Under One Roof

n the summer of 1996, retired Army Gen. Barry McCaffrey held boot camp along the U.S.-Mexico border. McCaffrey, then the White House drug czar, took 30 officials from agencies with a stake in the drug war on a weeklong border tour. From San Diego to El Paso, from Tijuana to the Texas Gulf Coast, McCaffrey's team surveyed a lawless territory overrun by illegal drugs and immigrants. They met people living in fear of crime that seemed straight out of the Wild West. In a particularly dangerous area near El Paso, train robberies were still frequent.

But McCaffrey was most dismayed by what he calls the "tribal mentalities" of the federal agencies that protect the border: the Customs Service, Immigration and Naturalization Service, and the Border Patrol. Each had its own procedures, unions, and work rules. At border crossings, no single agency was in charge. McCaffrey proposed to integrate the budgets of these agencies, creating a single budget for border security. He ran into a bureaucratic wall. "I had tremendous resistance from Customs and the INS," he says. Their parent departments also balked at relinquishing any budgetary authority. "Basically Treasury and the Justice Department just didn't want to go that route."

McCaffrey's reforms were hardly the first to crumble under pressure from the border bureaucracies. In the early 1990s, the Clinton administration's National Performance Review advanced the idea of a single border agency, only to be beaten back by Treasury and Justice. A few months after the Sept. 11 attacks, then-Homeland Security Adviser Tom Ridge suggested that the border agencies be consolidated. The idea went nowhere and was shelved.

But Ridge had the last laugh. On March 1, after more than 200 years of collecting duties and enforcing trade laws, the Customs Service ceased to exist. So did the INS. In their place were two new agencies designed to bring mission clarity to the tangled web of federal operations at the border. The new Bureau of Customs and Border Protection was formed to handle inspection chores, pooling inspectors from Customs, INS, the Animal and Plant Health Inspection Service, and the Border Patrol. Customs and Immigration investigators shifted to the new Bureau of Immigration and Customs Enforcement (BICE), which also includes the Federal Protective Service. It wasn't long before INS agents in South Florida started referring to themselves as "Miami BICE."

The border restructuring was a tightly run effort. Like the broader homeland security reorganization, it took place out of public view and included little input from front-line employees or outside groups. The plan was hammered out during a six-week flurry of discussions between senior border officials and Asa Hutchinson, the undersecretary for Border and Transportation Security. Federal unions were not part of the discussions. Nor were management experts from the National Academy of Public Administration, an organization chartered by Congress to provide management advice to the executive branch.

Behind closed doors, Homeland Security officials reshaped a group of agencies notorious for resisting reform. The reorganization makes use of authority provided in the 2002 Homeland Security Act, which allows the Bush administration to restructure most agencies within the massive department. (The Secret Service and Coast Guard can't be touched.) It is the first of what Bush officials have promised will be a series of management reforms that will tighten security and make the Homeland Security Department a model of good government.

Bucking bureaucracy has been a top goal of reorganization planners since last summer, when President Bush pledged to build the new department without spending more than already had been budgeted for its component agencies. When the transition planning office opened in July, officials moved quickly to start consolidating IT, financial, and administrative systems at the 22 agencies earmarked for the new department.

They soon realized the enormity of their task. Officials initially hoped that the Transportation Security Administration could piggyback on IT systems at Customs and the INS as it built a new IT infrastructure. But TSA's airport security mission creates unique IT needs, preventing large-scale collaboration with Customs and the INS. "Their focus is on arriving passengers, while ours is departing customers. We're on different technology paths," says Pat Schambach, TSA's chief information officer, who says the agencies are sharing some phone equipment at a handful of airports.

In December, after transition planners handed off stacks of recommendations to Ridge and other department leaders, people who worked on the initial transition teams began to realize it would take years for the department to act on some of their ideas. "Initially, I think people who really liked our concepts thought we could set [the department] up faster," says Coast Guard Rear Adm. Harvey Johnson, who served on a team that developed ideas for the Border and Transportation Security (BTS) directorate. "But it's harder than I suspected. It's going to take three to five years when all is said and done to get everything organized in the way that will be its final form."

