Great Britain's national alert system, for example,
	communicates warnings only to law enforcement officials. The
	general population is never notified because causing alarms to
	the general population would be counterproductive.
	On the other hand, public alerts may serve to delay or
	deter terrorist attacks and may, therefore, enhance
	opportunities to prevent them.
	We must, in some, strike an appropriate balance between
	providing meaningful warning where hard intelligence warrants
	it and causing a senseless, unfocused nationwide response to
	unspecific threat alerts.
	I look forward to our witnesses' views on how best to
	strike that balance.
	The chair now recognizes Mr. Turner, the ranking Democratic
	member, for any statement he might have.
	Mr. Turner. Thank you, Mr. Chairman.
	Secretary Loy, let me congratulate you on your new position
	and thank you for appearing before our committee today.
	As deputy secretary, you have the critical role of managing
	that department. I guess you have most of the duties that
	Secretary Ridge has except maybe you do not have to go to all
	the press conferences.
	But we are pleased to have you.
	And, Mr. Brennan, welcome back to you.
	Both of you are here to talk about a subject that the
	chairman and I have both had a great deal of interest in: the
	Homeland Security Advisory System.
	I have been able to observe the threat alert system over
	the last two years and have been able to view it in light of
	the briefings that we receive regularly regarding the threat.
	And I think it gives us a unique perspective on the system,
	being able to compare the threat information with the raising
	of the alert at the various times that it has been raised in
	the last couple of years.
	And after thinking about ways we might change the system,
	and observing how I think the public has reacted over time to
	the warnings, it is my judgment that the color-coded system
	should be eliminated.
	The system that we have today we all know was created very
	quickly after September 11th. It was our government's first
	attempt to establish a national system to alert our citizens
	and our economic sectors about homeland security threats. And
	while the system may have served some initial purpose, I do not
	believe that the color codes are serving us well today.
	Americans understand that we are fighting a long war on
	terror, often fought in the shadows and without a clear
	understanding of when or where we might be attacked. Therefore,
	our intelligence, law enforcement and other security forces
	must remain vigilant all the time, not just when the color code
	is raised.
	Specific threat advisories can help target the vigilance of
	these law enforcement and security forces by increasing their
	security measure at certain places and during certain times
	when they receive specific information.
	And I think certain sectors of our economy, if given the
	direct and specific information, can make adjustments that are
	important.
	But the color-coded threat alert system that we have does
	not meet, in my judgment, our true security needs.
	First of all, I think that the color codes send very mixed
	messages. In December we raised the threat level to orange, and
	as the chairman said, we told the American people not to change
	their plans or take any specific actions to protect themselves.
	I think that leaves the public confused and somewhat agitated
	with a system that causes them alarm but gives them no specific
	guidance about what to do.
	Constantly raising and lowering this color-coded level is I
	think making the public numb to the ongoing threat of
	terrorism.
	People need to know that they should be constantly alert.
	We need a culture of awareness in this country to be alert to
	suspicious behavior that may be linked to terrorism.
	Second, I believe the color-coded system is not providing
	threat information to the people that need it in order to make
	and take decisive action.
	Our law enforcement, security and emergency personnel do
	not need a color; they just need the facts.
	And if the governors and the mayors of this country need to
	order additional security measures, they need credible,
	actionable intelligence from the Federal Government.
	The General Accounting Office and the Gilmore Commission
	both reported that state and local officials are not getting
	the specific information they need to do their jobs. They are
	looking for more help, for more information. It is a constant
	cry I hear every time that I travel into our communities.
	Our state and local officials need to know the details
	before causing public concern and being asked to spend scarce
	dollars on unnecessary security measures.
	In addition, I believe that the all-or-nothing nature of
	the current system fails to distinguish between areas and
	sectors of the economy that we believe are at heightened risk.
	When the threat level is raised, a wide range of Federal,
	state, local and private sector protection plans go into
	effect. Although the intelligence has not suggested that all
	sectors of our society are specifically threatened. State and
	local governments spend hundreds of thousands of dollars,
	perhaps millions, to defend against an unknown threat.
	Finally, I think we also need to consider whether the alert
	system is helping terrorists more than it is helping us. When
	we raise and lower the threat level, we are also telling Al-
	Qa`2ida that we are strengthening our defenses. And then again,
	we tell them that we are lowering our guard when we lower the
	color.
	I think I agree with the chairman that we need to look at
	our system and question whether or not we are giving our
	enemies as much information as we are giving ourselves.
	Now, I recognize that the administration's in a very
	difficult dilemma here. Our intelligence agencies gather a lot
	of information, and very little of it relates to specific
	attack. And I can say, having received these intelligence
	briefings, that it is pretty clear to me that this general
	threat information is continuous and ongoing.
	I think we should have a level of security deployed around
	the country that is appropriate in light of the ongoing and the
	consistent threat of terrorism that we face.
	When we believe there is a greater risk of attack, those
	who are able to take specific action should be advised and
	should be given as much information as we possibly can share.
	But issuing general alerts does not serve a useful purpose and
	may well be counterproductive.
	Another point that I think is worthy of some consideration
	here, and that is that the very existence of this color-coded
	system really creates a no-win situation for the department. If
	the department fails to raise the level of alert and an attack
	occurs, you will be severely criticized. If, on the other hand,
	you raise the alert and nothing happens, people are quickly
	going to say you are crying wolf once again.
	And the political reality here is that the political
	pressure is always there for you to raise the alert level when
	threat information comes to you that indicates there may be
	some change.
	And so I think the political reality is that political
	pressure itself may cause an over utilization of the color-
	coded system.
	So I think we would be much better off if we shared with
	the public and with the communities and geographic areas and
	sectors what we have specific threat information about. And if
	we have general information that is more specific and may
	affect the entire country, let's just share it and tell them
	what it is. But to simply go through the motions of talking
	about color codes to me is not the America that I think we want
	to know, nor is it giving us the information that we need to
	have.
	Thank you very much, Mr. Chairman.
	Chairman Cox. Thank you very much.
	Under committee rule three, members who were present in the
	first five minutes can make opening statements of three minutes
	or reserve their time for questioning.
	Does any member wish to make an opening statement?

	Prepared Statement of the Honorable Jim Turner, a Representative in
	Congress From the State of Texas, and Ranking Member, Select Committee
	on Homeland Security

	Thank you, Mr. Chairman.
	Secretary Loy, let me congratulate you on your new position. The
	Deputy Secretary in any department is the person who makes sure that
	things get done. In this department, you will have your hands full, and
	I am pleased to see that you are on the job.
	Mr. Brennan, welcome back. Thank you both for being here to discuss
	the Homeland Security Advisory System.
	I have been closely observing the threat alert system closely over
	the past two years and have received threat briefings when the level
	has been raised to orange. After thinking about possible changes that
	could be made to the system, and seeing how the general public has is
	reacting over time to the warnings, my judgment is that this system
	should be eliminated.
	The system we have today was created quickly after the September
	11, 2001 attacks. It was the government's first attempt to establish a
	national system to alert our citizens and our economic sectors about
	homeland security threats.
	While the system may have initially served a useful purpose, it is
	not serving us well now.
	Americans understand that we are fighting a long war on terror,
	often fought in the shadows, without a clear understanding of when or
	how we might be attacked. Therefore, our intelligence, law enforcement,
	and other security forces must remain vigilant, at all times. Specific
	threat advisories can help to target that vigilance, by increasing
	security measures in certain places and for certain sectors of the
	economy.
	But the color coded threat alert system we have doesn't meet these
	security needs.
	First, we send very mixed messages. In December, we raised the
	threat level to ORANGE, but told the American public not to change
	their plans or take any specific measures to protect themselves. This
	leaves the public confused and agitated with a system that causes them
	alarm but gives them no concrete guidance. Constantly raising and
	lowering the threat level is also making the public numb to the ongoing
	threat of terrorism. People need to know that they should be constantly
	alert to suspicious behavior that may be linked to terrorism.
	Second, the color coded system is not providing threat information
	to the people that need it in order to take decisive action.
	Our law enforcement, security, and emergency personnel don't need a
	color, they need the facts. If the governors and mayors of this country
	need to order additional security measures, they need credible,
	actionable intelligence from the federal government. However, as the
	GAO and Gilmore Commission have reported, state and local officials are
	not getting the specific information they need to do their jobs. They
	are looking for more help from the Department. Our state and local
	officials need to know the details before causing public concern and
	spending scarce dollars on unnecessary security measures.
	In addition, the all-or-nothing nature of the current system fails
	to distinguish between areas and sectors of the economy that we believe
	are at a heightened risk. When the threat level is raised, a wide range
	of federal, state, local, and private sector protection plans go into
	effect, although the intelligence has not suggested that all sectors of
	our society are specifically threatened. State and local governments
	spend hundreds of thousands of dollars--perhaps millions--to defend
	against an amorphous threat.
	Finally, we also need to consider whether the alert system is
	helping the terrorists more than it is helping us. When we raise and
	lower the threat level, we are also telling Al-Qa`ida when we are
	strengthening our defenses, and then again when we are lowering our
	guard. I agree with the Chairman that this alert system may present a
	roadmap, broadcasting our vulnerabilities to those who would do us
	harm.
	I recognize that the Administration faces a difficult dilemma. Our
	intelligence agencies gather a great deal of information, and very
	little of it relates to a specific attack. We should have a level of
	security deployed around the country that is appropriate in light of
	the ongoing, consistent threat of terrorism that we face. When we
	believe there is greater risk of attack, those who are able to take
	specific action should be advised. But issuing general alerts does not
	serve a useful purpose and may well be counterproductive.
	I urge our witnesses and the Department to reform the threat alert
	system. We need to create a system that is flexible, gets actionable
	information quickly to the people that need to take action, and
	underscores the need for our citizens to remain vigilant in the face of
	the threats we face.
	Thank you, Mr. Chairman, for calling this hearing. I look forward
	to the testimony of our witnesses today.

	Prepared Opening Statement of The Honorable John B. Shadegg, a
	Representative in Congress from the State of Arizona

	I commend Chairman Cox for holding this important hearing and look
	forward to the testimony of Admiral Loy.
	Today we wi11 learn about the steps the Department is taking to
	improve the Homeland Security Advisory System. It is safe to say that
	overall homeland security in general has improved since 9/11.
	Awareness, intelligence sharing, and investment in our first responders
	have all increased. Likewise, states, localities, police and fire
	departments are becoming more comfortable with what it means to move
	from yellow to orange on the Homeland Security Advisory System.
	At the same time, there is room for improvement. As you know, my
	Subcommittee passed the Smarter Faster Funding for First Responders
	bill on November 20th. That legislation would encourage the Department
	to make the warnings more specific, by including geographic information
	and a- description of what kind of industry or business is threatened.
	I applaud the Chairman and the Ranking Member for supporting that
	legislation. I believe that it is a step in the right direction, and I
	look forward to seeing it pass full committee as soon as possible.
	I am still concerned, however, that we have not fully explained to
	the American people what moving from yellow to orange on the Homeland
	Security Advisory System means. Does that mean that they should fill up
	their gas tank, or buy reserve water, or give blood?
	As the brave men and women on Flight 93 proved, Americans are ready
	and willing to join the fight against terrorism, but they need more
	tangible information about what they can do. Leveraging the support of
	the American public is critical to our future success. I applaud
	efforts like ready.gov and the citizens corps, but as the Department
	continues to refine the Homeland Security Advisory System, I strongly
	encourage a focus on what citizens can do.

	Prepared Opening Statement of The Honorable Loretta Sanchez, a
	Representative in Congress From the State of California

	Thank you, Mr. Chairman. I'd like to start by welcoming our
	witnesses and thanking you both for being here.
	Today, we're here to talk about the Homeland Security Advisory
	System. It is my hope that you are going to report to us that this
	system has proven to be ineffective that you have instead come up with
	a far improved method to keep our citizens safe and calm.
	The mission of the Department is to protect the public from
	terrorists. And I am. quite sure it was not the intention of the
	Department to create a system that keeps us at an elevated state of
	alert at all times.
	There are three main areas that are a source of concern for me that
	I'm hoping I will hear you address today in terms of the alert system
	as it stands today.
	Those three topics are: (1) the WAY in which we obtain intelligence
	on terrorist activity; (2) the way we disseminate that information to
	the public-and in particular to law enforcement; and (3) the
	expectations of the public once they receive that information.
	I've talked with several people in the law enforcement community
	across California about these issues and the various breakdowns in each
	area, and it would appear that we still have some real changes to make.
	On the issue of intelligence, one only needs to read the papers
	lately to have real doubts about the quality of the information we are
	receiving. I'm hoping that Mr. Brennen can speak further about this
	issue. Have we been successful in our intelligence gathering? Are there
	areas in which we can make improvements?
	As for dissemination of information once we identify threats, I'm
	told there are real breakdowns in this area, particularly as it relates
	to the law enforcement community.
	I'd be willing to bet that every member on this panel has heard a
	complaint from local law enforcement that they've gotten a million
	calls from citizens asking what they should do because the threat level
	was raised to orange. Then the there are the obvious questions that
	follow from those law enforcement officers, "Why wasn't I notified? Why
	do I have to find out by CNN or a citizen's phone call?"
	I am confident that you have some ideas on how we can better
	communicate with our First Responders.
	Finally, the warning itself is far too broad and there is no
	suggested action to be taken.
	It is unfair, even cruel, to tell the public: ``You are in more
	danger than you were yesterday. We have information that you may be
	attacked. This means someone is trying to kill you. What should you do
	about it? Nothing really. Go about your normal routine, just be a
	little extra afraid.''
	I believe we can do better than saying: ``We think that somewhere
	in this huge country there might be a terrorist attack.'' How can we
	expect the public to have any confidence in our ability to protect
	them? More importantly, how do we expect them to feel safe?
	I am interested in digging deeper into these issues, and I am
	hopeful that you have some ideas about some real changes with regards
	to the alert system that should replace this one, a tool that will
	really help protect the public. Thank you, Mr. Chairman.

	Prepared Statement of The Honorable Sheila Jackson-Lee, a
	Representative for in Congress From the State of Texas

	Chairman Cox, Ranking Member Turner, I thank you for your efforts
	and energy in providing today's distinguished witnesses and for
	organizing this important hearing on the Homeland Security Advisory
	System. The alert system is of considerable controversy, and the
	testimony and analysis that will go on record today will allow us to
	improve the system. Thank you also to Admiral James Loy and to Mr. John
	Brennan for their time and testimony.
	I join my colleague the Ranking Member Turner in his criticism of
	the Homeland Security Advisory System (HSAS). Philosophically, it does
	no more than incite fear and anxiety for American citizens. A true
	``advisory system'' would do just that-advise citizens rather than send
	them into a frenzy. Since the HSAS's inception on March 12, 2002, I
	have advocated the need for a system of relevant and concise
	instructions for citizens-information that is truly useful in the event
	of a threatening situation.
	On December 31, 2003, I held a Homeland Security Taskforce Meeting
	in Houston, Texas and met with personnel from the Houston Police
	Department, School District Police Department, Fire Department, Mental
	Health Mental Retardation of Harris County, Office of Emergency
	Management, Health Department, Airport System, and the Houston chapter
	of the American Red Cross; members of the local branches of the Federal
	Bureau of Investigation (FBI) and the Drug Enforcement Agency (DEA);
	and the local academic and church communities to discuss the viability
	of Houston's threat assessment systems with respect to homeland
	security. As a Member of this Committee as well as Ranking Member of
	the House Judiciary Subcommittee on Immigration and Border Control, it
	was critical that I bring back to my fellow Committee members an urgent
	initiative to analyze and improve the interoperability and
	functionality of our local and national First Responder corps. This
	improvement initiative begins with a threat advisory system that
	actually gives intelligent and articulable information that first
	responders can use in such an instance.
	Among the issues that we discussed on December 31st were whether
	the funding levels, equipment availability, depth of personnel, and
	degree of interoperability between local, state, and federal systems
	are adequate to facilitate timely emergency response. Overall, some of
	the responses given were that intelligence-sharing has generally
	improved; however, other important aspects clearly require immediate
	attention. Monies that were promised back in 2001 by the federal
	government have not been received; more hospital beds and medical
	equipment are needed; and the first responder staff and equipment
	levels must be increased.
	The orange alert issued on December 21st signified a `high' risk of
	terror threat. With an improved and more comprehensive advisory system,
	our local hubs perhaps would have already been prepared! The issues
	underscored in that Taskforce meeting are of grave importance in a city
	such as Houston, the fourth largest city in the nation. We are the home
	to many critical sites such as ports of entry, power grids, major
	medical centers, and central business facilities that need to have
	adequate training, a sufficient number of personnel, necessary
	equipment, and adequate funding in the event that DHS issues a high
	alert as we have today. Clearly, we in Congress must hold oversight
	hearings as to the degree of threat assessment operability and
	interoperability of our cities? first responder systems and whether our
	communities across the nation are prepared in addition to today's
	matter-more focused on the alert system itself.
	Relative to suggested improvements to the system that will make it
	more effective, the Houston Chapter of the American Red Cross offered
	the following alert language to replace the ``orange threat level''
	indication:

	Individuals
	<bullet> Review your Personal Disaster Plan.
	<bullet> Ensure your Disaster Supplies Kit is stocked and
	ready.
	<bullet> Develop alternate routes to and from work or school
	and practice them.
	<bullet> Exercise caution when traveling.
	<bullet> Have shelter-in-place materials on hand and review the
	procedure in Terrorism: Preparing for the Unexpected, a Red
	Cross brochure.

	Families
	<bullet> Review Family Disaster Plan with all family members
	<bullet> Check items in your Disaster Supplies Kit and replace
	items that are outdated.
	<bullet> If not known to you, contact your child's school to
	determine their emergency notification and evacuation plans.
	<bullet> Ensure the emergency communication plan is understood
	and practiced by all family members.
	<bullet> Discuss children's fears concerning possible terrorist
	attacks.

	Neighborhoods
	<bullet> Check on neighbors who are elderly or have special
	needs to ensure they are okay.
	<bullet> Review their disaster plan with them.
	<bullet> If a need is announced, contact nearest blood
	collection agency and offer to organize a neighborhood blood
	drive.

	Schools
	<bullet> Review the school's emergency plan that was developed
	using the Red Cross Emergency Guide for Business and Industry.
	<bullet> Ensure all emergency supplies are stocked and ready.
	Offer Masters of Disaster ``Facing Fear: Helping Young People
	Deal with Terrorism and Tragic Events'' lessons in grades K-12.
	<bullet> Prepare to handle inquiries from anxious parents and
	media.

	Businesses
	<bullet> Review the emergency plans, including continuity of
	operations and media materials on hand.
	<bullet> Ensure that the emergency communication plan is
	updated and includes the purchase of needed emergency equipment
	as detailed in the Red Cross Emergency Management Guide for
	Business and Industry.
	<bullet> Determine any need to restrict access to the business
	or provide private security firm support/reinforcement.
	<bullet> Contact vendors/suppliers to confirm their emergency
	response plan procedures.
	I advocate an advisory system very similar to that which the
	American Red Cross presents. Because the alerts would be so narrowly
	focused, they would not cost cities, states, and municipalities the
	extraneous amount of emergency preparedness dollars that they struggle
	to produce to respond.
	Mr. Chairman and Ranking Member, for the above reasons, I recommend
	restructuring of the Homeland Security Advisory System. Thank you for
	assembling this meeting.
	Hearing no requests, the chair is pleased to again welcome Admiral
	Loy.
	Thank you again for being with us this afternoon, and thank you for
	your written testimony, which we have provided to the members in
	advance.
	We would be pleased if you would take five minutes to summarize
	your testimony.

