Mr. OBERSTAR. Shortly after the PanAm incident I happened to be interviewed, along with Ray Kline, former Deputy Director of the CIA, about this matter of security. I think he made a point that was very telling and very important for closing the circle on this panel's testimony and supporting what Ambassador McManaway said. That is that we have to get to terrorism at its source, and that means, as you put it, pro-active. That means getting out, finding where they are, finding state-supported terrorism and attacking it at its source, using all the devices that we have at our disposal.

The FAA is not an intelligence-gathering agency. It must depend on intelligence provided to it by our other intelligence services, and once provided with that information it can act properly. Beyond intelligence gathering is getting at those who have destructive schemes in mind, and that's probably the most effective element of the whole security apparatus.

We thank you very much for your testimony and ask you to remain available for the executive session later today.

We have a number of other witnesses and panels whose testimony is going to be very interesting and important to completing the scope of the hearing. We will recess for roughly one hour and resume at 1:45.

The subcommittee stands in recess.

[Whereupon, at 12:45 p.m., the subcommittee recessed, to reconvene at 1:45 p.m. this same day.]

AFTERNOON SESSION

Mr. OBERSTAR. The subcommittee will resume its sitting.

Our next panel of witnesses includes Mr. Richard Lally, Director of Security, Air Transport Association; Mr. Homer Boynton, Managing Director for Security, American Airlines and Vice Chairman of the Security Committee of the Air Transport Association; Mr. Robert Kierce, Staff Vice President for Security at Trans World Airlines; Mr. Robert Baudter, Manager for Corporate Security at United Airlines and Chairman of the Security Committee for the ATA; Mr. Edward F. Cunningham, Managing Director of Corporate Security for PanAm; Mr. Gerald Fitzgerald, Assistant Director for Aviation, Port Authority of New York and New Jersey, and a member of the Board of Directors of the American Association of Airport Executives; and Mr. Wilfred Jackson, Director of Airport Operations for the Baltimore-Washington International Airport and Chairman, Operations, Safety and Security Committee of the Airport Operators Council International.

That's a very impressive list of witnesses. Would you please take your seats at the table?

We are expecting Congressman Dan Burton, whose testimony will be welcome at such time as he does arrive.

Mr. OBERSTAR. Mr. Lally, you are the leadoff witness on this panel. We welcome you. We welcome all of you and thank you for your participation in the hearings.

TESTIMONY OF RICHARD LALLY, DIRECTOR OF SECURITY, AIR TRANSPORT ASSOCIATION, ACCOMPANIED BY HOMER A. BOYNTON, MANAGING DIRECTOR, SECURITY, AMERICAN AIRLINES AND VICE CHAIRMAN, SECURITY COMMITTEE, AIR TRANSPORT ASSOCIATION; ROBERT R. KIERCE, STAFF VICE PRESIDENT, SECURITY, TRANS WORLD AIRLINES; ROBERT F. BAUDTER, MANAGER, CORPORATE SECURITY, UNITED AIRLINES AND CHAIRMAN, SECURITY COMMITTEE, AIR TRANSPORT ASSOCIATION; EDWARD F. CUNNINGHAM, MANAGING DIRECTOR, CORPORATE SECURITY, PAN AMERICAN WORLD AIRWAYS; GERALD FITZGERALD, ASSISTANT DIRECTOR FOR AVIATION, PORT AUTHORITY OF NEW YORK AND NEW JERSEY AND MEMBER, BOARD OF DIRECTORS, AMERICAN ASSOCIATION OF AIRPORT EXECUTIVES; AND WILFRED A. JACKSON, DIRECTOR OF AIRPORT OPERATIONS, BALTIMORE-WASHINGTON INTERNATIONAL AIRPORT AND CHAIRMAN, OPERATIONS, SAFETY AND SECURITY COMMITTEE, AIRPORT OPERATORS COUNCIL INTERNATIONAL Mr. LALLY. Thank you, Mr. Chairman. You did introduce my colleagues who are present today from the major airlines, and I would just like to note that they are here to provide whatever assistance and information they can to the committee, both in this session and in the executive session, and they are on standby at your call to meet with you or other members of the committee or the staff as time progresses to provide whatever additional assistance they might be able to furnish.

