Mr. Chairman, I appreciate the opportunity to appear here before you this morning. I have a full statement I would like to submit for the record.

I want to once again begin by expressing the deep regret that all of us at the Department of State feel concerning the loss suffered by families and friends of those on Pan Am 103 and the people of Lockerbie.

I want also, Mr. Chairman, to express the outrage we in the Department feel and to assure this committee and all concerned that everything possible is being done to investigate this incident, bring to justice those responsible, and enhance aviation security to help prevent a repetition of this tragic event.

Mr. Chairman, my full statement covers five distinct areas: the alleged selective notification of U.S. government personnel prior to the flight; the problem of detecting plastic explosives; aviation security information concerning Pan Am 103; compensation to the victims of international civil aviation incidents; and preventing another incident of aviation sabotage such as Pan Am 103.

With your permission, I will concentrate in my oral comments only on a couple of these areas. I would like to address in particular the issue of selective notification. Much has been made in the press and elsewhere of the posting by the U.S. embassy in Moscow of the contents of an FAA security bulletin containing information of the so-called Helsinki threat.

Let me take this opportunity, Mr. Chairman, to assure you, this committee, the Congress, and the American people that there is not and cannot be a double standard between the travel security information available to official personnel overseas and to the American public.

As I and other officials have said before, it was not the intent of the FAA or the Department of State that the FAA bulletin concerning the Helsinki threat be made public or otherwise used to forewarn selectively U.S. government officials of a threat to civil aviation.

What the Moscow embassy did in posting this notice was not in accord with U.S. government policy, and we have taken steps to guard against this ever happening again.

FAA security bulletins are intended to help ensure the security of the traveling public by advising U.S. carriers of threats so that they can implement the appropriate countermeasures. Embassies are an important link in this process, since the assistance of host governments is often required to introduce new security procedures. This is why security and civil aviation officers at selected embassies are notified of such bulletins.

In the wake of Pan Am 103, we have restated these procedures to our embassies and consulates in the clearest possible language to ensure that all of them understand the purpose and limited dissemination of FAA Aviation Security Bulletins.

To ensure that there are no misimpressions, let me state for the record U.S. government policy concerning the dissemination of aviation security information:

If we have a specific and credible threat to civil aviation security which cannot be countered, we will strongly recommend to the air

carrier that it cancel the threatened flight. If it is a U.S. carrier, the FAA will cancel the flight if the airline will not.

If necessary, the Department of State will issue a public travel advisory to alert the American traveling public to this threat. This notice will be widely disseminated in cooperation with the U.S. and foreign media, our embassies abroad, and the travel industry itself.

A related concern, Mr. Chairman, is that U.S. government personnel cancelled their reservations on the December 21 Pan Am 103 flight because they were aware of the FAA bulletin. This did not occur.

In responding to this concern, I would remind the committee that 31 U.S. government personnel, including civilians, military, and dependents, were killed in the bombing of Pan Am 103. More to the point, there is no factual basis for the accusation that U.S. government officials systematically cancelled reservations on the flight based on the security bulletin.

The State Department, working with Pan American, has analyzed and re-analyzed Pan Am's reservation, cancellation, and noshow records for Flight 103. Here is what we have found:

The flight was never sold out. The maximum number of reservations ever held for the flight was 253 out of a seating capacity of more than 400. That was as of December 20.

It is possible that people seeking reservations at certain times and at certain fares were told that no seats were available in that fare structure. This is consistent with the "yield management systems" employed by the airlines and does not mean that all seats in all fares were sold out.

An important consideration in this regard is that Syracuse University reserved many of the lowest fare seats on the flight in May 1988. Attempts to make reservations at these discounted fares were difficult until Syracuse University released seats it did not need.

Only 17 passengers were "no-shows". This is well within the percentage that Pan Am would expect on such a flight. Between December 7, the day that State and FAA were advised of the so-called Helsinki threat, and December 21, the number of reservations for the flight increased by nearly 60 percent.

There is no evidence whatsoever of any systematic pattern of cancelled reservations for this flight by anyone or any group.