	STATEMENT OF THE HONORABLE JAMES LOY, ADM, DEPUTY SECRETARY,
	DEPARTMENT OF HOMELAND SECURITY

	Admiral Loy. Thank you, Mr. Chairman.
	Good morning, Mr. Turner.
	I would like to thank you as well as the other members of
	the committee for providing the chance to talk about the
	Homeland Security Advisory System.
	First, let me publicly thank my colleague, John Brennan,
	sitting next door. Since I arrived on the scene at DHS in early
	December, I think I have spent more time with John than I have
	with my family.
	TTIC's charter is to be the coordination point for the
	sharing of information related to terrorist threats for the
	intelligence community. In our day, every day at DHS starts
	with a TTIC review of current threat analysis. If it is about
	the terrorist threat, it goes to TTIC from any point now on the
	intelligence community compass, including some very new ones,
	like state, local and private sector information provided to
	them from DHS.
	Armed with this all-source array, TTIC offers the analytic
	product for those of us charged with operational
	responsibility.
	TTIC, like DHS, is an evolving organization, getting better
	at its job every day.
	John and his team have done an exceptional job in starting
	up the center and meeting the charter in the law. They have
	become a key cog in the business of securing our homeland.
	On March 11th, 2002, President Bush created the Homeland
	Security Advisory System, as the chairman said, as a tool to
	improve coordination and communication among all levels of
	government, the private sector and the American public in the
	fight against terrorism.
	The advisory system is binding on all Federal agencies
	except the Department of Defense. And it is encourage for state
	and local governments and the private sector; 55 of the 56
	states and territories have adopted it.
	During periods of heightened concern, the framework
	provides the ability to change the threat condition on a
	national level while also affording the opportunity to target
	communications to particular geographic regions, industry
	sectors or other affected entities.
	The latitude provided by HSPD-3 allows the department to
	address unforeseen situations and continue to refine the
	advisory system as the need arises. This flexibility is
	critical to the success of the advisory system and essential to
	its effective implementation as both the chairman and the
	ranking member have commented.
	With the creation of the department on March 1st, 2003, the
	advisory system has evolved into a framework that married the
	analytical assets of the intelligence community with the
	department's unique responsibility in IAIP, that directorate,
	to assess the nation's vulnerabilities and implement protective
	measures.
	The system in its various dimensions continues to evolve.
	And I believe we have reached a threshold in that evolution
	where the system serves the Nation well.
	When all the rhetoric is lifted, it is simply a tool in the
	system we have designed to secure our homeland. As part of a
	system that includes other tools and can be used selectively
	itself, the HSAS has demonstrated its utility on several
	occasions.
	This evolution to date has revealed three basic ways, I
	believe, to use the system.
	First, as a universal baseline, and as a universal
	adjusting tool, when and where the entire nation is alerted to
	a changed threat circumstance requiring across-the-board
	upgrades or downgrades of security activity.
	Second, surgically, where the threat conditions can be
	changed geographically, by economic sector, or even by a
	combination of both, and if the first use is blunt, and
	certainly it is, this use is more sophisticated and it requires
	a more evolved system as exhibited in the just-passed December-
	January holiday period.
	Third, using communication channels developed over the
	year, we now make adjustments within the existing threat
	condition to regions or sectors without a threat condition
	change at all.
	All of these approaches are keyed to the best judgments we
	can make on the threat itself. It is a threat-based risk-
	managed system. It demands new and different thinking and
	judgment than has ever been necessary before.
	We are getting better at it daily, and we look forward to
	working with the committee to work even better ideas into the
	HSAS framework.
	We recognize that a decision to change the threat condition
	has significant economic, physical and psychological impacts on
	the nation. Therefore, decisions are taken by the secretary
	only after serious consultation with key colleagues around the
	Homeland Security Council table.
	All the players at that table are now familiar with the
	range of actions the secretary has available to him. And in the
	final analysis, the HSAS is simply a communication tool.
	We have developed other products to fill out that tool kit.
	Each can be used to inform a broad or narrow audience,
	depending on the threat. They range from information bulletins
	to advisories to conference calls to executive visits. And such
	products have enabled DHS to use the advisory system in a more
	targeted and flexible manner.
	And as a result of this refined ability to target specific
	information with specific actions and prevention measures, the
	threshold for recommending changes to the threat condition has
	actually become more finely calibrated.
	This evolution is best illustrated by the most recent
	threat period, the change over the December 2003 holiday
	window. At that time the threat condition was raised from
	yellow to orange based on a substantial increase in the volume
	of threat-related reports from credible sources across the
	board. These were the most specific threat reports that we have
	seen thus far.
	When the threat condition was lowered on January 9th, DHS
	recommended that several industry sectors and geographic
	locales continue on a heightened alert status. And in this
	case, DHS utilized the HSAS communications tools to provide
	specific recommendations to particular industry sectors and for
	particular geographic areas in response to the specificity that
	we saw in the threat stream.
	For the first time since the creation of the system, the
	department lowered the national threat level but recommended
	maintaining targeted protections for particular industries or
	geographical locales.
	We are simply getting better at the decisionmaking required
	to meet our mission. In the end, it is about finding and
	building a flexible, effective system and then making good
	judgments and taking good decisions in the best interest of the
	American people.
	Mr. Chairman, I had the pleasure of hearing your staff
	director in your absence and Mr. Turner at a dinner event
	Monday night. Each spoke about our common work together. It was
	almost uncanny how both gentlemen seemed to articulate loud and
	clear the thoughts and discussions we have every day in the
	department.
	They spoke about focus and sacrifice across the board for
	this country and its citizens and strategic planning. They
	spoke about how the threat continues unabated and how we must
	be both offensive to rout out the enemy where he is to be found
	and equally aggressive in protecting our homeland. They spoke
	of building partnerships here and abroad and investing in
	technology as one of the keys to our eventual success--and they
	were on target on all counts.
	Mr. Chairman, this is very hard work, as you have
	committed. We have immensely dedicated people doing it. And I
	am proud of the efforts invested in the work accomplished thus
	far, but we also have very far to go and much more to do. And
	we must hold on to a sense of urgency about getting that work
	done.
	We at DHS are appreciative of your help, your ideas and
	your role as our conscience in this business.
	This is my 44th year of public service, and the work I am
	immersed in with my colleagues has never been important to our
	country. We will get it done and we will get it done well. We
	will be on time and we will on budget. We will be innovative
	and we will be creative.
	And we are trying hard not to be held back by the
	bureaucratic baggage of the past.
	The American public deserves our very best effort and they
	will be getting nothing less.
	Thank you sir, and I look forward to your questions.
	[The statement of Admiral Loy follows:]

	Prepared Statement of The Honorable James Loy

	Good morning, Mr. Chairman and Congressman Turner. I would like to
	thank you, as well as the other members of the committee, for providing
	this opportunity for me to join my colleague from TTIC, John Brennan,
	to discuss the Homeland Security Advisory System.
	On March 11, 2002, President Bush created the Homeland Security
	Advisory System (``HSAS'' or ``advisory system'') as a tool to improve
	coordination and communication among all levels of government, the
	private sector and the American public in the fight against terrorism.
	The advisory system is binding on the executive branch, and suggested,
	although voluntary, for State, local, territorial and tribal
	governments, and the private sector.
	The system, created by Homeland Security Presidential Directive-3
	(HSPD-3) and now, pursuant to the Homeland Security Act of 2002 ,
	administered by the Department of Homeland Security (``DHS'' or ``the
	Department'') identifies a flexible framework for communicating,
	addressing and mitigating terrorist threats to the nation utilizing a
	threat-based, risk-managed system. During periods of heightened
	concern, the framework provides the ability to change the Threat
	Condition on a national level, but also affords the opportunity to
	target communications to particular geographic locales, industry
	sectors or other affected entities. The latitude provided by HSPD-3
	allows the Department to address unforeseen situations and continue to
	refine the Advisory System as the need arises. This flexibility is
	critical to the success of the Advisory System and essential to its
	effective implementation.
	With the creation of the Department on March 1, 2003, the advisory
	system evolved into a framework that married the analytical assets of
	the Intelligence Community (which includes DHS) with the Department's
	unique responsibility to assess the nation's vulnerabilities and
	implement protective measures. Since its creation on March 11, 2002,
	the HSAS Threat Condition has been changed on five separate occasions.
	In each instance, the condition was raised from Yellow to Orange, but
	the circumstances surrounding each decision to elevate the Threat
	Condition varied.
	We recognize that a decision to change the Threat Condition has
	significant economic, physical and psychological impacts on the nation.
	Therefore, decisions made by the Secretary, in consultation with the
	Assistant to the President for Homeland Security to change the Threat
	Condition are made only after careful consideration and close
	coordination with other Federal agency heads, including other members
	of the Homeland Security Council. Let me take this opportunity to
	provide some insight into the decision making process.
	In the regular course of business, the Intelligence Community
	constantly reviews available threat information. When that information
	provides sufficient indication of a plan to execute a terrorist attack,
	the source and origin of the intelligence are further analyzed to
	determine the specificity and credibility of the information. It is
	only when the information received is both specific and credible that
	the Department takes appropriate action under the advisory system. Even
	then, the Threat Condition is not automatically raised to the next
	higher level. The Secretary has a range of actions available to him.
	These actions range from the issuance of advisories or bulletins up to
	a determination to change the Threat Condition.
	There are instances when the volume and credibility of the
	intelligence reaches a level that the Department believes it should
	notify the public of the increased risk and the actions professionals
	are taking in response to the threat. Although this is a subjective
	standard, this concept was demonstrated when DHS elevated the Threat
	Condition from Yellow to Orange for Operation Liberty Shield. The
	decision to change the Threat Condition was based on intelligence
	reporting indicating Al-Qa`ida's desire to attack the US in response to
	the US-led military campaign in Iraq. As you are aware, in this
	instance during a time of war, DHS recommended nationwide protective
	measures during a time of war.
	Since then Advisory System has evolved as more specific threat
	information has become available and the Department's ability to
	communicate threat information and protective actions to those affected
	improved. One example of this evolution is the development of specific,
	audience-tailored communications tools to address specific threats and
	provide measures to be taken in response to threats or vulnerabilities.
	These products have enabled the Department to implement the advisory
	system in a more practical and flexible manner. In fact, since March
	11, 2002, the protective posture of our nation has increased based on
	our refined ability to respond to specific information with targeted
	actions and prevention measures. As a result, today's Threat Condition
	Yellow is yesterday's Orange, effectively raising the threshold for
	changing the Threat Condition.
	This evolution is best illustrated by the most recent Threat
	Condition change over the December 2003 holiday period. At that time,
	the Threat Condition was raised from Yellow to Orange based on
	intelligence reports indicating a substantial increase in the volume of
	threat-related reports from credible sources that Al-Qa`ida continues
	to consider using aircraft as a weapon and other threat reporting
	targeting numerous cities in multiple geographic locales. These were
	the most specific threat reports that we have seen thus far. Even
	though the national Threat Condition was lowered on January 9, 2004,
	DHS recommended that several industry sectors and geographic locales
	continue on a heightened alert status. In this case, DHS utilized the
	HSAS communications tools to provide specific recommendations to
	particular industry sectors and for particular geographic areas in
	response to specific threat information. For the first time since the
	creation of the HSAS, the Department lowered the national threat level
	but recommended maintaining targeted protections for a particular
	industry sector or geographic locale.
	In addition to the ability to change the Threat Condition, the
	advisory system also utilizes communications tools, defined as threat
	products, to provide more targeted and specific information to a broad
	or narrowly focused audience. In some cases, the protective actions
	taken by the affected entities affect decisions on raising or lowering
	the Threat Condition.
	Threat products consist of warning and non-warning information
	designed to inform a particular audience about an existing threat or
	current incident. Two threat products used by the Department are Threat
	Advisories and Information Bulletins.
	Threat Advisories contain actionable information about incident
	information or a threat targeting critical national networks,
	infrastructures, or key assets. These products may suggest a change in
	readiness posture, protective actions, or response that should be
	implemented in a timely manner.
	Information Bulletins communicate information of interest to the
	nation's critical infrastructures and other non-governmental entities
	that does not meet the timeliness, specificity, or significance
	thresholds of threat advisories. Such information may include
	statistical reports, summaries, incident response or reporting
	guidelines, common vulnerabilities and patches, and configuration
	standards or tools. Because these products are derived from
	intelligence they are generally communicated on a need-to-know basis to
	a targeted audience, such as the intelligence that is shared at both
	the classified and unclassified level with State, local and private
	sector officials. Together, these products provide a thorough, well-
	calibrated system to prevent terrorist attack. The evolutionary nature
	of the advisory system, and the authority resident in HSPD-3, enable
	the Secretary to utilize a variety of tools to address terrorist
	threats that may affect the United States.
	Like other advisory systems, the success of the HSAS also depends
	upon our ability to work closely with Federal, State, and local
	officials, the private sector and the public. DHS not only communicates
	threat information but must also provide our partners with specific
	actions that can be taken at all levels to protect against the threat.
	The cornerstone of the HSAS is the protective measures that are
	implemented at each Threat Condition. The Federal government, States
	and the private sector each have a set of plans and protective measures
	that are implemented when the Threat Condition is raised. It is these
	protective measures and those specifically recommended in the HSAS
	communications tools that reduce the nation's vulnerability to
	terrorist attacks. However, it must be noted that while DHS encourages
	the adoption of the HSAS at the State and local level, the HSAS is
	intended to supplement, not replace, other systems currently
	implemented by State and local authorities and the private sector.
	Prior to announcing a decision to elevate the Threat Condition, DHS
	communicates directly with its Federal, State, local, private sector
	and international contacts as appropriate. These communications provide
	specific information regarding the intelligence supporting the change
	in the Threat Condition. As appropriate for the audience, protective
	measures are developed and communicated with the threat information
	prior to a public announcement of the decision. While at a heightened
	Threat Condition, DHS maintains regular contact with State and local
	officials and provides regular updates. In the event that threats are
	targeted to particular cities or states, DHS provides those State and
	local officials with the most detailed intelligence information
	possible at both the classified and unclassified level.
	It is important to note that threat information that is shared by
	the Department, and the ultimate raising of the Threat Condition, are
	actions primarily intended for security professionals at all levels of
	government and the private sector. However, in this post 9/11 world, in
	some cases threat information distributed by the Department or other
	Federal agencies eventually becomes accessible in the public domain.
	Based on this reality, the HSAS has again evolved to include a clear
	public explanation of the threat information to avoid misinterpretation
	of the information. When a change is made to the Threat Condition, DHS
	Secretary Tom Ridge includes guidance to the public regarding specific
	actions that can be taken in response to the threat. In addition to
	encouraging increased vigilance, DHS has recommended specific actions
	for the public including guidance for expediting their interactions
	with Transportation Security Administration airport screeners when
	traveling by commercial aviation. Although information is provided
	publicly regarding protective measures, it is important for the public
	to understand that DHS implements and recommends additional and more
	specific protective measures to State and local officials that are only
	disseminated to security professionals.
	Increasing citizen and community preparedness is a Departmental
	priority. One year ago, Secretary Ridge launched a multi-faceted public
	information campaignSec. conjunction with the Ad Council, which has
	received over $150 million in donated advertising. The public
	information campaign directs callers to a web site or and ``800''
	telephone number that provides critical information on emergency
	preparedness and different types of terrorist threats. Brochures on
	this effort are also distributed through Post Offices across the
	country and Salvation Army distribution centers as well as other
	private sector partners. The Ready information campaign works in
	concert with the American Red Cross and Citizen Corps, the department's
	initiative to mobilize volunteer leaders to increase their community's
	preparedness. The Ready.gov website provides specific actions
	individuals and families can take such as creating and testing a family
	emergency plan and assembling an emergency kit to ensure there are
	sufficient supplies available when needed.
	Along with providing information to the public, DHS also works with
	State and local officials and the private sector in developing specific
	protective measures. The Department recognizes that each State,
	locality and private sector facility is unique and requires the
	development of different protective measures. For example, the
	protective measures required for and implemented by New York City are
	vastly different from the protective measures that Orange County,
	California will implement. In recognition of this difference, DHS
	communicates regularly with and provides technical advice to State and
	local officials to assist in the development of specialized and
	appropriate protective measures. Certain national law enforcement
	associations have also been awarded Homeland Security grant funding to
	further develop their own standard procedures for security measures to
	correspond with HSAS Threat Conditions.
	DHS also works directly with critical infrastructure owners and
	operators to ensure that adequate protective measures and plans are in
	place to reduce the vulnerability to terrorism. Through this effort,
	DHS can deny terrorists the opportunity to use our infrastructure as a
	weapon. Let me offer two examples of this partnering:
	DHS sends out teams consisting of DHS personnel and personnel from
	other agencies to critical infrastructure sites throughout the country
	to conduct site assistance visits. These visits are focused on
	identifying vulnerabilities and shared characteristics of that critical
	infrastructure sector element. After the visits, a report is prepared
	about the site and shared with local law enforcement, Federal law
	enforcement and the owner/operator of the facility. This procedure
	assists the owner/operator in identifying their vulnerabilities and
	adding appropriate protective measures.
	However, it is not enough just to ``look inside the fence'' and
	identify the vulnerabilities of the site. We must work to remove the
	operational environment for a terrorist outside these facilities. To
	protect the area outside these critical infrastructure sites, DHS also
	conducts and prepares buffer zone protection plans. These community-
	based protection plans facilitate the development of effective
	preventive measures and make it more difficult for terrorists to
	conduct surveillance or launch an attack from the immediate vicinity of
	a high value or high probability of success site. The site assistance
	visits and buffer zone protection plans are just two ways in which DHS
	partners with critical infrastructure owners and operators to ensure
	that they have the best protective measures to guard against any
	terrorist incident.
	Since the creation of the Department of Homeland Security, the HSAS
	has experienced an evolution from the preventative elevation of the
	threat level from Yellow to Orange during Operation Liberty Shield to
	the most recent threat specific elevation during the December 2003
	holiday season. Over the past year, the system has been raised and
	lowered on three separate occasions, and each occurrence demonstrates
	that the Department's ongoing work to strengthen the system has
	improved the implementation of the system specific to each emerging
	threat. The evolutionary nature of the System, and the authority
	resident in HSPD-3, enable the Secretary to utilize a wide variety of
	tools to address threats that may affect the United States.
	In the future as the Department matures and our implementation of
	the HSAS continues to evolve, we will work diligently to provide
	information that best suits the needs of Federal, State and local
	officials, the private sector and the public. We look forward to
	working with the Congress on ideas to improve the system. HSAS is
	simply a tool and is one of the many means to the end we all are
	working toward which is a secure homeland.
	Thank you Mr. Chairman. I would be pleased to answer any questions
	you may have.

	Chairman Cox. Thank you, Admiral.
	I now welcome our second and final witness, Mr. John
	Brennan, director of the Terrorist Threat Integration Center.
	Mr. Brennan is a 23-year veteran of the Central Intelligence
	Agency. He served as chief of staff to Director Tenet, and just
	prior to being appointed director of TTIC held the position of
	deputy executive director at the CIA.
	Mr. Brennan, we are very appreciative of your being here
	today. I was going to say we have your testimony, but, do we
	have your testimony? We do, in fact, have your written
	testimony and we want to thank you for that, and also want to
	add five minutes for you to summarize that testimony.

	STATEMENT OF MR. JOHN BRENNAN, DIRECTOR, TERRORIST THREAT
	INTEGRATION CENTER

	Mr. Brennan. Thank you very much, Mr. Chairman.
	Thank you, Mr. Turner.
	It is certainly a pleasure to appear before the committee
	today to be with my very good colleague, Secretary Loy, who, as
	he said, we have gotten to know each other quite well over the
	past many weeks.
	I have submitted the written testimony and I look forward
	to answering your questions. But I would like to start off as
	we begin the hearing on the Homeland Security Advisory System,
	making three key points, important points, about the Terrorist
	Threat Integration Center's role in that system.
	The Terrorist Threat Integration Center, which we refer to
	as TTIC, since its stand-up on 1 May of last year, has played I
	think an important role supporting the Department of Homeland
	Security during periods of heightened concern about terrorist
	attacks.
	As you know, TTIC analysts have full, unfettered access to
	the full array of information available to the U.S. government
	related to the terrorist threat to the United States.
	This access allows the analysts, who come from the
	Department of Homeland Security, the Central Intelligence
	Agency, Department of Defense, Department of State, the FBI and
	other departments and agencies of the government to produce
	integrated assessments of the terrorist threat facing U.S.
	interests, both at home and abroad.
	As a recent example, in the very late hours of 20 December
	of last year, TTIC produced a terrorist threat alert and an
	analytic assessment of the Al-Qa`ida threat to the homeland,
	including against the aviation industry.
	These TTIC products were key factors in the decision made
	the following day to raise the threat condition level to
	orange. Language from these TTIC products was provided to the
	Department of Homeland Security, to Secretary Loy and Secretary
	Ridge to use both publicly as well as in their interactions
	with state and local officials.
	Second, even when the threat level is not heightened, TTIC
	has constant, in-depth interaction with the Department of
	Homeland Security intelligence components, indeed components
	throughout the Department of Homeland Security involved in the
	fight against terrorism. At least twice daily, TTIC and
	Department of Homeland Security officers are involved in a
	secure video teleconference with their colleagues from
	throughout the government to review the threat reporting and to
	look at it in terms of what type of threat it poses to U.S.
	interests.
	In addition to these opportunities, there are also regular
	interactions between DHS and TTIC officers to include
	electronic connectivity between TTIC and the Department of
	Homeland Security. This greatly facilitates the flow of
	information that is necessary for the Department of Homeland
	Security to do its work.
	Finally, TTIC, the Department of Homeland Security and
	other elements of the homeland security, law enforcement and
	intelligence communities engage in regular discussions on the
	many different factors that are taken into account when
	determining threat condition. This integrated effort allows
	threat information, which the TTIC provides, to be assessed in
	the context of the assessed capability of a terrorist group, in
	the context of the vulnerability of potential targets, in the
	context of extant mitigation and defensive measures that are in
	place, as well as in the context of the options available to
	enhance security.
	In this manner, Secretary Ridge, Secretary Loy and other
	senior officials are able to gain a true appreciation of the
	prevailing threat condition, and then make the informed
	decisions as appropriate.
	I look forward to taking your questions.
	[The statement of Mr. Brennan follows:]

