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Congressmembers Dan Lungren & Loretta Sanchez Meet With PoLB/PoLA & Fed'l Harbor Officials On Proposed SAFE Port Act; No LB Councilmembers Present (PoLB Blames It On Bureaucratic Snafu)
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Will Customs Duties Really Cover Proposed New Security Measures? We Ask About Container Fees...And Congressmembers Reply
(March 18, 2006) -- Congressmembers Dan Lungren (R., Sacramento) and Loretta Sanchez (D., Garden Grove), chair and ranking member, respectively, of the Subcommittee on Economic Security, Infrastructure Protection & Cybersecurity of the House Homeland Security Committee held a March 17 roundtable discussion at Port of LB on Cong. Lungren's recently introduced "Security and Accountability For Every (SAFE) Port Act" (details below) and other security-related matters.
The Congressmembers also held a news conference in which Congressman Lungren indicated that he'd spoken with Congressman Dana Rohrabacher (R., HB-LB-PV), whose district includes the Ports of LB and L.A., "and he likes the thrust of this bill. He has a little bit of a disagreement with respect to the funding mechanism, but we are still talking."
We noticed that Cong. Rohrabacher isn't currently listed as a co-sponsor on the bill...so we asked if Congressmembers Lungren and Sanchez support Congressman Rohrabacher's efforts to enable Ports to levy container fees -- paid by shippers whose containers create public security risks and costs -- to help defray public costs of container-related security measures.
Port and shipping interests oppose container fees. As previously reported by LBReport.com, the Port of LB's DC lobbyist, E. Del Smith, told an August 2005 meeting of LB's Harbor Commissioners that his firm had helped kill Cong. Rohrabacher's container fee plan in 2005.
We post below in extended transcript form the replies of Congressmembers Lungren and Sanchez to our inquiry about container fees for security purposes.
We also post below a portion of a telephone interview conducted a few weeks earlier with Congressman Rohrabacher [preceding the SAFE bill] in which he gave his traditional no-punches-pulled opinions on several topics...including container fees for security purposes.
Those attending the March 17 meeting included officials from the Ports of LB and L.A., U.S. Coast Guard, U.S. Customs...but no LB City Councilmembers or LB city management...who were not invited, an oversight stemming from a clerical goof said PoLB's Carl Kemp. Mr. Kemp shouldered responsibility for the snafu, saying Mayor O'Neill's office was told about the meeting but a :cc line on an advisory memo to Councilmembers was inadvertently not transmitted. "It was my error," Mr. Kemp said.
Councilmembers from the L.A. City Council were also not visible...but Port of L.A. reps (including newly named PoLA Exec. Dir Geraldine Knatz, a PoLB alumna) were present...as were LB Harbor Commissioners James Hankla and Mario Cordero, PoLB Executive Dir. Richard Steinke and multiple PoLB staffers.
Also present was Port of LB DC lobbyist E. Del Smith...who for years has also (under a separate contract) represented the City of LB's interests in DC. By a voted action of the LB City Council, LB city management recently issued a Request for Proposals seeking firms that might wish to provide DC legislative services for the City of LB.
The SAFE Ports Act (HR 4954) drew national attention on its March 14 introduction following the Dubai Ports World controversy. Multiple local media were present at the PoLB press conference held by Congressmembers Lungren and Sanchez following their discussion with Port and federal officials.
The SAFE Ports Act had 45 listed co-sponsors as of March 17...including southland Congressmembers Jane Harman (D., Southbay) [ranking member of the House Homeland Security Committee], Grace Napolitano (D, Norwalk), Adam Schiff (D., L.A.), Mary Bono (R., Palm Springs)...and Loretta Sanchez (D., Garden Grove).
At the PoLB news conference, Congressmembers Lungren and Sanchez said:
Cong. Lungren: ...[The Safe Ports Act] would build on the foundation established by the administration but do a lot of building on that foundation. It would reinject a sense of urgency to this task. We can't wait 10, 15, 20 years to secure our ports with the capital investment that's necessary. We need to do that in a very short period of time. We need to make sure that the strategy that's been out there is in fact enshrined in authorizing legislation so we know there's going to be a continuum there. We need to have a funding stream for these various programs. And we need to build on the concept that you push-out the frontiers of protection from our country, working with the foreign ports. The best thing to do is to ensure that our ports are the last line, rather than the first line, of defense...
