Transcripts For CSPAN Key Capitol Hill Hearings 20240622

Equipment the work force needs today while envisioning how to modernize our system and transform the traveling experience in the future. I see a future where advanced capabilities can transform the experience while preserving risk based security as a central feature. I think its possible in a an individuals buy row metric identity could become the boarding pass of the future. Linked to Intelligence Systems and requiring passage through an integrated capability design tore detect metallic and nonmetallic based threats. This can be realized with a suitable strategic approach. As such i commit myself to ensuring that t. S. A. A high performing, highly capable counterterrorism organization. Guided by a risk based strategy and employing a multilayered Intelligence Driven operation and that we recruit and retain a highly trained work force, one that harks the opportunity for Career Growth and development while placing a premium on professional values and accountability. That we pursue advanced capabilities with innovation and competition central to our way of thinking. And that t. S. A. Continues to strengthen its integration in the intelligence community, in the private sector, with our stakeholders and among d. H. S. And other state, local partners. And develop and lead the work force and adapt and invest appropriately and remain focused on these critical success factors. Finally throughout my years of service i remain aware of the need to balance desires for greater security with protection of the liberties and the rights that we cherish. Safeguarding Civil Liberties and privacy interests is a top priority and i look forward to working with this committee to enhance the safety of the traveling public and to achieve this balance. I am proud to see how the men and women of t. S. A. Each and every day and to have the privilege of serving with them in the defense of our country. Members of the committee, i thank you for the opportunity to be here today. And i look forward to your questions. Chairman mccaul thank you, admiral. I now recognize myself for questions. Admiral, you and i know al qaeda, particularly al qaeda in the Arabian Peninsula and the Corazon Group in syria are still very intent on hitting the aviation sector. Primarily flew bombs, specifically nonmetallic i. E. D. s. This led to a heightening of screening at 25 airports overseas. We have made some progress against them through strikes, recently taking out the leader of the Corazon Group. And others. But that threat is still there. And with this dismal report card that came in, 96 failure rate. Given the threat thats out there, im concerned about the safety of the American People when they travel on airplanes. Not to mention that 73 aviation workers have potential ties to terrorism. Now, i cant get into all the details. Because it still remains classified in terms of what slipped through the cracks. But what are you doing what are you planning to do as the new t. S. A. Administrator to address this enormous failure . Administrator neffenger mr. Chairman, thank you for the question. And youre absolutely correct to point out that this is a huge concern. And it greatly disturbs me to know that we had that failure rate at the checkpoint. As you know the checkpoint although not the only element system of our security is a critical part of security and the barrier between the sterile and nonsterile areas of an airport and a visible deterrent and the last chance to catch items that we do not want getting onboard aircraft. So as i look at the fill youre rate my immediate questions were the same ones that secretary johnson had. As you know that came out during my nomination and confirmation process. And i had a number of conversations with the secretary. He immediately ordered an establishment of a team to take hard look at the nature of the failures and what theyve done. So i inherited that theme. Ive seen the work that theyve done. And what i can do is ill speak directly to what that team is doing. But ill speak in more systemic terms of what its telling us about where our concerns are. As you know, ill begin by saying that covert testing is a is a net positive because you want to try to break your system of security on a daily basis to ensure that youve got it right. And it goes back to the need to continually adapt and evolve your organization. But when it breaks to the extent that we saw, that that raises some significant questions about how effective that youve been. So what the team has done is they took a hard look at exactly what the nature of each individual failure was. We looked case by case. Of the tests that the i. G. Did and the i. G. And i sat and talked with the i. G. Extensively about this. And theyve been quite open about sharing their results. We looked at the nature of the tests. And we looked to see is it a Technology Issue . Is it a Human Performance issue . Is it a process or procedure issue . And as you might suspect, it is in some cases some combination of those three those three elements. And then we looked to see whether there was whether there was a way to mitigate that. So that what the team has done over the past three months, is to take a part all of those. And you got a detailed brief and i would off to the committee a detailed brief on the specifics of that team. I think that it would be it would help you to understand how were moving forward. And then we looked at how how do we train out those specific failures . Because the immediate need is to train out those failures. So that we dont have a repeat of those. We are now in the process of doing that over the course of the next 60 days by the end of september. We will have trained the failure, the specifics about the failures to every frontline member of t. S. A. That will address the immediate problem. And i think that we can do that. The bigger question is, are there systemic issues in the way we are approaching our business that led to those failures in the first place . So that we what i dont want to see is some other set of failures in the future. I know that i can train to these. But im interested in figuring out how we train to the larger questions out there. And thats what were working on now. And that goes to a vision for how you then begin to think of yourself in this continuously evolving, continuously adapting way. And as i said, the the thing to remember is that there is there are other elements of the system. Some of them virtual. Some other physical elements of the system. But the checkpoint is one of the most important. And we have to get that right. Chairman mccaul you talked about technology and vision for the future. And you and i have talked about this privately. It seems like we have precheck i think has been a success and global entry, more passenger friendly, more risk based, which i think is where t. S. A. Should go. But as we look at the future you have the checkpoint of the future. And the use of technologies. What is your vision for the next say five to 10 years . What will the experience be like . What is your goal for the traveling passenger . Administrator neffenger a wonderful question. Because as somebody who has traveled a lot over the years, i know what checkpoints can feel like. When you get there. I do think that theres a vision for something in the future. One of the best terms i heard recently was security at the speed of life. And i like that. There are a number of interesting and innovative ideas out there. I mentioned one in my opening statement. The idea that you are your boarding pass. And if i can tie you biometrically to a reservation and identification and do it in a verified way, then then one, that moves you through the process faster. We eliminate boarding passes. And every airline has a different style of boarding pass and makes it very challenging for those document checkers to check those. Because theyre looking at something different. Theres not a lot of consistency there. So i think we can eliminate the boarding pass and move to integrated technology that does. And right now, theres a challenge because the a. I. T. Machines dont do metal detection. Metal detectors dont do nonmetallic explosives. And nothing sniffs for explosives as you go through. Ive actually seen prototypes of machines that you can walk through and it does all of that in one. Now, can they be fielded effectively . I dont know. I think this goes back to your earlier question about competition. I think we can do more to incentivize competition in the private sector. I am currently right now tied to a process that has me buying a lot of equipment that may be obsolete shortly after i buy it. I have to adapt continuously to a changing threat. I looked at the way the department of defense has periodically incentivized competition in the private sector to come up with new ideas. I think theres ways to do that. I would love to have more conversations with this committee on ways that we can do that. Ways that we can use or modify some of our acquisition practices and policies to allow us to do that. Chairman mccaul well, i look forward to working with you on that. And thank you for your testimony. The chair recognizes the Ranking Member. Ranking member thompson thank you very much, mr. Neffenger your comments clearly are a breath of fresh air. And i think the chairman will agree with me on that. Weve passed a modernization of acquisition, legislation to kind of give the department of the department a freer rein. One of the challenges we have is the culture that weve always done it this way. So we buy technology being t. S. A. , that we already know does not address the emerging threat. But because this is how we do, many in congress have raised their question a number of times. Im glad to see you willing to say how can we get out of this . C. I. A. , nasa, some of the other agencies, they have vehicles that they use to incentivize the acquisition of new technology. Some of it is you you create a you purchase participation with those companies so they can continue development. We tried that for quite a while. And i want to talk to you a little bit about that. Going forward. But as we talk about technology, lets talk about how we do processes. The manager Inclusion Program and some of us have had real problems with it. It appears that the issue became how can we get people through the checkpoint faster rather than how can we guarantee that those people who go through have actually been vetted . So were at cross purposes. How do you see the Department Working on this managed Inclusion Program . Administrator neffenger well, thanks for your question. I agree completely with you. I would like to see us and in fact ive ordered a phasing out of the managed Inclusion Program. Because the goal is to have a fully vetted population in the Precheck Program. The more i know i want known people, people i trust, going through the program. Thats that is really the heart of riskbased security. Is i want to separate out a known population from the ones i dont know anything about. And i want to make the experience less less intrusive for the known population. One that reduces the burden on the agency. Im paying attention to the things i need to Pay Attention to versus people that ive already vetted. So i think we have to phase out managed inclusion because it introduces i think a perhaps a higher level of risk than we want in the system. And grow the use of passenger detecting or passenger screening canines. The explosive detection dogs that we have out there. That is they are a tremendous asset. And were looking to were looking to expand that program slightly. And to reposition some of the some of the canine teams that we have in locations that are lower risk to higher risk locations. But more importantly, i want to look to ive were working on a request for a proposal to put out the option for private sector third Party Screeners to help us do the initial marketing and collection of people into the Precheck Program. Ive had a number of conversations with travel aggregators. With Credit Card Companies. And the like. And i think that theres an opportunity to expand that precheck population. The known population, enrolled population. Over the near term. And so im encouraged by the opportunity and hoping that this request for a proposal generates a lot of interest and competition. To help us do the initial marketing