Revision Time

Homeland Security officials hope a new organizational blueprint will improve operations.

Just five months into his tenure as secretary of Homeland Security, Michael Chertoff is remaking the department in ways large and small. After an intense review of the department's operations, policies and organization involving more than 250 employees in 18 working groups, Chertoff announced July 13 a range of changes aimed at clarifying priorities based on risk, streamlining operations and working more effectively with other agencies at all levels of government and the private sector.

"I thought he hit a home run," says retired Adm. James Loy, the widely respected former deputy secretary at Homeland Security who worked with Chertoff for several weeks to help smooth the former federal judge's transition to the department.

Chertoff's announcement included a range of initiatives and policy changes, from rescinding the rule requiring airline passengers to be seated for 30 minutes prior to landing or takeoff at Ronald Reagan Washington National Airport to requiring first-time visitors to the United States to enroll in the US VISIT database by having 10 fingerprints scanned instead of two. The database is used to track foreigners as they enter the country. The National Institutes of Standards and Technology recommended taking all 10, and criminal databases operated by the FBI long have held to that practice. "This will dramatically improve our ability to detect and thwart terrorists trying to enter the United States, with no significant increase in inconvenience," Chertoff said.

Chertoff's avowed commitment to setting priorities based on risk is at the root of a fundamental shift in Homeland Security's approach to its mission: "Our goal is to maximize our security, but not security at any price. Our security strategy must promote Americans' freedom, prosperity, mobility and individual privacy." In addition, he said, it is critical that Homeland Security be a more responsive agency: "Our enemy constantly changes and adapts, so we as a department must be nimble and decisive."

Most of the changes he announced involved reorganizing department operations, and some will require congressional action. Besides establishing two new directorates, one for policy and one for preparedness, he would eliminate the existing Border and Transportation Security directorate, requiring its operating units to report directly to him and to DHS Deputy Secretary Michael Jackson. Those organizations are the Transportation Security Administration, Immigration and Customs Enforcement, and Customs and Border Protection. Also reporting directly to Chertoff would be the Federal Emergency Management Agency, the Coast Guard, the Secret Service and Citizenship and Immigration Services.

Among the most significant changes would be the establishment of an undersecretary for policy, says Loy, now a senior counselor in The Cohen Group, a Washington-based consulting firm. "One of my great frustrations at the department was there was no front-end policy office" to develop long-range strategy, he says. Having a group of people dedicated to developing policies that will shape and refine Homeland Security is critical, he says. The policy directorate would include assistant secretary positions and staffs for international affairs, strategic plans, policy, the private sector and a director of immigration statistics.

The inclusion of an international affairs office in a powerful policy directorate is vital to the department's ability to effectively prevent and respond to terrorist attacks. "I don't think we had a single policy conversation that didn't have international implications," says Loy. "This will create a context for making critical investment decisions."

While the final outcome of many of Chertoff's recommendations won't be known for weeks or months, he has received encouraging accolades from at least one key member of Congress, Rep. Harold Rogers, R-Ky., chairman of the House Appropriations panel on homeland security. "The reorganization seems to recall Congress' original intent in creating the department, which was to streamline all homeland security functions and build a single, cohesive unit that effectively and efficiently protects our nation," Rogers says.

Unresolved Turf Battles

Chertoff's plan also is striking for what it leaves untouched.

Contrary to speculation, the reorganization will not revamp TSA, and it will not merge the enforcement and inspection arms of border security. ICE and CBP will remain separate as two of the seven operational entities that report to Chertoff. A merger would not "make sense" at this time, Jackson says, although he anticipates that less drastic changes eventually will improve coordination between the contentious bureaus.

A Customs and Border Protection official who participated in one of the working groups advising Chertoff says mission conflicts between ICE and the FBI and the Drug Enforcement Administration have yet to be resolved. The agencies repeatedly have tangled over which one has jurisdiction in certain terrorism and drug-trafficking operations. ICE, which is responsible for enforcing immigration laws in the nation's interior and detaining illegal immigrants, has neither the resources nor the political backing to adequately perform its primary mission. It does not have enough detention facilities or money to house the tens of thousands of illegal immigrants apprehended every year by the Border Patrol. As a result, those who don't have prior criminal records usually are released with orders to appear before an immigration judge for a hearing. Not surprisingly, only a small percentage bother to appear, adding to the huge population of illegal immigrants already living in the country and contributing to the rancor between ICE and CBP, which includes the Border Patrol.

