- The Washington Times - Monday, July 21, 2008

Playing a dual role as shipping lobbyist and member of a federal advisory panel, Sen. John McCain’s campaign policy coordinator helped shape a controversial homeland security initiative that has taken the government 5 1/2 years to develop.

The proposed program called “10+2” points out a key problem in the age of terrorism: How much can the government expect U.S. importers to pay to help ensure the country’s safety?

A former chief of staff to Mr. McCain, Christopher Koch in 2000 set up the World Shipping Council to lobby on behalf of about 40 foreign-based and U.S. ocean carriers.

The companies transport half a trillion dollars worth of U.S. exports and imports annually. The group has spent $1.7 million seeking to influence the federal government on a range of maritime issues.

In May, Mr. Koch de-registered as a lobbyist, took a leave of absence from the World Shipping Council and joined Mr. McCain’s presidential campaign. He plans to return to the shipping council after the election.

In keeping with what Mr. McCain, Arizona Republican, says is a strict policy to free his campaign from lobbyist influence, Mr. Koch has recused himself from dealing with the topics on which he has lobbied. He said in an e-mail that if a specific issue regarding regulation of the liner shipping industry were to arise as a presidential campaign issue, he would not participate in any campaign policy decisions about it.

Mr. Koch served as a federal regulator in the 1990s, becoming chairman of the Federal Maritime Commission in the administration of President George H.W. Bush.

As an industry lobbyist serving on an advisory panel to the Department of Homeland Security, Mr. Koch’s job reflects the complicated partnership between the business community and the government in a post-Sept. 11 world.

After the Sept. 11 terrorist attacks, the government proposed that the ocean carriers gather information about the millions of shipping containers arriving at U.S. ports.

At the time, the ocean carriers already were preparing to provide the government a substantial amount of data about containerized cargo under a homeland security initiative called the “24-hour rule.” The carriers said information beyond that level should be provided directly to the government by those who actually had the information: U.S. importers.

The data is vitally important because anti-terrorism officials regard shipping containers as potential delivery vehicles for weapons of mass destruction.

The Bureau of Customs and Border Protection (CBP) wants to know the chain of custody from point of origin to destination of containerized cargo so that the government can spot high-risk shipments in foreign ports before the containers are loaded on ships headed for the United States.

In regulatory filings, congressional testimony and speeches, Mr. Koch and the World Shipping Council argued that burdening the ocean carriers with the additional requirement would be severely disruptive to international trade, logistically impossible to carry out and contrary to federal law.

Mr. Koch said the only accurate source for such information is U.S. importers, adding that they are reluctant for commercial reasons to share the data with others in the private sector.

Customs officials issued a final rule in December 2003. A week and half before the requirement was to go into effect, CBP officials delayed it, saying the government wanted to review a petition from the World Shipping Council and three other groups of freight forwarders, retailers and industrial importers.

Four and a half years later, no final rule is in place and the government is still not getting the additional information it says it needs.

Richard Di Nucci, a Customs official in charge of the Secure Freight Initiative, said it took time to come up with the right approach to securing shipping containers.

“When you sit down with the trade community it can be a time-consuming process to get the proposal right,” said Mr. Di Nucci, who has been working on the issue for the past three years. “Are we exactly ecstatic that it took almost three years to get it right? The answer is ‘no.’ I do think we have gotten it right.”

The proposed program, 10+2, would shift most of the regulatory burden to the importers where Koch and others in the shipping industry say it should have been all along. It is “absolutely the thing to do,” Mr. Koch told a trade symposium late last year.

The program’s name is derived from the fact that the importers must provide 10 information elements and the ocean carriers two, in addition to the data the ocean carriers already provide.

The reaction of many importers ranges from concern to outrage.

In more than 200 comments filed with the government this year, many importers said the initiative is too burdensome and that the government is underestimating costs to business by billions of dollars. Some say the proposal is so misguided that it actually will increase the terrorist threat rather than reduce it.

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