Mr. OBERSTAR. Thank you.

Mr. LALLY. We have a formal statement that we have submitted for the record. I would like to summarize or highlight portions of it for the committee at this time.

Mr. OBERSTAR. Please proceed.

Mr. LALLY. The airlines have redoubled their efforts in the wake of the bombing of Pan Am Flight 103, instituting even tighter security screening procedures for international flights than were in effect before.

The security challenge faced by the airlines today is formidable, and the airlines cannot meet that challenge alone. They are commercial enterprises, not intelligence agencies. They rely on their Government and allied governments to help track and assess the many security threats made against commercial airlines each year. They very much need the Government's help, including the direct assistance of the Federal Aviation Administration's security specialists, to provide adequate security in high-risk areas of the world.

The nature of the security threat we face today is far different and far more dangerous from what it was in the early 1970s when we first began screening passengers and their carry-on baggage. Back then, hijacking was the primary threat; now it is sabotage by international terrorists seeking to influence the behavior of governments through acts of violence against commercial aviation. Modification of government policy is their real goal. Commercial aviation is merely a surrogate target.

Meeting this new threat both warrants and requires greater Government involvement in airline security. The U.S. Government

must go beyond its traditional regulatory role and become an active partner of the airlines in security.

We have four specific recommendations to offer. In making these recommendations we do not mean to suggest that it is solely the Government's responsibility to improve security. The airlines must do their part, and we can assure you that they will.

The first recommendation is that the Federal Aviation Administration should concentrate its own security resources where they are needed most. Congress substantially increased FAA's budget for security following the terrorist hijacking of a TWA jetliner three and a half years ago. FAA subsequently hired more Air Marshals and security inspectors. This morning we heard about additional increases in the FAA's security workforce.

But these resources must be deployed in areas where the threat of terrorism is the greatest, specifically to Europe, the Middle East, and the Far East. We are not suggesting that the FAA abandon its domestic responsibilities, but we are suggesting that it must assign more of its security people to ground duty in support of airline security activities at high-risk airports overseas.

The second recommendation we have is that the Government must speed the development and the commercial availability of emerging new technologies that detect hidden explosives. FAA has achieved promising results in recent tests designed to detect vapors emitted by explosives. It also has achieved significant breakthroughs in the development of thermal neutron analysis, a technique which appears capable of detecting all known explosives in the quantities that are of concern to commercial aviation.

The FAA recently announced that it will buy six thermal neutron analysis machines this year, and will do all that it can to bring this new technology on line quickly. We believe that the FAA should increase that purchase order, and that the new machinesas well as the two existing units that the FAA has been using for tests here in the United States-be airlifted to Europe as soon as possible.

In addition, the Government should help nurture these new screening technologies to maturity by providing seed money for the first industry buy of state-of-the-art equipment. FAA provided funds to the airlines in the early 1970s to speed the deployment of effective metal detectors at U.S. airports. Financial assistance now is even more appropriate and urgently needed in meeting today's far more dangerous threat of terrorism.

The Air Transport Association has developed a preliminary estimate of the explosives detection equipment requirements needed to support U.S. airline operations at high-threat foreign airports, as well as a preliminary estimate of the costs that would be involved. A detailed breakdown of these estimates is attached to our formal statement.

In summary, the preliminary estimate is that 66 thermal neutron analysis units and 171 vapor detection units are needed to meet the security requirements of eight U.S. airlines at 45 highthreat airports in Europe, the Middle East, and the Far East. The costs are estimated at $49.5 million for the thermal neutron analysis units, and $17.1 million for the vapor detection units, for a total preliminary cost estimate of $66.6 million.

We believe that Federal funding for this equipment is justified and warranted, and that that Federal funding could be provided by means of a special appropriation from the Aviation Trust Fund for this purpose.

Our third recommendation is that the United States accelerate efforts to strengthen international standards on security. The ICAO has made considerable progress in that direction in recent years, but more needs to be done. ICAO should lay out tougher security standards for all nations and, importantly, it should be given the resources it needs to evaluate security programs around the world and the authority it needs to impose sanctions against nations that fail to live up to established standards.