and collection of people into the Precheck Program. I have had a number of conversations with travel aggregators, with Credit Card Companies and the like. I think there is an opportunity to expand that population over the near term. I am encouraged by the opportunity. I hope this request for proposal generates a lot of competition in the private sector. And then to grow that population. And then to move people that are already screen, like we did with military members and others, that have already had that ground checks, that already have biometrics on file, into the Precheck Program based on their ongoing clearance. Representative thompson how do you plan to get us off the bottom . Mr. Hefenger i start with the fact that everyone rose raise their hand and took an oath of office. How many people in this country do that . Im sure their eyes were open. They knew it was not the most popular job in the country. But they said i want to be the face of security for the traveling public. That is where morale starts. What is where does morale fail after that . If theres a disconnect between what they think they signed up for and what the organization is asking them to do. I go right back to the mission and my dedication to the coast guard told me it starts with the mission. And then you have to talk about that mission. And you have to train to that mission. And you have to measure that mission. When i come to work, i know i want to know that i am being given the tools and the training to do it and they are backing me up when i have to make decisions. I think there is a lot of training to that and there is a Workforce Engagement needs. Piece. Mr. Thompson thank you. My last question. Weve resovened the problem with this committees help that people who apply dont have to go back. Now we are hearing, when they tried to get recertified, there is a tremendous backlog so that members card expires before the new card comes. We would like for you to look at that. I dont want us to create a bigger problem by alleviating the second trip and we didnt fix getting the card that to the person. The last item is those twic card workers who work on military installations on selected instances, are being required to get an additional card. It costs about 200. It has the same information that the twic card asks. Can we see some reciprocity so that the twic card can provide to other installations, so that those workers dont have to pay for a second card . Mr. Heffenger i am not familiar with the concern your raising. But if i can get with your staff, i can look into that. If we are collecting the same information, we can verify the same things. I think we can work on reciprocity. Mr. Thompson and the issue of getting the cards back before they expire . Mr. Heffenger yes, sir. Let me find out what our current backlog. Is i know twic has been a challenge over the years and its a focus area for me as i moove forward. As i move forward. I would like to know what the backlog is and are there things that can dramatically speed up that process . Representative thompson thank you very much. Representative rogers you have some in her should to deal with. Youve got a big challenge on your hands. Ive been on this committee since it was established. Ive seen the department grow and develop since it was established and i can just assure you, you have some inergsa to deal with inertia to deal with. You have some employees that you would like to put the fear of god into their heart or nothing is going to change. I have seen some good administrators precede you. That ran into administrative pressures to back off. Youre going to run into that. But i want you to understand that youve got some folks that really believe they dont have to change. You will be gone before they are. You need to make them understand that is not the case. If they dont change what theyre doing, it cant be slight changes. Its got to be dramatic changes. Or were going to have the same results weve been getting for the last several years. This most recent i. G. Report that upset so many people was identical to the previous three i. G. Reports over roughly a fiveyear period of time. Thats unacceptable. That is people who are unwilling to do anything different and dont believe there is any consequences for not doing anything different. So i hope you and still and understanding in them, if they are gone. And if you cannot do that, then you ought to be gone. I think you agree with that. One concern, i heard the chairman make reference to the project program. A vary good program as far as its goals. The problem we are running into is that frequent travelers, the people who want into this program, have gotten into it. The fsds at the airport have not adjusted the lane activity to accommodate that traffic. So now you spend more time in the precheck line than if you go into the priority lane. Whatever they call it. And just go through the typical take your shoes off type. That is silly. People are going to stop going into the project program. Precheck program. They dont find it enhances their ability to get through in a faster fashion. I hope youll address this with the airport folks. We want this to be the method of getting safe people that we know through in an efficient manner so we can put more attention on those infrequent travelers who are more apt to have a problem. I heard you make reference to the fact that you understand the explosive detection k9s are a valuable asset. They are the best asset you have. I am not going to talk in an open setting about the efficacy of the equipment or the personnel, but as soon as we are back from our august district work period, meet with you and go over in detail what shortcomings have been. I am very familiar with this subject matter. Something needs to be done to remedy that. I look forward to that and i hope ill get your commitment to meet with me in september for that purpose. That is all ive got. Think you, mr. Chairman. Representative jackson lee thank you for your presence here today, vice admiral. Let me thank you for your service. It is interesting that i followed my good friend mr. Rogers. I had the privilege of sharing chairing the Transportation Security Committee and served as his ranking when he was chair and we are, if you will, young, but we have been here for a little bit. So we are really grateful for your service. As i thank you for your service, let me take a different twist and say to you that i am vary proud of the men and women who serve every day on the front lines in many ways, but in particular today of transportation Security Officers. Over the years, i have argued for increased professional Development Training, to recognize that morale and commitment have a lot to do with pay, respect, and professional developer and training. I will be posing questions within the short amount of time that i have. Again, my sympathy to the Hernandez Family for mr. Geraldo hernandez killed in of duty as a transportation killed in the line of duty as a transportation security officer. We should never dismiss the fact, in all of the issues that you have to deal with, since 9 11, there are probably millions of tsa screenings, tso screenings. And any number of stops that the tso officers make a and i hope you acknowledge that. Beginning to correct starts with acknowledging service. I think it is vary important to do so. Let me also say, however, in addition to that, we have allegations of mismanagement wasteful procedures, retaliation against whistleblowers, low morale security gaps. But i never want to leave this table without saying thank you to the tso officers. I make it my business, as i travel through airports across america, to say hello, to ask a question, or to watch their procedures. Again, if i might, professional Development Training is crucial. So let me just ask you a series of questions. I think you can do better if we get rid of sequestration. You need the money placed in the right places. I agree with the use of privatization on the basis let me correct that. I believe there is a place for the private sector, in particular dealing with technology. I might have misheard you when you said a third tsa, that it was a private sector. I am against privatizing airports and tso officers. I think we need a professional, trained group. I want your comments as it relates to a professional, trained group. I would be interested in you being able to craft an effective utilization of these individuals with a more effective use of the resources you are given on that. I want to take note of the fact that a young man in dallas was so in love with his girlfriend and he recently ran past security. I would like your comment on that. We shut down the Newark Airport a couple of years ago with another enamored young man who ran to security. And i want your comments on tsos being the most is a buffets and america. How do the most visible faces in america. I hope i can join mr. Rogers and others for that gift briefing. If you could that scif briefing. If you could comment on those. Mr. Heffenger thank you first and foremost for acknowledging the workforce. I couldnt agree with you more. The mission of tsa is delivered by the frontline transportation Security Officers in this country. I cannot say how important they are to the success of this program but i cannot thank them enough for the work that they do. I do that myself whenever i travel and certainly now. With respect to budget, i think you are right. Sequestration will be a challenge for every Government Agency that will be subjected to it. I hope that congress is able to pass a budget resolution that will eliminate sequestration and allow us to have some certainty Going Forward. To make sure it was clear what i was saying with respect to third party what i was really speaking about was incentivizing have a sector entities, private sector businesses to help develop the technology that we needed to the future. I think we can do that in a competitive way to provide incentives that dont have government taking on all the risks of development, dont have government buying huge Capital Outlays that outlays for equipment that later becomes obsolete. The bdo program, as you know, there has been some controversy about that program. There have been a number of gao audits. One has looked at the efficacy of the program and the work that is done. I know the tsa contracted out a thirdparty overview of that program. That thirdparty spent two years collecting data on that program and running tests. That was submitted as a report. There is a question about the underlying concerns. I know we are in the process of completing a report that shows what we believe to be the scientific underpinnings of that. That said, i understand the concern with the use of that. From my perspective and im not clear on how i feel about the bdo program yet, being relatively new but from my perspective, a link to validated underpinnings, if i can so effectiveness with behavioral viewing, then i think it is an effective tool in the security toolkit. I know Law Enforcement agencies around the world use behavioral indications and determining whether they have problems whether you are a beat cop or you are looking at another situation. Im looking forward to reading that report that was done. It looks at the scientific underpinnings. And i look forward to discussing the further with the committee. The Security Breach at dallas airport, that you mentioned, that is of great concern to me. For a couple of reasons. One, i am vary concerned about our i am very concern about the safety of our frontline workforce. The attack in new orleans earlier this spring, those are vary real threats. You have to be careful of that. So any potential for somebody to breach a barrier runs the potential for not just a safety issue, but also a security issue. So i ordered an immediate review of that incident. More importantly, this goes back to the systemic issue. I dont want to go around and whacking off everyone a problem there is. I want to look at the system and understand if we have an issue with security at our check. Once that is the barrier once again, that is the barrier between a sterile and the nonsterile areas. I will share that with you when i have it. Most importantly, im going to look across the system and see how they are doing this. Representative jackson lee thank you. I would like to put this in the record so we can discuss it