With few political appointees in place, the department initially struggled to resolve organizational issues left unanswered by the Homeland Security Act. For example, the law seems to make the border and transportation directorate the new home of the Office of National Preparedness (ONP), a Federal Emergency Management Agency unit that provides grants to state and local first responders. But the law also says that only ONP's counterterrorism functions must move to the directorate, and FEMA considers ONP to be an all-hazards office that responds to disasters regardless of whether they involve terrorism. As some FEMA officials saw it, the grant office could stay put.

In late February, representatives from the border and transportation directorate met with staffers from FEMA, which moved into the Emergency Preparedness and Response directorate when it shifted into the Homeland Security Department. When border and transportation officials asked their FEMA counterparts to send over 85 employees from the Office of National Preparedness, FEMA officials balked, arguing the law required no transfers, according to sources familiar with the meeting. The session adjourned with no resolution.

As of Feb. 28, the day before FEMA moved into the department, officials had not decided where to put the Office of National Preparedness, according to FEMA spokeswoman Debbie Wing. "Everybody's still trying to control everybody, and we're spending an awful lot of government time on turf battles," says one official.

But border and transportation directorate officials kept infighting to a minimum as they hashed out how to restructure the border agencies. Under Hutchinson's direction, the border agencies themselves helped determine what the new agencies would look like and how they would operate. McCaffrey, who spent years battling border agencies, marvels at the achievement. "Even if it takes us five years to pull this off, we're finally going to correct some major shortcomings in the protection of the American people," he says.

BUILDING A BETTER BORDER AGENCY

Reorganizing the border agencies has been largely an inside-the-Beltway exercise, but it began in the field. The BTS transition team started its work with a road trip. Led by team chief Mark Everson, then deputy director of Management at the Office of Management and Budget, the 10-member group visited the Port of New York and New Jersey. They later toured ports of entry in El Paso, Baltimore, Chicago, Key West, Fla., and Detroit. At each stop they met with front-line inspectors and studied the different management structures used by Customs, INS and APHIS to support their inspection corps at the ports. The visits were eye-opening for team members, some of whom knew little about their fellow border agencies. "I had never even heard of APHIS before," remembers the Coast Guard's Johnson. The group drove all-terrain vehicles and rode horses at times to see how the Border Patrol did its job. They even spent the night in a Border Patrol reconnaissance shelter near El Paso, using night vision goggles to watch agents round up illegal immigrants.

The team churned out several proposals for tightening border security, many of them focused on ways to manage the vastly different field structures of the border agencies. Everson, who has since been named commissioner of the Internal Revenue Service, presented the team's work at three White House briefings, including one with White House Chief of Staff Andrew Card on Nov. 6. In late November, the team handed its recommendations to Hutchinson, who promptly convened his own working groups to analyze the issue.

Most Bush officials believed that merging inspection forces made sense-the president had endorsed the concept during the debate over the homeland security bill-but they differed on the details. In one scenario, the Customs Service would absorb both inspectors and enforcement units, creating a 45,000-person agency to handle all border operations. Sometimes known as the "Bonner plan," because it consolidated border duties under Customs Commissioner Robert Bonner, this proposal fell victim to Hutchinson's preference for smaller, mission-focused agencies. "I think that we've learned that if you have entities of a more manageable quality and quantity, then you can effectively integrate them together with the other sister agencies," Hutchinson says.

Hutchinson also worried that folding Customs and INS investigators into a single border agency would make it more difficult for them to work with law enforcement agencies outside the Homeland Security Department, such as the FBI. "You're much better off having a separate Bureau of Immigration and Customs Enforcement that can have corresponding interactions with other agencies from the FBI to the DEA," he says. By mid-December, Hutchinson had another plan in mind: creating two border agencies, one comprising inspectors, the other focused on enforcement.

On Dec. 18, about 20 officials from the Coast Guard, TSA, the Federal Law Enforcement Training Center, and the border agencies arrived at the transition office for the first meeting of the working groups. Hutchinson had gathered the top operations chiefs from each agency-Customs' assistant commissioner for inspections, for instance. Few knew what to expect. The transition was sucking up more detailees by the day, but their role was not clear. After initial greetings, Hutchinson presented the inspections and enforcement groups with two questions: What did your agency think of consolidation? What were the benefits and drawbacks?

