Homeland Security’s ‘private-sector guy’ leads business outreach effort

For the business community, he's the man to see at the Homeland Security Department. But Alfonso Martinez-Fonts says that companies may not always be happy about what he has to say. Martinez-Fonts, a 53-year-old Cuban-American, Bush campaign donor, and former Texas banker, is the first head of the Office of Private Sector Liaison at the department.

While he admits that business is inevitably going to face new regulations in the interest of national security, Martinez-Fonts sees his role as "ombudsman" or industry advocate within the department.

"I am the private-sector guy here," he says. "I'm trying to push the flow of goods and people."

The private-sector office was created in last year's homeland-security legislation at the request of industry groups. Business advocates said the office should serve as a single point of contact for discussing new regulations, as well as pushing new security products.

"Our role is not so much to weigh the arguments [about new regulations or products] as to direct, instruct, advise, and to be somewhat of a triage desk," says Martinez-Fonts. Part of his job is to deliver the unwelcome news about new regulations, since the vast majority of the country's infrastructure is in private hands and many government agencies have moved to make it more secure.

New airport regulations have been the most obvious precautions, but other changes have included a new Customs Service rule that requires shippers to provide manifests 24 hours before cargo arrives at a U.S. port. And before the Immigration and Naturalization Service was folded into the new department, it imposed tougher requirements on foreign visitors to the United States. Even more rules may be on the way. The Food and Drug Administration, for example, may soon require overseas warehouses to register with the agency in an effort to protect the food supply.

All of this, Martinez-Fonts admits, has led to "a certain amount of griping" from industry advocates. But thus far, he adds, companies have been responsible in their lobbying. "People are saying, 'It's OK to impose rules on us, but can you give us some lead time? Can you give us more time to implement them?' "

In response, Martinez-Fonts has been making the rounds in Washington, meeting recently with representatives of the U.S. Chamber of Commerce, the National Association of Manufacturers, the Council on Competitiveness and the Business Roundtable. His message is that differences between the department and the business community can be reconciled.

When the Homeland Security Department recently raised the threat level to Code Orange, Martinez-Fonts helped spread the word to the business community with a 25-point bulletin. He says he worked in coordination with Josh Filler, the department's liaison to state and local governments, to make sure that the elected officials and business executives were getting the same information so that "one guy isn't trying to evacuate the building while the other guy is trying to close it up and barricade it."

So far so good, say business representatives in Washington. Martinez-Fonts's background as chairman of J.P. Morgan Chase bank in El Paso has helped reassure wary executives. "We have businesses that call in here weekly, if not daily, that are worried," says Kim Dougherty, vice president for national security at the U.S. chamber. But, she says, Martinez-Fonts "comes from business and understands that there is a delicate balance" between increasing security and not harming the economy.

Still, James Jatras, a member of the homeland-security business unit at the law firm Venable, says that the emphasis so far has been clearly slanted toward greater security. "Right now, everyone is focusing on the public safety side, as they should be. But at some point, considerations like facilitating global commerce and regulatory relief will begin to reassert themselves," he says.

Dougherty says she is urging Martinez-Fonts to think of homeland security as the responsibility not of individual companies, but of the nation. For example, she says, the chamber was concerned to learn recently that the new Bureau of Customs and Border Protection is considering imposing user fees of $200 per container on importers. "If you are a big retailer like Wal-Mart or Target," she says, "that is a big chunk of change, and not something they want to pass on to their customers."

Already, the business community may be making headway. Recently, the Office of Management and Budget asked for comments on how it should quantify and weigh the economic losses created by new security regulations.

But the business community has also faced pointed questions about its security efforts. Most recently, the General Accounting Office issued a report questioning efforts by manufacturers and the government to ensure the safety of chemical plants. Sen. Jon Corzine, D-N.J., introduced legislation last year to require new security measures, but industry opposition helped sink the bill.

Still, Martinez-Fonts disputes the idea that companies won't act without government mandates. "People keep asking, 'Why would industry spend money on its own?' as if that would be frivolous," he says, when in fact businesses "have done a tremendous amount to make sure that they are protecting themselves."