Our last recommendation is one that help ensure protection that U.S. travelers deserve until the tougher international standards are in place. That is that the FAA impose the same stringent security requirements on foreign air carriers serving the United States as it imposes on U.S. carriers.

On December 29, FAA mandated heightened security measures for U.S. airlines serving Western Europe, the Middle East, and the Far East. Those same security steps were not required of foreign airlines serving the United States from the same airports, even though some 50 percent of U.S. citizens who travel abroad travel on those foreign carriers.

We think that omission, the coverage of security requirements for foreign air carriers, is a significant gap in the security program of the FAA.

On the domestic scene I would just like to report that in the 15 years since passenger screening began, there has only been one U.S. hijacking of a major airline involving a real firearm smuggled through the screening system. The U.S. airlines screened more than 1 billion people last year, four times the population of the United States, and the system detected some 3,000 firearms, leading to the arrest of about 1,500 people. By FAA estimates, 118 hijackings have been prevented since the passenger screening system became mandatory.

In other words, the passenger screening system in the United States is working well. It is accomplishing what it was designed to do, which is to prevent hijackings. However, meeting the new threat of international terrorism clearly requires new strategies calling for greater Government involvement in airline security and greater focus on airports and airline operations overseas. Government must share the burden of security. It must help the airlines shore up their defenses. With that kind of help, and if Government can target its resources where the threat is the greatest, I think we can go a long way toward shielding travelers against the scourge of terrorism in the years ahead.

Thank you, Mr. Chairman.

Mr. OBERSTAR. Thank you very much, Mr. Lally. We greatly appreciate your testimony. As I said earlier, the written statement in its entirety will appear in full in the record.

Do any of your associates have remarks to make at this time? Mr. LALLY. I think they do not, sir, but they may have some comments to contribute in the executive session.

Mr. OBERSTAR. I particularly appreciate your reference to the passenger screening system. I think it should be emphasized that this has proven to be a very effective deterrent. As I mentioned at the outset of the hearings, we tend to forget that from 1969 through about 1973 or 1974, we were experiencing one hijacking every two weeks. Then came the magnetometers and the other detection systems and the careful screening of baggage, and in the years since 1969 we have screened at American airports alone 9.5 billion pieces of luggage, some 9 billion passengers, and collected 41,000 firearms and thousands of bombs or incendiary devices, and made 14,000 arrests. People are still in prison for violating domestic security.

I think the record has to be cited, the enormity of it and the immense numbers of people and equipment and baggage processed through this system so that people understand that a very significant measure of security has been provided at domestic airports and that we are doing as fine a job as the state-of-the-art permits to be done. That's not to say that it can't be improved. The FAA has imposed two waves of significant fines on airlines for failure to achieve desired levels of detection. We're talking about levels above 95 percent. We think that kind of check system is necessary.

But at the very time that we were perfecting the passenger screening systems in the United States and abroad, the terrorists were moving on to more sinister means of, as you put it well, "making their point" on international policy for or against a particular cause. We need to be a step ahead of the game. Your point is again well taken about the FAA concentrating its resources where they are needed the most. The FAA is not an intelligencegathering agency. It is an agency configured to respond to intelligence gathered by other sources.

I would like you to be a little more specific, though, on what you think are the most appropriate roles for the FAA. Surely research and development is appropriate, but what are the other appropriate roles for the FAA? And how do those responsibilities mesh with the role of the private sector?

Mr. LALLY. I think the United States Civil Aviation Security Program is the one that, as you indicated, has been extremely successful. It is a program that involves FAA as the lead Government agency. It is FAA that defines the security threat and prescribes the measures that need to be taken to combat that threat. They assist and coordinate in the implementation of those measures. As a bottom line, they have the regulatory authority to enforce the requirements.

In addition, they serve a most important role in being the interface for aviation with the national and international intelligence community. The intelligence factor is an extremely important one. The system we have in place is very, very comprehensive and one that can be refined and tailored in response to intelligence to react to various changes in the nature and level of the threat.

We believe that FAA performs that job-that is their role and they do it rather well. The airlines, on the other hand, are primarily responsible for their aircraft, for the people and things that go on it, and for maintaining a secure inflight environment.