At the next meeting Hutchinson's staff posed issues that would have to be addressed if consolidation went forward. How would merged inspections work at a small airport? Could investigators follow up on leads generated by inspectors housed in a different agency?

Sometimes the chiefs forgot the parochial interests of their agencies in the heat of discussion. "Once we got them thinking about the possibilities [of consolidation] they were like kids in a candy store," says a senior official involved in the groups. "And every now and then somebody realized that they had gotten off their reservation, and they would clam back up."

It was clear that the final decision on reorganization would be Hutchinson's-a crucial point, because support among the chiefs was lukewarm at best. "You have people who have grown up in and have tremendous fondness and loyalty to their organizations," says the official. "So the idea of changing things around was difficult."

Some matters were simply too difficult for the groups to resolve on their own. For example, the chiefs quickly agreed that naming interim port directors was a first step toward unifying the chain of command at ports of entry. But they were unable to pick directors, for fear of upsetting the balance between the three inspection agencies. It took an intervention from Hutchinson to develop criteria for choosing directors, which were followed when the Bureau of Customs and Border Protection named interim port directors on March 1.

By mid-January, Hutchinson had enough information to go ahead with the reorganization. Ridge and President Bush approved his decision. Participants felt the short timeframe helped force uncomfortable choices. "Sometimes I thought if we had more time we wouldn't have done it because there would have been too much time to analyze things," the senior official says with a laugh.

MANAGING THE NEW BORDER

No one can accuse Homeland Security officials of wasting taxpayer dollars on a luxurious headquarters. The nation's homeland is being secured from a squat red brick building on the edge of a Navy complex in Northwest Washington. At first blush, it has the depressing feel of a factory that has just announced layoffs. Or a prison cafeteria.

Yet inside, the department is bustling with activity. On the third floor, ground zero for the border and transportation directorate, 20 people are squeezed into 17 desks. Staffers say it's a natural environment for Hutchinson, a hands-on manager who eagerly wades into the details of policies. Once he signed off on the restructuring plan, Hutchinson had to start deciding how to "divide the baby"-where to send the thousands of Customs and INS employees who are not inspectors or investigators. He wrote up explanations for many transfer decisions himself, giving them added weight with the two directors of the new agencies, Customs and Border Protection Commissioner Robert Bonner and Immigration and Customs Enforcement Commissioner Michael Garcia, who was previously the acting commissioner of the INS. "I think Bonner and Garcia have realized that he's writing some of these, and not some staffer" says an aide.

A conservative Republican who served three terms in the House, Hutchinson made waves in his last job, head of the Drug Enforcement Agency, where he launched a nationwide campaign to publicize the dangers of methamphetamines. He believes the importance of the homeland security mission will smooth the long-standing rivalries among border agencies. "We have a common bond in that we are the defense of America, and that brings us together. I think we will create [a common culture] fairly quickly because of the urgency of our present circumstances." Hutchinson plans to make frequent trips to the field to see how the reorganization is working and to listen to the employees who are protecting the border.

Hutchinson is implementing the reorganization slowly, in part to minimize any disruption of operations and in part because many key decisions remain to be made. When the restructuring took effect on March 1, most INS support employees remained at the Bureau of Immigration and Customs Enforcement, under Commissioner Garcia. Gradually, they will be parceled out to the Bureau of Customs and Border Protection or the Bureau of Citizenship and Immigration Services, which will handle the INS' service mission, according to a Homeland Security Department official.

This won't be easy. The INS had a large corps of lawyers who argued immigration cases before administrative judges and also provided legal support for the agency. The dismemberment of the INS into three separate agencies makes it hard to know who should go where. Customs also has thousands of support employees who will require new homes. Some of these decisions will be affected by Homeland Security's approach to administrative support, which will be designed by Janet Hale, undersecretary for management. If the department centralizes all IT, legal, and administrative services, support employees could end up working for Homeland Security, even though most would still reside at their former agency.