with her and discuss it further. Representative cap go representative katko i want to thank you for the job that your employees are doing every day and day out. One of the areas i want to focus on a little bit today is the issue of access control. We kind of touched on it but it is a gaping hole in security at the airports nationwide. Within the last year or two, you have had a major Drug Trafficking ring operating out of the oakland airport. You had another one operating out of the dallasfort Worth Airport that had implications in a briefing that is not necessarily probably. And an individual who smuggled as much as 160 guns, loaded, including assault rifles on airlines. And brought them up to new york city. I think these incidences point out a major problem with Access Controls at airports. I recently had to had a bill passed in our subcommittee. I would like to hear your thoughts on the axis control issue. Should there be minimum standards at all access point that these airports . I would preface the question further by saying, it is clear from the dallas case that the viper teams that are used to do the random screening at various points would be monitored by the bad guys at dallasfort worth and they were simply avoiding them. That is not going to work Going Forward. With that overview, i would like to hear your thought on Access Controls. Mr. Heffenger thank you. I agree with your concern. As you know, those incidents let me back up a little bit and talk in general terms. This should be a known interested population. Everyone of these workers gets vetted for background. There is a question about how far back we need to go in the future. They are continuously vetted. Any credential holders are continuously vetted in the terrorist screening database. And currently, there is a periodic revetting against criminal databases. That doesnt guarantee that you dont have a criminal population. So what do you do about the potential for criminal activity or worse in a known interested population . Known and trusted population . You introduce uncertainty to that population and you try to grow a culture of belonging to that organization. I absolutely agree that access should be reduced to the minimum necessary to ensure operations of the facility. My experience in the poor environment, when we looked at the maritime sector right after 9 11, a wideopen environment for obvious reasons. You want stuff to freely move in and out. The first answers we got back from the maritime cemetery was that it is impossible to close this down. But over time, the maritime secretary was that it is impossible to close this down. But over time, we did it. Periodic, random, and other types of inspections that you are subject to come a growing sense of culture that we are all in this together. As i look at the aviation environment, i look at the hundreds of different employers of people who hold. Badges and you think, how do i get that group of people to think as one . To recognize, hey, this is their airport . So there is a campaign out there that a combination of reducing Access Points increasing setting specific standards for those Access Points, how you inspect those standards, keeping that randomized expectation of inspection. I think that helps. You need a number of these things. And then growing a sense amongst the workforce the large percentage of which are good, solid, hardworking people that, look, it is their response ability to help release this as well. There are some airports who have done this and have done it a very effectively. And i would like to look at their best practices and extend those across. I am meeting with the airport executives, the airport council. This is a top issue of concern for me as well. Representative there are a couple of representative katko there are a couple of airports doing this. Those three airports are all going towards 100 screening of employees. We hear from airports across the country that is something i doable. I would like to hear your thoughts on that aired on that. Mr. Heffenger i want to see what 100 secured it looks like. I want to hear from them how they achieved it. What are the challenges . And what are the ongoing applications . I need to be able to address that when i meet with the airport to claim they cannot do that. So i am on a Factfinding Mission over the next month or two to educate myself as to what the various arguments are. What i would like to do is to continue have continue to have this conversation Going Forward. Representative rice mr. Secretary, i would like to talk first about diversity. I think gender diversity is a goal for most public and private sectors. But i think for tsa, it is an absolute necessity given the traveling public that they are interacting with on a daily basis. What percentage of tsa employees are women . Mr. Heffenger i dont have that number off the top of my head. Although i have asked for that. It is one of the things i and talking about this week. Diversity is critically important. Anecdotally speaking, i am pleased to see what looks to be a vary diverse frontline workforce as i travel around. I will get you the percentage of women and break it up into categories. I think that diversity is the key to success in an organization. Always has been. It is one of the Biggest Challenges we face in the coast guard and the military not just recruiting, but retaining a diverselooking workforce. We found out early on that recruiting wasnt enough to call yourself diverse if there was no pathway of the organization. What i commit to you is that it is of critical importance to me across the organization. Not just in the entrylevel, but throughout the organization to look for opportunities throughout. Representative rice i am glad to hear you say that. I believe there are limitations for female employees that male employees do not have. If they were to have a female employee and baggage needing to be moved to the passenger pat down area because of the need to have more women women only being able to pat down women and that leads to some level of frustration that women have because they are facing those kinds of limitations and room for upward mobility that men dont have. I am happy to be sitting here with you. I think you are a great choice. I think your focus on trying to improve the morale for your employees is a good goal. And i want to offer that we are here to improve your morale, such as it is. You are in a truly thankless job. I look forward to seeing you out in l. A. I am going to look at lax airport on the 18th of this month. We stand ready to help you in any way that we can. Mr. Carter admiral, welcome. I can in no way speak from members of this committee, but for myself and i suspect the Committee Members agree with this, we wish you success. We want to see you succeed and we want to do everything to help you. I want to touch quickly on two things. First of all, understand that i represent the entire coast of georgia. On the coast, we have two major ports. We have the savannah court, the number two container port on the eastern seaboard. And we have the number two rolloff for in the nation. Both of those ports are vitally important. In both of those ports, we use the twic cards. The transportation workforce identification card. Id like to read to you some examples of situations that have occurred with twic cards and im very concerned about. First of all, an individual used a card to gain access in a Norfolk Naval station and killed a naval officer. Twic holders have committed crimes in secure port areas, demonstrating twics are provided to criminals and can be used to commit crimes on ports. The proposed rulemaking for twics discusses multiple possible scenarios where the cards will not be effective. Dhs has failed twice to complete a Successful Pilot program with the cards. Dhs has not concluded a reliable analysis of the internal control effectiveness. G. A. O. Has demonstrated the twic programs practical programs weakness through testing multiple times. My question is, what about the twic cards . Can they be fixed . If they can, how are you going to fix them . Mr. Heffenger you raised a lot of the same questions i have coming into this job. As a former member of the coast guard, we worked with tsa throughout the coast guard implemented the twic card reader Program Based upon the rules that were set for the issuance. First of all, i want the them issued to a known population. I want some biometrics on that person. I want to be able to run those against databases and tell me if i have a criminal act or. Actor. And i want to know if the disqualifying factors are the right to disqualifying factors for holding the card. A lot of groups, longshoremen and others, had some concerns about that list. That took a lot of work to get that was negotiated. I think you need to continually look at that to make sure you have the right features or the right disqualifying factors and that you are consistent in the application. The second piece is to have it used properly when you are attempting to enter a facility. By used properly, i mean what aspects of the facility does it give you access to . Why does it give you access . And how known are you to the population . That is part of the reader issue and part of the procedure and rules issue. As you know, the card can be coded to give you access to different parts of the facility, some more secure than others. All of that is my ongoing review right now the program. While i cannot specifically answer your questions today, what i will promise you is over the next the coming weeks and months, i will answer them. The current state of play in your particular instances, i would like more detail because i can look at the specifically for you. Representative carter i want to follow up on vetting to on some of the Airline Workers specifically. In june, we had a hearing and i was appalled to find out that some of the applicants were only required to have their last name and first initial and no Social Security number. I hope that has been taking care of already since that hearing. And if it hasnt, i hope the first thing you do when you get back is to take care of that. Mr. Heffenger for the specific ones, it has been taken care of. And we are moving to, as i said, a full name, Social Security number, and clear connection to identity. Mr. Carter good. Let me finish by repeating what i said before. We wish you success and thank you. Thank you for what youre doing. Representative torres thank you again, admiral, for being here with us today. I have no doubt that, under your leadership and with your experience and what it sounds like great support from this committee, you will be successful at addressing Major Concerns that we have seen with the t. S. A. And their responsibility of securing our nation and our ports. Today i want to focus on my home airport, Ontario International airport. As you may know, the airport is controlled by the los angeles airport. They have oversight and management control of this airport. Through my experience not only as a passenger, but going on a security visit tour of the airport, i want to highlight for you today the concerns that i have. Under the agreement, the arrangement it has with ontario, lax is 56 miles away, and they are the ones controlling our airport. Ontario airports manager is only at the airport on a parttime basis. It is a shared position with another airport. We used to have a fulltime assistant manager, but that position was deleted a year ago. The authority, the Management Authority could be very well undermined when that manager is not at ontario airport. It is unclear who was in charge of the airport when that person is physically not present. When it comes to technology, the Ontario International airport seems to be lacking. The Card Reader Technology that regulates access to the secure areas is inaccurate, meeting that employees have no limited access as to where they can enter secure areas. Additionally, many dispatch centers security monitors at ontario airport are nonfunctioning. Ontario airport gets Old Fire Department equipment from lax. So whatever is deemed inoperable or unwanted at lax is shipped to ontario airport, and that is the equipment that our folks have to work with. When it comes to security, the airport perimeter appears to be lacking in needs to be reviewed. For example, as a result of a grade separation on the north side of the airport, we