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Mr. Lally. Well, the equipment is expensive and it has to be paid for. We believe that the needs today are consistent with Federal government responsibilities for public safety and for the protection of citizens against criminal acts, especially acts of international terrorism that are directed at governments.

So we feel that primarily the provision of the equipment and the provision of the protection is a government responsibility.

Senator Ford. Well, you carriers charge, judging from Secretary Skinner's statement, five dollars each way, ten dollars round trip, for security reasons. That is kept by the airlines and that pays for any additional expense as it might relate to your foreign security, does it not? Or it is intended for that?

Mr. Lally. Several airlines adopted a five dollar security surcharge for trans-Atlantic flights to defray the costs of the extraordinary security measures that went into effect in the summer of 1985. Those surcharges defrayed costs related to those extraordinary security measures.

What we are talking about now are even more extraordinary security measures placed on top of extraordinary security measures, so that additional funding is needed for these new requirements, particularly this new equipment.

So looking at it from our viewpoint, we believe first of all it is a proper government role. And secondly, if it is not funded exclusively and primarily by the government, then certainly it ought to be funded from the aviation trust fund, where funds are available.

And the last resort, we would say, would be to bill the passengers on top of the fees, they are already paying for security, especially when the fees collected by the passengers today are in the trust fund and available for this purpose.

Senator Ford. That ten dollars is not in the trust fund.

Mr. Lally. No, sir. The ten dollars is an airline initiative.

Senator Ford. Well, what do you think the additional fee would have to be in order to have sufficient funds to cover the costs?

Mr. Lally. The costs I do not know. I would have to do the arithmetic. But we estimated that equipping the 45 high risk foreign airports with sufficient equipment to meet U.S. airline needs would total, I believe our estimate was, $66.6 million.

Senator Ford. $66 million?

Mr. Lally. Yes, sir.

Senator Ford. That means that you would have 66 TNA's, rough

ly?

Mr. Lally. No, no, sir.

Senator Ford. $800,000 a unit, and it takes a maintenance. The maintenance is about $200,000 a year, is it not, to keep it up?

Mr. Lally. Sir, we did a preliminary estimate for those airports that included not only TNA's, but also vapor detection equipment. Our preliminary estimate is that 66 TNA's would be needed and 171 vapor detections needed for that purpose.

So the costs would be $49.5 million for the thermal neutron analysis units and $17.1 million for the vapor detection units, for a total of $66.6 million.

Senator Ford. How long would it take you to pay for that adding a couple of bucks, a dollar each way?

Mr. Lally. I do not know. I am not familiar with the passenger count.

Senator Ford. Well, the problem here is safety and then what do we—and I think Mr. Kutchins expressed it very well: What do we quit, what do we stop?

We find between a $6 and $7 billion surplus in the trust fund and we cannot find a way to spend it. We are trying to find a way to get to it, or maybe if not now, later on. But everyone looks to the government, and you say that the terrorists are after a government, they are not necessarily after its people. But the people are the ones that ultimately get hurt, not the government. The government keeps on going.

Mr. Lally. We agree with Mr. Kutchins, in that the funds that would be required for full implementation of the access control requirements relating to U.S. airports could be better spent in support of requirements to defend against the threat of international terrorism. We feel that is the paramount threat today.

Fortunately, it is not severe in the United States. But if we take things in priority order, we would be better served, I believe, by expending those resources to meet the primary threat, rather than to meeting a less severe threat that is presented domestically.

Senator Ford. Mr. Lally, I am not trying to be argumentative. If I was argumentative I would raise my voice. But government in most cases fund a large portion of the research and development, as it has in TNA, I think several millions of dollars.

And then once they do all the research and develop the machine to help the airlines protect, then the air transportation people come in here and say, not only do we want you to do all the research and develop it, then pay for putting it in.

Somehow or another it all winds up with people paying for it. We find our ability a little bit short to do all the things that we want to do. It is just like NASA. We have got a lot of problems with who has the patent on all this research. Do we own it or the people that suggested it or nave been working on it?

