Last year, when I addressed this group in Washington, D.C., I spoke on behalf of U.S. Customs in the Department of the Treasury. Now, this year - as of March 1, 2003 - I speak to you on behalf of CBP in BTS in DHS.

For those of you who forgot to bring your Washington acronym dictionaries this morning, that's Customs and Border Protection - CBP - in the Border and Transportation Security Directorate - BTS - of the Department of Homeland Security - DHS.

Today, I want to update you on our transition to the Department of Homeland Security, and I want tell you about this new agency, Customs and Border Protection, which I have the privilege of leading.

Creating CBP, Making History
To create CBP, we took almost all of U.S. Customs and merged it with about half of the personnel from the former Immigration and Naturalization Service (INS), including all immigration inspectors and the entire Border Patrol, as well as with agricultural border personnel from the Animal and Plant Health Inspection Service (APHIS).

The creation of CBP also involved a divestiture - the divestiture of Customs Special Agents, the plainclothes criminal investigators, and the Air and Marine Interdiction Division. They are now with investigators from the former INS in what is called ICE or BICE, which is responsible for immigration detention facilities and interior immigration enforcement.

I'll save you the trouble of reaching for those acronym dictionaries again - BICE is the Bureau of Immigration and Customs Enforcement, also in the Border and Transportation Security Directorate of the Department of Homeland Security.

Customs and Border Protection is a big part of the Department of Homeland Security. When combined with Customs' trade, revenue, and support functions, Customs and Border Protection has over 40,000 FTE. We are over one-fifth of the Department of Homeland Security. This is a reflection of how important the security of our borders is to the security of our homeland - especially when the threat is international terrorism.

Customs and Border Protection is the largest and most profound actual merger taking place in the Department of Homeland Security. There are some start-ups in the Department, and some agencies were transferred intact, like TSA and the Coast Guard, but these are not actual mergers. Customs and Border Protection, on the other hand, is four agencies coming together into one new agency.

Daunting as the task of merging these agencies is, it is a great and necessary step! For the first time in our country's history, all agencies of the United States government with significant border responsibilities are unified into one agency of our government, into one border agency.

Think about that! For the first time, we are able to take a holistic view of our nation's borders, and to devise a comprehensive strategy not for our nation's 300 plus ports of entry, indeed for the entirety of our border. Because now, one agency, not multiple agencies, is responsible for the management of the country's borders.

This is good government. It is good for those of us responsible for our nation's border; it is good for you and your industry; and it is good for the American people as a whole. It just makes sense.

By unifying the border agencies - a good government reform advocated by many studies over the past 30 years - we will be able to create "One Face at the Border." We will be able to integrate people, processes, and technologies in a way that will make us far more effective and efficient than we were when border responsibilities were fragmented into four agencies, in three different departments of government! This will streamline the way we do business with you and everyone else at our nation's ports of entry - seaports, airports, land border crossings. People and cargo will no longer have to deal with multiple personnel from multiple agencies in multiple departments of government.

So the creation of CBP is historic because it finally brings all U.S. border agencies together. But it is historic for another reason as well: the federal government has never tried a merger this complex.

Our merger involves combining over 40,000 personnel from four different agencies - agencies that operate with different legal authorities, that have different cultures, different overtime policies, different pay grades, different personnel policies, including different systems for hiring, for performance appraisals, for awards, for disciplinary systems, for retirement.

We also have multiple training programs and facilities, four separate canine programs and facilities, and three different unions and seven different bargaining units . . .

I could go on, but I think you get the picture.

You know, I said that the federal government has never tried a merger this complex . . . I don't think the private sector has tried a merger this complex either!

Tackling the Challenge
So what did we do to prepare ourselves for this merger? Well, for starters we talked to a lot of people - we sought advice from the experts. We talked to CEOs, consulting firms, business schools, and others. We asked them to give us their input on how best to tackle the challenge that lay before us.

And what did they tell us when we explained the magnitude of our task?

They said "Good luck!!!"

Actually, we got some very important input from the experts. Input that we have put to good use.

First of all, we did a lot of advance planning so that on Day 1 - March 1 - we were ready. On March 1st, we put in place a single, clear chain of command, from the Port Directors, to CBP Headquarters, to me. We also established a clear and short chain of command for the Border Patrol, which operates primarily between the ports of entry. Having this clear chain of command from Day One helped ensure that the transition was smooth, and that there were no disruptions in operations.

And, as of Day 1, we unified the management of the personnel both at headquarters and in the field. The Chief of the Border Patrol is at the Assistant Commissioner level at CBP Headquarters, and reports directly to me. Within CBP's Office of Field Operations at Headquarters, there are two Associate Commissioners for immigration and agriculture inspection programs, respectively.