BTS officials plan more cross-training of inspectors so the lead inspector at ports of entry can perform the essential tasks of Customs, INS, and APHIS inspectors. Inspectors at land ports are already being cross-trained, but the Bureau of Customs and Border Protection will extend this program to cover airports. Officials insist this will not weaken inspectors' expertise. "We're not going to have a homogenized inspection corps with watered down expertise," says an official, who adds the agency will gradually expand the cross-training program.

Officials also will work to preserve existing relationships between inspectors and investigators in the field. "Right now you have investigators located at the Port of San Jacedro [in California]. We're not going to move them geographically," says the official. "They're still going to develop their leads from the inspectors there."

At the Bureau of Immigration and Customs Enforcement, officials hope that uniting INS and Customs investigators will encourage them to collaborate on investigations. Hutchinson's working groups heard repeated stories of Customs and INS agents investigating the same case for days without knowing it. Customs and INS agents enforce laws from two different sections of the U.S. Code, but as investigation priorities change, some Customs agents may be designated to enforce INS laws, and vice versa. "If you are trying to have an emphasis on going after alien absconders we might have to have additional [law enforcement] designations," says Hutchinson.

Officials say Hutchinson plans to create an international office for law enforcement. Although details are still being hashed out, the office is intended to help the Border and Transportation Security directorate handle more steps in the immigration process overseas, before people actually show up at the border. "It's consistent with the philosophy of starting as far overseas as you can and pushing the borders out," says an official.

The border and transportation directorate still must coordinate the field structures of its agencies, as well as the Coast Guard, which reports directly to Ridge. The directorate inherits agencies that have vastly different ways of managing operations outside Washington. At Customs and the TSA, field agencies work directly for Washington. In the Coast Guard, by contrast, port captains answer to eight regional district leaders, who report to two area commands, and then up to headquarters. The Border Patrol is divided into regional sectors.

"Every agency was divided differently in terms of their chain of command," says the Coast Guard's Johnson, who studied field structure as part of the original transition team. "You've just got to see how it makes sense to bring everybody together, so that when you and I talk we know where we fit into the chain of command." As the Defense Department has learned, a fragmented chain of command can hinder joint operations.

Some offices could be combined or even shuttered once the department sorts out its field structure. The Homeland Security Act requires the department to produce a report on possible field office consolidation by November.

Congress will have more to say about the department's organization, partly through new legislation, according to Rep. Christopher Cox, R-Calif., chairman of the House Select Committee on Homeland Security. Cox is developing a bill to fine-tune the homeland security law. "We will go in with an X-Acto knife, to more precisely rationalize the functions within the department and its mission," he says. The legislation, which Cox hopes to complete by the end of summer, could send some new Homeland Security offices back to their parent departments. "To the extent that there is over-breadth [in the department], we can potentially return disparate functions to their home agencies."

The homeland security law protects employee's jobs for a year, but Ridge has said some positions could be eliminated as the department moves to consolidate management. Agencies can begin streamlining this year by not replacing managers who retire, according to Hutchinson. "Obviously, over the course of the next year we're going to have people retiring, and I would not think you would want to replace some of the middle management positions when they can be consolidated," he says.

The border bureaucracies are likely to grow. The Bureau of Customs and Border Protection plans to hire about 1,700 new inspectors and 570 Border Patrol personnel this year. Officials pledge this growth will happen strategically, as the department works out its overall approach to border security. Hutchinson already has one strategic planner on staff. His office hopes to quickly set new performance targets for border security and align Border and Transportation Security programs with the national homeland security strategy unveiled last summer.

By early March, the border restructuring was still a work in progress, but officials believe great strides are being made. On March 3, Hutchinson had a conference call with border officials in 12 cities to discuss joint operations. In many cities, Coast Guard and Border and Transportation Security officials were participating from the same location-a small, but telling sign of coordination. "I think you can go into the field right now and see that we're doing things better today than we did a year ago because of [the reorganization]," says the Coast Guard's Johnson. "We're actually scheduling things together more often. It wouldn't have happened without this effort."