Thank you for this opportunity to testify today.

It is an honor to return here for the first time as Customs commissioner. The Customs Service is a big, complex organization with an important, historic mission. We have been doing a good job since the founding of the republic. However, we can do it better.

We are living in a global economy in which international trade is the life blood of the wealth of nations. At the same time, America's appetite for narcotics, and the drug cartels efforts' to exploit it at any cost.. Has been -- and remains -- one of the great threats to the national well being. The Customs Service must live in both realities. And I intend that we tackle the problems and opportunities they both pose with equal vigor.

The same technology that defeats smugglers, helps legitimate trade move freely across our borders. Advanced technology is essential to fulfilling the mission of the Customs Service. It is absolutely essential in accommodating the explosion in trade, and in how the Customs Service processes imports.

Our current system of tracking and processing imports is outdated and expensive to maintain. It was designed for trade levels a decade ago. The volume of trade since then has increased dramatically. This chart illustrates what I am talking about. In the last four years alone, the number of import entries that the Customs Service processed increased from 11.3 million in 1994 to 16.3 million now an increase of 44% the value of those imports climbed by 45% from $658 billion in 1994 to almost a trillion dollars today. While -- in the same period -- the number of full time equivalent employees of the Customs Service declined by 2.4 percent.

To keep pace we must vastly improve and expand the automation of our import processing. Our answer is "ace" -- the automated commercial environment. This massive project is still in its infancy - - with very promising test sites up and running in Michigan and Texas. The complete conversion and full implementation will take 10 years and cost $1.48 billion but let me stress that it would cost even more -- and with far less benefit -- to try to keep the old system going.

We interdict more narcotics, by far, than any other law enforcement agency. About a million pounds annually over the last two years. Another million pounds for the first nine months of this fiscal year. We had been concerned about the decline last year in seizures. So early this year, we asked inspectors, agents and their supervisors to come up with new and port-specific ways of attacking the smuggling problem. Their combined efforts were dubbed "operation brass ring." And the results -- as this chart shows -- were impressive:

Cocaine seizures through July this year were up 32% compared to the same period the year before; heroin seizures increased by 13% marijuana seizures by 47% currency seizures by 45% and controlled deliveries increased by 100%

This success story was devised and implemented by the rank and file -- our front line people, with the support of their union leadership. Something everyone in the Customs Service should be proud of.

The crack down on smuggling was accomplished while keeping trade flowing as freely as possible. It's a demanding environment, when you consider that in the last fiscal year 118 million automobiles were driven across our borders.

As were 9.3 million trucks, over 320,000 railcars and 4.5 million sea containers. We can't stop and thoroughly expect every one of them for contraband. But through better intelligence and wider use of advanced x-ray and other technologies, we can selectively make it harder and riskier for smugglers to cross our borders or enter our air space or sea lanes.

We also have to remain as flexible as possible, shifting resources as the cartels and others respond to the pressure we apply, whether it is along the southwest border or the Caribbean basin. There are three ways to smuggle drugs and other contraband into the united states - land, sea and air. The Customs Service can provide effective deterrents in all areas, providing we maintain and modernize our best assets, including our marine and aviation programs.

We also deter narcotics smuggling through strong partnerships with legitimate industry. These partnerships work. Last year, for example, 43% of all of our cocaine seizures stemmed from prior intelligence provided by the trade community. Of course, prior intelligence is supported by hands-on inspections. And we are doing a better job of that by using advanced technology , such x-ray equipment designed expressly for inspecting trucks and railcars.

This is the key to the future -- the investment in advanced technology -- as a way of inspecting goods, and even suspected smugglers , as quickly and unobtrusively as possible. We want to be able to stop the drug smuggler or the terrorist selectively , without subjecting the law- abiding, traveling public to inconvenience, embarrassment or delay. We are also getting better at seizing the profits of the drug cartels as they try to smuggle their ill-gotten gains out of the united states.

Our budget request for FY 1999, reflects these concerns and others, including money for non-intrusive inspection technology, automated targeting systems ( including license-plate readers) and additional funds to fully implement our child labor enforcement plan.

We are also protecting children by combating child pornography. And yesterday -- working with a dozen other countries -- brought down the largest, known child pornography network in the world.

We greatly appreciate the efforts by the members of this committee to give customs the support it needs for the future. I'm confident that, together, we are on the path of making the Customs Service better than ever. Of making the Customs Service the legitimate trade's best friend and the drug cartels' worst nightmare. I'll be happy to take any questions you may have