In the field, as part of our unified port management structure, I designated 20 CBP Interim Directors of Field Operations around the country, who exercise line authority over the land, air, and sea ports of entry within their geographic areas of responsibility. Importantly, at each of the 317 ports of entry, I appointed one Port Director to be in charge of all the inspection functions - customs, immigration, and agriculture.

This unification of management at the ports of entry was the first step toward achieving our objective of creating "One Face at the Border."

I also put in place a temporary, full-time Transition Management Office for Customs and Border Protection. This is one of the most important management tools for our merger. It is a tool that has been used with large, complex mergers in the private sector, such as the merger between Hewlett Packard and Compaq - theirs was called the integration team. Carly Fiorina, who spoke to Governor Ridge, me, and others last year, emphasized the importance of a group of the best and the brightest devoted full time to identifying the issues and obstacles of a merger, and proposing solutions. And she was right.

Our CBP Transition Management Office is dedicated to helping Customs and Border Protection become a unified and integrated agency as rapidly as possible. It is made up of representatives from each of the organizations that were transferred into CBP, which ensures an inclusive approach to the transition.

Having these representatives work full time on our transition is key. It ensures attention is paid to the wide array of complex issues that result from a merger. It ensures thoughtful recommendations and decisions on those issues, and it ensures that decisions are made on an ambitious timetable. Last, but not least for agency with our mission, it ensures continuity of operations because it means that operational offices can focus on their day jobs.

Let me give you an idea of some of the things the people in our Transition Management Office are working on. They are working on unifying all primary inspection tasks for all purposes - customs, immigration, and agriculture - to create a single CBP primary processing point. To that end, they are also working on cross training for all customs, immigration, and agriculture inspectors. These are major steps towards achieving "One Face at the Border."

They are working on identifying unifying symbols for our new agency, such as a single, new uniform for all inspection officers at our nation's 300 plus ports of entry. I haven't made a decision yet. But we want a cohesive, unified agency. And "One Face at the Border" may well mean one uniform at the border. Stay tuned.

They are working on identifying the areas in which CBP responsibilities are linked with ICE - ensuring that despite the split of our Customs Special Agents, those links are maintained throughout the transition and beyond. The relationship between the frontline uniformed law enforcement officers at the border and the plain clothes criminal investigators and detectives must not be allowed to erode.

And, because no merger can succeed without effective and frequent communication with employees and stakeholders, the CBP Transition Management Office is conducting extensive outreach efforts to ensure that our mission is understood and that questions about the transition are being addressed as quickly as possible. In fact, later this morning, I'm having a Town Hall meeting with Customs and Border Protection employees here in New Orleans, in the great marble hall of the U.S. Customshouse on Canal Street a few blocks from here. I've held quite a few of these around the country.

Focusing on Priority Mission / Twin Goals
Behind all of these steps we are taking to unify Customs and Border Protection, to bring about our merger, there is an overarching principle that guides us - a focus on the priority homeland security mission of our agency.

I started my remarks today by telling you what has changed from last year. U.S. Customs is now U.S. Customs and Border Protection. Instead of being in the Department of the Treasury, we are in the Department of Homeland Security. That's what's changed. Those are no small changes, but there is one very important thing has not changed since last year: the threat our nation faces from international terrorism.

The attacks in Riyadh, Saudi Arabia that killed seven Americans and thirteen other innocent people just over two days ago are a sobering reminder to us that those who seek to harm us and our interests remain a very real threat. Intelligence said such an attack was likely, and it happened.

Our nation and our people are still in grave danger from international terrorists, and we must do everything we reasonably can to address that threat. For Customs and Border Protection, that means that our priority mission is preventing terrorists and terrorist weapons from entering the United States.

Every step we take in our transition has this priority mission as the backdrop. When I make a decision on an issue, I ask: Will it help further our priority mission? Will it give us greater protection against international terrorists?

At Customs and Border Protection, we understand, though, that we must perform this priority mission without stifling the orderly and efficient flow of legitimate trade and travel. We must protect the American economy as well as the American people. At CBP, as was the case at U.S. Customs, we have twin goals: increasing security and facilitating legitimate trade and travel. These goals are not mutually exclusive. They can and should be achieved simultaneously. As we develop ways to make our borders more secure against terrorism, we can also develop ways to ensure the speedy flow of legitimate trade and travel.

How do we do this? We do it, in part, by extending our zone of security, where we can do so, beyond our physical borders - so that American borders are the last line of defense, not the first line of defense. This is what programs like our Container Security Initiative, or CSI, and our Customs-Trade Partnership Against Terrorism, or C-TPAT, do. This is what our Free and Secure Trade, or FAST, program, and our NEXUS program do.