And then we have the dissemination areas of NASA in regions, where you can go to that regional office and get all kinds of help from the development by the Federal government, and that is giving it back to the taxpayers almost directly.

But here we are getting double jeopardy. Like I told a fellow yesterday, I do not mind getting heated up about a program, but I sure did not want to be reheated.

You recommend that the Federal government accelerate efforts to strengthen international agreements on airline and airport security. What are the areas that need immediate attention?

Mr. Lally. I believe the areas that need immediate attention are not so much the boilerplate of the agreements as they exist today. They probably cover all the bases. What is needed is the effective implementation of those measures by member states on a consistent and effective worldwide basis.

So I would say the initial requirement would be to equip ICAO with the authority and the resources needed to evaluate the effectiveness of the standards and then respond with such modification of those standards as may be appropriate, and to evaluate the manner in which member states apply and implement the standards.

And then also, if ICAO were given the additional authority to impose sanctions or to otherwise serve notice on states that do not live up to their obligations, that would provide a quick incentive for member states to properly apply those standards and the result worldwide would be better airline and airport security.

Senator Ford. You mentioned in your testimony that ATA has been advocating that the rules that FAA and DOT are mandating as it relates to increased security screening procedures for passengers and so forth traveling on U.S. airlines.

Shortly after the Pan Am incident, ATA began advocating that some of these rules be applied to foreign air carriers serving the U.S. I think you have made that in your opening remarks.

What evidence do you have that illustrates that these rules have put U.S. carriers at a competitive disadvantage on international routes?

Mr. Lally. Well, I think the issue here as far as I am concerned is the lack of equivalent security protection. Foreign air carriers are not affording their passengers the level of security that is afforded passengers by U.S. carriers.

But on the competitive point, there is no doubt that these extraordinary security measures that are in place by U.S. carriers and have been for almost four years, cost money. They are expen{ /! sive, and those same costs are not being incurred by the foreign air »/ ^carriers who compete with those U.S. carriers.

So the idea of a competitive edge for foreign air carriers is I think a fact. But the more compelling fact involves the levels of security that are provided or not provided, as the case may be.

Senator Ford. Well, would you not think that it would be a distinct advantage if your airline was considered more safe than another one? Do you not think they would prefer to fly on a safer airline than they would on another one that does not have the same security procedures as we do? •

Mr. Lally. Yes, sir, that is the point of my opening comment.

Senator Ford. I was hoping that being more secure would really enhance the airlines, rather than put them in a competitive disadvantage.

Mr. Lally. I would hope that to be the case also, sir. But there is, I believe, some emotion associated with this question, where the public, based upon some misperceptions or some misguided advice, are feeling, mistakenly so, that travel on U.S. flag carriers is more risky than it might be on foreign flag carriers.

I believe personally that the opposite is the case, and the public would be well served to fly on U.S. flag carriers.

Senator Ford. Well, let me get to Mr. Kutchins. It is getting almost to soup time here.

Mr. Kutchins, how could the objectives sought by the FAA in limiting access to secured parts of an airport be accomplished without the current rulemaking?

Mr. Kutchins. Speaking from what has actually happened in San Antonio, one of the things that the increased number of field personnel have brought to us is a very good working relationship and, working together with the FAA people, we are identifying improvements and putting them into place. I would presume that a similar experience can be found at other airports.

Senator Ford. Other than conducting the test program, I think similar to the type I supported in a letter to former Secretary Burnley last year, do you have any other recommendations as to how FAA should proceed?

Mr. Kutchins. Carefully.

I think, as I stated in the testimony, it would be extremely important if the various aviation associations can meet with Secretary Skinner and have a meaningful discussion of some of the points.

But I think all of the testimony that I have heard this morning has generally followed the same line. We are all in this together. Everyone seems to have a genuine appreciation for the problem. It is just how we get from point A to point B, but I think we are trying to work out the details.