Our legislation really goes to the point of ensuring that these things are done, that they are done with greater intensity, with greater urgency, and that we put our money where our mouths are, and show that this is going to be done immediately...
[cites bipartisan support in the House and a companion bill in the Senate]...The reason why that's important is that means we are acting to make a bill become the law, not just acting to make a statement.
Congresswoman Loretta Sanchez: ...Quite frankly up to this point, the federal government has really been out to lunch, on really taking a look at this. In fact probably at the top of the list of people who have handled this and thought about this and spent their own money have been the people of Long Beach and Los Angeles through their port system. The very people who stand behind us [points to PoLB and PoLA officials] are in the forefront of this. We want to make sure that this bill allows everybody to work together to ensure that we have safe ports and a strong economic because of it.
During Q & A (responding to another reporter's question), Congressman Lungren indicated he'd held discussions with Congressman Dana Rohrabacher (R., HB-LB-PV) -- whose district includes the Ports of LB and L.A. -- "and he likes the thrust of this bill. He has a little bit of a disagreement with respect to the funding mechanism, but we are still talking."
Since Cong. Rohrabacher isn't currently listed as a co-sponsor on the bill, we followed up:
LBReport.com: ...On the funding mechanism, what would backfill the customs duties to be used to fund this now and do you support [Congressman] Rohrabacher's [previously floated concept] of a container fee to help defray some of the costs?
Congressman Dan Lungren: Well, I'll tell you, the first thing is we in our committee do not have the jurisdiction to decide where you backfill certain things. This will probably be sequentially referred to the Ways and Means committee because it does deal with taxes, that is customs fees. My belief is, and Loretta can speak for herself on this, but my belief is, and I've spoke with Jane [Congresswoman Harman] on this, that someone needs to set that mark out, saying a dedicated stream of fund must be created for this purpose.
Our feeling in coming up with this approach was that if you look at customs receipts, customs fees across the country, quite a slug of it comes through the Ports...
...So we think it's a natural connection since the Ports are the greatest generator of these fees, and the loss of the ports for any significant time would basically stop those fees from coming in, doesn't it make sense to use part of those fees for the kind of capital investment necessary to secure our ports?
And on the second question [container fees], it's not original with Dana [Congressman Rohrabacher], there was an [op-ed piece by a third party in a national newspaper] suggesting that there be a $20 charge per container. At least that has a connection with the process.
I would like to stick with the fees that are already existing. I don't know what the trade implications are with that. I'm not sure what the total tax implications are from that. All I'm saying is we at least start the debate going with a dedicated source of funds or stream of funds for this purpose ought to be established. If they want to find it some other way, I'm happy to engage in that debate but at least we're saying we think it's that important this ought to be dedicated for this purpose.
Congresswoman Loretta Sanchez: It's always a very orchestrated dance, you know. I'm a businesswoman so, you always worry what's the cost? What's the cost of not doing this? And that's what you have to weigh and I think we have participants here from all over, from the Longshoremen, the different Ports that are represented, we have federal agencies represented, we're going to go out and see an operator after this to take a look at what's really happening, and we will get input. We've gotten input from the Association's report, we'll get input from the operators who of course are looking at the fact that 'what are you going to do, raise fees on me? Maybe I can't get my business done.' We understand that. Mr. Lungren and I understand the issues of we don't want to put a fee that you don't need or that won't really help the commercial values that we have here, but at the same time you have to be able to protect yourself as much as you can from something really shutting down these ports...
In a March 3, 2006 freewheeling telephone interview with Congressman Rohrabacher, LBReport.com asked about the Port of LB's opposition to container fees for security, reflected by an August 2005 boast by PoLB's DC legislative advocate that he had helped killed Rohrabacher's container fee legislation. ["There has been an effort to increase container fees, a piece of legislation that we helped defeat just recently," E. Del Smith told LB's Board of Harbor Commissioners in August 2005.]
On a cellphone [sounding as if he were in motion], Congresssman Rohrabacher commented on Port opposition to a container fee to help fund security:
Congressman Rohrabacher: ...It's pretty grotesque. This is the Ports beating themselves in the head with a hammer and then bragging about it. I mean it's insane.