have had residents that were able to walk into drive all the way through to the runway without being stopped. I also have concerns about the training of ontario airport employees. It appears that the lax employees do some training at the ontario facility, but its not clear if our employees are participating in that training. As you can see, i have many concerns about the security this is a major problem because the airport serves millions of residents in california. It is a hub, an engine for our community in the inland empire. My goal here as i explained to you earlier is not to pit or get into the politics of who owns the airport. My goal here today is to ensure that you fully understand the issues and concerns that our community has as it relates to security, and he was managing it. Who was responsible for the ontario airport . At this time i want to invite you to participate in a meeting with me to discuss these concerns, to come up with solutions to these problems. Would you be willing to discuss these issues and visit with me the airport, and also would you be willing to work with me and other relevant federal officials to begin to address the tremendous problems that i have seen, personally witnessed at this airport . Mr. Neffenger yes, i would be, and i look forward to the opportunity to understand better what the issues are, and more importantly to visit the airport and see for myself what these issues are. Rep. Torres thank you, and it want to reiterate that i do get the ontario airport experience once a week. Rep. Ratcliffe thank you, mr. Chairman. Admiral, first of all, i like to thank you for your 34 years of dedicated service in the coast guard. I certainly wish you the best of luck in your new role as the tsa administrator. You have a very difficult job ahead of you. As a number of our recent hearings in this committee have highlighted, there are some immediate and frankly glaring problems that you will need to address in this new role. We need to only rewind the clock a few days to underscores some of the troubling gaps that exist right now at the tsa. Im sure that youre aware that three days ago on sunday at the dallasfort Worth Airport, a 26yearold man was able to bypass tsa security without a boarding pass or any identification at all and get on a plane to guatemala. According to the Police Report it was only after the police were called and the individual left the plane that tsas security became aware of the incident. I want to give you an opportunity to respond to what happened at dfw and give us any information that you can about your investigation into how a breach of that magnitude was possible. Mr. Neffenger i share your great outrage over that. As i said before, the checkpoint is a critically important element of the security system, and it forms a barrier between. With that specific case, its under investigation. Im happy to share the results with the committee once we see what the specifics where that caused that. The bottom line is that you should not have it should not be easy, it should be impossible, for somebody to make their way past the checkpoint without being observed. It certainly should not be possible to get past the checkpoint to the point of getting on an aircraft without having known about it. We will find out what happened there, but it speaks as i said earlier to the more systemic question about how we are managing our checkpoints. I think it ties right into some of the concerns with respect to how we are supporting our frontline workforce, what the training is, what the standards are. As i said, i think we will find out what happened there, and i will make sure that we put into place the procedures to keep it from happening again. It may be a question of changing the way those barriers are constructed when theres nobody manning the station. Is quite often the case that you have lines that arent open, unsecured during that time. Rep. Ratcliffe dfw is an airport that i use frequently, and obviously, many of the constituents that i represent makes it one of the busiest airports in the country. Can you at least tell us at this point do you know is this an issue that was specific to dfw or are some of the concerns heres something that could happen at other airports around the country . In other words, do you know if this is a configuration issue, or is it a breach of protocol and procedure . You can share any information. Mr. Neffenger as i said, i have seen the report, the offices of investigation is working with that right now. I let you know what specifically were the issues here. My suspicion is that right now it is confined to that specific location, dallasfort worth. I will have a full review. I talked to the operations and said i want you to look across the whole system and tell me whether we have got issues like this elsewhere. And if we do, i want to plan for how we are going to address those. Rep. Ratcliffe obviously, that unfortunate event at dfw highlights the challenges that you face and i do wish you luck. I look forward to having you work with this committee to improve airport safety. Thanks for being with us. I yield back. Mr. Neffenger i thank the gentleman for raising this issue. I would like a report from the tsa. It is very disturbing i dont know how he got past security, completely and touched. We dont know anything about this individual, either, i assume at this point in time . Mr. Neffenger what i can tell you is that he was distraught over his girlfriend heading out of town if you wanted to stop her. Thats what i know. It looked like a love gone wrong. [laughter] well see. I will share with this committee our findings. Rep. Mccaul mr. Keating is recognized. Rep. Keating thank you. Thank you for your service in the coast guard and for your comments here today. You are certainly stressing accountability, and doing the kind of work you did it is a difficult assignment but i think you are on target. I just want to concentrate on one area, which has been something ive brought up the last several years. It represents, i think, a tremendous security issue with our airports. Thats the Perimeter Security issue. It dates back from the time i was a District Attorney in massachusetts with the case of a 15yearold boy stowing away on a commercial airline from charlotte douglas, tragically losing his life over milton, massachusetts when the landing gear went down. The fact that he penetrated that security aroused concern, but what followed that issue just to put it in perspective, from 20012011, there were 1388 Security Breaches in 450 domestic airports. Whats troubling is that the vulnerability assessment, as the risk seems to be getting greater, are going down. Just to give you an idea from 20042008, there were 60 of those assessments from 450 airports. From 20112013, that was reduced to 30 assessments annually. In 2014, only 12 of those assessments were covered. That means 97 of our nations airports were reviewed for security risk, despite the fact that we have had, time and time again, whether it is in chicago or philadelphia or los angeles or in charlotte, we have had these kinds of breaches that occurred. Scores of them has been people that have reached access to the runway at the airports, the refueling areas. Of 15yearold, a 16yearold can penetrate our security. In one instance, not even going to tech to after being reviewed, were vulnerable. If they can stoweaway themselves, then someone with a different motivation could weigh in explosive on those airlines and not risk their lives. I hesitate to say these things publicly, but nothing has been done in terms of progress. Thats why when i wrote you, congratulating you, i was very pleased to get a timely response and i appreciate that where you identify it as a priority. I want to ask you where you are going with that, because it is important. And the chairman and i, when we were working on the subcommittee, we had a field hearing one thing that was so obvious to us was the fact that this is a huge jurisdictional issue at these airports, and if things go wrong, they end up pointing fingers at each other. They are run by the Municipal Airport organizations, run by authorities, and this jurisdiction is unresolved. Even when the federal government comes in and says what you have to clean up, they dont do it. No one seems to make them do it. When you are doing that review, the other thing you have to clear up is this jurisdictional issue, and if people are going from one airport to another, they are in the network. You are only as good as your weakest link and we are not even assessing more than 3 of those airports for safety. I want to just give you a minute to try and expand upon what you want to do Going Forward in dealing with this issue. And also with this jurisdictional problem. Mr. Neffenger congressman, you raise a number of important issues let me start by saying that i agree that Perimeter Security is a concern. I use my experience in the port environment to know this was one of the Biggest Challenges we had, trying to understand what is the perimeter and what does secure mean. The joint assessment that you mentioned, those are additional, multi Agency Assessments that are done in addition to the annual inspections done. There is a tsa regulatory requirement that we fulfill by inspecting the perimeter. Then we go beyond the perimeter. Those are very important in concert. I want to make sure that the ratio of those is correct and i will look at that. I also need to attend one of these inspections to find out what they consist of. Anyone on this committee is welcome to join me, and i make the offer to the Committee Members, because i am very interested in how we are doing that. It goes back to my days trying to figure out how to secure port environments. I said, walking around, show me where the perimeter is, how do you secure that space, that space . Jurisdiction is key, because you are right, you can do the wizard of oz thing, just point at everybody but yourself when the jurisdiction comes so i need to clearly understand first of all, what are the extent of my authorities to direction act and whats the extent to compel action if i i think it needs to be done. I think the airports, the airlines and others would find of great benefit to make sure nobody gets on that field that shouldnt be on that field. Mr. Keating im optimistic given your background and understanding perimeter issues. And i look forward to working with you and report to myself and the committee what your progress will be on this, we deeply appreciate it. I yield back. Mrs. Watson coleman. Mrs. Watson coleman thank you very much. Congratulations to you admiral you are very encouraging and you have taken this assignment on with all High Expectations and with respect to those who get the job done on behalf of all of us, so thank you. I have a couple of little questions. Number one has to do with the federal air marshal service. My understanding there hasnt been a recruitment for nearly four years. Do you have any plan to address the attrition this might represent . Are they still as necessary or is there something that is replacing the need for them . Mr. Heffenger thank you for that question. We have a new director of the federal air marshal service. Im really encouraged and enthusiastic about his approach because hes come in with a very innovative and fresh set of eyes to look across the range of federal air marshals. There is still value in having that service. They perform valuable missions and i believe those missions have changed over time and the director is addressing some of those changes. They work a wide variety of missions not just the aviation mission, but they work on our viper teams and joint Counterterrorism Task forces and bring unique Law Enforcement perspective in thinking about the transportation role to those worlts. We have not hired for a long time in the federal air marshals. We have a request in our budget to begin the hiring process. That is an aging work force, 57 is mandatory retirement. Over the next five years well see some 30 of that work force begin to age out. You need to when you have a Law Enforcement agency, a federal agency, you need to refresh it. We need to grow new people into it. I hope our 2016 budget request will be met favorably and hope to begin hire into the attrition that were seeing. And more importantly grow a new work force into that as that mission changes over