	Prepared Statement for the Record of John O. Brennen

	Good afternoon, Chairman Cox, Ranking Member Turner, and the
	Members of the House Select Committee on Homeland Security.
	I appreciate the opportunity to join the Deputy Secretary of the
	Department of Homeland Security (DHS) to discuss how terrorist threat-
	related information supports the Homeland Security Advisory System
	(HSAS).
	As Committee Members well know, U.S. interests at home and abroad
	remain at risk of terrorist attack. Usama Bin Laden and Al-Qa`ida
	represent the most significant terrorist threat; however, there are
	many other known and suspected terrorist individuals and groups with an
	interest and the capabilities to do us harm. Since the tragic events of
	September 11, 2001, many steps have been taken to prevent future
	attacks. One of the most significant steps has been the creation and
	implementation of a national, color-coded Homeland Security Advisory
	System.
	The HSAS was originally established in March 2002 as a mechanism to
	inform the public during periods of elevated threats. TTIC supports the
	HSAS through the provision of terrorist threat-related information and
	analysis to those charged with administering the process.
	TTIC is a multi-agency joint venture that opened for business in
	May 2003, to integrate terrorist-threat related information, collected
	domestically or abroad, to form a comprehensive threat picture. On a
	daily basis, TTIC coordinates terrorist threat assessments with partner
	agencies, including DHS, Federal Bureau of Investigation, the Central
	Intelligence Agency, Department of Defense, and Department of State.
	Assignees from these partner departments and agencies have, of course,
	been involved in the production of these assessments prior to
	coordination with their headquarters. Twice daily, these assessments
	and others are discussed during interagency secure video teleconference
	meetings to discuss the current threat picture. DHS, TTIC, and others
	coordinate regularly on a product that combines threat information with
	actions being taken to protect the Nation against those threats. This
	multi-agency coordination process is enabling the USG to better know
	what we know, compare information, and make rational decisions based on
	a more comprehensive threat picture.
	When threat information dictates, TTIC participates in special
	meetings that are convened to determine whether to recommend to the
	Secretary of Homeland Security and other senior officials that the
	Homeland Security Advisory System condition should be adjusted. Last
	December 2003, for instance, TTIC--in close coordination with our
	partner entities - published a Holiday threat assessment that
	facilitated multi-agency discussions resulting in a decision to elevate
	the national threat level to ``orange.'' TTIC's threat assessments
	played an important part of the risk evaluation strategy that was used
	in making decisions related to the threat level.
	Another aspect of national preparedness and effective warning of
	terrorist threats to the U.S. and U.S. interests abroad, is more
	systematic information sharing across the intelligence, law
	enforcement, and homeland security communities. Progress has been made
	toward ensuring that all obligations are met, as detailed in applicable
	statutes and interagency agreements such as the Homeland Security Act
	and the Homeland Security Information Sharing Memorandum of
	Understanding (MOU) of March 2003, signed by Secretary Ridge, Attorney
	General Ashcroft, and Director of Central Intelligence (DCI) Tenet. On
	behalf of the DCI, and in close coordination with all partner entities,
	TTIC is facilitating efforts within the Intelligence Community to
	provide the Department of Homeland Security access to all information
	and analytic products required to execute its mission.
	Within TTIC, there is connectivity with 14 separate USG networks,
	allowing for unprecedented, near-real-time information sharing--the key
	to our support to the Homeland Security Advisory System. A primary
	conduit for information sharing across the intelligence, law
	enforcement, and homeland security communities is a TTIC-sponsored,
	classified website called TTIC Online. This website currently has over
	2,500 users throughout the Federal government, and it is being updated
	to support collaboration and information sharing at varying levels,
	from Top Secret to Sensitive-But-Unclassified. The website is also
	being updated to enable users to search across disparate USG-maintained
	data sets and to enable account holders from multiple Federal
	departments and agencies to post relevant information for collective
	access.
	In addition, TTIC is working with DHS and the Federal Bureau of
	Investigation (FBI) to ensure that all relevant threat information and
	analysis is expeditiously passed to state and local officials and law
	enforcement personnel, so that they may re-evaluate and adjust
	protective measures to prevent a possible attack. This rapid sharing of
	threat information with those working to disrupt potential terrorist
	activity is a critical area of emphasis in the national homeland
	security effort--some call state and local officials and law
	enforcement personnel our ``first responders,'' but if the information
	reaches them in time to apply appropriate protective measures, they are
	really our ``first and last defenders.'' For this reason, TTIC and
	others across the intelligence, law enforcement, and homeland security
	communities are working together to implement ``write to release'' and
	other innovative business processes to increase the number of sanitized
	and unclassified products available for rapid dissemination to better
	enable state, local, private industry, and foreign partners to
	implement protective measures in the Global War on Terrorism.
	In conclusion, through collective effort, we are making daily
	progress toward improving National preparedness through the HSAS and
	the effective warning of the Nation.