It is obvious that we must improve our capabilities to detect plastic explosives. We have underway a number of different initiatives to meet this objective. First, as Secretary Skinner discussed in this statement, Thermal Neutron Analysis (TNA) technology, or its equivalent, will now be part of the screening program at a number of airports here in the U.S., as well as abroad, for flights to and from the United States.

The TNA machines, however, are only part of the solution. We must improve further our ability to detect plastic explosives. Both the FAA and the Department of State are hard at work on this research effort. One source of such research is through the national, interagency counterterrorism R&D program which is funded by the Department of State. This program is undetaken in coordination with twenty-five other federal agencies with the FAA being one of our most important partners. Included in this R&D program are projects to develop less expensive and more widely applicable detec

tors to identify plastic explosives. The Department of State is seeking $6 million to support this interagency program in FY-1990. I would hope that the Members of this Subcommittee could support the pending request during Senate consideration of the State Department authorization bill and the Commerce/Justice/State appropriations bill.

Another avenue we are actively exploring involves introducing into plastic explosives a substance which is detectable by existing technology. This issue was reviewed at a special meeting of the Summit 7 experts groups in Paris on January 19 and 20 which was called to discuss Pan Am 103. The Experts agreed that dicussions should begin on the possibility of an international convention that would call for "tagging" plastic explosives during their manufacturing process by those nations that produce such explosives.

To exchange information on this coplex topic, the Department of State hosted in Washington on March 2 and 3 a meeting of explosives experts froma number of allied states. At the meeting a workplan was established for further research into the basic issues involved in detecting plastic explosives. The U.S. also participated in similar meetings held in early March under ICAO auspices in Montreal. Further progress was made in this meeting concerning the feasibility and acceptability of chemical taggants for pre-blast detection of plastic explosives.

Whether it will be possible to negotiate an international agreement regarding taggants remains to be seen. But the common recognition by many governments that more needs to be done to detect plastic explosives, in combination with the steps that have been taken already, represents a major step forward.

I would like next to turn to the aviation security information concerning Pan Am 103 available prior to that flight. There have been misimpressions about what information on possible terrorist threats existed prior to the bombing of Pan Am 103. Hopefully, the following will help correct some of these misunderstandings.

In the fall of 1988 there was information available through intelligence and law enforcement channels on a number of possible terrorist threats, both to civil aviation and to other targets. There was the arrest of members of the Popular Front for the Liberation of Palestine-General Command, or PFLP-GC, in West Germany, an area well outside of the usual operational area for this group.

There was the so-called "Helsinki threat". Other information was available on possible hijackings of aircraft, as well as anti-U.S. terrorism incidents intended to sabotage the emerging contacts between the U.S. and the PLO.

It is important, I think, to note that the mere presence of threatening information does not mean that a terrorist event will take place. Indeed, in the majority of cases the threatened action never

occurs.

Nevertheless, the U.S. government investigates and takes action as appropriate on every threat received, even anonymous ones. The U.S. government has a center which works to piece together all of the intelligence available in an attempt to anticipate terrorist plans and to counter those plans.

Yet the very nature of terrorism-small groups, tightly compartmented information, use of human couriers as a means of commu

nication, deliberate disinformation campaigns by groups attempting to discredit each other-combine to make the gathering of information on terrorist plans and intentions extremely difficult.

The following chronology of major threat information available and related to Pan Am 103 in any way will hopefully address these concerns expressed.

In late October 1988, West German authorities detained 14 suspected members of the PFLP-GC. Weapons and explosives were seized. Twleve of the suspects were subsequently released.

In mid-November the U.S. government received detailed information on the Toshiba radio-cassette bomb seized during these arrests. This information was forwarded quickly to airlines through an FAA Aviation Security Bulletin. There was no information resulting from these arrests or the discovery of this bomb that connected the bomb with Pan Am flights or with any other target for such a bomb.

Nevertheless, because of the discovery of such a bomb and the unusual number of suspected PFLP-GC members arrested, the FAA issued an Aviation Security Bulletin to U.S. carriers to warn them about the presence of the PFLP-GC members in Europe, the existence of this bomb, its characteristics, and to advise that increased security measures should be introduced to counter this threat. This bulletin remains in effect today.

