As you know, Customs is the nation's oldest law enforcement agency, founded in 1789. We are responsible for collecting revenue, protecting the flow of legitimate travel and trade, and enforcing the laws of the United States. For over two hundred years, the Customs Service has stood as America's frontline against illegal contraband entering our borders; contraband that includes everything from child pornography, to nuclear materials, to illegal narcotics. Narcotics smuggling dominates all the others.

Detecting narcotics in the massive sea of passengers and cargo entering the United States each year is an immense challenge for Customs. It has been made all the more challenging by the explosive growth in global trade. The "windows of opportunity" for smugglers are many and diverse: Customs processed nearly 500 million travelers last year, about 140 million cars and trucks, and over a trillion dollars worth of trade.

Despite these difficult odds, the men and women of Customs continue to seize drugs in record numbers - over 1 and a half million pounds of cocaine, heroin, marijuana, and other narcotics last year. They have also taken on the menacing new threat of "club drugs" with remarkable success, seizing over nine million tablets of Ecstasy in 2000, about triple the amount taken in the prior year.

Customs' unique position at the border allows us to exploit the connections between drug transportation, seizures at the border, and criminal trafficking inland. Many of our seizures originate with our 7,500 inspectors who screen incoming travelers, conveyances and cargo at 301 ports of entry across the United States. They are also the product of the fine investigative work carried out by Customs Special Agents, who conduct undercover operations, controlled deliveries, and title-three based surveillance in an effort to disrupt and dismantle smuggling networks.

In addition, we rely on the Customs Air and Marine Interdiction Program as a primary tool in the fight against drug trafficking. Customs deploys air and marine assets along our borders, throughout the areas in which the smugglers operate, and deep into the source countries to interdict illegal narcotics destined for U.S. markets. Operating as a team, our inspectors, canine enforcement officers, intelligence analysts, agents, pilots and marine enforcement officers contribute to a highly coordinated and effective strategy to prevent narcotics from entering our country.

Our primary threat areas for drug trafficking centers around three zones: the source zone; the transit zone; and the arrival zone. In the arrival zone, which comprises all U.S. territories, the Southwest Border continues to be the main gateway for cocaine entering the United States. Mexico is the preferred transit route to for up to sixty percent of the cocaine sold in the U.S. The drug transportation groups operating there are very powerful, well-financed, and resilient.

The Caribbean Corridor also remains a top focus of Customs in the transit zone. It is the second most important route for narcotics trafficking. Cocaine smuggling into Florida is heavy in this area, eased by the shorter distances the smugglers travel from South America to various staging points along the Caribbean island chain.

Customs also claims a strong and active presence in the source zone for illegal drugs. This area includes the countries of Colombia, Bolivia, and Peru. One of the most important elements of our national drug strategy is continuous airborne surveillance over the Andean Mountains, across which most of the cocaine produced in the region travels. U.S. Customs is responsible for the vast majority of flights that perform this mission. Our P-3 early airborne warning aircraft, with detection systems designed explicitly for drug interdiction, are the mainstay of Source Zone surveillance.

The Committee may also be interested in the fact that Customs serves as the current chairman of the Interdiction Committee, a federal interagency group that advises the Office of National Drug Control Policy. As such, we have been actively involved in streamlining coordination between federal, state and local law enforcement agencies operating along our Southwest Border. Last year, the Interdiction Committee also began a process to designate the Commissioner of Customs as the Arrival Zone Interdiction Coordinator, with responsibility for developing an Arrival Zone Interdiction Plan. We continue to move forward with this initiative.

Turning back to investigations for a moment, Customs is also one of the lead agencies responsible for uncovering money laundering. We actively investigate the techniques the cartels use to repatriate drug dollars, and seize those proceeds wherever possible. Last year, we seized 204 million dollars in cash, bank accounts, and monetary instruments derived from drug trafficking.

One of the most insidious methods we have been dealing with of late is the Black Market Peso Exchange, or BMPE. This is a system the cartels use to convert the drug dollars they have accumulated in the U.S. into pesos in Colombia, mainly by exploiting U.S. business and Colombian laws. By working against the BMPE, Customs not only saps one of the cartel's most critical resources - their profits -- we also help to neutralize the damaging impact of their money laundering activities on U.S. companies and economies in South America.