	Chairman Cox. I thank you both for your testimony.
	Members will now be recognized for questions. We will be
	observing the five-minute rule with the exception that members
	that were here within five minutes of the gavel will be able to
	extend their time of questioning by three minutes.
	The chairman recognizes himself for five minutes.
	I would like to ask both of you or either of you, depending
	on how you care to respond, about the difference between the
	public and the nonpublic aspects of our national response to
	this heightened alert.
	We have, as you both outlined in your testimony, an
	admirable system, still developing but very far advanced from
	where it was a few years ago, of sharing information among
	scores of government agencies at the Federal level and
	integrating that information also at the state and local level.
	The TTIC online example that you provided, for example, is
	a secure network that can be accessed by many users all over
	the country. That is working, as I think citizens expect it
	should, so that our government springs into action, does
	everything it can to anticipate and prevent and prepare for
	terrorist attacks in response to actionable intelligence.
	What we are also wrestling with here today, though, is the
	impact on the rest of the country, specifically everybody else
	who is not part of either law enforcement or intelligence.
	The government in any way does not manage a large chemical
	facility or a nuclear power plant, does not run an airport or
	an airline, is not responsible for a high-rise office
	building--just somebody watching TV who is told, ``Now, we are
	at a heightened state of alert.''
	Why are we asking that person to be at a heightened state
	of alert? What do we expect that person to do differently? And
	how do we expect that person to square that message with the
	simultaneous message, at least what we have seen was a
	simultaneous message in our recent experience, that you should
	go about your business just exactly as you were before?
	I ask you this question because in my experience, these
	warnings are having a chilling effect. I have admittedly
	episodic evidence, but a lot of it, of, for example, school
	groups canceling their field trips to other countries that have
	nothing to do with terrorist attacks on the United States of
	America. They do not know that. They are just worried, and so
	they are playing it safe.
	Business groups canceling conferences, even sometimes
	within the United States, in other cities, all manner of
	tourism being affected from small to large decisions that
	people make. They are behaving differently because a heightened
	state of alert means to them a heightened state of anxiety.
	What is the payback for that? And how are we going to
	mitigate those effects of the public warning system?
	And if you can in addressing that, also include in your
	answer the consequence and the way that you deal with this
	consequence of the fact that in communicating publicly with 280
	million Americans we are also communicating very publicly with
	Al-Qa`ida, or whoever it is that we must thwart.
	And I would be happy to hear either of you.
	Admiral Loy, you seem ready to begin.
	Admiral Loy. I will take a stab at it, sir.
	I think first and foremost, Mr. Chairman, we are all, as
	citizens and as responsible public servants, learning our roles
	in this very, very new security environment that we all woke up
	to on 9/11/01.
	It is just so fundamentally different from--not that any of
	us are pining for the good old days of the Cold War. But the
	notion of what occurred from 1989 to 2001 was almost an
	interruption, when the wall fell and the Soviet Union imploded,
	that the whole notion of a complacency gene sort of rose among
	us.
	And I saw that not only in individuals and people but
	perhaps in organizations and even in nations. And come 9/11/01,
	that cold pail of water in the face, offered a very different
	environment, an enormously different environment, an enemy that
	we do not understand, that we are just beginning to learn
	about, that we are just beginning to read about, with no flag,
	no president, no boundaries, no nation-state--all those things
	that were comfortable to us in the course of the Cold War
	window.
	So as we try to learn our way through that fog, if you
	will, toward a more clear day when we will really be able to
	react much more adroitly and specifically to the things at
	hand, I think the challenges have to be about across-the-board
	notions.
	But for the individual citizen, I think three things are
	important. I think it is about awareness, it is about
	preparedness, and it is about recognizing they, too, have a
	contribution to make, almost in the Rosy the Riveter notion of
	World War II, because this is really an all-hands evolution.
	Every citizen has the potential to be involved.
	So on the awareness side, vigilance matters. And to make
	that an impression on the citizens of this country is an
	enormously important thing for us to do. We have to have every
	citizen understand it is important to hold the edge associated
	with this new security environment that we are grappling with.
	So that means every citizen is a sensor. They have the
	opportunity to report things that are out of the ordinary, and
	they should be doing that.
	And the notion of interoperable communications suggests
	that that citizen should have the capacity to report whatever
	they see out of the ordinary that makes good sense to them.
	Preparedness is simple things as much as a family emergency
	plan, an emergency kind of support kit that would be
	appropriate, and finding their way, as a citizen must, in this
	new normalcy that we are trying to define for ourselves in the
	new security environment we are grappling with.
	Chairman Cox. I take it that we do not wish that level of
	preparedness to evaporate if the threat level is at yellow?
	Admiral Loy. Absolutely not, sir.
	Chairman Cox. So that by ticking up the threat level, we
	are not telling them at that time to go do an emergency
	preparedness kit or at that time to start looking for
	suspicious activity?
	Admiral Loy. No sir. If you look, for example, at the
	department's Web sites associated with such things, you will
	find counsel to the citizens at large that are directly along
	the line of both yellow and orange as a set of conditions that
	demand of them these kind of different behaviors in the
	security environment that we are all trying to understand.
	Chairman Cox. Mr. Brennan, do you want to add to this?
	Mr. Brennan. Mr. Chairman, I would just make reference to
	the TTIC online, which is the classified Web site that we in
	TTIC maintain to make information available to the Department
	of Homeland Security and other Federal departments and
	agencies.
	We are working very closely with the department to in fact
	try to construct a multilayered and interconnected
	classification system as far as the flow of information
	downward.
	And so as you pointed out, the Department of Homeland
	Security has a statutory responsibility for providing the
	information to the state and local officials. And we, with TTIC
	online, are working with the department to make sure that there
	can be that flow of information to the departments so that the
	department can then take the information and share it as
	appropriate.
	Even though as a classified Web site, we put products on
	there that are at the unclassified level, or at the sensitive
	but unclassified level, that can be released. So we are working
	hand in glove with the department on that effort.
	Chairman Cox. Well, I will reserve for a later round of
	questioning similar questions that get at that point, Mr.
	Brennan, about what state and local law enforcement can do and
	what specifically we are asking them to do when we change these
	alert levels. And certainly that access to information is a key
	starting point.
	Mr. Turner?
	Mr. Turner. Thank you, Mr. Chairman.
	Admiral Loy, Mr. Brennan, I, as you know, share much of the
	sentiment that the chairman just shared. I mean, I have many
	instances of folks saying they have canceled their plans to do
	things that, frankly, my better logic would say they had no
	reason to cancel, because they heard we changed the alert
	system to orange.
	I think when we look at our efforts, there is no question
	that we need a threat advisory system and we need to see it
	continue to mature, as I think it is doing.
	And I even noted on several occasions where Secretary Ridge
	has himself questioned the system and has made some adjustments
	already as your information gathering system matures.
	But I really think the color codes, while may be useful two
	years ago when this was all new and we were in our infancy, and
	if you did not have a way to get the information out and you
	did not know exactly what you were hearing and how important it
	was, well, sure.
	Let's say, yellow to orange--and I do not know what red
	means. I never did get a clear understanding of that. I had a
	lot of different people tell me what they thought it meant. But
	all I know is that if you said red today, it probably would
	just create mass panic. I do not know what it means.
	But I really do think that you have reached the point where
	you could abandon these color codes and rely on specific threat
	advisory information. And if that information needs to go to
	the public, have a press conference and tell every network what
	it is we are worried about.
	Much of the information, I think we all know, needs to be
	directed to local law enforcement and to the private sector
	that may be affected.
	And that information sharing has not yet matured to the
	level it needs to. And we are going to have to, I think, get to
	the point where we have a greater willingness not only to
	sharing information among Federal agencies, which we always
	seem to have to struggle with, but with the Federal, state, and
	local officials who have a role in protecting the homeland.
	But I agree completely, Admiral Loy, with what you said
	about the need to have the citizens involved. But I just do not
	believe the color code involves them. Because, clearly, as you
	stated, we need a culture, if you will, of vigilance in this
	country.
	Every citizen has a role in protecting our homeland and
	they need to be reminded of that. But more often than not, I
	think, when the color code goes up, they do what the chairman
	said and they cancel some travel plans.
	And think about it a bit, if you were the youth director at
	your local church and you had responsibility for 30 children of
	parents in your church, and you heard the alert system went to
	orange, your tendency would be to say, ``Listen, I better not
	risk anything here; we better cancel this trip.'' And that
	ripples all through the society every time you raise that
	level.
	And I even think it goes on in the department. I think the
	political reality that I shared a minute ago is very much the
	case. And I really think the department would be better off if,
	when you have new information, the key players in the
	department and the FBI and the White House, if they were
	talking about, ``What is it we have on our hands and what
	information can we share and how quick can we share it?''
	rather than sitting around the table and getting on these phone
	calls that I am sure that take place, saying, ``OK, should we
	go to orange, should we not go to orange?''
	It is just basically a judgment that somebody ultimately
	has to make. And I do not think there is any great precision in
	it. Because the flow of threat information, as I said earlier,
	I think we all understand it is fairly regular and continually
	constant.
	And, Admiral, you said we need the citizens to be prepared,
	and we do. And we probably failed in this regard, because the
	color coded system has not prompted anybody that I know of to
	make different preparations for different levels.
	And if you ask the average person on the street, when the
	level went to orange, they might have declined to go take a
	trip, but I doubt many of them would tell you, ``Yes, I made
	sure I had more water in the basement,'' or whatever it is that
	we all think folks are supposed to do when the level goes up.
	So I guess my question for you is: Have there been serious
	discussions within the department about the color codes and
	whether or not the color codes are really an important element
	of an effective alert advisory system?
	Admiral Loy. Yes, sir. There have been such discussions.
	I, too, believe this is a work in progress, and there very
	well may come the day when categories, as are reflected by the
	colors, are no longer necessary when our citizenry and our
	private industry sectors and the state and local governments
	actually have the capacity and have internalized this new
	security environment that we are dealing with and are
	adequately prepared to deal across the spectrum from low threat
	to high threat as it really does change, perhaps not day to
	day, but over the course of time.
	My sense is that we are not there yet.
	There are very valuable levels of activity that are
	clarified for many of the industries that we are dealing with
	already. And as we reach out, just as we are speaking, to
	engage all of those economic sectors with respect to following
	on the president's homeland security Presidential Directive No.
	7 on critical infrastructure, we will be able to at least
	initially sort activity levels associated with those industrial
	sectors and geographic places according to a range from low to
	high of varying activities associated with a threat, if in fact
	a threat can be understood to be that and communicated to them.
	The communications channels we have in place are very
	strongly now able to communicate that information. But what we
	are still working very hard on is the delineation of what is
	different between the activity set associated with yellow, for
	example, from that of orange.
	I have run the Transportation Security Administration for
	the last couple of years, sir. And I can guarantee you that
	every airport in this country has a security plan that denotes
	a variety of activities that change as we go from one threat
	condition to another.
	So for the moment, it is a very good set of anchors along
	the path to a spectrum perhaps of adjustment that can be made
	further down the road. I believe they continue to serve a good
	purpose for us today.
	Mr. Turner. Thank you, Admiral. And I am not telling you I
	disagree with classifications that apply to sectors. I mean, I
	can see the wisdom of that.
	Admiral Loy. Sure.
	Chairman Cox. The gentleman's time has expired.
	The gentlelady from Texas, Ms. Granger, is recognized for
	eight minutes.
	Ms. Granger. Thank you very much.
	I appreciate your being here and the work you are doing.
	And not to beat a dead horse, as we would say in Texas, but let
	me add my concern about the color-coded system.
	A little different, there are some people, yes, who do
	react. My concern are the people that listen to it and now have
	become very cynical and very angry--one or the other. And the
	cynicism will lead them to do nothing differently. And so that
	is a concern I have.
	I am very aware the airports do make a change and are very
	aware of what they are supposed to do, but others are not,
	particularly at the local community. So when you go from one
	color to another, there is concern with what they do, and then
	of course the cost of doing that. And the local communities are
	having a real struggle keeping up with additional costs that
	are not being reimbursed.
	Let me move from that to something else.
	In the fiscal year 2004 Homeland Security appropriations
	bill, it required a report on the use of NOAA's radio network,
	what we call the weather alert system. And I was going to ask
	if that report has been written. If so, could you summarize the
	conclusions of the report, and then what steps DHS is taking to
	use the NOAA system.
	Admiral Loy. I apologize, Ms. Granger, I simply do not know
	where the status of the report is. I will check that out today
	and call you.
	Ms. Granger. Great, I would appreciate that very much.
	And one of the committee's goals is to ensure that DHS
	utilizes an alert advisory system. That means it can
	disseminate local alerts and national alerts. Have you focused
	on the available technology that is out there already for that
	alert?
	Admiral Loy. Yes ma'am. I think there is a couple of very,
	very real communications kind of challenges that are part of
	what we are doing.
	One of the things I think we can do dramatically is set
	standards such that they are associated with grants in the
	future, such that when the acquisition of communications
	equipment is procured, it is procured according to the standard
	such that they have become interoperable.
	One of the most dramatic lessons that we learned from 9/11,
	of course, was at the World Trade Center when this police
	officer could not talk to that fireman, could not talk to that
	emergency medical technician because of not having
	interoperable communications.
	It is one of the absolute goals of Secretary Ridge, and we
	have done some very good work on that to this point. Out
	science and technology directorate is right on the verge of
	establishing and issuing those standards such that down the
	road that kind of procurement process will yield continuing
	interoperable communications.
	Ms. Granger. That is extremely important, particularly at
	the local level if you are talking about from hospital to
	hospital--all of those first responders.
	Admiral Loy. Responders, yes ma'am.
	Ms. Granger. Thank you very much.
	Chairman Cox. Does the gentlelady yield back her time?
	Ms. Granger. I do.
	Chairman Cox. The gentlelady from California, the ranking
	member of Intelligence, is recognized for eight minutes.
	Ms. Harman. Thank you, Mr. Chairman.
	Welcome to our witnesses, both of whom are very competent
	managers and are doing an excellent job.
	I want to commend you, Mr. Chairman, for holding this
	hearing. Among the hearings I know of that this committee has
	held, this would be up there in terms of the most important.
	I also want to commend you and the ranking member for the
	bipartisan collaboration on this issue. I think it is
	critically important, as you know, that we engage in oversight
	activities by our committees on a bipartisan basis, and this is
	happening in this case.
	I also think it is useful for us to be offering
	constructive criticism to Federal agencies. This is part of
	what Congress is supposed to do. We pay the bills and the
	taxpayers expect us to do this.
	And, Mr. Chairman, I noticed in your statement, a large
	amount of constructive criticism, and I applaud you for it, and
	I frankly agree with the comments that you made.
	I think it is useful for us to criticize constructively our
	Federal Government, and I am sure our witnesses took it in that
	vein.
	And, Admiral Loy, you said that things are evolving, you
	are operating a work in progress. We all understand that. And
	so this criticism is intended to help you shape your future
	steps toward an end that we all share, which is to make our
	homeland safe.
	So, Mr. Chairman, I am happy to be in this room, and I
	commend this productive activity of the House of
	Representatives. Today, there are too few activities like this.
	And so it makes me feel good, and I hope it makes all of us
	feel good to be part of this one.
	I have questions in two areas. One is your point about the
	public, and the second is more technical questions about the
	interface between DHS and TTIC.
	And let me not forget to mention my valuable visit to TTIC
	a few weeks ago where I saw Mr. Brennan and his very talented
	work force. TTIC is a success story in this government. I
	commend you for your leadership and as important, I commend
	those from a variety of agencies who work for you for their
	part in helping make certain that we keep our homeland safe.
	Admiral Loy, I look forward to visiting your folks as well
	sometime soon. I think it would be a very valuable visit for
	me, both in my role as a member of this committee and as
	ranking member on the Intelligence Committee.
	My question on the warning for the public is this: A year
	ago, I mentioned to Secretary Ridge, my interest in a program
	called FLASH. That program is an acronym which I cannot
	remember, but the idea behind it is to invent a curriculum for
	our public schools which would be taught each year in the same
	week to all the children in the public schools by their regular
	teachers. And the point of this curriculum, which would become
	more complex with each year, is that both the teachers and the
	students would be trained in what to do in the event of a
	terrorist attack.
	I am old enough, and I think you are, too, Admiral Loy, to
	remember the civil defense drills of the 1950's when I was
	trained on what to do in my public school, and it was valuable
	training.
	It seems to me that in terms of an effective warning system
	for the public, making certain that every school kid and every
	school teacher knows what to do would go a long way toward
	reducing panic, improving response and giving parents the
	comfort that their kids will know what to do and be adequately
	protected.
	But, I cannot get to square one on this issue. I have
	proposed a pilot project. I have offered, you know, five
	different permutations of how this thing could work.
	Secretary Ridge sent me to the Education Department. They
	responded with a ``no''.
	I think this is dead square in your jurisdiction, and I
	just want to mention it to you here, ask you if you have any
	comments about it, and urge you, please, to take back to
	Secretary Ridge at least one Member's opinion that this would
	be a very effective way to augment your threat advisory system.
	Admiral Loy. My comments would go to be actually very
	supportive. I think the notion of what Mr. Turner and I spoke
	about just a moment ago of the holding the edge issue, the not
	allowing the complacency gene to kick back in place, of truly
	holding on to the sense of urgency that is associated with this
	global war on terrorism on the home front and then translating
	that to a consciousness, if you will, that is pervasive across
	our citizenry.
	I believe it is in the very direct interest of all 280
	million of us to have that kind of sense about us in this
	dramatically different security environment that so many people
	actually would like to sort of just push away and return to
	normalcy, whatever normalcy used to be. But we have a new
	normal normalcy, and this has got to be part of it.
	I will, in fact, carry your message back to the secretary.
	And we have initiated a number of educational notions inside
	our science and technology directorate which can translate to
	curriculum elements that would be very profitable.
	Ms. Harman. Thank you for that answer. I will be following
	up. Be warned.
	I hope we will do something like this, at least on a pilot
	project basis, in the school system in one or more states to
	see how it works.
	But the curriculum has been developed. A very talented team
	of people, who happen to be based in California, has developed
	it and is trying it out, and I really think this will add value
	to the public piece of the threat warning and homeland security
	problem.
	Turning to the interface between your two organizations:
	This is also critically important. Some members of this
	committee--I think all members of this Congress--were surprised
	when the president suggested that TTIC be stood up. It was not
	the way we had intended this to go in the way we drafted the
	homeland security law, but I, for one, am pleased with how it
	is going and am very pleased about the connection between the
	two of you.
	My questions just want to probe this a little further, and
	I will observe my time.
	First of all, Mr. Brennan, you mentioned in the past that
	one of the major strategic issues for you is figuring out where
	TTIC's counterterrorism job ends and the counterterrorism work
	of other agencies begin. You convened something called the
	Water's Edge Panel, and I am curious how that came out. And I
	do not want this clock to go off here.
	I would invite both of you to tell me how you are working
	together, whether there are any problems with sharing
	information, sharing technology, interoperability, which was
	raised before, meeting each other's intelligence needs, or
	anything else out there that you did not cover in your
	testimony that this committee should be aware of.
	Mr. Brennan. I would say that, first of all, there are a
	series of challenges as opposed to problems.
	The challenges as far as bringing together different
	information systems--in TTIC we have 14 different information
	systems that come in from all the different departments and
	agencies. In trying to address the different information
	security policies, different infrastructure, hardware-software
	issues--those are challenges that we are overcoming.
	So these are things that we are working very compatibly on.
	We have, in fact, a joint program office: TTIC, the
	Department of Homeland Security, and Department of Justice, FBI
	to address these initiatives in a collective and a
	collaborative way as opposed to doing it individually.
	So again, there are a series of challenges there, but it is
	something that I think we are able to attack together. And we
	are making progress every day.
	Admiral Loy. I would just wholeheartedly agree.
	I think the most important thing in here is that the law
	clarified the realities of 9/11, clarified intent on the part
	of all the players.
	And at those twice-daily sessions, where each of us has an
	opportunity to hear John's analytical product be tabled and
	then the discussion offers the opportunity to come to a
	collective consensus onto what that threat piece really means,
	and then offer it forward as something that has really been
	kicked around among ourselves, us from the standpoint of the
	operator and the requirements to be met, John from the
	standpoint of attempting to meet those and helping us
	understand just what are to the possible is inside the
	intelligence community flow.
	We also have people connections as well as technical
	connections.
	The secunded DHS representatives to TTIC that staff is his
	world as well as those from across the Federal Government are
	such that all the players that have a contribution to make are
	at his disposal to gather and allow the analytical work to be
	done inside the organization. I think it is going very, very
	well.
	Ms. Harman. Well, just keep at it.
	My time is up, Mr. Chairman, but I would like to share a
	secret, and that is that the hard drives that are under the
	desks of the talented people at TTIC have names. And their
	names for the moment are Huey, Dewey, Louie and Fred.
	And a little humor goes a long way, but it is important
	that we keep developing the IT and that we keep it compatible
	and we keep moving this mission ahead together, and we keep the
	public trained to understand what they are supposed to do too.
	Thank you very much, Mr. Chairman.
	Chairman Cox. The gentlelady's time has expired.
	The gentleman from New York, Mr. Sweeney, is recognized for
	five minutes.
	Mr. Sweeney. Thank you, Chairman, and I appreciate the
	recognition. I also appreciate you conducting this hearing.
	Because I think as my prior colleague, Ms. Harman, just pointed
	out, this is one of the critical oversight responsibilities we
	have in Congress. And we oftentimes, I think, have not been as
	particularly focused as I would like.
	I would like to thank Admiral Loy and Director Brennan in
	advance for their cooperation and their work both here today
	and prior to this.
	You know, the principle piece of legislation this select
	committee has proposed has a number of very valuable and
	important components to it. And I think it is reflective of a
	bipartisan effort on this committee's part to really help you
	as you evolve this process and construct what is an entirely
	new concept in American government.
	One of the pieces I think is particularly important in that
	legislation is when we call upon the Department and try to help
	you establish a sector-by-sector or regional threat assessment
	system.
	There are a lot of reasons why there is great utility to
	that. There are a lot of reasons why it is important. And I
	will simply point out as a New Yorker, I know I would expect
	that my colleague, Congresswoman Lowey, will also follow up
	with some of this.
	But New York, and New York City in particular, have huge
	costs that cannot be reimbursed right now by the Federal
	Government. And one of the tangible examples of that is when
	the rest of the country goes to yellow, New York City pretty
	much constantly stays at orange.
	I will ask Admiral Loy this question--when do you think the
	Department can move to that kind of more specifically focused
	threat analysis and threat information system?
	Admiral Loy. Mr. Sweeney, I think we are very close to
	being there. The capabilities that are now important for us get
	on with are the analytical work necessary in a partnered
	fashion with the stakeholders of all 13 economic sectors of the
	Nation and the four key assets inventories that are identified
	in the president's national strategy for homeland security.
	Since the president has now signed HSPD-7, the ball is in
	our court to do that outreach. A series of meetings were just
	held this week with respect to internal to DHS. The next one is
	internal to the department.
	And then the template associated with that has to be taken
	literally to each of those 13 economic sectors to discuss
	through, understand the requirements on their end, what can be
	provided on our end to establish that security paradigm, for
	lack of a better phrase, that we are all looking for.
	Mr. Sweeney. So as we speak it is evolving and developing.
	Admiral Loy. Absolutely. Yes, sir.
	Mr. Sweeney. Within a year is practical or not?
	Admiral Loy. Absolutely, it is, sir.
	Mr. Sweeney. OK, good to hear.
	Admiral Loy. We should have that done inside a year.
	Mr. Sweeney. Director Brennan, thank you for all of your
	work and your interaction with my office.
	How is the relationship with the FBI Joint Terrorism Task
	Force going?
	Mr. Brennan. With the JTTFs that are located nationwide, it
	is a very strong relationship. We have had interactions, we
	have had TTIC officers who have been out to the JTTFs and have
	sat down with the FBI agents and analysts there to review
	different issues, review information.
	We work very closely with the JTTFs through FBI
	headquarters in terms of the counterterrorism division that has
	sort of oversight on the terrorism matters.
	So it very, very close.
	Mr. Sweeney. Has the FBI retracted or taken back any of its
	analysts from your operation?
	Mr. Brennan. Oh, no, sir. In fact we are getting more
	analysts from FBI. And in fact, I have been very impressed with
	some of the young FBI analysts in TTIC in terms of their
	dedication and the quality of their work.
	Mr. Sweeney. Somewhere, there is that misinformation that
	recently in some sort of in-the-bowels kind of turf war, the
	FBI removed 70 of their analysts from your shop. We would like
	to know that, I think, on this committee. And I especially
	would like to know it as an appropriator who is both on
	Homeland and on Commerce-Justice-State. So I would like to know
	that if that happened.
	Mr. Brennan. I have noticed none of them missing. If I do,
	I will let you know, sir.
	Mr. Sweeney. Let me ask one final question, and it is
	really for Admiral Loy: New York Police Commissioner Ray Kelly
	testified on the record before this committee and the Judiciary
	Committee last year. Another important part of the principle
	piece of legislation relates to the formulation and how we are
	spending money and what you are allowed to do and what you are
	not allowed to do.
	He noted that the personnel costs in New York City are a
	significant part of the expenses when the threat level is
	increased. I am wondering, your thoughts. Why shouldn't
	overtime costs, personnel costs, training costs associated with
	those increases be reimbursed?
	Admiral Loy. Sir, I think the categorization of grants and
	the ability for state and locals to claim against those dollars
	over the course of time is the answer to that question. It,
