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January 30, 2007

Chairman Price, Ranking Member Rogers, Members of the Committee, thank you for inviting me to testify today regarding my views on the critical steps for our nation’s homeland security efforts during the next five to ten years.

In 1941 and 1942, President Roosevelt asked the industrial giants in America to figure out how to get dramatically more bombs on target in Germany. The results were called B-17s, B-24s and B-29s. That was the magic of public-private partnerships at war at the end of the age known as the Industrial Revolution. That intersection between the Industrial age and public-private partnerships eventually provided the products and services to win that war and the Cold one that followed. Today we live in the Information Age and I offer that many of the solutions to the challenges of the post 9/11 security environment will be found at the intersection of today’s Information Age and today's public-private partnerships.

I was still in uniform as the Commandant of the U.S. Coast Guard on 9/11/01. When I retired from service in May 2002, I was asked to help stand up the Transportation Security Administration and 18 months later, then-Secretary Ridge asked me to come help him stand up DHS. Those four years offer me a bit of inside perspective that might be valuable to the Committee as you develop a long-term vision for the oversight and funding of DHS. For the past two years I've been among the many in the private sector trying to make a contribution to securing our Homeland. Opinions and perspectives shared with me by private sector executives may also help to shape your thinking.

Mr. Chairman, I am well aware that your committee has dozens if not hundreds of formal pieces of commentary about how well or poorly DHS is doing its work, ranging from studies and investigations by the General Accounting Office, Inspectors General, and the Congressional Budget Office to personal observations recorded by Members as they visit department field activities. As a result, I do not intend to repeat that commentary as it is all readily available to the Members and staff.

Neither do I believe it valuable for us this morning to reinventory the full range of extremely important and complex projects currently in place or under review. That would be an almost endless list of things like SBINet, USVISIT, TWIC, Secure Freight, Secure Flight, etc. They actually represent the in-box of burning issues of today that keep the Department from stepping back and thinking strategically. I applaud you and your committee and Chairman Thompson's committee as well for holding hearings like this to ponder out-year realities and challenges.

Rather, I would like to offer you a set of observations that I categorize in three ways. The first is commentary on recent directional pronouncements by departmental officials as well as mandates from the Congress. The second is a short list of what I call my "hangover issues." These are areas of work on which I felt we at the Department of Homeland Security should have made dramatically more progress during those two years we spent standing up DHS. The third will be a collection of ideas and concerns expressed by private sector colleagues these past two years. Lastly, I will try to identify for you a set of overarching strategic concepts that I believe need very specific attention as you and the department collectively set a course to a desired end-state in say 2020.

Category One – Pronouncements and Directions. Secretary Chertoff has recently offered insight into his intentions for the balance of his tenure in the department. For the remaining two years, he has identified five goals:

• Protect our Nation from Dangerous People
• Protect our Nation from Dangerous Goods
• Protect Critical Infrastructure
• Build a Nimble Effective Emergency Response System
• Strengthen and Unify DHS Operations and Management

He has a clearly articulated set of projects and programs that align under each of these goals. All are captured in public speeches and do not need to be inventoried here. Again, the Committee and Staff have access to it all. The list acknowledges Congressional direction and lessons learned from challenges like Katrina and the terrorists plots uncovered last summer against commercial aviation that still leave that sector of our economy at the heightened orange level of security. This set of administration announcements of intent must be followed by accountability mechanisms led by departmental leadership and the Congress to monitor progress along the track lines laid out.

The second category I offer is my list of "hangover" items. When I left government I took with me great pride in what our first leadership team had accomplished as well as great frustration that many key areas had somehow defied our intentions and had stalled down the road of progress. Such seemingly solvable mission items as interoperable communications, automated screening of aviation passengers, or a clearly articulated global supply chain security system remain under development but are still not completed after four years. I'll gladly describe those frustrations more deeply in our question and answer session.

The "back room" challenges gathered in the Under Secretary for Management area of responsibility remain another frustration. The newly designed HR Max is tied up in the courts. A common IT Enterprise Architecture remains on the "To Do list." The extraordinary challenge of creating a One Team, One Fight DHS culture based on common core values is dramatically under appreciated in its complexity by the many critics who have never spent a day in the trenches trying to make it happen.

In the "good news department", TSA, in conjunction with the Terrorist Screening Center, is nearly finished with its thorough, name-by-name review of its no-fly list. That effort has effectively cut the number of names on the list by half, and is intended to facilitate greater accuracy in identifying people of concern and a reduction in potentially harmful false-positives.

The Department has also made dramatic progress in fulfilling one of the key recommendations of the 9/11 report: enhanced information and intelligence sharing. I believe that the Office of Intelligence, which rests in the very capable hands of Charlie Allen, has made a number of positive steps toward increasing inter-Departmental information sharing, as well as toward enhanced information sharing that supports states and localities. DHS is the unique link in this role of sharing information with every level of government, and I think the newly organized directorate has taken significant strides toward that end.

There are many other areas where extraordinary progress has been made. Both the Department, its agencies and the Congress should be credited with that effort.

I would be remiss if I failed to comment on organizational reform. Governor Ridge and I felt it to be our responsibility to stand up the department as specified by the Homeland Security Act. That legislation was the product of both Administration and Congressional authorship, and we worked diligently along with what became thousands of dedicated Americans to do just that. It was noble work, but endlessly frustrating. We both left our list of recommendations for Secretaries Chertoff and Jackson as they undertook their Second Stage Review. I for one was delighted with the decisions the new Secretary outlined in his speech at the National Press Club in July 2005. I thought all the changes he made were solid including the decisions he took not to do things offered by a seemingly endless array of self-proclaimed experts.