Customs also participates in numerous interagency programs and task forces designed to cripple the illegal drug trade. In addition to the Interdiction Committee, we play a key role in the High Intensity Drug Trafficking Areas initiative, led by the ONDCP. We also play a major part in the Department of Defense's Joint Interagency Task Force, which commands and controls the air and marine assets of all the federal agencies in the source and transit zones.

As a result of interagency cooperation and intelligence sharing, we are in a position to respond to the changing threat on all fronts. In the south, the Air and Marine Interdiction Division utilizes our P-3s and interception assets, which include 26 Citation jets, to help host nations at the source in the apprehension of smugglers. Our assets detect and track aircraft suspected of carrying narcotics and pass that information off to host forces for final action.

The Air and Marine Division deploys out of forward operating locations in Manta, Ecuador; and Aruba, Netherlands Antilles. In addition, we have Citation aircraft stationed in Hermosillo and Monterrey, Mexico where we conduct very successful joint air interdiction operations with the Mexican government.

We are vigilant in our response to the air and marine threat, and to any changes in that threat. Of late, our intelligence points to the increasing use of the Eastern Pacific Ocean as the preferred transit route for moving cocaine into Mexico, where it is then transported to our Southwest border. In fact, it is estimated that over 50 percent of the approximately 645 metric tons of cocaine departing annually from South America travels by this route. Loads are typically relayed to Mexico through a network of fishing vessels and go-fast boats that link suppliers in South America with Mexican trafficking groups.

Shifting to other fronts, Customs is also charged with seizing illegal drugs transported by commercial air. As long as the drug trade remains so highly profitable, Customs will have to contend with travelers who attempt to smuggle narcotics either on or in their bodies. It is one of the most difficult and sensitive aspects of our mission.

As the members know, over the past two years we have engaged in a thorough review of the process by which we select and search arriving passengers for drugs. We have instituted numerous reforms to the personal search, overhauled the training we provide our personnel, and taken every action necessary to guarantee that the rights and safety of travelers are protected. As a direct result of our changes, Customs decreased the number of searches of air passengers by sixty percent from 1999 to 2000, while maintaining our overall level of airport seizures.

Technology has also helped us immensely. Customs is applying new technologies in all aspects of drug interdiction, from the non-intrusive body-scan machines installed at major airports to mobile truck and rail x-ray systems deployed at our land borders. And no discussion of technology at Customs, or of our counterdrug efforts in general, would be complete without reference to the Automated Commercial Environment, or ACE.

We process 98% of the nation's trade with our automated systems. For the past seventeen years, we have relied upon our current system, the Automated Commercial System, or ACS, to screen incoming goods and collect data on the commerce that flows into our nation. But that system is now obsolete. Fortunately, Customs has an answer in ACE. ACE is our "next generation" system for trade processing, a network that leverages the power of today's new technologies, including the Internet, to move goods efficiently and target those shipments most likely to be in violation of U.S. laws.

Thanks in great part to this Subcommittee, Customs was able to secure the first installment of start-up funding for ACE in our 2001 budget. We thank you for that vital support and we look forward to your continued assistance as we proceed with our development plans for new automation.

Mr. Chairman, I have touched on an array of programs, policies, and plans today, all related in one way or another to our core border enforcement mission. My goal is simply to paint the spectrum of Customs' counterdrug activities on the broad canvas on which it must be portrayed. While we will always be known first and foremost as a border agency, the truth is our drug-fighting impact is felt well beyond the boundaries of the United States. Customs is a critical link throughout the chain of our national drug control strategy, extending the entire length of the Source, Transit, and Arrival Zones.

We face daunting challenges in maintaining that presence while contending with exploding border traffic - there is little doubt of that. The drug traffickers are ruthless, well-financed, and relentless foes. But I am confident that with the continued support of this Subcommittee, Customs will match them step for step.

Thank you again for all your support of the Customs Service. I would be happy to answer any questions you may have.