Of course, U.S. Customs has historically played a big role at our seaports, and will continue to do so as Customs and Border Protection. Through CSI and the 24-hour rule, we will continue to protect our seaports by getting advance information, identifying and pre-screening high-risk containers before they leave foreign seaports for our ports. Before they leave Rotterdam, or Singapore, or Hong Kong, or Bremerhaven for our seaports, like New York, Los Angeles, New Orleans, Seattle, or Oakland. And by doing so, as we implement CSI, we'll be able to release those pre-targeted and pre-screened containers faster on arrival at U.S. ports.

With C-TPAT, partnering with the private sector, we add to the security of our nation's seaports and the protection of that infrastructure through increased supply chain security. I saw on your agenda for yesterday a session about "How to Protect Your Ports Against Acts of Terrorism?" One of the best ways to protect your ports against terrorist attack is supporting CBP's initiatives for extending our borders.

Another initiative is Operation Safe Commerce. Through Operation Safe Commerce, CBP, the Department of Transportation, and others are funding and testing smarter, more physically secure, tamer-evident containers. Operation Safe Commerce is not exactly a security program in and of itself - but it is a test bed to improve security programs like C-TPAT and CSI.

It's time we got on with adopting a seal and sensor that add real increased security against terrorism for transnational intermodal shipments, and that permit expedited customs processing.

The point I want to make is that there are ways to achieve the twin goals simultaneously, and at CBP, we are continuing to follow those ways, and continuing to achieve our twin goals.

Continuing Traditional Missions
I also want you to know that Customs and Border Protection has not cast aside its traditional missions. Preventing terrorists and terrorist weapons from entering the United States is - and has to be - the priority mission, but that does not mean that our traditional missions cease.

As we move forward with our merger, we are making sure that we continue to perform the traditional missions of all of the incoming agencies - and that we perform those missions well and effectively. These traditional missions include interdicting illegal drugs, apprehending those attempting to enter the United States illegally, protecting our agricultural and economic interests from harmful pests and diseases; protecting American businesses from theft of their intellectual property; collecting import duties; and enforcing U.S. trade and immigration laws at our borders and ports of entry.

Making Progress
So, the task Customs and Border Protection faces is a big one. We have an extraordinarily important priority mission, we have important traditional missions, and we are in the midst of an historic merger.

You might ask, how are we doing so far? We've been "Customs and Border Protection" for 75 days now - what have we accomplished?

In addition to establishing that clear and short chain of command, and a unified management structure at headquarters and in the field, we were able to achieve an immediate tangible increase in security. Effective March 1st, all frontline, primary inspectors began using radiation detection devices at all ports of entry into the United States. That had not been possible before March 1, before the unification of border agencies.

CBP has already rolled out antiterrorism training for all frontline inspectors and Border Patrol Agents.

CBP has already implemented joint enforcement practices at land, air, and sea ports of entry - this includes joint rover teams of immigration and customs personnel that now operate in pre-primary areas at the ports of entry.

CBP already has begun eliminating separate Passenger Analysis Units for immigration and customs by creating Joint Passenger Analysis Units at our country's international airports.

CBP has already rolled out a mission statement and a list of CBP core values. Those core values are vigilance, integrity, and service to country.

CBP already has its own new website, cbp.gov. I encourage you to check it out.

Next month, we will begin rolling out Unified CBP Primary Inspection for all purposes and a Consolidated CBP Counterterrorism Secondary Inspection. This October, I expect to begin Integrated Basic Training for customs and immigration inspectors.

Because immigration, customs, agriculture, and the Border Patrol are now one agency, you will get clearer responsibility and accountability from us. And with the new DHS, stovepipes are coming down. Let me give just one example, from right here in New Orleans.

Customs and Border Protection in New Orleans and the Coast Guard's 8th District have exchanged liaisons. This is good government - it will promote better communication and coordination on operational issues, and on incident response. You will see benefits from this improved communication and coordination.

It helps that CBP and the Coast Guard, which must coordinate if we are to have effective security for our seaports, are in the same department of government - again - for the first time since the 1960s.

Conclusion
Many of you may know or have heard the statistic that up to 80 percent of all mergers fail. They fail because they end up not adding value for shareholders.

Well, I can tell you this - we're not going to fail; we're going to succeed. Not because we don't have a stock price to worry about. We will succeed by adding value - value in terms of more effective and efficient operations at the borders; value in terms of increased security and greater facilitation of trade and travel; value in terms of better protection for the American people and the American economy.

You can count on that!

Thank you.