On The Waterfront

The revelation this past week that a company owned by the United Arab Emirates had acquired the rights to operate major facilities at six American seaports touched off a firestorm of debate in Congress. The issue was whether a Middle Eastern country, an ally of the United States, accused by some as having a spotty record on terrorism, should be allowed to run installations vital to American security.

But in some respects, foreign countries operating port terminals is the least of the problems America faces on the waterfront. 60 Minutes reported about some of those problems shortly after 9/11 and decided this was a good time to go back and take another look, beginning with Stephen Flynn, widely regarded as one of America's foremost authorities on port security.

Correspondent Steve Kroft reports.

Flynn has been called the "Paul Revere of port security." A former Coast Guard commander who is now a senior fellow at the Council on Foreign Relations, he has testified before Congress 15 times on the vulnerability of U.S. ports to terrorist attacks.

"We have a real problem on our waterfront. But it's less about who owns these few terminals in our country. It's about the systematic vulnerability," he says.

"So you're not terribly concerned by the fact that a company from Dubai is going to be operating port terminals in the United States?" Kroft asked.

"I'm concerned that the entire system is potentially vulnerable," Flynn replied.

Flynn says the weak link in the security chain is the standard 40-foot shipping container, so common now we barely notice it.

Almost everything we buy, sell, eat, drink or wear is moved in these metal boxes. They are essential to American commerce and international trade. And at any given moment, millions of them are being shuttled around the globe, on top of ships, trains and 18-wheelers, and piled up by the thousands at ports, depots and huge outdoor warehouses. When 60 Minutes first interviewed Flynn in the spring of 2002, he told Kroft the problem is that no one really knows with any certainty what's in those containers when they first arrive at a U.S. port.

"It is physically impossible to check every container without essentially stopping global commerce," Flynn said.

"Should we be talking about all this stuff? I mean, are we giving away secrets here by talking about this?" Kroft asked.

"The fact of the matter is criminals have been operating in seaports a long, long time," Flynn replied. "The bad guys know how open the system is. The good guys don't seem to have a real command on it here because we haven't paid as much attention to this problem as we need to."

Flynn took 60 Minutes on a helicopter flight over Charleston, S.C., one of the busiest seaports in the nation. It now handles more than one million containers a year. Flynn called them "the soft underbelly of globalization."

"It's an incredibly efficient system, but it's also a system that poses opportunity for bad people to do bad things," Flynn said.

Flynn says the most logical way for terrorists to smuggle a nuclear device or dirty bomb into the United States is to ship it into a U.S. port in one of these containers. And since many big cities were literally built around their ports, they present an attractive target.

"Now, if you were to set off an atomic device here, what are some of the things that could be affected?" Kroft asked.

"Well, it would not even have to be a chemical or biological or nuclear weapon. Because the only thing separating that container yard from basically where people live and work is a fence," Flynn explained, flying over downtown Charleston.

But it's not just port cities that are at risk. In most cases those shipping containers are quickly loaded onto trains and trucks and dispatched inland to practically every town in America. Flynn says it wouldn't be difficult for a terrorist to track a container with a global positioning system and detonate a weapon hidden inside. In fact, someone could even use a shipping container to smuggle himself into the country.

Italian authorities arrested a man trying to ship himself from Egypt to Canada inside a container. It was equipped with a makeshift bed and enough food and water for the three-week journey. The stowaway was a trained airplane mechanic and he was carrying a laptop computer, a satellite phone, fake credit cards and an airport security pass.

Admiral James Loy, the former Coast Guard commandant and former Deputy Secretary of Homeland Security, told 60 Minutes there was evidence that al Qaeda terrorists were already involved in the maritime trades.

Asked if he believes al Qaeda has ships, Loy said, "We are pretty certain that there's some traceability to al Qaeda and, believe me, we are very, very interested in those vessels."

Loy said he believes the terrorist have ships. "Clearly so," he said.

"Then you can't say how many," Kroft asked.

"And I'm not going to tell you how many, no," Loy replied.

The United States believes one of those ships delivered a cargo container filled with explosives that were used in the embassy bombings in East Africa.

U.S. Customs and Border Protection said this week that now it is screening 100 percent of the cargo entering U.S. ports, which is reassuring, but according to Steven Flynn, somewhat misleading.

How many of the containers are actually inspected?

"First we gotta get, what's an inspection, all right?" Flynn says. "And, you know, Americans think we're opening up containers like we do the luggage at airports and looking inside. That happens very rarely, like under 1 percent that we open up the car and look inside."

