Round 2

New Homeland Security leaders enter the ring for a bruising management battle as the department turns two. Gaunt, pugnacious, tough and direct, Michael Chertoff may be just the boss the Homeland Security Department needs.

Three-and-a-half years after Sept. 11, the department still hasn't created a viable terrorist watch list. Threat information collected by intelligence agencies is not integrated. The infrastructure vital to American economic power-things such as transportation systems, the energy grid and computer networks-remains vulnerable. Homeland Security needs a fighter who won't flinch from taking on bureaucratic heavyweights at the Defense and Justice departments to win back turf ceded since 2002. The new secretary also must stop internal sparring that further weakens DHS.

Chertoff won't have many experienced senior managers helping in his corner. Homeland Security has not been able to attract and keep top-notch thinkers and leaders. As of early February, the deputy secretary, two undersecretaries, three assistant secretaries and a number of other senior managers had left the fray. What's more, the department has no significant cadre of senior civil servants. Most executives are political appointees or are on loan from other government agencies, where their paychecks continue to be cut and their loyalties likely reside. And while management is in turmoil, unions are spoiling for a fight over a new personnel system announced in January.

Just two years after Congress cobbled together the third-largest Cabinet department from 22 agencies and gave it the unenviable mission of protecting the country against another terrorist attack, some lawmakers are calling for an overhaul. At a January hearing of the Senate Homeland Security and Governmental Affairs Committee, Chairwoman Susan Collins, R-Maine, and ranking member Joseph Lieberman, D-Conn., said they would consider recommendations to restructure DHS. One option is to abolish middle management positions and create an undersecretary for policy post as suggested by the Heritage Foundation and the Center for Strategic and International Studies in December. James Carafano, a senior research fellow at Heritage and one of the authors of the joint report, "DHS 2.0: Rethinking the Department of Homeland Security," warns that the window for making such changes is closing: "Do management first. It takes only a few years for bureaucracies to become entrenched and virtually impossible to change."

The White House seems to agree. In its 2006 budget request for Homeland Security, the administration says the department should create a new senior policy management position, although it leaves the details up to Chertoff and Congress.

Many of the day-to-day challenges of managing Homeland Security are likely to fall to Michael Jackson, the administration's nominee for deputy secretary. Jackson, a former Lockheed Martin executive, served as deputy secretary at the Transportation Department in 2001, where after Sept. 11, he was instrumental in building the Transportation Security Administration, now part of DHS.

Internal Strife

The news from Homeland Security is not entirely bad. Americans are more secure than they were on Sept. 11. Air travel is safer. Cities are better prepared and better equipped to respond to a terrorist attack. Firefighters, health care providers and other emergency responders are better trained to handle mass casualties. Critical drugs that could be needed after an attack are stockpiled nationwide. People have emergency plans to keep family and friends informed should the unthinkable happen. Law enforcement personnel at all levels of government are more able and more likely to share vital information.

Still, problems abound. One of the most troubling is the all-but-open warfare among branches of the Border and Transportation Security Directorate, which includes the Immigration and Customs Enforcement bureau, led by former federal prosecutor Michael Garcia, and the Customs and Border Protection bureau, led by former Customs Commissioner Robert Bonner. CBP is home to inspectors who operate at U.S. land, sea and air ports, and to the Border Patrol, which operates between the ports. ICE investigates violations of immigration and customs laws. Both agencies comprise former employees of the Customs Service and the Immigration and Naturalization Service-vastly different cultures that have proved enormously difficult to integrate, especially within ICE. Severe budget shortfalls at ICE have compounded the tension. Interviews with dozens of ICE, Border Patrol and CBP agents reveal a level of distrust and hostility that is rare in government.

Neither former Homeland Security Secretary Tom Ridge, the widely liked ex-governor of Pennsylvania, nor the outgoing undersecretary for border and transportation security, Asa Hutchinson, a three-term congressional representative from Arkansas, was able to control the tension between Bonner and Garcia, says Clark Kent Ervin, the department's inspector general until December. "In order to settle these fights, you have to make decisions," Ervin says. "The bottom line is [Ridge and Hutchinson] didn't want to alienate either of them by making a decision between them as to who would have what. And meanwhile, things went adrift, and they continue to drift."

Ervin and his staff produced a collection of reports beginning in late 2003 highlighting major security lapses. An early report dealt with the agency's oversight of the State Department's visa program. Because State had failed to adequately vet visas issued to several of the Sept. 11 hijackers from Saudi Arabia, Homeland Security was given an oversight role. State would continue to issue visas, but Homeland Security visa security officers would look over State's shoulder, first in Saudi Arabia and then throughout the world. "It wasn't working at all," Ervin says. "[Homeland Security personnel] didn't speak Arabic; they didn't have any training in law enforcement or fraud detection. They weren't adding any value. To this day, State remains essentially in charge of the process."

Ervin's staff shed light on many other problems throughout 2004. They found they could smuggle weapons onto airplanes. They found that the CIA still was integrating threat information even after Homeland Security had been given the job. They found the department had ceded its responsibility for creating a terrorist watch list to Justice without a fight.

"Here we are, four years after 9/11 and two years after the creation of DHS, and the entities that were in charge of these critical projects on 9/11 are still in charge . . . DHS is really not a player in any one of those critical counterterrorism roles," Ervin says.

The lack of leadership in domestic security goes well beyond the department. Neither the White House nor Congress has integrated homeland security planning into the nation's broader defense strategy, which remains the province of the Defense Department. Defense's $500 billion budget (including spending in Iraq) dwarfs DHS'$40 billion, even though terrorists are much more likely to attack nonmilitary infrastructure than confront U.S. forces directly.

"We have a comfortable definition in saying [that] homeland defense is when the adversary comes from outside the United States and attacks the territory of the United States-then the Defense Department is the lead. When it happens inside the United States, well, that's a homeland security domestic problem," says Stephen Flynn, a retired Coast Guard commander and now a senior fellow at the Council on Foreign Relations. "As somebody who was on the front lines of the drug war and dealing with other murky issues in the transnational realm, what I know about this adversary is that they blend into the real estate. They don't go, 'Hello, I'm coming from the outside, here's my plane.' What they do is, they get in here and stuff happens."