Homeland Security grants overhaul to begin as key official departs

President Bush on Wednesday signed the fiscal 2007 Homeland Security spending bill that will make major changes in how urban anti-terror grants are awarded, just days after the official in charge of the program abruptly resigned.

The Homeland Security Department came under heated criticism from lawmakers in late May when it announced that New York City and Washington, D.C. were getting about a 40 percent cut in Urban Areas Security Initiative grants, which are designed to bolster anti-terrorism efforts in major metropolitan regions.

That set in motion an internal department feud that resulted in changes in the UASI program and the resignation Monday of Tracy Henke, director of the office of grants and training, administration officials and other sources said Wednesday. Henke had received a recess appointment from Bush in February.

Facing a political backlash over the UASI grants, sources say she faced little chance of being confirmed. Sources also said she was finally forced out by the administration.

"After the way she handled the UASI grants, she was persona non grata and basically was cut out," one source said. "It was pretty obvious that her days were numbered."

Another source countered, however, that the grants process was micromanaged by Homeland Security higher-ups, meaning Henke did not have a chance to make the process work. "She was really made a scapegoat from where I sit," the source said. "She was never given a chance to do a good job."

Henke is expected to stay until the end of October and then go to work at the Ashcroft Group under her old boss, former Attorney General John Ashcroft.

In an effort to prevent the problems from recurring, Congress is mandating changes in the UASI program through the Homeland Security spending bill. Lawmakers direct the department to make applications for the program available within 45 days. States will have 90 days to apply, and the department must act on an application within 90 days of receiving it.

Homeland Security Secretary Michael Chertoff also plans to work more closely with communities to adjust their applications and maximize the amount of funding they can get, Homeland Security spokesman Russ Knocke said.

"Cities like New York, L.A. and Washington, D.C., are always going to be highest in risk and they'll consistently see the most significant portions of funding allocated by Congress," Knocke said. "Risk, however, is not exclusive to these cities, and we have an obligation to consider the security of the entire country."

He denied that Henke's resignation was a result of the UASI controversy. One source noted, however, that Congress continues to provide less UASI funding than the administration requests.

In fiscal 2006, for example, the administration requested about $1 billion for the program; Congress provided $765 million. For fiscal 2007, the administration requested $838 million. Congress has provided $770 million in new spending bill.