time. Mrs. Watson coleman another area that struck me as i was preparing for today has to do with the secure identification display area cards, the credentials. And i understand that on occasion individuals who have had access to those cards have done things which were illegal and which just were not settable. So i was wondering what are your plans with regard to greater accountability of those cards . Mr. Heffenger accountability is the key. As we were discussing earlier you have a known what should be a known and trusted population. They do get vetted for criminal background history and get looked at continuously for potential terrorism. That said, we also know that even in known and trusted populations you could have criminal activity that occurs and we have seen enough evidence of that over the past year. One of the things that came out of the incidents or the arrests at atlanta last year for the drug smuggling ring that was discovered was the request by the secretary of the Aviation Security Advisory Committee to take a hard look at the Insider Threat problem and the use of badges. They came out with 28 recommendations as a result of that. We accepted 28 of those recommendations and working very closely to implement those over time. A number of those were done immediately. Accountability was one of the ones done immediately. Im very concerned about accountability. Doesnt surprise me that people could lose their badges or misplace them but there needs to be imimmediate yailt notification and shutting down of that badge and then take whatever action is necessary in the event it was done in a deliberate or intentional manner. Mrs. Watson coleman you have a big task ahead of you. I wish you the best of luck and hopeful you can be helpful. I think the secretary chose the right man for the job and we have enjoyed our conversations over the past several days and look forward to working with you to improve both the safety of our airports and making it more passenger friendly. The Committee Members may have additional questions in writing and pursuant to the committee rules, the record will be held open for 10 days and without objection, the committee stands adjourned. [captions Copyright National cable satellite corp. 2015] [captioning performed by national captioning institute] this weekend on the cspan networks politics, books and american history. Saturday night at 8 00 eastern on cspan, a discussion on Illegal Immigrants and the enforcement of arizonas immigration laws. New jersey governor and republican president ial candidate on National Security. He speaks at the university of New Hampshire at manchester. On cspan2 saturday night at 10 00 eastern on book tvs after words, the growing National Debt and restructuring National Entitlement programs. Glen beck presents his thoughts on islam. We commemorate 50th anniversary president johnsons signing of the 1965 Voting Rights acts. And l. B. J. s 1965 speech at the u. S. Capitol and signing of the bill. Saturday night, university of california at berkley history professor looks at the history of gun production in europe and how arms trading contributed to an american victory during the revolution. Get our complete schedule at c span. Org. The republican candidates are in manchester New Hampshire for the first president ial forum on monday at 7 00 p. M. Eastern. We are providing live coverage of the twohour forum on cspan. The media organizations from the early caucus and primary states are sponsoring this forum to answer questions from voters. And following the live forum, you can provide your input by joining our callin program. Road to the white house 2016 on cspan cspan radio and cspan. Org. The Senate Foreign Relations Committee held a hearing today on the sanctions against iran and the recent nuclear deal. Senator corker tch is to evaluate the Nuclear Agreement between iran and the six major world powers. We heard from the administration and private witnesses. Todays hearing gives us an opportunity to look closely at one of the key aspects of the agreement, sanctions relief. Next week well have an opportunity today we have two well respected experts on sanctions. We thank you both for being here. Its worth noting that real questions about sanctions relief remain. On the same day the u. N. Passed the resolution endorsing the deal and setting out the snapback mechanism, iran wrote a letter to the u. N. Saying that they would treat use of the snapback as grounds to walk out of the agreement. Again, i think youall know this passed in about 90 seconds at the u. N. Last monday, and at that moment iran sent a letter refuting the ability to use snapback. That same letter outlines that extension of current sanctions would be in violation of the agreement. I know we had an exchange the other day where it was asked if we had some sanctions that are rolling off in 2016 if we just extended those so there would be something to snap back to. I snow senator menendez has made a strong point about this. That itself would be a violation. And then iran would reconsider any imposition of new sanctions with the nature and scope identical or similar to those that were in place prior to the implementation day irrespective of whether new sanctions are introduced on nuclear aid or other grounds. We have a number of very powerful sanctions that are being alleviated. Most of us have felt that if for some other reason iran was out of order, we could reapply those sanctions against terrorism, human rights, other activities. I think theres a major debate over that could happen. As a matter of fact iran has said it couldnt. I also say that our partners in the west very strongly told me the same thing. Recently they had been backing off of that a little bit. I dont know exactly where that stands. Those statements, the agreement itself, and the lack of clarity from our administration have left senators with unresolved questions. Those include questions about the efficacy of u. S. Secondary sanction it is Congress Disapproves the deal, very important factor for us to be considering. There are also remaining questions about whether or not the u. S. Can reimpose sanctions lifted in the agreement should we need to use them for terrorism purposes. Although im very honestly surprised to say but there are remaining questions about whether or not extending the iran sanctions act would constitute a violation of the agreement, as i mentioned earlier. I see no reason why simply extending existing authority which could be can waived, would be in violation of the agreement, but secretary lew and the iranians think otherwise. I hope you answer these questions and expand on what you might see as the current climate for doing business in iran. Both of you spent time with the companies affected by these sanctions and if you could i would appreciate hearing any valuable takeaways. Its important to note that the sanctions this congress put in place are responsible for bringing iran to the negotiating table. In exchange for suspension of virtually all of our economic leverage, iran over time will develop a National Scale legitimate Nuclear Program. While this agreement is not intended to address terrorism, many of us worry that the agreement will prevent the u. S. From using economic tools to counter iranian regional aggression. Our witnesses have extensive experience in both economic coercion and combating terrorism. I would appreciate your perspective on how this agreement could affect our ability to use sanctions in response to terrorism. Secretary kerry said last week we are free to adopt additional sanctions as long as they are not a phony excuse for just taking the whole pot of past ones and putting them back. I worry that iran will not agree with our definition of phony and that through this agreement the administration could inadvertently be hampering its own ability to combat iranian terrorism. In september, well have the opportunity to vote to approve our disapprove of the agreement. At its core that choice is whether or not this agreement merits Congress Voting to lift those sanctions. Thank you very much for appearing before our committee. I turn to our distinguished Ranking Member for his comments and look forward to a very good hearing. Senator cardin mr. Chairman thank you for arranging this hearing. The deal with the sanction aspects of the joint jcpoa. I thank both our witnesses, two experts in this area, for sharing their thoughts and engaging our committee in a discussion so we can better understand the impact of the jcpoa as it relates to sanctions. Yesterday we had, i thought, a very helpful hearing that dealt with the overall effects of the agreement. I think we spent a good deal of time looking at the alternatives. If we do not if congress effectively rejects the jcpoa, what would be the consequences . And in that discussion, we did talk about sanctions. Im sure well get back to the same impact today. But i think today we want to concentrate on the sanction aspects of the agreement. Ultimately the members of this committee, the members of the United States senate, congress are going to make a decision whether the benefits are of the agreement outweigh the risks or whether the risks of the agreement outweigh the benefits to prevent iran from ever becoming a Nuclear Weapon state. Thats our test and the sanctions have a major impact on our evaluation of those issues. Let me first deal with an issue that is i raised since day one that the chairman raised again in his opening comments. I hope that well get your views on this. And that is it has been stated very clearly by this administration that we are not taking off sanctions as it relates to terrorism and human rights and their missile program. Its also been stated, and i asked the direct question at the hearing last thursday, if we have credible information that iran has violated our policies on terrorism, can we reimpose sanctions on the specific organizations that received relief under the jcpoa, or the economic sectors that were affected such as the crude oil sales by iran. Could we reimpose those types of sanctions . And secretary lew said fairly directly the answer is yes. Depending on the circumstances if we condemn and its related to terrorism. Mr. Chairman, i asked similar questions to the representatives of your office that were here this week because we know that its going to require ultimately five of the eight votes in the commission that oversights this. And their response was similar to what secretary lew said in all fairness, im just relaying what they said to me. But i am tempered by the language of the jcpoa. After all, thats what we agreed. To i said frequently, im more interested in whats in the jcpoa than what the iranians say is in there or for that matter our own administrations words. Because we are bound by the language in the jcpoa if we go forward with it. The e. U. It says section 29 the e. U. And its Member States the United States, insistent with the respective laws, will refrain from any policy specifically intended to directly and adversely affect the normalization of trade and economic relations with iran. That then it says in paragraph 30 that the e3, eu 3, will not respect entities for engaging in entities covered forfeiting of sanctions in jcpoa. There are qualifications. So what i would have hoped well get into a discussion today would we be out of compliance with the jcpoa if we reimpose sanctions for nonnuclear activities of entities or Economic Activities that were relieved from sanctions under the jcpoa . And secondly, what type of pressure would there be on the United States if we wanted to go forward . Would there be International Pressure for us not to be as aggressive as perhaps the congress or the administration wants to be . And we were told yesterday by both of our witnesses that we should be very aggressive in holding iran to high standards if this agreement goes forward what type of pressure would there be on us effectively being able to impose the type of sanctions to prevent iran from the their nonnuclear nefarious activities. Thats one set of questions i hope we can get into today. The second is, how effective would snapback sanctions be . After they are lifted and during that period of time before they are repealed, if the any of the negotiating partners felt that there was a material breach and takes it to the point of snapping back all or part of the sanctions that were relieved