LBReport.com: Well, isn't this sufficient to show that the Port of Long Beach, or at least the people running it now, are putting the interests of their rent-paying tenants ahead of the interests of taxpayers and the public around here?
Congressman Rohrabacher: I can't say what their interest is and what their decisionmaking is. All I know is that there's a tremendous arrogance in the Ports, and in Long Beach and in Los Angeles in those people involved around the Ports, and when you have arrogance coupled with basically naivete, it's really a very destructive force.
And that's what you've got here. They're involved in a powerful dynamic in our society, the ports. This is an incredibly powerful dynamic, but they are nowhere near as sophisticated as they think they are. And in fact, their parochialism would be funny if it wasn't so destructive, and their opposition to the container fee idea is the best example of that.
However, if you have a good idea and you keep pushing it, and you are someone who doesn't mind being put down for a number of years until people realize that you are right, it's OK.
Using maritime customs fees as the SAFE Port Act's initially proposed funding source doesn't challenge the American Association of Port Authorities (AAPA)...in which the Port of LB is a member. AAPA publicly supports increased port security but has opposed new taxes on shippers. In a policy statement on its website posted before introduction of the SAFE Ports act, AAPA said:
"The maritime community already pays billions of dollars in user fees and taxes to the federal government, including $17.5 billion in Customs duties collected in FY 03. Maritime cargo provides approximately 70% of the yearly customs collections. AAPA believes that Customs duties should be used as a source of security funds if Congress seeks a dedicated source of funding. AAPA opposes new taxes to fund security enhancements."
In introducing the Congressmembers, PoLB Executive Director Richard Steinke as much as gave his blessing to maritime Customs fees as a funding source for the SAFE Port Act, saying "the funding mechanism provides that the money that is generated from the maritime sector goes back to correct some of the things where we need to have better security."
A fact sheet on the SAFE Ports act says the bill will:
- Require DHS to conduct terrorist watch-list checks of all port employees with access to secure areas,
- Ensure 100 percent of containers are scanned for radiation
- Provide risk-based funding through a dedicated Port Security Grant Program to harden U.S. ports against terrorist attacks and enhance capabilities to respond to attacks and resume operations.
- Require the Secretary of DHS to develop protocols for resuming trade after a transportation security incident.
Quick fact sheet on SAFE Port Act/HR 4954
Full text of SAFE Port Act.
"The SAFE Port Act will...create a dedicated stream of funding that will, through a comprehensive risk-based analysis, provide funding to high-risk ports," Cong. Lungren said in a press release and reiterated at the PoLB news conference. "A dedicated grant program for port security will not only protect domestic assets, it will enhance international border security through measures implemented both abroad and at U.S. maritime ports of entry. The adoption of comprehensive port security legislation is urgent, eminent, and essential to protecting the American people and the vitality of the American economy."
The SAFE Port Act is the companion bill to the "GreenLane Maritime Cargo Security Act" co-authored by Senators Susan Collins (R, ME), Patty Murray (D, WA), Norm Coleman (R, MN) and Joe Lieberman (D, CT)
"I am hopeful the recent heightened attention paid to the issue of national port security will inject a sense of urgency and spur the adoption of real-time legislation that ensures the safety of the American people and the security of our global supply chain," said Congressman Lungren in a release...which he reiterated at the news conference.
"The SAFE Port Act strategically and practically addresses the need for comprehensive port security by effectively extending our borders out and focuses our limited resources on suspect cargo, port operations, and individuals before our national security can be compromised. Our shores must be the last line of defense in port security, not the first," Congressman Lungren said.
After the news conference, we buttonholed Congressman Lungren briefly on another Port-related issue: did he have some quick thoughts on a proposal to put an LNG [Liquefied Natural Gas] terminal in the Port of LB? Congressman Lungren replied,
"I happen to think it's important for us to have LNG access to this country. We need LNG. [I have] basically said it's a decision that locals can make with respect to what they think is appropriate. Is it appropriate here versus somewhere further away from a major metropolitan area? That's a decision that I haven't gotten involved in, but we do need LNG."
Following the news conference and a Port luncheon, Congressmembers Lungren and Sanchez received an overview of surveillance security systems and visited Mearsk APM terminals in the Ports of LB and L.A.
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