	too, is something I think that is evolving.
	The Congress was generous in the supplemental on all three
	till I identified $200 million in the aftermath of Liberty
	Shield as a pool of funds to be claimed against by the locals,
	state and local elements.
	There is about 60 of those billions of dollars that have
	actually been claimed against as opposed to the $200 million
	that has been offered.
	There is an exchange going on as we speak. We clarified
	that the 23rd of February was sort of a deadline that we would
	like to have people let us know what were the costs associated
	with this last experience at orange over the holiday period.
	That will give us another data point associated with the role
	of the Federal Government, as appropriated by the Congress in
	terms of the capacity to reimburse, and also help us all
	understand that as, again, we have talked about several times
	before this afternoon already, this is really an all-hands
	evolution.
	And so to some degree, it is about state and local folks
	standing up to the task, including the financial end of
	whatever is appropriate for these evolutions, and the private
	sector as well.
	So in threats to our national security historically, you
	know, when it was the artillery folks looking over the Folda
	Gap at each other or whether it was across the demilitarized
	zone in Korea, the notion there was the clarity with respect to
	Federal responsibility in taking care of that ``for the
	citizenry'' was very, very direct.
	This is a very different security environment that we are
	grappling with in understanding. The rules as they play out,
	sir, are still literally being forged by the Congress and by
	the executive branch.
	Mr. Sweeney. And I understand that. I know my time is
	expired, but I think we need to get specifically focused on the
	impacts in order to maintain the vigilance we seek here. And I
	thank you.
	And I thank the chairman for his time.
	Chairman Cox. I thank the gentleman. The gentleman's time
	has expired.
	The gentleman from Massachusetts, Mr. Markey--the proud
	owner of a Super Bowl trophy, almost, almost personally,
	derivatively. He is recognized for eight minutes.
	Mr. Markey. Thank you, Mr. Chairman, very much. It is water
	on the desert up in Boston, I can promise you. It has been a
	long drought in every other sport but football.
	Mr. Brennan, your job is to remedy the problem that we
	found before September 11, that there was fragmented
	dissemination of information across the Federal bureaucracy to
	state and local governments that did not effectively make it
	possible to coordinate in a way that could protect against a
	terrorist attack.
	As the Senate office building, Mr. Brennan, remains closed
	for a second day due to ricin contamination, we have learned
	that three months ago the White House also was the target of a
	ricin attack. However, the information reportedly was not
	shared with congressional leaders until after the discovery of
	ricin in the Senate earlier this week.
	Mr. Brennan, did this information, that is, the information
	about ricin attack on the White House, did that come to your
	attention three months ago?
	Mr. Brennan. Sir, I would have to go back and check the
	record as far as when it came to my attention. And I can get
	back to you on that.
	Mr. Markey. Did you know about the ricin attack on the
	White House before there was an attack on the Congress?
	Mr. Brennan. As far as an attack, sir, I do not believe--
	and I also do not think, sir, this is the appropriate forum for
	discussion about the nature of particularly the terrorist
	threats that may exist to the White House. There are other
	venues.
	Mr. Markey. Mr. Brennan, this is the forum. We are the
	committee given responsibility to make sure that the agency,
	which we have created, is working to protect the American
	public against attack.
	If you had knowledge that there was a potential ricin
	attack on the White House, and you did not give that
	information to the Congress, or other relevant high-priority
	targets of Al-Qa`ida, then that is something that we have to
	talk about and you have to tell us what is your decisionmaking
	process as to who is on the list that receives this very
	important information.
	Mr. Brennan. Mr. Markey, I would be glad to talk to you
	about the process. My comment that this is not the appropriate
	forum is because sometimes with threat information, as you well
	understand, there is classified information, and this is an
	open hearing. And so, any type of discussion about the
	underlying reporting or information regarding that should be
	kept in appropriate channels.
	Mr. Markey. OK. Well, let us put it this way: Did you
	notify the Capitol Police when you found about the ricin attack
	on the White House?
	Mr. Brennan. Sir, I would have to go back and I would have
	to check as far as what action was taken, when such information
	was known.
	Mr. Markey. You do not know if you notified?
	Mr. Brennan. I will have to go back, sir, and check on
	that. I do not want to give you--.
	Mr. Markey. Doesn't an attack on the White House, Mr.
	Brennan, automatically trigger a set of responses in TTIC in
	terms of notification of other high-priority targets?
	Mr. Brennan. Sir, I would like to get the facts in front of
	me first before I respond to your questions as far as what
	actions were taken.
	Mr. Markey. To the best of your knowledge, did your agency
	notify mail processors handling mail bound for Capitol Hill or
	basically the same post offices that had to be shut down after
	the anthrax attack here in Washington? Did you notify them?
	Mr. Brennan. It would have been our responsibility to
	notify the Federal departments and agencies that have a
	responsibility to share that information with the nonFederal
	family.
	Mr. Markey. Well, I will tell you, Mr. Brennan, that if the
	White House took upon itself not to share this information with
	other potential targets in Washington, D.C., then that is a
	very serious matter.
	We know that Al-Qa`ida was targeting either the White House
	or the capitol dome with the final plane that was pulled down
	in Pennsylvania. And we know that within that same timeframe,
	Congress was the subject of anthrax letter attacks, as were the
	networks and other high-visibility institutions in the United
	States.
	So I believe that if that information was not shared, then
	there was a very serious mistake which was made.
	Mr. Brennan. As I said, Mr. Markey, I will look into it and
	find out what the facts are.
	Mr. Markey. Well, we cannot thwart--I would just put it on
	the record that we cannot hope to thwart terrorists who use the
	U.S. mail system and other means to threaten our homeland
	security without all the facts.
	It is, to me, unnecessary. And as the facts unfold,
	potentially appalling, that innocent lives could be put at risk
	if they were not given the fundamental information that there
	was already a ricin attack that had occurred in Washington,
	D.C., that protective actions could have been implemented to
	lessen dramatically the likelihood that that could be a
	successful attempt.
	Mr. Brennan. Mr. Markey, I can tell you that the Terrorist
	Threat Integration Center has looked very carefully at the
	potential use of CBRN materials by Al-Qa`ida. We have shared
	information with those respective departments and agencies that
	have responsibility for guarding against those types of
	attacks.
	And we also have worked with the Department of Homeland
	Security and the FBI and others to ensure that the appropriate
	measures are put in place.
	And so, as I said, on that particular case, on that
	particular day, as far as what happened, I will be glad to
	check the record on this.
	Mr. Markey. You can understand that two days after this
	attack unfolds, the fact that you do not know the answer to
	that question as you sit here is something that in and of
	itself causes some concern to those of us who are in charge of
	overseeing the department.
	Admiral Loy, you have Secret Service as part of the
	Department of Homeland Security. When did you learn of the
	ricin attack?
	Admiral Loy. I was not in the department at that time, sir.
	But I did anticipate that this question might come fro the
	committee this morning. I touched a base with the director of
	the Secret Service who advises me that his recollection was
	that the reports were made constructively inside the executive
	branch. I did not ask him whether or not they had advised the
	Congress. I will go ask that question, sir, and get back to
	you.
	Mr. Markey. Is that a decision that the White House has the
	right to make under these existing new share-the-information
	rules and regulations, that is, can the White House decide,
	just as a matter of executive branch authority, not to share
	that information with the Congress or other Federal
	institutions or other state and local institutions that might
	also be at threat? Is that a policy?
	Admiral Loy. Of course not, sir.
	Mr. Markey. It is?
	Admiral Loy. Of course not, sir.
	Mr. Markey. Of course not.
	So if the Secret Service and the White House decided not to
	share this information with the Congress, knowing that we were
	a target just two yeas ago--the staffer over my shoulder here,
	she was on Cipro for two months--that is a very serious issue
	to those of us who lived through that. It touched the lives of
	the people who are here and working with us--and as proxies for
	all other Americans as well.
	So do you think that the system works, Admiral Loy? That
	is, do you believe that the White House having obtained this
	information handled it correctly in terms of ensuring that the
	rest of the vulnerable targets would also be notified?
	Admiral Loy. Sir, all I know is the conversations I had
	with Mr. Basham this morning. I will be delighted to found out
	who called who when and let you know.
	Mr. Markey. Well, let me ask it another way: If Congress
	did not know, do you think the system worked?
	Admiral Loy. No.
	Mr. Markey. The system did not work.
	Admiral Loy. Right.
	Mr. Markey. OK.
	Mr. Brennan. I might add, Congressman Markey, that there is
	a representative of the Capitol Police within the Terrorist
	Threat Integration Center who is fully cleared and authorized
	for access to information such as this.
	Chairman Cox. The gentleman's time is expired, but we may
	return to this on a subsequent round.
	The vice chairman of the committee, the gentlelady from
	Washington, Ms. Dunn, is recognized for five minutes.
	Ms. Dunn. Thank you, Mr. Chairman, thank you very much.
	And, gentlemen, I apologize for not having been here to
	hear your earlier testimony and the other questions, so forgive
	me if I overlap on some questions. I was in another committee
	meeting.
	I wanted to ask you, Mr. Brennan, when we first heard about
	TTIC, my inclination was to recommend that it be under the
	Department of Homeland instead of the CIA. Have you had any
	reason to change your opinion of where TTIC should be located?
	Mr. Brennan. First of all, Ms. Dunn, TTIC is not within the
	CIA. We are located right now, temporarily, at the CIA
	compound.
	Ms. Dunn. But you are funded by the CIA, is that correct?
	Mr. Brennan. We receive funding from the director of
	central intelligence budget. But in fact we see monies from all
	the different partner agencies.
	So we receive it from CIA, FBI, Department of Homeland
	Security, Department of Defense and others.
	So my view, though, is that we should not reside within in
	one department or agency because the fight against terrorism is
	a collaborative fight, and if we are really going to do this
	well, we need to have an organization or an entity such as TTIC
	that is able to represent the interests of those different
	agencies and departments.
	Ms. Dunn. But the Department of Homeland Security has that
	as its primary focus.
	Mr. Brennan. There are many different departments and
	agencies in the U.S. government that have a terrorism
	responsibility. The CIA has responsibility for transnational
	threats to U.S. interests, including at home.
	The Department of Defense has that responsibility, the FBI
	and others.
	So, yes, the Department of Homeland Security has the
	responsibility for homeland security. But the threat to the
	homeland from international terrorism is truly international,
	and TTIC has that worldwide responsibility to report and
	analyze on those threats to U.S. interests at home and abroad.
	Ms. Dunn. What is your relationship to IAIP? Is that
	relationship and that coordination satisfactory to you now?
	Mr. Brennan. It is very close. Information Analysis and
	Infrastructure Protection Directorate within the department, we
	have constant interaction with them. The assistant secretary
	for information analysis, for example, retired General Pat
	Hughes and I are on the phone constantly. We have daily
	meetings, several times a day.
	The under secretary for IAIP, Frank Libutti, is also
	someone who I am in regular contact with.
	So it is very satisfying. It is improving and growing
	stronger.
	Ms. Dunn. In your opinion, do they have the adequate
	resources to perform the analysis of function after they get
	the information?
	Mr. Brennan. We do not collect the material. But I would
	defer to Admiral Loy as far as whether or not they have the
	adequate resources to do their mission.
	Admiral Loy. They certainly do, ma'am, and that is growing
	as part of the department's growth as we speak. Literally, they
	are physically moving to another building with adequate space
	to put analysts in seats, if you will. And so the growth is a
	work in progress as well.
	But the notion that John cites I think is the important
	point here.
	DHS is enriching TTIC's ability to do its work by the
	contributions and the flow of whatever our piece of the
	information and intelligence-sharing process is that our people
	at TTIC provide him.
	At the same, he enriches our ability to do our work by
	having this full all-source array of material at his disposal
	to do his analysis, to create his products from, and then we
	accept those products back in the other direction for the
	mission of securing the homeland.
	There is a very strong assessment process that I think is
	appropriate for us to go through as we then attempt to map that
	threat piece to the economic sectors, regions of the country or
	individual citizens, whatever might be highlighted in the
	threat piece that he has provided us.
	So at this point, the free standing nature of TTIC as an
	entity is serving the best interests of the country very, very
	well.
	Ms. Dunn. How does the organization work? Do you have
	regular meetings? Or do you meet on a needs basis? Or do you do
	work by e-mail or over your communications devices? Is it
	hierarchical? Is it that you reach out when you need to to the
	particular department that you are interested in talking with?
	How does it work?
	Mr. Brennan. It works in all the above ways that you
	mentioned as far as we have regular meetings, we have twice
	daily secure video conferences with the Department of Homeland
	Security. We have electronic connectivity as far as sharing
	information both ways, between ourselves and Department of
	Homeland Security. We have officers from the department, not
	just IAIP but also from the various constituent agencies--the
	Coast Guard, the Secret Service, Customs, others--who actually
	are resident within TTIC performing the analytic function and
	liaising, then, back with their parent agencies.
	So it is across the board, both in terms of information
	sharing, people, interaction meetings. There are regular
	meetings throughout the week where I, along with the DHS
	counterparts, get together to review threat information as well
	as the actions that DHS is taking.
	Ms. Dunn. Just to finish my questioning: Is there any area
	where you believe that communications could be improved with
	regard to TTIC's relationship with these other agencies of
	government?
	Mr. Brennan. I think as we referenced before, this is an
	evolving process. We have a number of challenges ahead of us as
	far as stitching together the different types of information
	systems. We have different metadata standards as far as how
	reporting comes into the government.
	So there are a lot of challenges out there, and I think we
	are making progress on it, and we need to make further
	progress.
	But I feel good about the progress that has been made to
	date.
	Admiral Loy. Ms. Dunn, if I may, one other thought: The
	other value of the free-standing nature of TTIC is that, I
	believe that on down the road we will find valuable other kinds
	of data and pieces of information that heretofore have probably
	never been part and parcel of the thought patterns about
	analyzing the threat to the homeland.
	For example, I believe much more can be done with respect
	to proprietary private sector data--what is in that container
	coming at us? What does the bill of lading say? What does the
	manifest say?--and the mixing bowl that TTIC represents by
	having all those kind of things in the future offered into that
	cauldron, so to speak, so that the mix is the product that is
	of greater value to those of us who are trying to secure the
	homeland, or to those of other executive functions that are
	trying to do their work overseas.
	Projecting down the road, I think this freestanding nature
	represents a continuing positive opportunity.
	Ms. Dunn. Thank you very much, Admiral.
	Thank you, Chairman.
	Chairman Cox. I would just observe, as I yield to the
	questioner, that TTIC is not, strictly speaking, freestanding,
	but rather it is under the direction of the director of central
	intelligence.
	And when you talk about something that may well have
	fruitful ends for homeland security such as further mining
	private sector data, it is because of, among other things,
	civil liberties concerns, that many of us in Congress did not
	want the DCI to be in charge of the intelligence analytical
	portion of homeland security, that integrating fusion function.
	And it is why if somebody is going to be in charge, I would
	much prefer that it were the secretary of homeland security. As
	I said in my opening statement, that is a carol for another
	Christmas.
	And so I yield next to the gentleman from Maryland, Mr.
	Cardin, for eight minutes.
	Mr. Cardin. I thank you very much, Mr. Chairman.
	And let me thank both of our witnesses that are here for
	their service to our country in this very important area.
	Admiral Loy, I was listening to your response as to what we
	expect on the code changes from the different stakeholders,
	including local governments. And you point out, and I think
	rightly so, that we all have responsibilities, including local
	government, to do what is necessary for the security of our
	country.
	I am not exactly clear what we expect, though, when we
	change the coding from local governments. Do we expect that
	they will increase their presence of law enforcement in the
	community? Will they tighten up their port securities, if they
	have ports? Will they do their critical assets, more police
	patrolling? And probably all of the above, you will say, and
	that this is something that is somewhat intuitive, although I
	think we should have better understanding as to what these code
	differences mean.
	You then point out, though, that the funding for this
	additional burden is reimbursable under the general funding
	formula, or grants, that we make available to local
	governments. And that is at odds with what we are being told by
	the conference of mayors and our governors.
	The chair of the Homeland Security Task Force is the mayor
	of Baltimore. And I have talked to him frequently.
	Mayor O'Malley said: Cities are our front lines in ensuring
	homeland security. And America's cities need direct homeland
	security funding. We simply cannot fund robust homeland
	security on the proceeds of local property taxes and fire hall
	bingos.
	The report that was issued pointed out that most--in some
	cases 100 percent--of the costs are borne solely by local
	governments and that there is no funds available under the
	current system.
	Congressman DeFazio has a bill in Congress which has a lot
	of interest on both sides of the aisle to reimburse directly
	local governments when we change the code to a higher level for
	the additional cost.
	I guess my question to you is: I would hope there would be
	some sensitivity to working with Congress to develop a more
	sensitive funding source to local governments to pay for the
	extra cost of when the security rise so that we have a national
	expectation as to what local governments will do but we are
	also providing the resources in order to carry that out.
	Admiral Loy. It think it is a very, very difficult and
	appropriate question for us all to get on the table and grapple
	with, sir, until we have that resolution.
	There are an existing inventory of grant systems in place
	as we speak today. Some of them are tailored to specific
	purposes--state formula grants, emergency management grants,
	Citizen Corps grants, law enforcement terrorism management
	grants, and the new grants associated with the urban areas.
	And the formulaic approach to that I believe must be much
	more complex than the simple notion of a base-plus-per-capita
	kind of formula across the board.
	And so the president's budget, for example, this year, when
	it came up, recognized by doubling the urban security grants,
	which are about a combination of population in general, the per
	capita notion, which remains sound; population density, for
	example, in terms of the likelihood of the targets there;
	critical infrastructure associated with that particular area,
	community or region; and the threat itself in terms of how it
	is focused toward those things.
	And so I believe there remains a challenge for us across
	the board in a distribution of those monies for the purposes
	that have been outlined by the Congress and reinforced by the
	administration.
	But there is a nature of changing that formula to
	recognize, for example, Baltimore as opposed to my hometown of
	Altoona, Pennsylvania. Maybe there is a greater population
	density, critical infrastructure inventory, threat notion that
	is more appropriate there.
	Mr. Cardin. I appreciate that, and I agree with you said.
	Our distinguished chairman and ranking member have been
	working very hard on the funding formula that, as the chairman
	indicated, will be marked up in the full committee soon, that
	is sensitive to the points that you raise.
	I would point out, though, that I do not think it directly
	answers the concerns of local governments when we change the
	alert level in that there is some specific expenses that we
	anticipate will be incurred when we raise those levels. And the
	funding formulas really are not geared to dealing with that
	problem.
	And I would hope that we could work together to try to
	figure out whether there is an appropriate way that we can help
	provide that assistance to local governments consistent with
	the national assessment on homeland security.
	Admiral Loy. Yes, sir, I look forward to working with you,
	sir, on such things.
	You know, again, the sort of shock value of what 9/11
	represented to all of us, in this particular instance, became
	$200 billion in the supplemental of 2003 as a pool of
	recognized funds to be dispersed.
	As I mentioned earlier, only $60 billion of those $200
	billion have actually been claimed against to this point in our
	time line.
	So we are sort of finding, like is often the case in the
	wake of a national tragedy, the mix between job description on
	one hand, so to speak, and the resources to do it.
	Mr. Cardin. Of course, that brings up the second problem,
	and that is getting the money actually out there as quickly as
	possible. And that is another area that we hope that the
	legislation we are acting on will help in that regard.
	I want to turn to the budget itself because you have
	mentioned that a couple of times.
	I am trying to understand the president's budget, and I am
	hoping that you may be able to clarify this point.
	Interoperability is the one area that is been a very high
	priority of this committee. And in testimonies before the
	committee, we have talked about that as a prerequisite to a
	national system. Yet it looks like the 2005 budget zeros out
	the specific grant for interoperability. Am I reading that
	wrong--I hope?
	Admiral Loy. I do not know that I have a good enough
	understanding of it, sir. I will get back to you with that
	specific question.
	Certainly the intention with respect to interoperability is
	among the secretary's four or five most important things to try
	to get accomplished for our country this year.
	Mr. Cardin. Well, I appreciate that.
	According to the information I have, it was zeroed out in
	2005.
	I want to mention one other thing, which is port security
	grants for state and local governments. It was included in the
	2004 budget in transportation security administration at $124
	million. It looks like that it is now in the opposite, domestic
	preparedness, but at $45 million, which would be a substantial
	reduction in port security.
	Next to the airports, I would say that the next highest
	priority has been in port security. And I can tell you, again,
	from the Port of Baltimore, but speaking to my colleagues that
	represent many other ports, there is tremendous need there, and
	I would hope that we would be increasing the Federal
	Government's commitment to local government for port security
	and not reducing it.
	I appreciate perhaps you could look into that also and get
	back to me.
	Admiral Loy. All right, sir.
	Mr. Cardin. Thank you, Mr. Chairman.
	Chairman Cox. I thank the gentleman. The gentleman's time
	has expired.
	The chair recognizes the gentleman from Connecticut, Mr.
	Shays, for eight minutes.
	Mr. Shays. Thank you, Mr. Chairman.
	Mr. Chairman, I have to control myself in this hearing
	because I find myself feeling like we are ships passing in the
	night. I find myself thinking, ``Maybe we don't have a
	terrorist threat. Maybe it is all in my imagination. Maybe the
	20 hearings I had before September 11 were really just, you
	know, make believe. Maybe the three commissions that we had''--
	talking about the terrorist threats--''we are just inventing
	this. Maybe September 11th didn't even happen.''
	I vowed after September 11th that I would not be silent
	about the threat. And now I am hearing that we have a system
	that I think makes sense. I think it makes sense. I do not care
	what color you call it. We have low, we have guarded, we have
	elevated, we have high, we have severe. I think it makes sense.
	I congratulate you for having a system that warns the people
	who can protect us in the general public.
	What I think is idiotic, foolish and stupid is to go to a
	high threat and then tell the public, ``Just do what you
	normally do.'' I cannot think of anything stupider than that.
	Because it would seem to me that when you are going to high
	threat--now high threat is--a high condition is declared when
	there is a high risk of terrorist attacks in addition to the
	protective measures taken under the one below it.
	How about just elevated condition? An elevated condition is
	declared when there is a significant risk of a terrorist
	attack.
	You have low risk, you have general risk, you have
	significant risk, you have high risk, you have severe risk.
	Maybe the problem is, on this committee, that we do not
	think you were right in going to high risk. But I think,
	Admiral, you thought you were. Correct?
	Admiral Loy. Absolutely.
	Mr. Shays. And we are now under significant risk. Isn't
	that correct?
	Admiral Loy. Correct, sir.
	Mr. Shays. Significant. Not general, not low, not no risk.
	Admiral Loy. that is correct.
	Mr. Shays. And it was based on the reality of information
	that was coming to you. Is that correct?
	Admiral Loy. that is correct.
	Mr. Shays. Why would the department tell people to do
	everything they would normally do? We are not at low risk, we
	are not at general risk, we are not even at significant risk.
	We are at high risk, second only to severe risk. Why should I
	just do what I normally would do?
	Admiral Loy. I think it goes to both the comments from the
	chairman and from Mr. Turner that the notion of the secretary's
	comments when he has solicited awareness, when he has solicited
	preparedness and when he has solicited from the citizenry an
	understanding and even an endorsement, that their
	responsibilities entail recognizing there may very well be some
	inconvenience associated with what has just occurred.
	Mr. Shays. So it is just about inconvenience? In other
	words, from the general public, we just have to know it is just
	about inconvenience?
	Admiral Loy. Of course not, sir.
	Mr. Shays. OK.
	Admiral Loy. The reality here is that having solicited
	those senses of understanding from the American public, the
	secretary's also suggesting that they should go about their
	normal business as best they can under the heightened threat
	condition that has been established.
	Mr. Shays. But maybe normal business does not mean you do
	not have to do something. Why would you have them do something
	that puts them at risk if they do not have to do it? Why would
	you put the general public at risk?
	Admiral Loy. We are not trying to put the general public at
	risk, Mr. Shays.
	Mr. Shays. In Israel, if they were at high condition, they
	would not invite people to assemble in a large crowd. Now, if
	you have to take a bus to get to work, they would tell you to
	take a bus. But they recognize there are certain things they do
	not want the public to do.
	I have not heard one thing that you have said, even when
	you are at high alert, that you do not want the public to do.
	Tell me one thing they should not do.
	Admiral Loy. I certainly do not think they should be doing
	things that are foolish as it relates normal activity.
	For example, the question was raised in terms of whether or
	not the church group should go to Washington, D.C., to see the
	sites at orange as opposed to yellow.
	My counsel is that having gone to orange, we have also
	raised the security paradigm to the degree that the secretary
	is encouraging that trip to be taken, and that trip can be
	taken safely and securely because of what we have undertaken to
	actually put into place activity-wise associated with the
	threat condition rise.
	Mr. Shays. So if you think a plane is going to be hijacked,
	potentially from Europe to the United States, you would still
	tell your child to fly on any plane coming from Europe.
	Admiral Loy. Sir, through the course of this last period,
	as a direct answer to your question, we thoughtfully, I
	believe, gathered all the right minds to the table, including
	our international colleagues at the government-to-government
	level and at the airline level, and arrayed what we felt would
	be the prescription of activities and mitigating strategies if
	in fact that plane were to fly.
	And the choice, as you saw in the press several times along
	the way, made either by the government or by the airline--.
	Mr. Shays. So it is a foolproof system? You are going to
	catch all terrorists?
	Admiral Loy. Of course not, sir.
	Mr. Shays. So isn't there a possibility that you know that
	a terrorist might be taking a plane from Europe and they might
	actually succeed, you might not catch them? Isn't that a
	possibility?
	Admiral Loy. There is not a single moment where the
	secretary or the president or anyone else has said that we have
	a foolproof system. This is a journey, sir; it is not a
	destination.
	Mr. Shays. I will tell you what I would do. I would do the
	following: If I knew a plane likely is going to be hijacked
	from Europe--because they do not have the same procedures we
	have, they do not have fire marshals--I would advise the people
	I love not to take a trip to Europe right now, just defer it
	until you go to code yellow or until you go to code blue.
	Admiral Loy. And the point, sir, is if we provide the
	public with information, they can make those decisions. They
	can make those decisions.
	Mr. Shays. So you want the public--so you do not want them
	do what they normally would do. You would like them to use
	their brains and maybe make a decision.
	Now, if they want to make a statement of patriotism of not