Chertoff's plan for the department also fails to address problems inherent in the existing management directorate, which would remain in place. Undersecretary for Management Janet Hale currently oversees five line-of-business chiefs who report directly to her. Those chiefs-ostensibly responsible for integrating the department's technology, financial management, procurement, personnel and administrative systems-arguably lack adequate authority to control those functions, which continue to be run by the bureaus themselves.

Observers inside and outside the department have criticized the arrangement on two counts: It is ineffective and it would seem to violate federal law. Chief information officers are required by the 1996 Clinger-Cohen Act to report directly to their agency heads. The Homeland Security Financial Accountability Act, signed by President Bush in October 2004, requires department chief financial officers to be confirmed by the Senate and report directly to the secretary. "If [Homeland Security] is not instituting this change as required by law, I believe [it] has missed a valuable opportunity to strengthen the role of its [chief financial officer] and to improve its ability to deliver on its mission," Rep. Todd Platts, R-Pa., author of the financial accountability act, wrote in a July 13 letter to Chertoff.

The Government Accountability Office recommended in March that the undersecretary for management position be replaced by a chief operating officer with a term limit and a performance agreement (GAO-05-139). Such an official could serve as "an identifiable source for employees to rally around during the tumultuous times created by such dramatic reorganizations and transformations as [Homeland Security's] merger," GAO auditors wrote.

Both GAO and former DHS Inspector General Clark Kent Ervin have questioned five October 2004 directives that grant shared responsibility for management integration to the line-of-business chiefs-the chief information, financial, acquisition, human capital and administrative officers-and their counterparts at Homeland Security's bureaus. The concept of "dual accountability" is workable, but could leave the central business chiefs struggling for control over staff members scattered about the department, Ervin reported last December.

The management directives will nonetheless survive Chertoff's reorganization. Gale Rossides, detailed from the Transportation Security Administration by Loy to help write them, says she could see room for future refinements. There would be value in re-examining dual accountability "function by function," she says. Bureau heads might not need control over centralized paycheck processing centers, for instance. But Rossides adds that she firmly believes bureau leaders should remain accountable for hires, promotions and other personnel decisions, as well as contract management. "That's part of a federal executive's responsibility," she says.

Rossides currently directs the management directorate's Business Transformation Office, established in October 2004 to advise the business chiefs, track progress toward integration and fill the "white space" between the business lines. A lot has been accomplished under the current reporting structure, she notes. "Just the presence of this office has caused a terrific shift . . . in the last couple months," she says. "The chiefs really think of their activities and their functions as part of a much larger whole."

The business chiefs-or the CIO at least-might be able to make do with the authorities they've been granted, says Jim Flyzik of Guerra, Kiviat, Flyzik & Associates, a Potomac, Md.-based consultancy. Flyzik, a former Treasury Department CIO, also was an adviser to Tom Ridge when he ran the department's precursor, the White House Office of Homeland Security. Flyzik would prefer to see the CIO reporting directly to the deputy secretary or secretary and "empowered" to enact changes on an "enterprisewide" basis.

'All Hazards' Approach

One of the most significant of Chertoff's changes would break up the Information Analysis and Infrastructure Protection directorate. In theory, infrastructure protection and information analysis units were supposed to work together-protection specialists mapping out the nation's vulnerabilities, and intelligence analysts assessing threats against them. But department sources say the collaboration wasn't smooth. Vulnerability maps weren't clearly matched up with intelligence analysis, and the analysts couldn't obtain information they needed, which often resided with other agencies.

In addition, in the turf-bound intelligence community, Homeland Security lacked the authority to collect intelligence and the clout to demand it from powerhouses like the FBI and the CIA. Yet the department's analysts need intelligence from those agencies to assess threats to the nation's borders, transportation networks and critical infrastructure. To bolster Homeland Security's standing with other agencies, Chertoff will create an Office of Intelligence and Analysis, headed by a chief intelligence officer who will report directly to him. "Now the department will be a player and a single voice in the constellation of agencies [that collect and analyze intelligence]," says Loy.

Chertoff said the intelligence chief will "fuse" intelligence generated in-house at Homeland Security. "More than 10 components of offices" in the department are "intelligence generators," Chertoff said, adding that all Homeland Security units consume and apply intelligence. "We need to have a common picture across the department. . . . We need to fuse that information and combine it" with other agencies' intelligence and that of state, local and international groups.

