Risks and Realities, Grants and Vulnerabilities

Neither the Department of Homeland Security (DHS) itself, nor any of the numerous congressional committees that have jurisdiction over DHS funding and operations, is able to determine whether the tens of billions of dollars the department has been provided to date are being spent wisely or well. One example of the confusion that now exists is that for the past two years Congress has appropriated “billions of dollars … to enhance the terrorism preparedness of first responders.” But there is a growing body of evidence that at least some of that money is spent for equipment and programs not related to terrorism preparedness, and that no one at DHS knows how much money has been wasted, and for what purposes.

Under current law, though, it should be emphasized, the huge sums provided to DHS cannot be spent by that department as part of a concentrated and tightly controlled program to ensure that U.S. taxpayer dollars are used primarily to protect the most vulnerable targets, and the ones most appealing to terrorists – e.g., nuclear power plants, major U.S. ports, and the tunnels and bridges leading into New York City. Instead, the funds are distributed somewhat haphazardly to cities and states throughout the country “without any [prior] analysis of risk,” and the grateful recipients then “look for ways to spend the money.”

DHS is, at worst, therefore, only partly responsible for the “abuses” this process leads to, because most of the discretionary “grant” funds it distributes are allocated in accordance with rules set down by Congress itself.

The preceding charges probably would be described as “shocking” or “scandalous” if they were included in the executive summary of a CBO (Congressional Budget Office) or GAO (Government Accountability Office) report, or a Brookings Institution or Heritage Foundation study. Their source, though, is not only much more authoritative than any of those respected institutions but also quite possibly the best-positioned person in Washington, D.C., to correct the problems with the present system by replacing it with a new, more effective, and much more cost-effective process for the allocation of government funds: Rep. Christopher Cox (R-Calif.), chairman of the House Committee on Homeland Security and, in that post, probably the most influential member of either the House or Senate on matters related to homeland defense and domestic preparedness in general.

Chertoff Orders “Second-Stage Review” 

The charges of possible abuses in the allocation of grant funds and wasteful spending not just by DHS but by Congress itself were included in Cox’s opening statement at last week’s full committee hearing on the promotion of “Risk-Based Prioritization and Management.” Without blaming DHS itself – which, he commented, distributes grant funds “with the complicity, if not outright direction, of Congress” – Cox said he had long advocated that federal programs “to prevent, prepare for, and respond to terrorist attacks” should be based primarily on an assessment of the risks and vulnerabilities involved.

The “risk-based approach,” he added, “should be expanded beyond specific grant programs to encompass all the department’s activities.” It would, Cox conceded, require “strong leadership and clear congressional direction … to instill risk-based prioritization into the formulation of [DHS] budgets, policies, and programs.” But that approach is necessary “to enhance our national security” and also is “critical” to the nation’s long-term economic security.

The leadoff witness at the hearings, DHS Secretary Michael Chertoff – making his first appearance before the Cox Committee – not only agreed with the chairman’s comments but seemed to have anticipated them. In the past two years, Chertoff said, the department’s 180,000-plus people had made “great strides” and had demonstrated “unflinching resolve and a driving determination that such an attack [the 9/11 terrorist attacks on the Pentagon and the World Trade Center towers] should never occur on American soil again.”

But much more still has to be done, he said, to prepare the department, and the nation, to meet future threats, particularly in the coordination of intelligence, policy, and operational issues throughout DHS. This requires “an unwillingness to accept complacency,” Chertoff emphasized. “Old jurisdictions,” “old turfs,” and “old stove-pipes” should be torn down, and the emphasis has to be on the future.

To meet that lofty goal, the DHS secretary said, he had ordered that a “comprehensive review” be carried out “of the organization, operations, and policies of the department as a whole.” A team of senior DHS officials has been appointed to carry out the “Second-State Review,” as Chertoff described it, and will report back to him “by Memorial Day” with a list of recommendations. He used “maritime cargo security” – because it “cuts across several departmental components” – as an example of what he hopes to achieve: “Customs and Border Protection, Coast Guard, Science and Technology, Information Analysis and Infrastructure Protection, and the Transportation Security Administration each address aspects of this overall mission [maritime cargo security]. Each might perform its element well, but we must go further to ensure that each is performing seamlessly and in coordination with the others, that we eliminate any duplication of effort, and that we reap the full strength of our wide spectrum of capabilities.”

Addressing the topic of risk assessment per se, Chertoff concurred with Cox that a risk-based approach is needed “in both our operations and our philosophy.” The department will have to be “realistic” in setting forth its priorities, though, and must “assess the full spectrum of threats and vulnerabilities.” The assessment of risk, moreover, cannot be made in a vacuum, but requires using “a trio of threat, vulnerability, and consequence as a general model for assessing risk and deciding on the protective measures we undertake.”

Although still relatively new to his job, Chertoff added a politically shrewd “note of caution” by pointing out that “the media and the public often focus principally on threats.” Nonetheless, although threats “are important,” they should not be, he said, “automatic instigators of action.” A terrorist attack “on the two-lane bridge down the street from my house,” he said, picking a close-to-home example, “… has a relatively low consequence compared to an attack on a major metropolitan multi-lane bridge.

“At the other end of the spectrum,” he added, shifting to the ultimate terrorist scheme, “even a remote threat to detonate a nuclear bomb is a high-level priority because of the catastrophic effect” such an attack would create.

Short-Term Analysis: 

Although there will be additional hearings, and some trading back and forth between various committees – and between the Senate and the House – it seems likely at this stage that DHS funding for fiscal year 2006 will be relatively close to the overall total requested by President Bush. In view of the opinions already expressed by Chertoff and Cox (and other members of the committee), it also seems likely that there will be much tighter controls on grant programs in the future. This does not necessarily translate into lower appropriations – and, in fact, there may well be significantly higher appropriations for a number of projects that have been well substantiated. The writing of funding proposals, therefore, will require not as much creative writing as before but, to begin with, extremely clear writing. After that, the proposal will have to stand on its merits.


 (1) One of the most interesting (but not necessarily the most comprehensive or authoritative) reports on alleged “abuses” in the allocation of grant funds appeared on the 10 April edition of CBS’s 60 Minutes, which used the following and other examples to make its case: Converse, Texas, used DHS funds for the purchase of a “homeland-security trailer” which was then used to carry riding lawn mowers to local lawnmower races; Newark, N.J., spent $250,000 “on air-conditioned garbage trucks”; and Washington, D.C., spent some of its grant funds for a new emergency operations center (a reasonable expenditure, it would seem), and other funds “to send sanitation workers to a Dale Carnegie course” – allegedly to help them develop the skills needed to deal with panicky customers in the aftermath of a disaster. Some citizens would question the absolute importance of the latter expenditure.

(2) Veronique de Rugy, a National Research Initiative research fellow at the American Enterprise Institute (AEI), has recently updated (on 1 April 2005) an AEI Working Paper (“What Does Homeland Security Buy?”) that spells out, clearly and succinctly, some of the major issues involved in the allocation of DHS funds for grant programs. Her 35-page monograph is exceptionally well documented (203 footnotes) and is highly recommended as an essential primer for those who want to know more about what to many Americans is a complex and somewhat esoteric subject. For more information about the de Rugy Working Paper.

James D. Hessman

James D. Hessman is former editor in chief of both the Navy League’s Sea Power Magazine and the League’s annual Almanac of Seapower. Prior to that dual assignment he was senior editor of Armed Forces Journal International.



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