	letting terrorists interfere with them in any way, let them
	make that. But shouldn't they be the ones to make that
	judgment?
	Admiral Loy. And that is precisely why the secretary offers
	them both the combination of a threat condition change and the
	reflection that it represents in terms of additional activities
	security-wise, as well as, we heard earlier, the challenge to
	tell them in a public sector that it is their decision to make.
	Mr. Shays. OK, I get your point.
	We were concerned about planes being hijacked from Europe,
	particularly because they do not have air marshals and they do
	not do the same type of security.
	Admiral Loy. No, sir. We were afraid--I will use that time
	loosely, to parallel your thought.
	Mr. Shays. Concern.
	Admiral Loy. We were concerned because of what we saw in
	the threat stream.
	Mr. Shays. Well, but you do know the following: You do know
	they do not do the same process that we do. They do not have
	marshals on planes. Correct?
	Admiral Loy. Many of them do not, that is correct.
	Mr. Shays. And we encourage them to, but they still do not.
	We are encouraging them to do, and they are resisting.
	Admiral Loy. Sir, in the case of many of--.
	Mr. Shays. Isn't that true?
	Admiral Loy. In the case of many of those, they in fact did
	exactly that.
	Mr. Shays. OK, but we are encouraging them to. We are
	encouraging them to have marshals on a plane because we think
	there is a danger.
	Isn't it not true that we were concerned about dirty bombs
	during this last code? Isn't that a concern?
	Admiral Loy. Sir, I would take that one behind closed
	doors, if you do not mind.
	Mr. Shays. Why? Why? Why would we take it behind closed
	doors? Why doesn't the public have a right to know? Why should
	I know and why should other people know and then tell their
	families to act accordingly but we are not going to tell the
	public? Why? Why? Why?
	I want to know why, if we think there is a concern--I am
	not asking sources and methods. I want to know why the public
	does not have a right to know what you have a right to know if
	in fact it endangers the public?
	If we are concerned about dirty bombs, why shouldn't the
	public know?
	If we are concerned that it might be where a large
	congregation of people gather, why shouldn't the public know?
	If we are concerned that it might be at a place where it is
	dramatic, why shouldn't the public know? Why should I know and
	you know but the public not know?
	Chairman Cox. The gentleman's time has expired.
	But I think there has certainly been a number of questions
	put to you, Admiral Loy, so feel free to answer at whatever
	length you choose.
	Admiral Loy. Thank you very much, Mr. Chairman.
	Mr. Shays, the notion is very complex. The challenge here
	for us as public servants is to develop that security paradigm
	that will allow us to have confidence that the threat as
	identified and the map to economic sector--in this case,
	airlines--have an opportunity to develop a set of mitigating
	strategies that takes that threat sense down from where it was
	that gave us pause.
	So our challenge through the course of those hours and
	hours and hours of discussions around that table at the CVITS
	twice a day, in international discussions with the players that
	were a part of our identified threat stream this past holiday
	season, was to take as good a set of judgments as we could in
	the interests of the security and safety of the flying public
	and to so require of anyone that was heading this way and were
	going to penetrate U.S. air space and get landing rights here.
	And in each of those instances, sir, we either had those
	mitigation strategies met and those aircraft flew. Or in those
	instances where that was not possible, or chosen not be on the
	part of the international lines, those governments or those
	airlines canceled their flights.
	Mr. Shays. Sir, I have tremendous respect for you. You are
	an American hero.
	Chairman Cox. The gentleman's time has expired.
	Mr. Shays. Could I just please make this point?
	Chairman Cox. I am sorry, the gentleman's time has expired.
	Mr. Shays. I just would like to say--.
	Chairman Cox. I am sorry, but the gentleman's has--.
	Mr. Shays. --that it was a bureaucratic answer--.
	Chairman Cox. The gentleman's time has expired.
	Mr. Shays. The terrorists know--.
	Chairman Cox. The gentleman's time has expired.
	Mr. Shays. The terrorists know there there is a threat--.
	Chairman Cox. The committee will be in order.
	Mr. Shays. --shouldn't the public know?
	Chairman Cox. The gentleman's time has expired.
	The gentlelady from the Virgin Islands, Dr. Christensen, is
	recognized for five minutes.
	Ms. Christensen. Eight, but I will probably only take five,
	Mr. Chairman. I did not make an opening statement. But anyway,
	I only have a few questions.
	But I want to thank you for this hearing, because the alert
	system is something that not only we in Congress but our
	constituents have to deal with on a regular basis. And to the
	extent that it can be clarified and brought to a level that is
	meaningful and where one is able to develop a specific
	response--which is what I think we are trying to get at today--
	this is a very important hearing.
	I have, I think, three questions. Two to Admiral Loy.
	And I want to welcome both of you for being here this
	afternoon.
	And it goes back to the standardization of the responses at
	each terror level. Because you cited that in the area of
	airports, for example, I think in the instance of airports,
	they have clear responses as to what is supposed to happen when
	we go to an orange alert. But I think you allow that this is a
	work in progress and that other agencies, businesses, the
	public still have to develop a capacity and a knowledge base to
	be able to fine tune what needs to be done.
	I wanted to know: Is there a systematic process ongoing to,
	one, develop those standards and then to communicate and put
	those standards in place? Or is this just kind of just flowing?
	Is there something specifically being done to develop those
	standards, or communicate them and put to put them in place?
	Admiral Loy. Absolutely.
	Ms. Christensen. And what is the time line that you have on
	that?
	Admiral Loy. Absolutely, Ms. Christensen.
	With respect to geographic locales, we have just literally
	received on the deadline of yesterday representative security
	plans from state and territory that is associated with our
	work.
	We are reviewing them very, very carefully so as to look
	for those things that have become common concerns among states
	and territories to be dealt with in that fashion.
	In the notion of your parallel with aviation, ma'am, that
	is a piece of the transportation sector. The other 12 major
	economic sectors are each being reached so as to have not only
	a blueprint for what they should be doing but rather to have
	them also help us develop that blueprint. Because they know
	much better than we do what are the essential ingredients, for
	example, of securing their chemical plant or their nuclear
	plant or whatever it is that they are responsible for.
	This is a very active and very ongoing outreach program.
	And I would like to think that by the end of this year we will
	have the national game plan for critical infrastructure
	protection in place.
	The president has just recently signed, as I mentioned
	earlier, the homeland security presidential directive on that.
	The ball is now in our court to engage all the players as
	appropriate to do so. And we are very actively doing that.
	Ms. Christensen. The agencies or the Federal Government--
	and I often come back to one that I have responsibility for,
	which is the National Parks Service.
	When we go to orange alert, a lot of the agencies, all they
	can do is a shotgun approach to responding to that alert. Is
	there something being done to also prepare standards in terms
	of their response at different levels? What is absolutely
	required of them? Because they are not being funded to respond
	to these alerts. The money is coming from other operational
	dollars.
	Admiral Loy. There is an interesting question there, ma'am,
	for an authorizing committee, for example.
	The notion of whether or not the interior budget ought to
	be looked at through the lens of whether there is adequacy with
	respect to homeland security activities and responsibilities
	may be something of interest to the committee.
	I only parallel my personal experience in the
	counternarcotics effort when, as a Coast Guard commandant, I
	was obligated to make sure my budget that had to do with
	counternarcotics was authored through the Office of National
	Drug Control Policy for their commentary on the way to OMB so
	that they could pass judgment on whether what I was asking for
	was going to be sufficient to the responsibilities that they
	saw me doing for them in the counterdrug effort.
	There may be a parallel notion here that would be of value
	to the committee.
	Ms. Christensen. I think they need some help. Many of the
	parks are areas where either illegal people or goods can pass
	through.
	Admiral Loy. Yes, ma'am.
	Ms. Christensen. They need some help in developing
	specifically what they need to be doing, what they need to be
	putting in place at different levels of alert so that they can
	plan.
	Admiral Loy. You are absolutely right. This is an all-hands
	evolution. It is not only private sector, state and local, but
	it is of course all the Federal agencies and our
	responsibilities as well.
	Ms. Christensen. And you said that as in the last orange
	alert for the country was dropped to yellow, there was still
	some targeted areas that remained at high alert. And I wanted
	to know to what extent were our members of Congress who
	represent those areas informed? Is that standard practice?
	Admiral Loy. I personally picked up the phone and called
	several folks associated with helping them understand as the
	threat was going by. The secretary's judgment in terms of being
	lowered to yellow offered the opportunity for us to continue to
	concentrate on a couple of economic sectors and on several
	geographic locales. Those players were communicated with
	routinely, ma'am, including at the local level. For example--.
	Ms. Christensen. But specifically members of Congress--.
	Admiral Loy. Oh, yes, ma'am.
	Ms. Christensen. --can be expected to be informed if an
	area in my district, or any of our districts, remain at high
	alert.
	Admiral Loy. That would seem to be a reasonable thing to
	do.
	Ms. Christensen. Any my last question--.
	Chairman Cox. I am sorry, the gentlelady's time has
	expired, but I think we are going to have time for another
	round.
	The gentlelady from New York.
	Ms. Lowey. Thank you, Mr. Chairman.
	And thank you, Admiral Loy and Mr. Brennan.
	As you heard from many of my colleagues today, and you hear
	from members of the public, as well as state and local law
	enforcement officials, there are real concerns about the
	vagueness of the systems warning, its lack of preparedness and
	response recommendations to state and local governments and the
	public.
	In fact, even Secretary Ridge, the top official in charge
	of HSAS, has even expressed concerns about its credibility and
	conceded that it needs to be further refined. And you both were
	talking about it evolving.
	In my judgment we need a system that issues fewer national
	alerts and instead crafts targeted warnings to localities or
	industries with specific information indicating where or what
	the terrorist target might be. And this is exactly the reform
	called for in the first responder legislation, which was
	approved by the committee.
	As you may know, I represent a large portion of Westchester
	County, one of the largest counties in New York State. Within
	our borders we have the Indian Point nuclear plant situated
	among 20 million people within a 50-mile radius. We have the
	Croton and Kensico reservoirs which supply drinking water for 9
	million residents of New York City and the lower Hudson Valley,
	the county airport, which houses the largest corporate fleets
	of planes in Westchester.
	In light of the obvious threats to our region, our law
	enforcement officials work hard to protect these landmarks. So
	when the Federal threat advisory warning goes up, our local
	governments and local enforcement officials go into action,
	whether or not they have special intelligence from the Federal
	Government or guidance how to guard against these threats.
	For example, Westchester County police department spent of
	$220,000 from December 21st through January 9th during the most
	recent heightened alert. Individual communities, smaller ones
	like Larchmont, spent $15,000; Ossining spent $8,000 for police
	officer overtime pay.
	Now, on the surface--and I am right near New York City--
	these figures may sound small in comparison to some of the
	numbers that we hear. However, for towns of populations of
	fewer than 30,000 residents, these figures represent sizable
	portions of their local budget. And they simply cannot continue
	to bear these additional costs without substantial help from
	the Federal Government.
	And as one first responder from my district who testified
	before the committee said, ``Look, we can't go to orange
	without first seeing green.''
	Now that takes me a statement you made before, and I think
	it is important to clarify it.
	You said the $60 billion in grants, February 23rd the
	deadline. Well, this is the first time I have heard that,
	unless you are talking about grants to the states. These are
	not grants, as I understand it, that are going to localities.
	And as my police chief, Chief Kapica in Greenburgh, said,
	``Look, I can't wait for the feds, for the state. I have to do
	what I have to do.''
	They need reimbursement.
	So if you can tell me how much Federal funding has been
	allocated to reimburse localities for these costs and September
	11th, I would appreciate it.
	And this program that you referred to, I am assuming is
	money that is going to the state. Because otherwise, none of my
	localities have heard about it.
	Admiral Loy. that is correct.
	Ms. Lowey. So it is going to the state?
	Admiral Loy. Through the states, ma'am.
	Ms. Lowey. Well, I think you should know that that is not
	good enough. Because the localities have to be able to apply to
	some source of funds to reimburse--and obviously there should
	be appropriate review. We do not expect you to be handing out
	these dollars willy-nilly.
	We need to get legitimate expenses reimbursed.
	And so I would appreciate if you would consider that.
	One of my questions is: Will the Department of Homeland
	Security support legislation to reimburse local jurisdictions
	directly?
	Second, to follow up on the interoperability issue, this is
	one of the top priorities of the secretary. Yet there are no
	specific funds set aside in this bill, in fiscal year 2005, to
	enhance state and local interoperability.
	And last year, Congress put $85 million under the COPS
	program for this purpose, but this administration has proposed
	zero, no funds, in DHS or COPS for interoperability.
	I mean, I do not understand. If this is a priority, how
	exactly are we enhancing interoperability?
	And I would dare say--what, is it six months ago, since I
	am still on yellow and not red--there was a hearing where the
	gentleman was telling us--I forgot his name--that they are
	going out with an RFP with interoperability, and then they are
	going to be issuing guidelines with interoperability.
	Frankly, all our local governments are just going ahead
	with it.
	So I would strongly recommend that there would be some kind
	of reimbursement programs for essential expenditures, because
	our local governments just cannot deal with it anymore.
	I do not know if you have time to respond.
	Chairman Cox. Of course the witnesses may take as much time
	as they see fit to respond.
	Ms. Lowey. Thank you.
	Admiral Loy. Thank you, sir.
	The president's budget asks for I think $3.5 billion. It is
	important for us to take the $200 billion worth of supplemental
	Liberty Shield dollars and separate them from the notion of
	annual grants--I do not want to confuse the two.
	The claims process associated with those $200 billion is of
	course--those are dollars against which only $60 billion worth
	of claims have come toward us. So there was about--I am sorry,
	millions.
	There was this pool of leftover dollars, if you will, that
	was very important for us to gain as quickly as we could a
	sense of what the period from the 20th of December to the 9th
	of January was costing the first responders in the local
	communities.
	So the call has gone out to allow that claims process to be
	initiated.
	As it relates to annual grants, the $3.5 billion worth of
	grant requests that are in the president's budget is back to
	the discussion we had earlier, ma'am, on the adjusting nature
	of how best to provide those dollars in a post-9/11 security
	environment that is just dramatically different than times
	before.
	And where there are areas of greater population, greater
	population density, greater critical infrastructure elements,
	like you were just describing in Westchester County, the notion
	that that distribution algorithm should reflect that is I think
	something that is--we are sort of in violent agreement at this
	point between the committee and the administration to how we
	get down to--the devil is always in the details--but the notion
	of it being other than just an across-the-board base-plus per-
	capita distribution algorithm I think is clarified by what the
	president is requesting and a doubling of those UAC grants for
	2005.
	Chairman Cox. The gentlelady's time has expired.
	The gentlelady from Texas, Ms. Jackson-Lee, is recognized
	for five minutes.
	Ms. Jackson-Lee. Thank you very much, Mr. Chairman--and a
	very important hearing and one I hope that I can capture for
	both Mr. Brennan and Admiral Loy the frustration that you have
	heard on occasion among members.
	For the last two State of the Union addresses, we have had
	the president dominate his message to the American public with
	the idea of either war or the war on terrorism.
	We are living in a state of panic, a state of fear.
	This committee, I believe one of the singular committees in
	this Congress and in this nation to able to be a partner when
	what is a 170,000-person department--that is a lot of people--
	are trying in essence to get its act together. And I do not say
	it negatively. I know there are hardworking individuals there.
	If I recall correctly, the president's recent State of the
	Union address took 35 minutes on the issue of terror. And so,
	when we hear--keeping in mind the line of questioning of
	Congressman Markey--that there was an incident at the White
	House, obviously there is great concern that we now find a
	similar incident in the Congress. And who knows where else it
	might occur.
	You can imagine the public's view of this incident, as to
	where it might occur next.
	So I am going to ask the chairman of this committee--
	because we cannot be problem solvers if we cannot be part of
	the factual information--that we hold a secured briefing and
	meeting with the appropriate officials of the Homeland Security
	Committee to provide us with both the knowledge of the
	occurrence at the White House, how the information was
	disseminated, who it was shared with and its ultimate--I do not
	want to use the term tracking, but I will use it--to the point
	where we are now in the United States Congress facing a similar
	incident.
	I am going to ask that to you, Mr. Chairman, that we have
	such a briefing.
	We have had those. And I do not even like to call it a
	briefing. I want it to be a meeting where we are engaging on
	what I perceive to me a national problem that we have to
	address. And I would like to have that request made. And I am
	putting that on the record.
	I do not know, Mr. Chairman, am I allowed to yield to you?
	I know I would be losing my time. I want to proceed. But I
	would like to make that offer, Mr. Chairman.
	Chairman Cox. Well, I would advise the gentlelady that at 7
	p.m. this evening on the House floor there is precisely such a
	discussion, for members only, on the ricin incident in the
	Dirksen Senate Office Building.
	Ms. Jackson-Lee. And Mr. Chairman, what I would offer to
	say to you is that I would prefer to have a separate meeting
	for members of the Homeland Security Committee, inasmuch as
	this takes a lot longer time. And as well, we are entrusted
	with the responsibility to secure the homeland.
	So I will make that request still, recognizing there is a
	meeting this evening.
	Let me also then continue--and I thank you, Mr. Chairman,
	very much--to lay that groundwork for why we are concerned with
	what I am hearing today.
	Let me ask the question, or let me put on the record so
	that you also know the frustration with the reimbursement
	question that my colleague from New York has raised.
	Cities nationwide are now spending $70 million per week.
	Houston, the fourth largest city in the nation, is obviously
	spending even more.
	In a 145-city survey on either the homeland security, Iraq
	war on terrorism and war in Iraq, with the homeland security
	issues and the question of alerts coming and going, they may
	spend over $2 billion in the next six months.
	So you did not answer the question of Ms. Lowey on the
	point of whether or not you are reimbursing cities now,
	directly, for the costs they have already expended. Can I just
	get a yes or no or where we are in that position?
	Admiral Loy. Yes, ma'am. As I indicated, we have set a
	February 23rd deadline for the claims that are put together as
	a result of the experiences from 20 December to 9 January. And
	we expect to pay the bills when we get those claims and have
	reviewed them.
	Ms. Jackson-Lee. And those will be directly to the
	locality?
	Admiral Loy. I do not know that to be the case, ma'am. I am
	not personally familiar with the process of how the claim goes
	in and how the claim goes back out.
	My sense is of course that the difference between working
	with 55 entities, the states and territories, as opposed to a
	countless number of entities, if you were dealing with each and
	every city in the country--.
	Ms. Jackson-Lee. Let me stop you for a moment so I can get
	my other question on the record here, so you can answer it. Let
	me complain or raise a question of concern on the idea that it
	goes to the states and not directly to the localities.
	I am going to research that with you. I understand that you
	do not have the specific information.
	But let me move forward.
	During the Super Bowl weekend, there was a decision for a
	flight leaving from London not to come into Houston. My
	question is whether the TTIC is involved in this kind of
	intelligence assessment.
	If that is the case, I want to hear from Mr. Brennan
	whether or not he is comfortable in light of the
	vulnerabilities and failures of the intelligence system, as
	related to the Iraq war, as we are now seeing unfold.
	Are you confident in the intelligence that is now moving
	this alert system up and down, up and down? And what is it that
	you are doing to vet the intelligence that is coming to ensure
	that even as we use the system that we are now critiquing, that
	you in fact have the information to make determinations that
	would then cause you to go to orange alert or yellow alert,
	which then generates this high cost that we are now expending
	in our local communities?
	What is the basis upon which you are utilizing or
	collecting intelligence? And what is the basis upon which you
	are vetting intelligence to make sure that we have viable
	intelligence to make the right decisions?
	Chairman Cox. The gentlelady's time has expired.
	But both Admiral Loy and Mr. Brennan, please take whatever
	time you see fit to answer the questions.
	Ms. Jackson-Lee. I thank the chairman.
	Mr. Brennan. As you I am sure understand, there are many
	different types of information that come into the U.S.
	government regarding threat--some of high credibility, some of
	low credibility.
	Analysts and TTIC, as well as in other organizations,
	constantly look at that information, evaluate it, assess it,
	digest it, challenge it and compare it with what we know about
	what terrorists are doing.
	We then, as an intelligence analytic element, we interact
	then with those agencies that collect the information, whether
	it is collected from human sources or technical systems or
	whatever it is that they do, to make sure, then, that we
	provide them the feedback as far as what our questions, what
	our requirements are so they can then go back to do the vetting
	of the sources that is necessary.
	But this is a constant back-and-forth process.
	We get the information in, we look at it, we compare it,
	then we provide feedback to those organizations that are
	providing the information to us.
	And so what we try to do is to appropriately characterize
	the nature of the information to the Department of Homeland
	Security so that they fully understand the nature of the
	information, any questions that we might have about it, as well
	as our assessment of its credibility and reliability of the
	sources.
	So it is a cycle in terms of--a cyclical process. The
	information comes in. We provide it to customers. They have
	issues or questions about it, we have our own and we pass it
	back to the collectors so that they can better vet those
	sources.
	Ms. Jackson-Lee. Admiral Loy, you are the recipient of the
	information, at least the department is.
	Admiral Loy. Yes, ma'am. John describes it exactly the way
	we watched day after day through the course of those weeks, Ms.
	Jackson-Lee.
	And the specificity and credibility of that intel stream is
	always going to be the judgment we need to take when that
	analytic product, as a result of that give and take John just
	described, is then offered to the Department of Homeland
	Security.
	Our intelligence shop will give us a good assessment of
	that product that they just received and then map it across the
	vulnerabilities that we know to be in our country, in all those
	economic sectors.
	And then our challenge is to make a good judgment, a risk
	assessment, if you will, knowing this threat piece that was
	just provided to us, knowing the vulnerabilities that are
	there--what are we going to do about it and what are the tools
	that we have to do it, including the communications tools to
	tell locales, economic sectors and indicate specifically, as
	you alerted with your question, the aviation industry as it
	related to the flight in question that was heading to Houston
	on the even of the Super Bowl.
	That flight, as I can recall, would originally have arrived
	in Houston around half-time. And the combination of the threat
	piece that we received, and our engagement process with
	vulnerability, as we understood them at the time, caused us to
	engage with that particular airline, prescribe what would have
	been a set of mitigating strategies that we felt were
	appropriate if it was to fly and leave the judgment associated
	with flying to the airline.
	That process worked through that particular event.
	And frankly, the day-after-day engagement between TTIC as
	the threat collector--collector in the sense that it is
	provided as information for them to produce a tactically
	actionable product, if you will, and then offer that to the
	customers elsewhere in the business of securing our homeland.
	Ms. Jackson-Lee. Thank you, Mr. Chairman.
	I think their answers evidence the need for a security
	briefing of this committee. Because as you well know, if our
	nation's citizens continue to hear about alerts and they do not
	respond, they are not being secure.
	So I think it is very important that we have this closed-
	door meeting of the Homeland Security Committee.
	Thank you.
	Chairman Cox. The chair recognizes himself for five
	minutes.
	Admiral Loy, Mr. Brennan, you have heard from a number of
	our members questions coming at you from I think both
	directions on the clarity or ambiguity of the threat-level
	message, not to law enforcement, not to Federal agencies, to
	governors, but rather to the general public.
	And that remains a concern of mine.
	I want to be absolutely clear and unambiguous in my
	compliments to TTIC, to the Department of Homeland Security, to
	the administration across the board on the progress that you
	are making, the very rapid changes that you are making in the
	way that government does business when it comes to sharing
	information among people in the government who can do something
	with it.
	But I have great concerns about the adequacy of our system
	for dealing with the general public, because I think that the
	confusion that is sown is about equal with the benefit that it
	gained, and that tradeoff is not working as well as it might.
	But let me turn now to the second part, which is actionable
	information in the hands of people who can act, people who are
	responsible because of their job descriptions for doing
	something with this information.
	There are two main sources of responsibility for the
	department. We have Homeland Security Presidential Directive 3
	and we have the Homeland Security Act.
	HSPD-3 tells departments and each Federal agency that they
	are responsible for developing their own protective measures in
	response to each threat level.
	The directive also recommends, as you pointed out in your
	testimony, is binding on the Federal Government, advisory as to
	everyone else, it recommends that governors, mayors and others
	develop their own protective measures for each threat level.
	Then we have the Homeland Security Act, which authorizes
	the department to provide guidance to state and local
	government--to the mayors, the governors, the police chiefs,
	the fire chiefs, the first responders and so on--about what
	they should do at each threat level.
	And this includes also private sector entities and the
	public.
	It is my understanding that we are not yet at the point
	where we can take a look at a classified document that says,
	``Here are the protocols for this sector,'' or ``Here are the
	protocols for this law enforcement arm when we go,'' for
	example, ``from yellow to orange.''
	What guidance, if any, has DHS issued to Federal, state and
	local and private sector agencies regarding the appropriate
	protective measures at each level? In what form has that
	guidance been given? And is it sufficiently digestible that it
	would be sensible for the committee to review it?
	Admiral Loy?
	Admiral Loy. Sir, it varies across the board, if you will,
	in terms of sectors of the economy. The focus is associated
	with sectors of economy at this point in terms of being able to
	identify, with clarity, such that the state and local elements
	as well as the private sector elements, know what is expected
	of them, if you will, and what they should--the encouragement
	process here, of course, is to identify the kinds of things
	that they should expect of themselves.
	And I go back to Mr. Turner's I think absolutely right-on
	commentary about all of us rising to the occasion in this very
	different security environment that we are all part of today.
	So, for example, with respect to aviation security--one
	that I just happen to know a good about, based on what I have
	been doing for the last two years--there are very specific all
	the way down to encouraged additional patrols to be foot
	patrols, not in uniform, around the airport terminal building,
	looking for the briefcase that is left unattended.
	It has to do with the parking lots and how we are actually
	going to be dealing.
	It has to do with threat reduction plans associated with
	potential bombings, given that vehicle bombs remain one of the
	most dramatic potential sources of problem.
	So in the case of the aviation piece of the transportation
	sector, enormously specific guidance has been provided--
	actually, I would call it worked through with the airport
	directors and with the airlines themselves.
	It has to do with identify authentication of people in
	those airports.
	It has to do with access control of how we deal with
	elements in those airports.
	There are probably less robust but aggressive and growing
	interchanges with the rail industry, with the transit industry,
	with other elements in the transportation sector.
	that is just one of this puzzle of sectors the secretary's