upped the u. N. , e. U. , and or the United States, how effective and how quickly can we reimpose sanctions that will require iran to rethink its behavior . I would be interested in your views in that regard. And then the last point i would like to have you respond to, and that is, if we do not approve the agreement, if we reject it the United States sanctions remain in place, how effective will those sanctions be if we do not have the support of the International Community to cooperate with us in a sanction regime . I think these are important questions for the members of the congress to understand. And i just look forward to our discussion today. Senator corker i do want to say again i think when i met i know when i met with our western partners they were very explicit in agreeing with iran. They did get back with us since that time and there may have been some reach out from the administration, but they moderated their views much in line with what you may be saying. I want to also say the chairman and i, Ranking Member and i, asked mr. Omano testify before us today this week next week. Just so we could get an understanding of the iaea issues that we have been concerned about and whether we do that in a classified setting or someplace else. We have been turned down. I do want to make people aware of that. Obviously there are a lot of concerns about the agreement that we havent seen. What we do know about it, i think we all know, at best, very questionable. Im sorry to say we are not going to have the benefit of their testimony to help clear up some of the concerns that we have. With that we have two outstanding Witnesses Today that will be very helpful. Our first witness is honorable juan c. Zarate, chairman of the Financial Integrity Network and chairman of the center on sanctions and illicit finance at the foundation for defense democracies. Mr. A ratty previously served as Deputy Assistant to the president and Deputy National security advisor for combating terrorism. In addition, mr. Zarate was the first ever assistant secretary of the treasury for terrorist financing and financial crimes. You havent been very successful in that regard, just kidding. Thank you. Our second wednesday is mr. Richard nephew, Program Director for the economic state craft sanctions and Energy Market at the certainty for Global Energy policy. Previously mr. Nephew served as Principal Deputy coordinator for sanctions policy at the department of state and the lead sanctions expert for the u. S. Team negotiating with iran. He has also served as the director for iran on the National Security staff. Thank you both for being here. We are excited about you being here. If you would sort of abbreviate your comments. You are going to have lots of questions. Your written testimony without any opposition will be made part of the record. Thank you both. You can start which ever order you wish. Chairman zarate thank you very much for that kind introduction. Ranking member cardin shall distinguished members of this distinguished committee, thank you for this privilege and opportunity to speak to you about the sanctions implications of the jcpoa. Im honored, privileged, thank you very much. Im also grateful to be here next to mr. Richard nephew. Im going to pass those difficult questions to him. I do want to thank him in all honesty for his service to the u. S. Government, to the state department, and on the issues related to sanctions. I take this responsibility before you today seriously given the gravity and implications of the agreement. I appreciate the questions you have posed which are nuanced and important and happy to answer any others. I come to the issue with views borne dealing with iran from both the Treasury Department and National Security council. I know that all involved have been working incredibly hard toward a peaceful solution to the Iranian Nuclear program, through painstaking strategies of coercion, sanction, and diplomacy. The financial and economic restriction campaign built over the course of a decade helped bring iran to the table. In the words of president rouhani, the sanctions threatened to drive iran into the stone age. They have also been designed to constrain and isolate rogue iranian behavior, the assad regime, proliferation, and other dangerous activity, as well as to protect the integrity of the u. S. And International Financial systems. I will based on your invitation focus my testimony on the sanctions relief framework in the jcpoa. Mr. Chairman, i will tell you the framework in the jcpoa is flawed. The relief is too frontloaded. It does not account for the increased risks stemming from iranian commercial and financial activity. And the jcpoa as you have alluded to broadly constrains the u. S. Governments ability to use effective financial power against iranian nonnuclear National Security risks. There are structural problems in the jcpoa that undermine the ability of the u. S. To use these powers to affect iranian behavior. The snapback framework itself proves problematic and is a blunt instrument. It will only be applied if the most egregious violations can be proven openly and convincingly to all parties. If new contracts signed or grandfathered as is suggested in some of the text of the u. N. Resolution and discussions around the jcpoa, the snapback loses its real world effect to insure compliance. It has the potential to create a gold rush incentive for commercial actors to get into the Iranian Market quickly. The iranians maintain a hecklers veto on any reimpose significance of Nuclear Sanctions and can walk away from the agreement. With the appellate processes any u. S. Sanction or related action to which iran objects would be subject to review by the other parties, including iran, china, russia. Creating a whole new paradigm for how the u. S. Reviews and issues its sanctions. The jcpoa unwinds sanctions bluntly. Encompassing issues of proliferation and weaponization without addressing the underlying conduct. This creates real risks and it does damage to the ability to use the very same tools against iranian individuals and entities in the future. This proves highly problematic with the delisting of iranian banks, for example, the central bank of iran. And transport companies which have been used not just to facilitate the Nuclear Program but also for proliferation and sanctions evasion. Though nonNuclear Sanctions were supposedly off the table, the spirit and letter of the agreement may actually neuter u. S. Ability to leverage one of its most powerful tools. The normalization of economic relations with iran, which is embedded in paragraph 29 of the preface to jcpoa, and also further ensconced in the new u. N. Security Council Resolution does grave damage to that ability and those powers. Mr. Chairman, from the start of negotiations, as you know, what the iranians wanted most was the ability to do business again. Unfettered and plugged back into the Global Financial and commercial system. With a commitment to the reintegration of the iranian economy on the back of the nuclear deal, the administration effectively put all sanctions on the table. To understand this, one needs to appreciate why these financial and commercial measures were so effective in the first instance. These were not the sanctions of old. The financial constriction campaign which began against iran in 2005 has proven effective over the past decade not because iran was her medically sealed with naval blockades or trade embargoes but because it was unplugged from the elements of the Global Financial and commercial order. The regime has needed access to banking, shipping, insurance new technologies, and activity to the oil and Global Economic markets to maintain and sustain the regime. That is what they lost over the past decade. That appears to be what they have gained and guaranteed in this deal. Now, mr. Chairman, in addition the United States will need to amplify its use of Financial Measures aggressively against key elements of the iranian economy to deal with increased risks based not just on this deal but also Iranian Foreign policy. Its not clear to me that this is well understood by all parties or part of our strategy. The risks from iran are real and will increase. Iran will get a massive infusion of capital from initial sanctions relief with some of the estimates up to 150 billion. No doubt some of this will go to support terrorists and militant groups from the golan to yemen can. With the allowance for an Iranian Nuclear program, the deal will likely increase not decrease the risk of proliferation. The regime will use its control of the economy not only to further enrich itself, but to suppress internal opposition brutally and ensconce its rule. The concerns over human rights abuse also grow. And the reality and risks of iranian sanction evasion, Money Laundering, and other financial crimes will increase not decrease over time. The United States will need to use the same types of Financial Strategies and campaigns to isolate rogue iranian activity which will necessarily affect the trade, commerce, and economy of iran. Mr. Chairman, i think there are three critical principles for congress to demand related to sanctions and the jcpoa. Congress, i think, should ensure there is clarity in the jcpoa and in the execution of any sanctions unwinding plan or framework. It should ensure that the United States maintains as much financial and economic power and leverage as possible. Congress should as well mitigate the risks attended to enriched and embolden regime in tehran. These principles then could help inform the basis of a new strategy to address the real and dangerous risks stemming from iran. The u. S. Should adopt the financial constriction campaign focusing on the irgc, and core elements of the regime that engage in terrorist financing, proliferation of weapons and nuclear technology, and support to militias. This could include the use of secondary sanctions. There should be a recommitment to the elements of a nonproliferation regime and a dedicated strategy focusing on the proliferation risks attendant to any deal with iran. This would include tighter export control enforcement interdictions, and financial restrictions tied to suspect iranian actors and activities, including iranian banks. The elements of the patriot act section 311 action against iran and the central bank of iran should be reiterated and reinforced with a designation of primary Money Laundering concern against the class of transactions involving any iranian bank. This, mr. Chairman, could be amplified with a program perhaps led by the european union, to create a Monitoring System through swift, the bank messaging system, akin to what we built in the terrorist financing tracking program. To track and analyze suspect iranian banking transactions. Mr. Cardin, the Global Human Rights accountability act could be used expansively to target the finances and holdings of the Iranian Regime and those involved in gross Human Rights Violations on its behalf. Senator, i know this is of deep concern and issue for you. Mr. Chairman, these are just some of the measures that could be taken to confront the risks from iran. But of course undertaking these types of steps in whatever form will likely be seen by diplomats from whatever country as interfering with the jcpoa or any deal for that matter. Instead, they should be seen as necessary steps to enable any nuclear deal temper market enthusiasm for doing business with a dangerous regime, and preserve importantly a key element of americas power and leverage against iran and rogues. Mr. Chairman, when the iranians came back to the table after president rouhanis election one western diplomat based in tehran told me in confidence you have won the war using economic sanctions and financial pressure. But he then asked, can you win the peace . I think and hope we can still win the peace, but it will require using and leveraging the very same powers and authorities that helped bring the regime to the table. We must ensure that the jcpoa has not inadvertently empowered the regime in tehran while taking one of americas most potent powers off the table. Thank you, mr. Chairman. Senator corker thank you. Mr. Nephew it is a privilege and honor to speak to you about a subject to which i have dedicated my professional life. The Iranian Nuclear program and sanctions, and with juan who pioneered a lot of the work well