When customs says it screens 100 percent of the cargo, that simply means it scrutinizes the paper work of cargo manifests and of ships headed for the United States, looking for things that might raise a red flag. It could be specific intelligence, or a container from a shipper they have never seen before, or one they have had trouble with in the past. Special attention is paid to unusual items or shipments from countries linked to terrorism.

Kevin McCabe is the chief customs inspector at the combined ports of New York and Newark, the largest container port on the East Coast. He told 60 Minutes that on an average day, six to seven percent of the shipments are singled out for special attention.

"So we're confident that we're doing the percent that gives us the biggest bang for the buck," says McCabe.

At the very least the suspicious containers are checked to see if their seal has been broken, and most are run through a giant X-ray machine, called "Vacis," which can see through the steel walls of containers and outline any differences in density within the shipment, which customs calls an "anomaly."

Asked if he would know a weapon of mass destruction if you saw one, McCabe says, "I'll know an anomaly when I see it and then we'll have to cautiously identify it."

When 60 Minutes was there four years ago, a container was singled out because it originated in the Middle East and because it fit a profile based on intelligence information.

The container had emanated in Oman, went through the Netherlands and then arrived in the port of Newark.

Asked if this was a possible terrorist route, McCabe said, "It could be. Yeah, this is something that we're looking at."

The manifest said only that it was a shipment of food stuffs. But the Vacis machine showed an anomaly. Part of the shipment was heavier than the rest.

They decided they better have a look, so the container was moved to an adjoining warehouse to be searched by hand, a process that can take up to five hours.

As it turns out they did not find a weapon of mass destruction, only cookies. The anomaly the machine detected was the difference in density between fruit-filled tarts and chocolate wafers.

The day 60 Minutes visited, almost all the cargo was waved right on through. Flynn thinks the system is a house of cards.

"They're making their best guess about what they think is a high risk material," Flynn says. "And they're inspecting that. But they assume that the other 95 percent has come from trusted shippers, known shippers, you know, name brand companies that they're not involved with terrorism."

Flynn says it's unrealistic to believe that. "If I'm a terrorist and intend on causing mass disruption, I wanna go after a name brand company and I can find a way to do that," he says.

And he gave us a hypothetical.

"A well-known brand name company, has a potentially a factory in Indonesia," says Flynn. "And on the truck that loads the container in Indonesia is driving to the port of Jakarta, on its way gets intercepted. And if somebody offers that truck buyer, driver more money than he's seen in his lifetime to basically go take a long break, they access the container. They put something bad in it. But because it is a trusted shipper, a known player, it gets loaded on the ship, it's offloaded, driven to the heartland, America and something goes very wrong."

Flynn acknowledges that some progress has been made since 60 Minutes first talked to him. Customs and Border Protection now have inspectors in 42 foreign ports, where they can check on cargo before it reaches U.S. shores.

And shipping companies are required to provide U.S. officials with much more information about what is on board. They've also begun deploying a new generation of radiation detection equipment, that could help spot a nuclear weapon or dirty bomb. But for the most part, Flynn says port security remains drastically underfunded, with major vulnerabilities largely ignored.

"In Los Angeles and Long Beach today there are 11,000 truck operators who can have access to the port," said Flynn. "And they get into the port by showing a California driver's license. There's no credentialing process. The federal government said we're gonna get a transportation worker identification card. Congress has mandated we have one. We still don't have one."

"So there're no background checks of anybody going in and out of the port?" Kroft asked.

"There's no background checks required for the transportation providers. And there's a lot of other people come into ports, too," says Flynn. "And the people who are at the gate, the cops are still rent-a-cops, basically. And they're the poorest paid workers in the seaport on average. There's no minimum standards. The federal government still has set no national standards for what a private security firm should be if it's protecting this critical national asset. And that's what Americans should be outraged about."

The White House maintains that the Coast Guard and customs are in charge of port security, but protection for most of the facilities, from gate guards to night watchmen, is the responsibility of the port operators, the private companies that run the terminals where cargo is off-loaded and stored.

It's companies like Dubai Ports World, the United Arab Emirates firm that hopes to manage container terminals at six ports on the East Coast, and has caused such a scandal in Congress this past week.

But Stephen Flynn thinks the scandal is not the nationality of owners, but rather the lack of rules and regulations that would govern them.

"Yeah, isn't it outrageous that we're basically delegating this job of policing this critical national asset to a terminal operator without much checking?" said Flynn. "We have one company out here now in the crosshairs. But we have a system wide failure. We are protecting this critical asset with rent-a-cops determined by all private operators, whether they're American owned or foreign owned, without setting the bar very high. That's crazy. And we're doing it without givin' the Coast Guard adequate resources to police it or enough customs agents to make sure that proper inspections are done. Those are the problems that I hope Washington gets around to debating."
By Andy Court/Ira Rosen