	responsible for across the board.
	We have established ISACs, as they are called, information
	sharing and analysis centers, associated with each of the major
	economic sectors in the nation. The ability to exchange and
	hear from them so they are part of the design work of that set
	of things we would be expecting of them or ask of them at
	different threat condition levels, that process of engagement
	is robust as we speak at the moment and about to almost
	explode, sir, as we are moving with respect to this critical
	infrastructure national game plan that is going to be built.
	Chairman Cox. So I do not want to use up any more of my
	time in asking new questions, but just to re-ask the question
	that I already put, is the information in digestible form for
	this committee?
	Admiral Loy. There is absolutely a lot of it, sir, that we
	would be delighted to share and help you understand where we
	are trying to go and where we are with respect to--.
	Chairman Cox. I say that because I think every member on
	the committee has had the same experience of a police chief in
	my hometown of Newport Beach, California. What is the Newport
	Beach police chief supposed to do? What should his department
	do differently when the threat level rises? Or is it up to him?
	After a fashion, HSPD-3 leaves it up to everybody to come up
	with their own.
	Admiral Loy. To a degree there is a strong encouragement
	process and then there is absolutely an appropriate ``let the
	mayor define what is going to happen in his town, let the
	governor define what is going to happen in his state, let the
	police chief be part of the process of defining what is going
	to happen in his responsibility area.''
	Yes, sir?
	Chairman Cox. The gentleman from Texas is recognized for
	five minutes.
	Mr. Turner. Admiral Loy, that reality that every mayor and
	every governor and every CEO of a corporation is complying with
	your alert level voluntarily--there are no requirements of law
	to do so--is the very reason I think it is so critical that we
	move forward to a more sophisticated system.
	Because I heard an emergency manager at the U.S. conference
	of mayor's meeting just a couple weeks ago that I was a part
	of. He was from Arizona. He reminded everybody around the table
	at this meeting of the mayors and emergency managers that they
	did not have to comply with what the Federal Government was
	saying, that was theirs.
	And some of them were somewhat shocked. They kind of
	thought, well, maybe they were supposed to do this.
	And he reminded them, ``No, this is voluntary.'' And he
	said many times he has not complied when the alert level has
	gone up in recent times.
	So I think there is beginning to be an erosion of
	confidence in the system.
	You mentioned many times the importance of looking at
	threats and matching them against the vulnerabilities. And that
	is what the task is all about, as you go through analyzing
	these threats.
	And yet, a few weeks ago, I read in some publication that
	Assistant Secretary Liscouski said that it would be five years
	before the department would complete the congressional-mandated
	national comprehensive threat and vulnerability assessment.
	So it struck me that that time line is totally
	unacceptable. And so I would ask you: What do we need to do in
	the Congress and what do you need to do to be able to shorten
	that time frame to accomplish that very critical assessment?
	Admiral Loy. I could not agree with you more, sir. That is
	unacceptable.
	Someone was suggesting to me just the other day that the
	notion of standard-setting for interoperable communications was
	something that might be at 18 or 24 months out. And I had to
	help them understand that is totally unacceptable. It should
	have been maybe done by now.
	But there are challenges associated with this, sir, that
	are enormously difficult. I do not think there is plenty of
	``authority'' in the Homeland Security Act and HSPD-3 to enable
	the secretary and I and others to get on with the business of
	these enormously important things that you described.
	On the other hand, Congress has acted in addition to the
	Homeland Security Act in many ways. If you think, for example,
	of the MTSA, the Marine Transportation Security Act, an
	augmenting piece of legislation where the Congress felt for
	whatever correct set of reasons, probably that either we were
	not moving fast enough or the nature of the maritime
	transportation system deserved guidance in the form of
	legislation.
	And in the president's budget today you will see a $100
	million worth of requests from the Coast Guard to get on with
	the implementation of the ingredients of the Maritime
	Transportation Security Act that the Congress passed last year.
	I would offer in this greater sense, there is almost a
	repeatable series of things that must occur with respect to
	each of these sectors. There must be a standard-setting
	process.
	There must be a vulnerability assessment process. There
	must be an identification of mitigating strategies. And there
	must be, then, an action plan that comes out as a result of
	that sequence of events with accountability at the bottom end
	of it as the most appropriate and final loop for us all to
	close.
	Mr. Turner. You know, that description you just made there,
	what needs to be done, it would be very helpful if you could
	lay that out in a letter to the committee as to what the
	process is so we can have a better understanding.
	And if you could, also let us know what we can do to help
	move it along. Because I think we have got to come to grips
	with the fact that five years is not acceptable.
	There is another issue that I wanted to lay on the table
	before my time expires for you to respond to. And that is it is
	not only the collection of intelligence and the analysis of it
	and matching against vulnerabilities, but it is then turning
	around and providing information back to those who have a need
	to know.
	And a few weeks, maybe it has been a couple of months ago
	or longer now, the department made an announcement that we are
	going to change the policy regarding information sharing. And
	the governors were able to designate, I believe it was three
	people, within their office that could receive classified
	information.
	Now, the Gilmore Commission made some recommendations on
	this. And I think it is incumbent upon the department to take a
	look at this. And I think that we are all of like mind here,
	that if this information is going to mean anything, we have to
	be able to share it with people that can use it. Otherwise, you
	are in the same position that I am in when I get a briefing,
	and that is I cannot tell anybody this classified information
	or I violate the law.
	And so, since I am not a first responder, since I am not
	out there on the front line anywhere, then it is good for
	educational purposes in terms of congressional oversight, but
	it is not making the country a lot safer in the short term.
	And the Gilmore Commission said this: ``We should designate
	one or more security-clearance-granting authorities which can
	grant security clearances Federal Government-wide.'' In other
	words, we need some entity that can grant security clearances
	that will be recognized by all Federal agencies.
	We also need to, I think, extend that to local and state
	governments. They said we need to develop a new regime of
	clearances and classification for dissemination of intelligence
	and other information to state and local governments and the
	private sector, and develop a training program for state, local
	and private sector officials for interpreting intelligence
	products. Obviously not only for interpreting but for
	understanding what the classification system means and what you
	can and cannot do with that information.
	But to say that we are collecting all this information and
	we are understanding these threats and yet we are not passing
	this information down to those who need it, who could use it--
	and I am not just talking about passing it down to the folks
	that might be affected in a given area--because when you are
	relying on this color-coded system, you know the folks in
	Houston need to know just as much as the folks in Buffalo,
	because if the threat relates to Buffalo, they then know it
	does not relate to them.
	But we have to get to the point where we broaden the number
	of people who we have enough trust and confidence in, and there
	is a lot of patriotic Americans out there working real hard on
	front lines that I would trust--.
	Admiral Loy. Yes, sir.
	Mr. Turner. --that we can share this classified information
	with and get them in a position where what we are collecting
	would actually be meaningful in the event that the worst
	occurred.
	Admiral Loy. Sir, let me take a crack at it, if I may sir.
	And John probably has some thoughtful cautions along the way
	with respect to sources and methods and things that he is far,
	far, better to answer than I.
	First of all, we may be able to take a lesson from, again,
	the aviation book, sir.
	Well before 9/11, there was a category of information known
	as SSIs, sensitive security information, that had been part and
	parcel of the means by which airlines and airports worked with
	the FAA and others in terms of concerns that had been, of
	course, part of that community's interest since Lockerbie and
	since many, many years before 9/11, the means by which we could
	translate--I will use that word--the classified information you
	are describing such that it is totally there with respect to
	its import at that local chief of police station or JTTF
	locally in the city is absolutely a goal that we should all
	have.
	To find the way, A, to communicate it, that is the
	technical end of the communications channels, and also so that
	the receiver, that first responder set that we are expecting so
	much of, to be as armed as possible in terms of understanding,
	sort of, what they are getting into.
	And I could not agree with you more that we should find and
	are in the midst of trying to design better ways that will
	approximate that SSI system that served the aviation industry
	reasonably well.
	John?
	Mr. Brennan. Mr. Turner, I would not disagree with the
	comments that you read of the Gilmore Commission, first of all.
	second, I think it is critically important that there be a
	national enterprise business process architecture. But
	honestly, the technical challenge I do not find as daunting as
	the engineering of the business processes that need to go on in
	terms of bringing together the different elements of the
	Federal family, then bringing in state and local and local
	police or law enforcement officials.
	That type of architecture, as far as how information should
	flow, who it should flow to, under what circumstances
	individual components should receive information, that is a
	tough, tough challenge as far as, again, putting together a
	national architecture of moving information very quickly--which
	can be done--but as far as who has that responsibility in
	certain areas, I think this is still being worked out with the
	state and local officials and the Department of Homeland
	Security.
	But what we are trying to do is to get the Federal system
	right as far as the terrorism intelligence feed to the
	departments so that they can then take it to the next level.
	Admiral Loy. If I may, sir, just a closing comment on that
	if our answers of course have been adequate.
	There is a system called JRIES, J-R-I-E-S, it is a Joint
	Regional Information Exchange System. I might not have all the
	acronym correct. But the notion there is that the technical end
	of being able to do the communication is a system that we need
	to build. that is the how to it.
	Then the what to be shared and the means by which that
	classified matter through the JRIES can actually be exchanged
	between levels of government, for example, Federal, state, and
	local, is absolutely on point. And we are about to develop a
	couple prototypes to prove that it has its merit and move out
	on it, sir.
	So we could not agree with you more. The rightness of being
	able to share the tactically sound and valuable information
	among those players that can best use it for our national
	interest is right on target.
	Mr. Turner. Thank you.
	Thank you, Mr. Chairman.
	Chairman Cox. The gentlelady from New York is recognized
	for five minutes.
	Ms. Lowey. Thank you, Mr. Chairman.
	And I want to thank you, Admiral Loy, and Mr. Brennan for
	being here today. And I want you to know that we appreciate the
	enormity of the task.
	However, as a member of Congress--and I know I speak for my
	colleagues as this hearing winds down--we represent over
	660,000 people. I am the mother of three, a grandmother of six.
	As I travel around my district, the fear is palpable. These
	youngsters are not growing up the way I grew up.
	And they all want to know, what should we do? Should we go
	to the mall? Should we go to Times Square? Should we take an
	airplane? Should we take the train?
	So I want to make it very clear that although I understand
	how hard everyone is working, and I know we appreciate your
	efforts, when you look at 170,000 people that are making policy
	two years after 9/11, as someone who lives 30 minutes from New
	York City who has family and children in New York City, I
	frankly think in order to earn the public's confidence we have
	to move more quickly.
	It is just not good enough to say that we are thinking
	about it and we are planning it, and a year from now and five
	years from now--we were talking about all the nuclear plants
	that are not up to standards that you and I would deem
	adequate--we just have to move more quickly.
	And it seems to me that DHS should be able to not only
	decide that it is orange or green or yellow, but they should be
	able to provide some kind of standard, some kind of information
	to the locals. They are not receiving it.
	In fact, I guess it was at the last time--I was looking
	through the dates. It was awhile ago, when Secretary Ridge
	appeared before the committee, and he testified before the
	Senate Government Affairs Committee last May. He also
	acknowledged that the process for notifying state and local
	agencies of the change in the threat level needs improvement.
	I wonder: Have there been improvements made? It is my
	understanding from that hearing that when the secretary decides
	to raise or lower the threat level, DHS makes a conference call
	to as many state and local law enforcement agencies as can be
	reached.
	Number one, approximately how many state and local law
	enforcement agencies are you able to reach through this method?
	My people, who I meet with regularly, tell me they hear about
	the threat level through the media.
	Is this the best method in a time when you are trying to be
	as efficient as you can?
	I would be interested to know who is on the conference
	call. I mean, fire departments, for example, are so critical to
	increasing security protections during an increased threat
	level. Are they part of this effort? Or are the mayors part of
	this conference call--and they are supposed to alert.
	I just wanted to, as we close down this hear, let you know
	that I know your concern. But from the perspective of most
	members of Congress, you hear our frustration and we just do
	not feel that the department is moving as efficiently and as
	expeditiously as it should.
	And I understand the complexity. But I just hope that you
	get that message loud and clear.
	And perhaps you could answer that one question about who is
	on this conference call. Do you think it is working
	efficiently? Should we be e-mailing or BlackBerrying everybody?
	What kind of information are the locals getting?
	And I believe you answered--I believe it was Chairman Cox--
	that you are not providing specifics. With all the expertise
	you have, with all the various people in play, not to provide
	some kind of directive to the locals, and just say, we are in
	alert, that does not seem to be as good as we could possibly
	be.
	Admiral Loy. Yes, ma'am. To answer your question directly,
	the conference calls that are cited are with the homeland
	security advisory players in the respective states. And it is,
	for lack of a better analogy, it is a phone tree, if you will.
	And we count on those state officials to advise their local
	constituents as appropriate to what it is that has been passed
	to them.
	Now, in addition to that, depending on what we are actually
	seeing in the stream. For example, in the holiday period, we
	were on the phone several times a day to Ray Kelly and his
	team; we were on the phone to Mayor Hahn and his team several
	times a day; we were on the phone to Las Vegas and their team
	several times a day to update them on whatever it was that the
	twice-daily sessions associated with TTIC re-analysis of the
	threat stream was helping us understand.
	We made executive visits. We comprised teams from the
	Department of Homeland Security that went and visited Los
	Angeles and Las Vegas and New York and Washington, D.C.,
	because that is where the threat stream was telling us in this
	particular period these folks deserved a more wholesome review
	of the information that we have so they can understand what it
	is that is being asked of them.
	Now, can we make, you know, 30,000 executive visits in a
	10-minute period, when we are trying to ``pass the word''?
	There are technical and substantive values to both the
	technology that you are describing to help us do that better--
	whether JRIES is the answer, we will know very quickly and we
	will be able to do that or whether the holding on to the blunt
	instrument nature of HSAS in its color-coded fashion that we
	have it today may continue to have value there, when each of
	them who sees it occur understands what that translates to
	them--and then of course the follow-up that we would have with
	anyone that we would be getting more specific information for.
	Ms. Lowey. Just let me thank you very much and thank the
	chairman.
	And I just want you to know we feel as if we are all on the
	same team, Democrat and Republican, and whatever we can do
	legislatively or in any way cooperate, we recognize the urgency
	of this issue, and we applaud you for taking the
	responsibility.
	Admiral Loy. Thank you, Ms. Lowey.
	Ms. Lowey. Thank you.
	Chairman Cox. The gentlelady's time has expired.
	The gentlelady from Texas, Ms. Jackson-Lee, is recognized
	for five minutes.
	Ms. Jackson-Lee. Thank you, Mr. Chairman, very much.
	And gentlemen, let me do as I did earlier and give you a
	few pearls of thought, if you will. And then, if you would
	comment.
	But allow me a moment of personal privilege to add my
	appreciation and applause for the law enforcement that included
	Department of Homeland Security, United States Customs and TSA,
	and my own Houston police department, and various country and
	other local law entities for this past weekend. I believe they
	did an excellent job in Houston with the Super Bowl. Massive
	number of people, massive number of potential activities that
	could have occurred, good and bad.
	I think most of the good did occur and none of the bad. And
	so I want to acknowledge that and express the appreciation for
	the service that was rendered.
	Chairman Cox. If the gentlelady would yield, I think the
	question was put earlier, you know, what should people do
	differently when we are at this heightened state of alert, and
	I think the example was given during half-time of the Super
	Bowl. People should not do that.
	Admiral Loy. Thank you, Mr. Chairman. I could not agree
	more.
	Ms. Jackson-Lee. Being a supporter of the First Amendment,
	and I appreciate and yield to the chairman on his views, I will
	just associate myself with the views that Houston did a great
	job. And of course the law enforcement did a very good job.
	Chairman Cox. Of course I agree with the gentlelady, and I
	thought it was a great game as well. And Houston did a
	wonderful job of hosting the Super Bowl.
	Ms. Jackson-Lee. Thank you very much.
	A lot of interesting things occurred. We could have been a
	little better on the streaker that was on the field that no one
	was able to capture.
	But let me proceed and be on the same theme, if you will,
	of the frustration is not with the hard work that you are
	obviously engaged in, it is that we want our fellow Americans,
	our nation, to be safe.
	So let me ask some pointed questions.
	I have held a number of meetings on terrorism in the
	Houston area--one, I want to thank the ranking member, who was
	present, and we look forward to the chairman being present--a
	very good meeting in the summer that we visited a lot of sites
	and heard from at least 50 or 60 witnesses on this question.
	Subsequently I held another meeting toward the end of this
	last year, December 31st. And one of the questions asked was
	that monies seemingly had not been distributed to local
	entities that were promised since 2001.
	That may require you to go back to your drawing boards.
	And, again, this city is Houston, Texas. But this is my law
	enforcement that truly, I would say, is victimized or impacted
	by the fact that it seems that monies go to the states and not
	to the local entities. So I would like to have that
	information.
	And then, to follow up, as to whether or not this
	application process for the 23rd will--and you were going to
	look into it because you were not sure--go directly to cities,
	or whether or not it will go to state entities. That is a
	definitive and a real problem for us.
	In addition, one of the issues were that local communities
	need more hospital beds and medical equipment in time of
	tragedy. And how does the Homeland Security Department
	interface with them on that basis?
	Let me cite for you out of the U.S. Conference of Mayors
	another point--I made one earlier: Cities have received little
	direct Federal assistance for homeland security since the
	attack on September 11th. The president's proposed an
	additional $1.4 billion in aid for local governments,
	recommending that all but $50 million of that funding be
	channeled first through state bureaucracies.
	I think it is key that the Homeland Security Department be
	engaged with the administration--you are part of it--but with
	the White House on this fallacy, where monies are not coming
	directly to local facilities or local entities, because they
	are, in fact, spending the money.
	I appreciate the states' role, but it is the Federal
	Government that the local communities look to. Those monies
	then are stopped, if you will, estopped, midway, and it is a
	long, long time before they get there.
	And I think that is unfortunate.
	I do not know where I am going to come down as it relates
	to alerts, orange, yellow and other colors. But I will say to
	you that I think it is imperative that we engage and not be
	afraid of each other. It appears that we are afraid of each
	other--it is the administration, it is the Congress. Because
	what is happening is that individuals are becoming less engaged
	when they hear the alert system.
	that is the only criticism. that is what we are saying to
	you. Less engaged. While cities are either spending money or
	forgetting about it.
	The Red Cross at one of my meetings suggested maybe in the
	alternative that you offer a plan, review your personal
	disaster plan, ensure you have supplies, develop alternative
	routes to and from work, exercise caution when traveling, have
	shelter in place, localities for you.
	One of my big issues with respect to the schools, we need
	to think about them. And if you could comment on that.
	Let me finish, however, by making this point: Citizen
	Corps, which is a very, very good promise and proposal, that is
	supposed to be organizing our citizen groups in our respective
	communities. Not many citizens are aware of Citizen Corps. They
	come in; they take up the larger entity, which is the county in
	my instance. They may be doing a great job. I want to
	compliment them. But neighborhoods do not know anything about
	it.
	Citizen Corps needs to be diversified. It needs to be
	smaller. It needs to go into neighborhoods. And it needs to be
	funded.
	Mr. Chairman, I see the gavel. I will say one last
	sentence. And that is: You might answer me on whether or not
	you have been able--if good intelligence is important, have you
	been able to diversify your analysts? Are you pulling from
	diverse populations? Do you have Arabic speakers? Do you have
	African-Americans? Do you have Hispanics? Do you have Asians?
	That has been a key concern of many of my colleagues. And I
	might just add, Congressman Donna Christian-Christensen, who
	had to leave, we are very concerned about that issue.
	Chairman Cox. The gentlelady's time has expired.
	Ms. Jackson-Lee. I thank the distinguished chairman.
	If you would answer the series of questions. I hope you
	were gathering notes. I was, so I hope you will be able to
	answer some of them.
	Admiral Loy. I will try several, ma'am. And then John
	perhaps has more insight on the last one.
	First of all, Citizen Corps, I think the public affairs
	dimension of that is enormously important. And we do need to be
	as understanding as we can with what the potential is there for
	its purpose. And its purpose is to basically enhance individual
	citizen preparedness.
	Ms. Jackson-Lee. Right.
	Admiral Loy. And the flow of the dollars through that
	particular process, in terms of community emergency response
	teams, and their ability to be adequately resources, so as to
	be able to do what they are supposed to do when they are
	supposed to do it, I think Citizen Corps is a great program. I
	think the president has asked for $50 million for the program
	for this upcoming year?
	Ms. Jackson-Lee. We may want to talk. That is not
	happening. I will just say on that point.
	Admiral Loy. Yes, ma'am, OK.
	As it relates to the flow of monies, first of all, I think
	it is enormously important as we look at the absolute dollar
	amounts asked for in grants this year to have some context to
	this over the course of a couple of years.
	Over the window of 1999 to 2001, I think there was a $1.3
	billion total to the grants to be administered in that fashion;
	2002 to 2004, not counting the $3.5 billion the president is
	asking for this upcoming year, $13 billion, a 900 percent
	increase in those two windows of time.
	So the context in which we think our way through numbers,
	in terms of their absolute value and potential value to
	preparedness in the nation, is very important.
	And lastly, I could not agree with you more that we must
	have an efficient system for the distribution of those dollars.
	I am a new arrival to the department. I will guarantee you I
	will take on the challenge of looking very carefully at the
	efficiency of the system as you were describing your
	frustration in terms of the Federal through states on the way
	to the locals. I do not see any reason why that should not be
	as it is called for, as I understand, something like an 80 to
	85 percent pass-through, on to the cities and counties of our
	respective states.
	I will take a round turn on that, ma'am, and look forward
	to working with you on it.
	Ms. Jackson-Lee. I look forward to that.
	Mr. Brennan?
	Thank you, Admiral.
	Mr. Brennan. Ms. Jackson-Lee, the Terrorist Threat
	Integration Center takes that word in its title,
	``integration,'' very seriously. From the standpoint of that,
	we recognize how much of a force multiplier the integration of
	those different perspectives and agencies within the U.S.
	government can bring to the fight against terrorism.
	There is a rich diversity there. We are fortunate I think
	right now to have within the TTIC population African-Americans,
	Hispanics, Asians, Arabic speakers and others.
	Since we are not an independent agency or department, we do
	not have direct hiring authority. So we receive the analysts
	who are sent to us from those departments and agencies. And one
	of the things that we are going to be looking at is ensuring
	that we have within the TTIC population that type of richness
	and diversity, not just in terms of departmental
	representation, but also in terms of the richness and diversity
	of America.
	Ms. Jackson-Lee. I look forward to working with you further
	on that, and also tracking how those individuals are shared
	with you and what opportunities you will have to have your own
	impact on that diversity as well. I think it is key for good
	intelligence.
	Mr. Brennan. I look forward to it. Thank you.
	Ms. Jackson-Lee. Thank you, Mr. Chairman.
	Chairman Cox. I thank the gentlelady.
	Before we proceed, I have an announcement I would like to
	make. Today is the last day for our senior counsel, Mike
	Jeffroy, whom many of you know, who has ably served this
	committee. He is here on his last day for a while at least,
	because he is going to be leaving for six months. He has been
	called up by the United States Marines to go to Iraq.
	And I want to wish him Godspeed and to thank you both for
	the outstanding work you have done in making America safer,
	working here in Washington in the Congress, and for what you
	are embarked upon to make Iraq and the world a safer place as a
	United States Marine. Thank you very much.
	[Applause.]
	I want to thank our witnesses. You have been very patient
	through 2.5 hours, nearly three hours of hearing here. We have
	covered a lot of ground. I think we have made a lot of progress
	in informing the Congress. And hopefully you have learned
	something from our questions.
	There is, as you know, in progress a GAO analysis of the
	color-code threat warning system. The GAO has briefed both the
	Democratic and Republican staff. I believe it is GAO's habit to
	work with the department while they are preparing these
	reports, and I take it that you have heard from them in the
	process of this.
	But I would just note that much of what you have heard from
	the members here has also been echoed in the interim report
	from GAO on this subject, specifically that Federal, state and
	local agencies wish for much more detailed information and
	advance information, separate from the color-code warnings.
	Some 85 percent of GAO customers said that they got this
	information first from television, the same way, in other
	words, that Al-Qa`ida or Osama bin Laden's getting it, when it
	is made public to the world.
	Second, GAO pointed out that nobody is doing a good job--
	nobody meaning not the Federal Government, state government, or
	local government--of tracking the costs associated with this
	system.
	Perforce, we do not have a way in the Federal Government of
	measuring this system's effectiveness. Simply put, are the
	costs worth it? We do not know, because we do not know what it
	costs. There is no accounting system that is agreed upon by
	anyone.
	Some people are keeping careful track of their costs, but
	others are using different methods completely. And there is not
	any common denominator.
	I think as we go forward, we have to have some system of
	measurement, and that, thus far, is lacking.
	Lastly, GAO reports that Federal, state and local
	government agency officials indicated that they would like to
	receive more information and intelligence on a regional, state
	and infrastructure sectoral basis . That is something, of
	course, that you have heard from this committee before.
	So we hope that you take these suggestions to heart. And we
	look forward to working with all of you.
	I would yield to the gentleman from Texas, if you have any
	closing comments.
	Mr. Turner. Mr. Chairman, I think it has been a productive
	hearing. And I join you in thanking our two distinguished
	witnesses, great patriots who are working hard to be sure this
	country is safe.
	And we appreciate what you do and those who work with you.
	I have often had the opportunity to be impressed with the
	quality of people that we have serving this country. And you
	two here today are fine examples of that. So thank you very
	much.
	Chairman Cox. That is a fine comment. One I wish to join
	in. I want to thank you, Admiral Loy, Mr. Brennan, for your
	service to our country. And in addition, for your very close
	cooperation and work with this committee and with the Congress.
	We look forward to continuing that relationship.
	This hearing is adjourned.
	[Whereupon, at 3:29 p.m., the committee was adjourned.]