Senator Ford. You recommended that we create a dedicated funding source to cover nearly a billion dollars, I think, in nationwide costs anticipated for acquiring, installing, and maintaining computerized access door systems.

In your view, how can we do this? How can this be accomplished? Stick another tax on?

Mr. Kutchins. I imagine there are several ways in which it can be funded. From the tremendous resource within the trust fund. I would personally not like to see it just limited to the entitlement funds which we get as an airport, because those things are pretty well spoken for all the way down the line.

And then, as Mr. Lally indicated, I suspect there is always the option of a surcharge for a period of time to fund the materials and get them in place.

Senator Ford. Let me ask you a final question then. Do you believe that airports should be regulators of airport tenants operating in exclusive areas of the airport property?

Mr. Kutchins. I believe that the tenant in an exclusive area has to bear the ultimate responsibility. If there is a rule and all we do is get guidance that says, your tenants have to do it, but if they do something wrong we are going to come back against the airport, that is very, very difficult to try and explain, and it is not practical.

Senator Ford. How do we find out if a tenant is not complying? Would we have to investigate or would you as the airport executive report it?

Mr. Kutchins. Well, right now what happens is that the FAA comes down and provides a rather elevated level of inspection, and they, along with the airport people at times, go around and review what goes on among the tenants.

However, I think that our people on their own as part of their daily inspection are vigilant to see if there is a violation, and then we get back to the tenant immediately.

Senator Ford. Okay. Is it your experience that the current access controls at your airport are adequate?

Mr. Kutchins. We are improving, almost on a daily basis. There are always things that we can do to enhance our system.

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There is a possibility that a system whereby people can be removed from a data base on a five-minute notice is probably pretty good. We have found that in the past there got to be a rather careless attitude on lost badges, for instance, and we had to tighten that up rather substantially.

But to say that the status quo is all we ever need, I do not think I could be comfortable with that.

Senator Ford. Vigilance, I guess.

I have no further questions for either gentleman, so I thank you for your patience today and look forward to working with you more closely in the future.

Our final panel today is Mr. Paul Hudson and Mr. Brian Barry, representing the Victims of Pan Am Flight 103. If you two gentlemen will come forward, we will be very pleased to hear your statement this morning.

Mr. Hudson, we will ask that you go first, and then Mr. Barry will follow, and I will have some questions for both you gentlemen. You may proceed, Mr. Hudson.

STATEMENT OF PAUL S. HUDSON, CHAIRMAN, VICTIMS OF PAN AM FLIGHT 103, ACCOMPANIED BY BRIAN BARRY

Mr. Hudson. Thank you, Mr. Chairman.

Mr. Chairman and distinguished members of the committee: It has now been 113 days since the terrorist bombing of Pan Am flight 103 killed 270 innocent people, including 189 Americans. My daughter Melina, who was 16, was one of those.

It is long past time for the Senate to take a hard look at whether corrective action has been taken to prevent another such tragedy. Regrettably, Mr. Chairman, we must say that a business as usual attitude by the FAA, the State Department, and the airlines has not resulted in significantly improved airline security four months after the worst terrorist attack on American civilians in our history.

Moreover, the confidence of the flying public has deteriorated in both airline security and in the capability of our government to deal with terrorism.

The basic facts on security measures in force in December 1988 have not been released by the airline or the FAA. We are really not sure. It is somewhere between completely inadequate and grossly incompetent.

The government line, that there was only one warning, the socalled Helsinki warning, and that was a hoax, was completely discredited on March 16th when it was revealed by the press that there were at least three additional, very detailed bomb warnings issued by the FAA and the British Transport Authority prior to the bombing of 103.

No known additional steps have been taken by our government to implement a more effective counterterrorism policy. I would be glad to get into the details of that in the questions.

The State Department has not released any information which would substantiate its claim that there is not in practice a policy that results in selective warning of U.S. government employees of terrorist bomb threats, nor that only select U.S. government em

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