Now I find myself agreeing with a recent GAO report, which said that frequent reorganizations and fund reprogramming have complicated the day to day budgetary tracking and planning for critical departmental elements. I believe firmly that the organizational directions in the 2007 Appropriations Bill, which juggled yet again the alignment of administrative and mission responsibilities for FEMA were, in part, ill-advised. In my mind, the two critical questions were relatively straightforward and we got one right and one wrong. The first was related to the independent status of the agency. That one we got right including its direct line of access to the Secretary and when necessary through him to the President. The second question was whether that agency should be burdened with the administrative responsibilities of grant programs and other Preparedness functions. I remain of the mind we got that one wrong.

The lessons from Katrina said we needed an operating agency responsible for dealing with the federal response to and recovery from disasters. That, as we all observed, was a huge responsibility by itself. To burden the agency Director with the administrative burdens now added will dramatically reduce his leadership attention to operational excellence. Such responsibilities should have been left at the department level. I see that the Secretary has released his latest Organization Chart representing his compliance to the new direction. Unfortunately, the dedicated workers at FEMA and elsewhere are now struggling yet again to adjust to their fourth major upheaval in four years.

The third category of reports I can offer is from the private sector. Homeland Security has of course become a very hot growth space for the private sector. Billions of dollars of opportunity seem to be there for the private sector each year. Here’s a list of comments I hear all the time:

• DHS should fundamentally rethink and redesign the way in which it interacts with the private sector. While the Department has spent a good deal of productive time learning and estimating the regulatory impact of prospective government action on private industry, they have not taken full advantage of the benefits derived from true public-private partnerships.
• Absent is a systematic effort by DHS to interact regularly with private sector companies in order to better understand the best ways in which DHS can leverage private sector capabilities and expertise to complete its varied missions.
• Industry is rarely sought out as a source from which to mine ideas.
• As FDR realized so many years ago, the genius of American industry is its ability to produce answers to unprecedented technological challenge. DHS needs to tap into that reality more creatively.
• Private sector companies across various industries continue to feel frustrated by the seeming lack of transparency in DHS' procurement process. Industry wants to understand how decisions are made. This understanding will allow the private sector to provide solutions that are better suited to the Department's needs.
• Industry Days are too few and far between.
• Structure and resource the Homeland Security Institute (HSI) and then use it. DoD understands how to employ FFRDCs. DHS needs to learn how to use HSI.
• DHS should study and as relevant, adopt many of the best practices in logistics and transportation used today by private industry. DoD is on the road to doing so for itself, to seemingly good success.
• HSARPA should be the vehicle to pursue rapid product development, again akin to the DoD DARPA. Perfect solutions should not be the enemy of good, deployable systems whose capabilities can be strengthened once exposed to field conditions.
• Industry is seeking ways to contribute. Examples: BENS Task Force on Emergency Response; Dow Chemicals Independent Advisory Panel on Chemical Security (IAP).
• Mostly, the Private Sector wants bold leadership standard setting and policy articulation so they don't mis-invest.

Mr. Chairman, I'll close my testimony with a list of things that I believe to be truly strategic as we look to a 2020 DHS.

• Homeland Security Professionals. We need to invest in the professional development of future homeland security professionals. The demographic realities of departing senior grade experts to retirement make this challenge even more serious. DoD again has an exceptional model. From boot camp to the Capstone Course for Flag/General Officers, we as a nation invest in the production line of military professionals. We need to do the same for DHS.
• Significant Expenses on the Horizon. There will be dramatic resource requirements associated with technological breakthroughs. The most graphic example may be the requirement to replace the explosive detection equipment at airports. Creative financing mechanisms will likely be required. Leasing such equipment could become the answer.
• Public Private Partnerships of many designs can become the answer to many challenges. Think of the TSA stand-up process. The Aviation Transportation Safety Act mandated 36 deadlines in that agency’s first 18 months. They were all met because the private sector leaned forward to partner with government to get that work accomplished.
• Role Clarity. The government should be the national leader, articulating policy and setting standards. The private sector should rise up and make happen that which is mandated. Both should be part of metric based accountability for progress against deadlines.
• Reasonable Congressional Oversight. Hearing and briefing appearances by senior departmental officers should be keyed to legitimate oversight, not turf conscious committees. The 9/11 Commission's recommendation should be considered carefully and followed to make oversight of the Department more efficient and effective.
• Strategic Goals. The strategic goals articulated early in the first year of DHS remain solid. They were: Awareness, Prevention, Protection, Response, Recovery and Organizational Excellence.

The endless challenge at DHS is prioritizing both the important and the urgent. They must be given the direction and resources to plan toward a carefully constructed end-state for 2020. What will our nation need in 2020? How should DHS do its part? What resource decisions will take us to that end-state? There is an ongoing and virtually endless list of questions that we must answer together. The strategic goal categories help organize that work and can be used constructively to provide both challenge recognition and solutions.

Mr. Chairman, I thank you again for the opportunity to share some thoughts as you design the way forward for your committee's oversight and funding of DHS. I will try to answer any questions you may have.

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