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Get Four
|  | APRIL 19, 2005
Homeland Security's New Broom"We do have limited resources," says the department's new chief, Michael Chertoff, "and we have to prioritize them"In the scant two years that the Department of Homeland Security (DHS) has existed, the nation's newest Cabinet department has shied away from requiring private industry to defend against a terrorist attack or to prepare for the aftermath, with the notable exception of the commercial-airline industry, which has received intense scrutiny. That may be about to change. DHS Secretary Michael Chertoff, who took over from Tom Ridge in February, has ordered a 60-day review of the agency's goals and operations. In an interview with BusinessWeek's Paul Magnusson on Apr. 13, the 51-year-old former federal judge and prosecutor hinted the department's officials may be running out of patience with foot-dragging by private industry. A case in point: the chemical industry, which has argued resolutely against anything but voluntary guidelines. Plus, the industry and the railroads have fought in Congress against restrictions on shipments of even the most hazardous materials, such as chlorine gas headed for sewage-treatment plants all across the country. Yet a Fourth-of-July terrorist attack resulting in the rupture of a 90-ton tank car filled with chlorine could kill up to 100,000 people on the mall in Washington D.C., according to one study. DHS -- blending 22 agencies and 180,000 employees -- isn't fully baked into a cohesive pie. Moreover, nearly every independent assessment of America's homeland security has found glaring flaws and gaps. And DHS is being created at the same time that the nation's intelligence agencies are also being reorganized under a new Director of National Intelligence, who will oversee the country's 15 separate intelligence agencies and their $40 billion budget. Chertoff was interviewed at the department's temporary headquarters in Washington. An edited transcript follows: Q: From the beginning, the Bush Administration has been in the Republican mold of being extremely reluctant to regulate or mandate anything of business, which, as you have pointed out, owns 85% of the infrastructure in the country. The chemical industry has essentially escaped regulation, for example. Trains still carrying chlorine travel near Washington, D.C. There have been a series of cybersecurity reports from the department saying essentially that the government shouldn't be mandating anything. At the same time, business groups say, "We don't want any more regulation. We don't want anything that is going to make us less competitive." What can you do about that, if anything? A: First, let me lay out my framework for how I think we do homeland security, and how we interact with the private sector. I begin with the proposition that we have a balanced approach and the recognition that security and prosperity and our way of life will have to coexist in a sustainable way. The notion of "security at all costs" is not a long-term sustainable position. We have to come up with a system that maximizes our security without undue cost in terms of our liberty and our prosperity. That means we basically have to do a cost-benefit analysis. So that's the first principle. The second principle, as it relates to business: I don't think this is a zero-sum game. Business has a very strong interest in security as well. If you have invested a lot in an asset and it gets blown up, no businessperson will think, "Wonderful, somebody just blew up my asset." So businesses have a strong inherent motivation to optimize security using a cost-benefit analysis. There are sometimes going to be situations where for whatever reason -- lack of profitability or other real-world constraints on market modeling -- we're not going to get the optimal result with voluntary action or market incentives, and then we do have to consider the use of something more. For example, in the case of the chemical industry, the Administration has indicated, if necessary, we will look to regulation to make sure we have adequate security for chemical plants. That's an example of a circumstance where, if we can't get it done voluntarily or working with market incentives, we might have to go a step further and make sure we're protecting the country. Q: How are you going stop Congress from using the department as a pork-barrel funding mechanism to channel money to political cronies back home? A: The President's budget for fiscal 2006 makes it clear that we want to move more to a risk-based system for funding. And Congress has largely recognized the need to do that in its public statements. I recognize that in the application of that principle there are going to be differences of opinion. We have to be disciplined and united in the idea that, in the long run, a risk-based approach is in everyone's best interest. That means that some people may not be happy with the result. But one thing seems clear to me: Dribbling out a packet of everything everyplace is the least sensible way to do things. We do have limited resources, and we have to prioritize them. We have to recognize we can't protect every single person every moment for everything in every place, and therefore, we have to make judgments. And if we are straightforward and we have a reasonable, disciplined, and analytical methodology, people will at least understand where we are coming from. Q: Also from the beginning, the Bush Administration seemed to come to the idea of a Department of Homeland Security reluctantly and only acquiesced for political reasons. You've been chronically understaffed and portions of the department were given away to other departments, such as the counterterrorism and intelligence branches. What can you do to turn this around? A: When the department was set up, there was obviously a challenge in dealing with a number of agencies which had as their primary responsibility what you might call homeland security, but that did other things as well. Rather than really slicing and dicing the departments down to the molecular level, a decision was wisely made to keep the significant pieces intact, recognizing that this would result in a department that had a core mission of homeland security, but also a number of important duties. There was always going to be an element of deciding where to draw the line. I think the line was drawn sensibly, but you can always quibble about it. Q: You have had high turnover rates -- there have been three heads of the Transportation Security Administration (TSA), three deputy directors, a lot of vacancies. Many have been reluctant to move to the department when their functions were transferred here. How do you turn that around? A: With political appointees, there is a fair amount of turnover between administrations. People get tired. We have a fundamentally capable and inspired workforce. They want to do a good job and are excited. At a change in Administrations, there is typically a short-term gap. We have some tremendous people coming on at a high energy level with a fresh perspective. We are looking for people with experience in the business world and in government, and people with prior administration experience. We are assembling people with a wide variety of experience in the post-9/11 world.
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