	A P P E N D I X

	------------

	Material Submitted for the Record

	Questions and Responses for the Record Submitted by Deputy Secretary
	James LOy

	Questions from Congresswoman Loretta Sanchez

	Question: 1. Since the inception of the Homeland Security Advisory
	System, the threat level has been raised to Orange 5 times. Thankfully,
	no attacks occurred at these five times. Do you have evidence that the
	increased threat level prevented attacks, or did the attacks simply not
	happen--in other words, were these false alarms?
	Answer: The protective measures and alerted posture the Homeland
	Security Advisory System elicits and the incredible work done by all
	members of the Department of Homeland Security and other Federal,
	State, local, tribal, major city, and private sector partners serve as
	a deterrent to terrorists and terrorist actions. Based both upon the
	scope of measures implemented and on the intelligence we have received,
	we believe that the current system is effective and that attacks
	against the homeland have been prevented. With each new threat and with
	the lessons learned from unfortunate international incidences, DHS is
	learning about how it can continue to secure the homeland and to
	provide a significant deterrent.

	a. Is this a sign of the limitation of our intelligence
	capabilities?
	Answer: The Information Analysis and Infrastructure Protection (IAIP)
	Directorate and specifically the Office of Information Analysis (IA)
	believes it has the capabilities to adequately analyze all intelligence
	information, compare threat information, and issue timely warning
	products to state, local, tribal, major city, and private sector
	officials.

	b. I know this is an unclassified setting, but can you tell us
	about any activity that DHS or other law enforcement agency
	thwarted that coincided with the Orange alert?
	Answer: The answer to this question is classified.Sec. he Department is
	willing to provide the answer by way of a secure brief or some other
	means acceptable to the Committee.

	c. Can you tell us generally what you perceived as the threat
	that made you decide to increase the threat level to Orange?
	Answer: In each case of the five times the threat level has been raised
	to Orange, Department of Homeland Security (DHS) officials, and
	specifically the Secretary of DHS, felt that the particular
	combinations, in each case different, of the credibility of the threat
	information, the degree to which information was corroborated, the
	specificity and imminence of the threat, and the gravity of potential
	consequences of an event were high enough to warrant alerting the
	Nation.

	d. The second time the threat was raised was just after the
	attacks in Bali and Kenya. The fourth time the threat was
	raised was just after attacks in Saudi Arabia and Morocco. What
	advanced intelligence did we have about these attacks? Did
	These attacks correspond to increased levels of chatter? If so,
	why wasn't the threat level elevated before these attacks?
	Answer: Beginning in the Fall of 2002, a body of intelligence
	originating from overseas suggested that Al-Qa`ida operatives were
	planning multiple operations against U.S. or Western interests.
	Although the Homeland was never directly or overtly mentioned in those
	reports, the possibility of an attack on US soil could not be
	dismissed. That particular body of reporting developed over a six-to-
	nine-month time frame in the period between the Bali and Kenya attacks
	in the Fall of 2002, and the May 2003 attacks in Morocco and Saudi
	Arabia. By the May 2003 timeframe, this body of reporting, combined
	with the Morocco and Saudi Arabia attacks, raised the potential that an
	operation in the Homeland was near or close to execution, which led to
	the decision to raise the Homeland Security Advisory System level.

	e. Has anyone been apprehended as being part of a terrorist
	plot in relation to previous Orange alerts?
	Answer: The answer to this question is classified.Sec. he Department is
	willing to provide the answer by way of a secure brief or some other
	means acceptable to the Committee.

	2. A U.S. Conference of Mayors survey conducted last year reports that,
	because of the war with Iraq and repeated elevations to high alert,
	cities were spending up to $70 million per week on extra security
	measures. Los Angeles alone was spending about $2.5 million a week.
	Clearly our First Responder community is taking the threat alert system
	seriously, even though it is far from clear what they should be doing.
	In the First Responder bill that recently passed our Emergency
	Preparedness Subcommittee, and will go through the full Committee soon,
	we have included a provision which would allow for Federal Funds to
	support States and localities in covering the added costs associated
	with these changes in threat level. Would you support such a provision?
	Answer: We do not support such a provision. We have already
	significantly increased the funding to local communities to improve
	their capacity to respond to heightened threat levels. In FY 2004,
	programs such as the State Homeland Security Grant Program ($2.2
	billion) and the Urban Area Security Initiative Program ($727 million)
	both help local governments meet the preparedness costs associated with
	increased threat levels. In addition to the funds provided in FY 2004
	through SHSGP and UASI, the Department has provided additional
	significant support to our Nation's emergency prevention and response
	community, including more than $2 billion under SHSGP in FY 2003 and
	nearly $800 million under UASI in FY 2003. Similarly, in FY 2002, State
	and local agencies received more than $315 million to support a wide
	array of activities to enhance our Nation's preparedness through ODP's
	State Domestic Preparedness Program.
	We have also created a Homeland Security Funding Task Force to help
	streamline the grant process and enable local governments to quickly
	receive the funding necessary to prepare for future threats. We think
	these measures--in addition to the over $8 billion that has been
	allocated and awarded for First Responders since March of 2003--go most
	of the way to helping defray the costs associated with increased threat
	levels. When we change the general threat level, state and local
	officials have a responsibility to decide how to address and resource
	the protective measures they implement. For the threat advisory system
	to be effective, it must be driven by actionable intelligence and
	public safety rather than the fiscal consequence of a particular
	advisory.

	Question 3. What new systems are you putting in place to make sure
	state and local first responders hear about and can react to changes in
	the alert system before the general public hears about the changes from
	their local news? Do you find this to be an important aspect of the
	threat alert system?
	Answer: We recently announced the expansion of the Homeland Security
	Information Network (HSIN). This system has been gaining ever expanding
	acceptance within the communities of users which are stakeholders in
	the DHS mission. This system, tested and now in use in the Homeland
	Security Operations Center, provides real-time connectivity between DHS
	and local communities in all 50 states and 50 major urban areas. This
	system already facilitates critical information sharing between federal
	and local governments, thereby strengthening our homeland security.
	This system is the most cost effective way to bring information and
	critical tools to first responders and decision makers at all levels of
	government. In addition, DHS in conjunction with DOJ is exploring all
	available avenues to make HSIN, RISS, and LEO more compatible to
	enhance information sharing across the Federal enterprise and with
	State and Local, Tribal, and private sector security providers. Within
	the next 60 days, the DHS and DOJ systems at the SBU level will allow
	cross posting of information, by later this year, we will have agreed
	upon a plan which will make these systems more compatible, as well as a
	longer term plan for making the networks fully interoperable.
	At the Secret level, DHS is developing and fielding HSIN-Secret
	(HSIN-S) which will allow for more robust delivery of critical
	information to the State, major city, and private sector security
	decision makers and providers. A significant part of making prudent
	decisions about the level of response at the local and state level will
	be significantly enhanced by the ability to share at this level. In
	addition, HSIN-S will become the secret information and intelligence
	sharing backbone for the Federal government organizations which are not
	part of DoD. The network will interface with the DoD SIPRNET to assure
	robust sharing and exchange capabilities to deal with threats and
	incidents--whether natural or man made.
	In the near future, this system will be accessible to select
	private sector critical infrastructure owners and operators as well as
	government officials. Users will have the ability to receive important
	threat information prior to the general release, providing the
	opportunity to prepare for, and possibly forestall, any potential
	terrorist activity. We recognize that information sharing is an
	important component to the success of the Homeland Security Advisory
	System (HSAS) especially as nearly 85 percent of the nation's critical
	infrastructure is owned and operated by the private sector. HSIN will
	provide operators the necessary lead time to take protective measures
	on a real time basis--independent of a change in the threat level--as
	necessary to ensure the safety of their facilities.

	Questions4. A vague, color-coded terror threat advisory system has the
	potential to needlessly scare Americans living in relatively safe towns
	and cities, OR desensitize Americans to the real terrorist threats.
	Have you considered replacing the current broad terror threat advisory
	system with one that is more specific?
	Answer: The Homeland Security Advisory System (HSAS) has evolved
	throughout the history of DHS and currently includes the flexibility to
	assign threat levels for the entire nation, or a particular geographic
	area or infrastructure sector, depending on the credibility and
	specificity of available threat information. The HSAS is a
	collaborative process which takes into account current threat
	information and incorporates the perspectives of other federal entities
	(both within and outside of DHS); state, local, and tribal partners;
	and private sector stakeholders.
	The elevation of the HSAS level to ORANGE for the financial
	services sector in New York, northern New Jersey, and Washington, DC in
	August of 2004 demonstrates how the HSAS has matured and is an example
	of its flexibility to adapt to available threat information. This
	flexibility allows DHS, local communities, and others to target
	resources appropriately and reduce resultant costs where possible.
	DHS learns new lessons and continues to improve the system each
	time HSAS level changes are considered.

	Questions from the Minority Staff

	Question: 1. The President included $10 million in the FY 2005 budget
	request for the Homeland Security Advisory System (HSAS). What
	specifically will these funds be used for? Are there personnel costs
	associated with this request? Are there technology costs? Will the
	funds be expended in a way that speeds notification and allows for more
	targeted warnings? If not, why not? If so, what specific steps will be
	implemented? What is the projected budget for the HSAS in the coming
	years?
	Answer: There is no specific $10 million line for the Homeland Security
	Advisory System (HSAS) in the FY 2005 budget request. It is important
	to understand that HSAS represents and encompasses the day-to-day work
	of the Information Analysis and Infrastructure Protection Directorate
	(IAIP) and the Department of Homeland Security: constantly monitoring
	the threat picture, mapping specific threat information against the
	nation's critical infrastructure, assessing preventive and protective
	measures already in place, issuing timely and actionable bulletins and
	advisories, and when necessary, recommending change in HSAS level to
	the Secretary. HSAS currently has the flexibility to allow us to, if
	the information is specific enough to support it, tailor an advisory or
	other activity to a specific area or critical infrastructure sector.
	Because level of activity and resources involved in administering the
	HSAS is dependent upon the daily situation in the homeland, it is very
	difficult to tie specific resources and requirements directly to its
	operation.

	Question: 2. What steps are being taken to ensure that information in
	the HSAS, especially recommendations for responsive action, reaches
	State and local first responders?
	Answer: We are implementing the Homeland Security Information Network
	(HSIN) of which the Joint Regional Information Exchange Systems (JRIES)
	is a part, to establish real-time connectivity between DHS and federal,
	state, and local governments. Eventually HSIN will link DHS to select
	owners/operators of private critical infrastructure. When fully
	developed, HSIN will substantially increase the nation's capacity to
	prevent a potential terrorist attack or effectively respond to one.

	Question: 3. Is the Department of Homeland Security (DHS) developing a
	plan to differentiate its warnings to targeted American communities as
	indicated by threat intelligence? How many times has a targeted, as
	opposed to a nationwide, alert system been used?
	Answer: The elevation of the HSAS level to ORANGE for the financial
	services sector in New York, northern New Jersey, and Washington, DC in
	August of 2004 demonstrated how the HSAS has matured and is an example
	of its flexibility to adapt to available threat information. This
	August 2004 elevation of the HSAS level was the first targeted HSAS
	level change.
	As the HSAS has evolved, it has come to reflect the need for
	certain localities and/or specific areas of industry to be given the
	various threat related issues. As such, DHS has become adept at
	providing information to states and infrastructure sectors through
	Homeland Security Information Bulletins and Advisories. Additionally,
	Department officials speak personally with State, Local, and private
	sector partners when the need arises. This personal communication,
	along with the flexibility in the system to allow DHS to communicate
	broad, generic threats to the Nation and specific threats to a locale,
	embody the enhancements that have been needed this far. Additionally,
	DHS communicates with the officials described above through regular
	conference calls and through calls made to specific locales and sectors
	as the threat requires. Lastly, during specific events and periods of
	high alert, DHS sends officials to areas and events of concern.
	With each raising and lowering of the Homeland Security Advisory
	System (HSAS), the Department of Homeland Security learns new lessons
	and improves its notification process.

	Question: 4. Admiral Loy, your testimony included reference to
	information bulletins, threat advisories, conference calls, and
	executive visits as means used to convey threat information without
	changing the threat level. Please provide additional information to the
	Committee on the use of these additional tools, including the number,
	types, and recipients of such past communications.
	Answer: Information sharing is one of the critical mission areas that
	the Department of Homeland Security (DHS) has set as a priority for
	better preparing the homeland. The DHS Office of Information Analysis
	(IA) prepares warning products, in conjunction with the other DHS
	entities, and distributes them to state, local, tribal, and major city
	officials through the Office of State and Local Government Coordination
	(SLGC). These products, which include both Homeland Security Advisories
	and Homeland Security Information Bulletins, allow DHS officials to
	communicate threats and suggested protective measures to regions and/or
	sectors of concern, without changing the threat level. Additionally,
	unclassified information is shared through a daily Homeland Security
	Operations Morning Bulletin and the weekly joint DHS-FBI Intelligence
	Bulletin. SLGC also coordinates bi-weekly conference calls with all of
	the Homeland Security Advisors in all the states and territories to
	help relay important departmental information as well as respond to
	queries from advisors. The Department has also paid for and established
	secure communication channels to all of our state and territorial
	governors and their state emergency operations centers. This investment
	in communication equipment included secure VTC equipment along with
	Stu/Ste telephones. Additionally, DHS has worked to ensure every
	governor has been cleared to receive classified information and are
	working with the Governors and their Homeland Security Advisors to
	provide security clearances for five additional people who support the
	Governors? Homeland Security mission. This provides DHS an avenue for
	disseminating classified information directly to the location that
	needs the information.

	Question: 5. What steps has DHS taken, and what additional steps are
	planned, if any, to link the HSAS to other existing alert systems, for
	example the Emergency Alert System?
	Answer: DHS is working with the Department of Commerce's (DOC) Oceans
	and Atmosphere Undersecretary to provide in the near future the
	dissemination of emergency messages via the National Oceanic and
	Atmospheric Administration's (NOAA) Weather Radio System. (Messages
	sent out on NOAA's Weather Radio System can also be disseminated via
	DHS/FEMA's Emergency Alert System--EAS). The Memorandum of Agreement,
	signed on 6/17/04, provides for enhanced DHS capability to provide
	warnings, advisories, and other vital information to the general public
	in a manner that allows for reaching the maximum population with
	minimum delay. Of note, messages can be targeted to the whole Nation,
	specific regions, and even to the urban area level.
	DHS is also in the process of studying all alert and warning
	systems to seek other opportunities for linking the HSAS.

	Question: 6. The Gilmore Commission states that by providing real-time,
	useful guidance to federal, state and local government, an improved
	homeland security strategy can help create a ``new normalcy'' that
	acknowledges that the threat of terrorism will not disappear, but still
	preserves and strengthens civil liberties. The country has been under
	the ``Yellow'' alert level for most of the time that the Homeland
	Security Advisory System has been in effect. Should we regard
	``Yellow'' as normal?
	Answer: While the Department of Homeland Security (DHS) has kept
	the Homeland Security Advisory System (HSAS) at ``elevated'' for a
	number of months, the ``Yellow'' alert level should not be viewed as
	normal. No matter how long it is employed, a ``Yellow'' alert level is
	still indicative of a significant risk of terrorist attack. The fact
	that the risk has remained elevated for an extended period of time
	should not preclude the country from going about business as usual;
	however being always mindful that increased vigilance for activity
	deemed out of the norm should be made aware to appropriate Federal,
	State and Local entities. ``Yellow'' indicates to our state, local,
	tribal, major city, and private sector partners that, given threat
	information communicated through Homeland Security Advisories and
	Information Bulletins, they should increase surveillance and security
	of areas of concern, coordinate emergency plans as appropriate, take
	into account suggested protective measures, and implement suitable
	contingency and response plans.

	Question: 7. Among the four criteria laid out in Homeland Security
	Presidential Directive-3 that underlies changing threat conditions
	(credibility of threat information, degree to which information is
	corroborated, specificity and imminence of threat, gravity of potential
	consequences), which factors weigh more heavily in the decision-making
	process? Or is each given equal weight?
	Answer: Department of Homeland Security (DHS) officials rely on
	judgment and experience to evaluate intelligence information received
	from the Intelligence Community, state, local, tribal, major city, and
	private sector officials, and DHS component entities. In any given
	situation, the credibility of threat information, the degree to which
	information is corroborated, the specificity and imminence of the
	threat, and the gravity of potential consequences can change. As such,
	DHS authorities, and ultimately the Secretary of DHS, weigh these
	factors against each other and determine the overall danger to the
	Nation.

	Question: 8. When local governments and entities undertake additional
	security measures in response to raised threat levels, substantial
	costs are incurred. The Congress provided $200 million for critical
	infrastructure protection in the FY 2003n Supplemental Appropriation to
	help reimburse State and local governments and first responders for
	additional costs incurred under heightened alert, but a significant
	amount of these funds have gone unspent.
	A. Considering the statements of need from State and local
	officials, why do you believe more of the available funds have
	not been requested?
	Answer: The Office for Domestic Preparedness (ODP) has received state
	reported obligations of approximately $108 million dollars against the
	$200 million provided through the FY 2003 Supplemental appropriation.
	This number represents the amount of funding, reported by the states,
	as firm obligations at either the state or local level. States were
	required to provide at least 50% of the Critical Infrastructure
	Protection funds to local communities. Our initial information from
	some states indicated that they were holding a small portion of funding
	``in reserve'' for future alerts. However, ODP program guidance
	stipulated that states must obligate all funding within 45 days of
	grant award. As such, states and locals then began to re-direct those
	funds towards other authorized program costs. ODP's Information
	Bulletin #84, provided additional categories in which funds may be
	expended, such as equipment for target hardening, critical
	infrastructure site assessments, and protective security exercises and
	training. These numbers do not reflect the drawdown activity against
	these funds, and states reimburses themselves and their local
	jurisdictions on different schedules.
	B. As additional security steps taken under periods of
	heightened threat fall clearly within the federal government's
	responsibility to ``provide for the common defense,'' do you
	agree that it should be the federal government's responsibility
	to reimburse State and local governments for additional
	security costs incurred at times of heightened threat?
	Answer: Homeland security is a shared responsibility between Federal,
	State, territorial, tribal and local units of government. The Federal
	government's primary role, including that of the Department of Homeland
	Security, is to assist States in preventing, preparing for, responding
	to and recovering from acts of terrorism outside of their traditional
	incident management responsibilities. The Homeland Security Alert
	System was created as an information-sharing tool, not a rationale for
	additional Federal funds. DHS does not reimburse Federal agencies for
	additional security costs they might incur during heightened alerts.
	The Department, through SLGCP, has provided States and localities
	more than $8.2 billion since March 2003. This support ranges from
	assistance to purchase specialized equipment needed to prevent and
	respond to a WMD event to training and exercise support. States and
	localities should be responsible to budget appropriate funds for their
	traditional homeland security missions, while receiving additional and
	supplemental support from DHS and ODP. Funds provided through DHS and
	ODP are meant to supplement, but not supplant State and local funds.

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