On December 5, the U.S. embassy in Helsinki received an anonymous telephone call reporting that a Finnish woman would unwittingly carry a bomb onto a Pan American flight from Frankfurt to the United States within the subsequent two-week period.

The so-called "Helsinki threat" did not include a specific flight number, date, or itinerary. The Finnish authorities began an immediate investigation. On December 7th, this information was reported to the State Department and the FAA.

That same day, the State Department Regional Security Officer in Frankfurt alerted Pan American and Frankfurt International Airport to the information and the FAA issued an Aviation Security Bulletin to alert U.S. carriers. Increased security to counter this threat was imposed by Pan Am for all of its flights leaving Frankfurt.

By 10 December, the Finnish authorities had determined that the Helsinki threat was a hoax. However, the enhanced security in response to this threat continued.

In the wake of the Pan Am bombing, the Helsinki threat was reinvestigated by the Finnish authorities. Their findings were reviewed by other concerned governments, including our own. All of these governments concluded that the Helsinki threat was baseless.

The caller, who was known to the Finnish authorities from similar calls he had made to the Israeli embassy, drew upon public information on previous terrorist incidents to concoct his story. In this case, however, his threat was a horrifying coincidence with what someone else did to Pan Am 103.

Let me emphasize three critical points: There is no connection between the Helsinki threat and the discovery of the bomb made by the PFLP-GC. These were two independent and unrelated

events.

There was never any threat specific to Pan Am Flight 103, on 21 December or any other date.

The Helsinki threat was a hoax. It had no relation whatsoever to the bombing of Pan Am 103.

Secretary Skinner has tasked his senior staff to undertake an immediate and comprehensive review of the collection, coordination, dissemination, and follow-up to Aviation Security Bulletins.

The Departments of State and Transportation have worked together closely on all aspects of this review and will cooperate in implementing any needed revisions to the system that may come out of this review.

Compensation to the families of the victims of Pan Am 103 is another issue. It is obvious that the compensation cap of $75,000 per person for claims against airlines provided by the Montreal Agreement and the Warsaw Convention is grossly inadequate and long out of date. I assure you that the Departments of State and Transportation look forward to working with the Senate Foreign Relations Committee toward ratifications of the Montreal 3 and 4 Protocols which would completely revise the compensation system for Americans killed or injured in international air transportation disasters. Through these Protocols we can develop together a new and comprehensive supplemental compensation plan for victims of civil aviation incidents. The starting point for this process should be the proposal submitted to the Senate in June of 1988 by then Secretary of Transportation Burnley which, when finalized, would completely revise the compensation system for U.S. carriers and Americans traveling abroad.

The fifth issue which has attracted much attention during other Congressional hearings has been preventing another act of aviation sabotage. Both the Department of State and the FAA have underway a number of initiatives to accomplish this objective. Concerning additional security measures, a number of new initiatives were announced on April 3 by Secretary Skinner of DOT. Mr. Belger and Mr. Salazar of the FAA will address these new procedures during their testimony.

Secretary Skinner's proposals represent a major step forward in strengthening security procedures for U.S. carriers. Another important step is to heighten civil aviation standards for airlines throughout the world. The appropriate venue for such changes is the International Civil Aviation Organization (ICAO). At the request of the U.S. and Great Britain a special, ministerial-level meeting of the ICAO Council was held on February 15 and 16 to discuss Pan Am 103 and its implication for international civil aviation. Emerging from that meeting was a comprehensive workplan which will result in ICAO developing new international security procedures to help prevent a repetition of the Pan Am tragedy. We are pressing ICAO to develop these security procedures expeditiously so that the skies are safer for airlines of all nations.

Mr. Chairman, in light of some remarks, opening remarks by Senator McCain, I would like to cover a couple of other points if I may. This is the eleventh Congressional review of Pan Am 103 that we have appeared before. Our testimony for these hearings has necessarily and appropriately focused on the events directly surrounding that terrible tragedy.