be discussing today. I would like to begin by extending my personal gratitude to the members of the u. S. Negotiating team. Regardless of how one evaluates this deal, we are all most fortunate this country produces diplomats, civil servants, and experts like those who worked on this deal. In my opinion, the deal that they negotiated is a very good one. Especially compared to the most realistic alternative. And any negative consequences can be managed. It satisfies the two most important u. S. National security objectives for irans Nuclear Program. First, lengthening the time iran would need to produce enough Nuclear Material for one Nuclear Weapon. And second, ensuring that any such attempt could be quickly detected. In doing so, it creates a 10 to 15 year band of time in which fears of an iranian Nuclear Weapon will be reduced. Some may argue that the sun set key provisions renders the deal unacceptable. I disagree these concerns are worth killing the deal. The argument against sunset presupposes either that there is no point in time in which iran could be trusted with a Nuclear Program, requiring regime change. Or that negotiations could possibly have delivered a longer sunset. Having been in that room i believe the length is as long as was achievable. After key restrictions lapse the United States is also free to declare that irans Nuclear Program remains a concern, Getting International support to do something about it will require effective diplomacy. But it is an option for future president. A principal complaint and main subject for today is on the nature of sanctions relief in the deal. Some argue it provides iran with far too much relief and the practical effect of increasing trade with iran will render snapback ineffective. First, it is a blunt reality that iran was not going to accept major restrictions in invasive monitoring. The administration did the right thing in leveraging sanctions relief for maximum early nuclear steps. Iran is now under every incentive to take the steps required of it as soon as possible. Which the iaea will verify before iran gets an extra dollar. The sanctions relief provided by the United States does not equate with unilateral sanctions it retains a number of sanction authorities that will continue to exact consequences for iranian violations of human rights and engage in terrorism financing. Though i personally believe that fears about the extent of new iranian spending in this regard are overblown, and according to the l. A. Times so does the c. I. A. The United States will still be able to pressure banks and companies into not doing business with the irgc, and irans military forces as well as those who facilitate their business. Even if the e. U. And u. N. Remove some of these from their lists these bad actors and iran generally will find business stymied will they correct their own behavior in the eyes of the United States. This is both due to the direct risk of u. S. Sanctions and the improvement in International Banking practices since 9 11. A bipartisan effort begun under george bush and juan and continued under barack obama. The United States will also retain its facility to impose sanctions on those trading with iran in conventional arms as well as Ballistic Missiles even after u. N. Restrictions lapse. The United States can also trigger snapback existing sanctions, even just one jcpoa participant can trigger a review and a vote on a resolution to continue with relief. The u. S. Veto power in the u. N. Security Council Gives us the ultimate free hand to reimpose these sanctions. Snapback can be less draconian to deal with. As secretary lew testified. This could come with political costs. Many skeptics point to these costs as likely meaning that no such snapback would be triggered. But International Reaction to u. S. Actions will always depend on the context. If the rationale for doing so is credible, chances for success will always be higher. Iran had much to lose if snapback were to be triggered. Irans leader would carefully evaluate the cost and benefits of any course of action that threatens the integrity of the nuclear deal. These cost also grow as irans economy grows. Some may see this as resilience; i see it as iran having more to lose. A critic once referred to this deal as a marshal plan for iran. While the analogy is far from perfect, it is interesting. The marshal plan was intended in part to prevent the spread of radicalism in europe after the Second World War in recognition of the fact that harsh sanctions had on german politics in the 1920s and 1930s, and the liberalizing benefits of trade and growth. The soviets refused to participate, fearing the effect economic openness would have on their population. As the president outlined one potential benefit of the deal is the possible transformation of Iranian Society over time, government policy. This may not happen. But at a minimum, irans leaders will have to wrestle with the benefits of economic openness and risk of losing control as a result of this deal. As well as the threat of returning sanctions that may break its terms. This will be a challenge for them and possibly an existential one. To conclude, though it is not a perfect deal, i believe the Nuclear Deal Reached by the United States the p5 1 partners and identify rain meets our needs, preserves our option, and possibly lays a path to a better future. I urge the congress to make the right choice and support t thank you. Senator corker thank you both. We can see from these two witnesses why this is a difficult decision for people to make. We thank you so much. So that i can reserve my time for various interjects along the way and not nominate in any way, ill turn to our Ranking Member for questions and move on down the line. Thank you. Senator cardin let me also join the chairman in thanking you both for your testimony here today. Let me give you a hypothetical. Its a year from now. And iran complies with all of the preliminaries required and they have received the relief a few months earlier than that. From both the United States, the waivers being exercised by the administration on sanctions, as well as the u. N. And europe. We get clear evidence that iran has used crude oil sales to directly finance terrorist activities in lebanon and yemen. They have done it through the central bank of iran. We have clear evidence of that. The United States Congress Passes the statute that says that well impose sanctions against iran for their support of terrorism against the central bank of iran and crude oil sales. A, are we in compliance with the jcpoa . And secondly, what pressure would there be on the administration to implement such a statute if congress were to pass it . Any thoughts . Chairman zarate its an astute hypothetical because it points out the difficulty of disentangling the regime. With respect to a country and regime that controls key elements of the economy. And when they are still engaged in some of the underlying activity that is subject to at a minimum u. S. Sanctions. So it certainly is within the congress right and i would argue certainly should be a focus of this administration to go after the financial conduits that the Iranian Regime or any other state sponsor uses to support destabilizing activity or support terrorist groups around the world. So it would be wholly justified. To Richards Point i think in the context of any action taken in the could he number bra of the jcpoa context, it would depend on what information and evidence we have. The problem i have with the jcpoa framework as i laid out in both my submitted testimony and orally this morning, is that we have now established ourselves and placed ourselves into a framework where we ourselves will have to submit or potentially have to answer to other parties why we are justifying the use of u. S. National power with respect to these other types of challenges and risks. So under the agreement the iranians, for example, could object, could threaten to walk away. And perhaps even the view of some legitimately say you are simply trying to reimpose sanctions that were just lifted under another name. Of course, the administration is saying and we would argue, all of us, that these are different sanctions and they should be imposed and they can be imposed, but there would be a question in the context of the jcpoa and probably a process trigger if it were significant enough action that would call into question whether or not we could take the action. Ultimately it may prevail. But it would put us into a completely new venue and into a new process to have to explain ourselves, demonstrate evidence to parties like the chinese and russians, and ultimately justify our action in the contours of the jcpoa. I just dont think thats an acceptable outcome. Mr. Nephew i would add two important caveats or conditions to it. First is we always had to justify and explain our secondary saxes. You have to bear in mind the sanctions you are referring to govern the trade activity of foreigners with foreigners. To get them to do things we have to explain why and explain in what context its appropriate. I think that going after the hypothetical that you brought up would be complicated because the chinese, for instance, or other importers of iranian oil, we have known for a long time that iran supports these groups, thats a given. It was a given when we were what change made you have to do this . I think this points to the second problem. The hypothetical you brought up will happen because oil is a primary revenue stream for iran and its a primary way which they support groups we believe are terrorists and engage as terrorists. I think the bigger question to my mind is, is that the most effective way of curtailing iranian terrorism . In my view, no. We have had very crushing Oil Sanctions on iran for the last three years and they still supported assad, and hezbollah. Thats because the scope and scale of that support doesnt have to be oil revenue worthy. It can be much smaller and something the iranians believe in strongly. I would argue that rather than go for an oil embargotype sanction we have to think of a better policy response to deal with the terrorist issue that we have identified. Senator cardin do we have the flexibility to do that . Do we have you may very well be right. We may choose other ways. The reason i use that two examples because they were lifted by the sanctions. Absolutely. Here i guess is the question. Yesterday we heard from both witness that is u. S. Should be pretty aggressive in making sure iran complies with the letter of everything it said in this agreement and be prepared to start taking action. Irans past activities show they test us. They try to push the envelope as far as they can. So will interpret some of the jcpoa differently than we do and do things we think are wrong. How aggressive should we be . Can we get our partners to agree with us on less than major violations . Will we be able to do that . Mr. Nephew it depends on the context. If we go with a good case and able to justify why we are doing t. Then we can be very effective as we were from 2011 to 2013 with respect to the oil embargo. On the other hand, if we are seen as acting capriciously and if the response is to say we are walking away from the nuclear deal, that will be a challenge. Ultimately we need to be aggressive, but we also need to be mindful that the nuclear deal, again, in my view, is something thats worth preserving. I dont think that precludes our use as sanction tools in an aggressive way. Just like we have already done we are going to have to be careful about the unintended consequences of those acts. Senator cardin if we have to snap back, if there is a substantial violation that we have to take the International Community and maybe exercise our veto, how quickly can they bite Strong Enough to effect iranian behavior . Mr. Nephew i would say that if we are able to get snap back and in the context that is conducive to people imposing swift sanctions, we can start biting the iranian economy quickly. The oil embargo we were talking about started having dramatic economic effects on iran within two or three months of being imposed starting in january of 2012. So again i think with the right context, with cooperation, we can start to really have an impact on the iranian economy. Senator cardin you were inconsistent on oil. You said one time that would not be effective from financial