While the intelligence analysis arm will move into its own directorate, the infrastructure protection unit will move into a new preparedness directorate. Also reporting to the undersecretary for preparedness would be an assistant secretary for cybersecurity and telecommunications, to lead the national response to electronic threats. The new chief will have to work closely with the private sector, which owns most of the nation's digital networks, to compel them to share information about vulnerabilities. Historically, corporations have been loath to reveal their weaknesses for fear of inviting more attacks or lawsuits.

"Having the position is one data point moving in the right direction," says Amit Yoran, who directed Homeland Security's National Cybersecurity Division. Yoran resigned before the presidential elections last year in frustration over his lack of clout. He says the new cybersecurity chief will need the title of assistant secretary, one he never received, in order to lead a national response.

The new preparedness directorate also will have a chief medical officer, whose responsibilities will include coordinating with other agencies in responding to a biological attack, and an assistant secretary for grants and training, bringing Homeland Security's support to state and local responders under the same umbrella. Combining these organizations into a single directorate makes sense, says Loy: "All these things are really about preparedness."

Chertoff also has demonstrated a willingness to revisit changes to the missions of the agencies that transferred to Homeland Security. The Federal Emergency Management Agency, for example, will return to its "historic and vital mission of response and recovery," he said, making it one of seven organizational entities reporting directly to the secretary. FEMA had taken on broader missions, such as helping agency officials craft plans to continue critical operations outside Washington in the event of a terrorist attack. Loy applauded the decision, saying, "This allows FEMA to do what FEMA does best."

Beefing Up Oversight

Chertoff said one of his first acts as the new secretary was to contact Homeland Security's inspector general and chief procurement officer and request an evaluation of the department's procurements and contracting practices. That he would enlist acting Inspector General Richard Skinner in the quest for stronger stewardship of the department's $41 billion budget demonstrated a "welcome contrast" from the approach of former Secretary Tom Ridge, says former Inspector General Ervin. He described Ridge as the ultimate gentleman but a weak manager.

Skinner and Chief Procurement Officer Greg Rothwell conducted the review, which resulted in recommendations for strengthening contract oversight, including crafting and conducting ethics training for all senior leaders and increasing staffing in five of the department's eight procurement shops, Rothwell says.

Inadequate staffing has left the department over-reliant on contracts negotiated by outside agencies, often for a fee. Such interagency contracts are becoming increasingly popular across government, but GAO auditors say they are difficult to oversee and especially vulnerable to abuse. DHS' eight acquisition shops obligated $9.2 billion in contracts in fiscal 2004, of which roughly 32 percent, or $3 billion, went to agreements negotiated by outside agencies. "Both the secretary and deputy secretary have been strong and enthusiastic proponents of assuring that procurement integrity and efficiency are a management focus throughout the department," Rothwell says.

Changes in how Homeland Security hires procurement professionals, trains them, settles upon contract structures and completes audits will make the department a better shopper, Deputy Secretary Jackson says. "So what are we doing about procurement?" he asked rhetorically during a press briefing after Chertoff's July 13 announcement. "Actually, quite a lot. [We're] trying to send a message that it's a very important thing."

Chertoff also faces significant personnel management challenges, as department leaders seek to implement new personnel regulations in the coming weeks. The new personnel system is designed to eventually move the department away from the General Schedule to a pay-for-performance system. A group led by the National Treasury Employees Union filed an injunction in June asking a judge to halt plans to begin implementing new personnel regulations on Aug. 1. On July 15, the department agreed to the request of Judge Rosemary Collyer of the U.S. District Court for the District of Columbia to delay implementing its system until Aug. 15. Unions want more robust independent oversight of disciplinary procedures. They also maintain the department has not honored collective bargaining rights.

Risk and Reward

Many employees are anxious about personnel changes, which will affect more than just the rank and file. Jackson says titles and compensation for some top managers will change with the reorganization. "There were some imbalances in the operating components about the compensation levels for people with different jobs," he says.

Chertoff is pressing ahead, and seems to realize the department will have to offer employees rewards for taking on new challenges: "[Homeland Security] employees also deserve an organization that provides top-notch professional career training, an organization that actually enables individuals to broaden these experiences by working in other components of the department without impeding their career paths," Chertoff said.

NTEU President Colleen Kelley responded that she wanted to hear details of Chertoff's plans for training, career development and employee rewards, and is seeking a meeting with him to discuss them. Chertoff evinced "little recognition of the impact that a pending overhaul of DHS personnel rules is having on the day-to-day performance," Kelley said. Chertoff said he will share more details with employees "in the weeks and months to come."