terrorism if we impose the sanction. Now youre saying that could bite quickly. Mr. Nephew i thinkim not saying it wouldnt bite the economy. My point on terrorism, biting the economy does not necessarily preclude iranian support for terrorism. So you can have damaging impact on the iranian economy, but will that translate into stopping iranian terrorism . If my view the history suggests not. Chairman zarate if i could address strategy and the use of these tools. Our tool kit is not expansive. We have limited tools to address whether its terrorism, human rights abuses, etc. The use of financial power and the power to exclude from the global system is one of our principal if not most effective tools. And so i take Richards Point which is an important one. We have to have a comprehensive strategy. We have to use all tools of national power. No doubt. But the reality is at the end of the day these tools are the ones that prove to be most effective. And as i said in my testimony, i actually think the risks to the International Financial system go up with this deal or any other deal with respect to iranian activity. So we are going to have to, if we are honest about whats happening in the International Financial commercial order, we are going to have to crack down on front companies, irgc funding flows, contracts run by the ministry of intelligence. Thats the nature of the iranian economy and the way they do business and the way they have reached precisely what we have cut off. You have asked some astute sets of questions. At the heart of this is have we given up too much of our power to deal with all these other risks that iran presents that will actually go up over time . Senator cardin thank you. Senator corker before i move to senator flake, just because you have different view, wonder if we could get consensus. It would be fair to say, on the other hand, in nine months when the sanctions most people believe all the sanctions will be gone, and then iran has, in essence, the nuclear snapback, that people will be somewhat reticent to put sanctions in place if iran cheats by inches because of the things that youre saying. Iran does have the ability to say at that moment, well, we are out of the program. Would you agree, i think both of you are shaking your head up and down, that does create a dilemma . Ill take that as a yes. Senator flake. Thank you. Senator flake thank you. I want to thank the chairman and ranking minority member for putting these hearings together. Hearing your testimony today each on one side of this in terms of favor the agreement or not, i think demonstrates that the only thing thats certain is this is no easy call. For those who stand and say that it is, i think they havent examined the agreement or the broader Foreign Policy context in which this is going to be implemented. So i appreciate the testimony and the way you have gone about it. And i appreciate the question from the ranking minority member and i think all of us will have some variance of the same kind of questions because we have asked administration witnesses. We have been assured we havent diminished our tool kit. That we can distinguish between nuclear and nonNuclear Sanctions. But when you read the plain text of the agreement, that seems to conflict with the assurances that we have received. And let me just turn to the financial sanctions. I couldnt agree more that thats i have always felt that thats what really finally bit. Because its more difficult with these financial, these secondary sanctions for the russians chinese, or others to help iran evade. Which is easier to do with just crude Oil Sanctions or other petroleum sanctions. But if we find that iran is linked directly to terrorism and we want to punish and go in, when i look at the agreement it seems difficult to do that. On the financial sanctions, if we decide to do so, how effective will that be if our european allies are not with us . I hear conflicting testimony and discussion from others about whether or not we can lead on that and that the our European Partners will eventually have to follow, or if they can go their merry way and we are left with unilateral sanctions which rarely work. Whats your thought on financial sanctions . Can we lead our partners back, do they have to be with us . Whether People Choose to do business with a 17 trillion economy or 1 trillion economy what do you make of that, mr. Zarate . Chairman zarate again another very astute question. I think the financial sanctions have been led by the u. S. Because the u. S. Is the dominant economic and Financial Center of the world. The u. S. Dollar is the reserve currency. And we have the moral and strategy situation to be able to effect what others do. Both governments and the private sector. I want to emphasize the last point. I do think we shouldnt undervalue or undercut the power of our u. S. Financial sanctions. In many ways, u. S. Unilateral sanction that is affect the Financial Community in the first instance here, iranian banks, are global by definition. There is no unilateral u. S. Financial sanction. What the u. S. Says in terms of how to interact with u. S. Financial institutions and u. S. Markets is a global standard. And in fact is applied as such by the private sector. One of the interesting things here, this goes to a time dimension of this issue. One of the interesting things here is i think there is still opportunity to shape the environment and the risk calculus of the private sector. In many instances the major global banks, nonamerican banks around the world are derisking enormously. They are making decisions not to do business in iran, cuba. Regardless of where sanctions policy is going. Almost in opposite direction. And so what congress says, what the u. S. Does, what the u. S. Treasury may put out in advisories or designations, has an enormous power and capability to shape the market. I dont want to anything i say here to undercut that reality. In the context of this deal, that diminishes over time because the International Sanctions architecture in the u. N. , in the e. U. Directives really does enable countries that may not be quite as enthusiastic about this risk calculus to participate. I would say if we wanted to effect the Global Financial system, if we wanted to isolate iranian banks, based on legitimate concerns that are demonstrable, we can put out in registry, we can put out and show to our allies, that has enormous power and capability to isolate the iranians. Would that be accepted by the iranians . Probably not. Thats why im so concerned about the constraint on our power based on the agreement. Senator flake mr. Nephew . Mr. Nephew i would agree with what juan had to say. The only thing i would add is, again, this concept of the context matters. If we are going after an iranian bank of because of very clear evidence, support payment for terrorism, to go to European Countries to say you need to impose sanctions on this bank is strong. If its capricious, i dont think thats going to have the same kind of impact. That doesnt mean we wont have Financial Companies and Financial Institutions cooperate. This is important point i want to note. It may be we are able to influence banks and Company Behavior even if their governments are not supportive. This is what we did from 2005 until 2010 in europe. But the danger of that is that you start to have european governments or japanese governments or anybody else have laws that say you are not allowed to comply with u. S. Sanctions as what happened in 1996 with the iran sanctions act originally. I think there is still u. S. Unilateral power we can use in the financial sector, but with that power comes the responsibility to wield it effectively and carefully lest we challenge ourselves, the w. T. O. And so on. Senator flake the concern that we have is that we the leverage point actually goes to iran. If we find that they are engaged in nefarious activities, we want to impose sanctions on, and given the multilateral nature of this agreement, and the fact that we would have to submit to the body that we believe that iran has violated Good Behavior and we want to impose sanctions. Given the interlocking nature of these it sanctions, how it affects banks, private companies, and governments, it might be even more difficult to get them to agree to allow us to impose those sanction it is thats what we have to do. If we go it alone, thats a whole different can of worms. My time is done. I appreciate the answers and im sure this will be touched on later. Thank you. Senator corker before going to senator menendez, there was another question senator flake asked in a previous setting i want to use part of my time to follow up on. We sent out a ninepage summary of about 13 documents to help everybody understand quickly what the deal was. In that we talked about contracts that were entered into, in other words, if you lift sanctions, contracts that you are entered into, the way we read it, those contracts are grand fathered. You can continue to do business under those contracts even if sanctions are put in place after. We had some pushback and obviously we dont want to be accused of sending something out that has fault, so we asked the white house for redlines we never got back. And we started send out something to qualify, i think we did, but candidly as we sat down and talked with the experts that we typically rely upon for these things, they are telling us that, in fact, we were right in the first place. That contracts that are entered into when sanctions are lifted are grand fathered. Could you give us some clarification as to whether that is or is not the case, mr. Zarate . Chairman zarate its a great question. I read paragraph 14 of the new u. N. Security Council Resolution to create some sort of a grandfather provision. Now, this is not typical paragraph in these kinds of sanctions regimes. Now, of course, this is related to snapback provision which is not usual in these types of regimes anyway. I read that to open the door for some sort of grand fathering provision. So you could read in a maximum way to say, look, there is no application of the snapback to contracts that are signed between the lifting of the sanctions and the snapback. That creates the potential gold rush effect that i talked about. If you read this to say, look, it has to be contracts that dont have anything to do with prior sanctions, then you say, look, if there is a contract with the irgc or some other element that is now relisted that has to be nullified. Perhaps. But i would say in the interpretation of any of these sanctions whether they are related to iran or north korea there has always been slippage of interpretation, especially when talking to the chinese or russians, about what some of these provisions mean. I would imagine at a minimum there would be a fight diplomatically, over what this provision means and what contracts with chinese banks chinese companies, russian banks, Russian Companies would ultimately mean. I would say, mr. Chairman, it is interesting that the russians are a part of this commission in part because they are under and chafing under sanctions regime led by the u. S. And european union. So they are going to have every interest to undermine any capability of thwarting commercial relations that affect their economy as well. Senator corker can i get you to reach at least a degree of agreement, would you say at a minimum that its highly unusual that a clause like that would be in an agreement like this when typically its very clear that theres no ambiguity. Its an unusual clause to have in an agreement like this. Go ahead, mr. Nephew. Mr. Nephew i think this is an unusual agreement in a lot of respects. I wouldnt call that particular provision the most unusual. I would disagree with the idea that this immunizes longterm contracts. I think the intent here is basically to assure people if they invest in iran and snapback is triggered, that we would not impose sanctions for the plant that was built or for the the business that was conducted. The intent is to say that business will not be sanctioned, but that doesnt stop us from saying you now have to stop performing the business under the contract. Whats at issue does it nullify or protect contracts, its more the performance of the contract from snapback forward can occur. Similar to what we did with a special rule. Senator corker if b. P. Built a billion dollar facility to