Red Alert

It was billed as America’s front-line defense against terrorism. But badly underfunded, crippled by special interests, and ignored by the White House, the Department of Homeland Security has been relegated to bureaucratic obscurity.

Photo: Joseph Rafferty

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Obscurely tucked away in a quiet residential neighborhood of Washington,
the Department of Homeland Security is far removed from the columned federal buildings downtown.
Drive by its fortified main gates, as thousands of motorists do each day, and you probably won’t
even know it’s there. No sign announces the department’s subleased headquarters,
and nothing indicates that the jumble of red-brick colonial structures inside the Nebraska Avenue
Complex of the Washington Naval District houses the largest government agency in the United States.

My initial reaction when I presented myself at the small guardhouse at the NAC, as the Navy’s
intelligence complex is known, was that I was in the wrong place. But no, the security guard
assured me, this was it. “Building 3,” he added, sliding a plastic-laminated entry
pass embossed with maritime insignia through a slot in the Plexiglas partition.

I had come to the NAC as one of the first journalists to get an inside look at
what was billed as the most ambitious government overhaul since the creation of the Pentagon in
1947. Unveiled on March 1, 2003, the Department of Homeland Security has been touted as the Bush
administration’s bold response to the new threats facing America in the post-Cold War world
of global terrorism. Composed of 22 formerly separate federal agencies, it boasts 186,200 employees.
Its far-flung operations are funded by a budget of nearly $27 billion—roughly the equivalent
of Microsoft’s revenues. On any given day, these megabucks go to screening 1.5 million airline
passengers, inspecting 57,000 trucks and shipping containers, and making 266 arrests and 24 drug
seizures. Each day, the department reviews 2,200 intelligence reports and cables, issues information
bulletins to as many as 18,000 recipients, and trains 3,500 federal officers from 75 different
agencies. It deploys 108 patrol aircraft, has a fleet of more than 350,000 vehicles, operates 238
remote video surveillance systems, and stands watch over 8,000 federal facilities, ports, power
plants, tunnels, and bridges. And that’s just a sampling of DHS’s myriad activities,
which the agency has posted on its website to give taxpayers a taste of what they get for $75 million
a day in security spending.

On paper, DHS is a colossus, and I had naively expected that its headquarters
would be equally impressive. But at first, I couldn’t even find Building 3. I wandered down
the main road, past the heavy hydraulic vehicle barriers, no-trespassing notices, cameras, and
some landscapers making a racket with a leaf-blower. Buildings 18, 11, 22, 5—all occupied
by various Navy spy programs—were plainly visible, but not 3. The landscapers were not much
help. “Maybe that way,” said one, with a noncommittal wave of his rake. That led me down
Intelligence Way to the intersection of Cryptologic Court, which seemed a fanciful name for what
was essentially a service entrance to a dark, dank courtyard dominated by an industrial-sized
power generator. The only thing missing for the Dickensian tableau to be complete was a
couple of Dumpsters overflowing with garbage. This couldn’t possibly be it. “Yeah,
just down there,” said a passerby emerging from beneath a brick archway that led to a narrow
fire lane forking off from the desolate courtyard. The little alley was barely wide enough for a
car, much less a Cabinet secretary’s motorcade, and at the end of it was a dull gray steel door,
such as you might see at the side entrance of a warehouse or a seedy after-hours club. A small plaque
was affixed to the unpainted wall: The Department of Homeland Security.

In the game of smoke and mirrors that is otherwise
known as national politics, Americans will go to the polls in November to choose a leader who they
think can best protect them from terrorist attack. Other issues will be important in the presidential
election—Iraq, the economy, taxes—but none will be as central as which candidate can
keep us safe.

Defending America has been a pillar of President Bush’s reelection
campaign. Only the president, argue his backers, has the resolve and strength of leadership to
prevent another 9/11. This campaign tactic has proved surprisingly effective. Even as public
opinion polls show that increasing numbers of Americans are wondering whether the White House
has been fighting the right battle in Baghdad, many remain convinced that President Bush will be
tougher on terror than his Democratic opponent. This view has been a mainstay of Republican campaign
commercials, conservative talk radio shows, the editorial board of the Wall Street Journal, and,
of course, the folks at Fox. Unfortunately, like a lot of “popular” notions generated
by concerted public relations drives, it’s a myth not rooted in reality.

The war on terror has many fronts, not the least of which is the one right
here at home. But as I learned in more than two years of reporting on the often neglected domestic
front lines of the war on terror, defending the homeland simply doesn’t appear to have captured
the imagination of the White House the way, say, a firefight in Falluja does.

Hamstrung by special interests, staffed with B-team political appointees, and crippled
by a lack of funding and political support, DHS is a premier example of how the administration’s
misplaced priorities—and its obsession with Iraq—have come at the direct expense
of homeland security.

From my vantage point, standing for the first time outside its bleak, back-alley
entrance, DHS seemed cruelly cut down to size, more like a minor, ill-favored bureaucratic outpost
than the largest government agency in America. That it could be both at once spoke volumes about
how cynically the political process in our nation’s capital can work.

It is well known in Washington that the Bush administration was not overly
enthusiastic about the idea of forming a homeland security department, which was first floated
by Democrats like Senator Joe Lieberman. The very notion ran counter to the Republican mantra of
fighting “big government.” Any reorganization on this scale (650 separate computer
systems to integrate, 18 different unions to bring to heel, etc.) was bound to be fraught with problems
and to invite criticism—especially with an election around the corner. And once the department
was up and running, the president could easily lose control of the whole thing. Congress would have
much greater oversight over DHS’s operations than if it had remained a small, relatively
anonymous policy unit within the protective confines of the White House.

On the other hand, the public was clamoring for the government to take
action on terrorism, and Congress solidly backed the idea of combining all domestic counterterror
responsibilities. So while DHS did not start as a project near and dear to the president’s
heart, political expediency ultimately forced its creation.

But was it for real? Or simply a paper tiger, “a myth,” as some
cynics such as Hillary Clinton have suggested? I would have been inclined to dismiss the senator’s
remark as partisan, but now DHS’s wholly inadequate headquarters gave me pause. It was spectacularly,
even suspiciously, out of character for status-conscious Washington, almost like an afterthought,
as if someone had said, “Oh, yeah, them— stick ’em in the storage room in the basement
and keep them out of my hair.”

The NAC was supposed to have been a temporary home for DHS, somewhere
for a skeleton staff to pitch its tent until a suitable location could be found. But the department’s
search for a permanent site had coincided with the planning of the invasion of Iraq. With senior
White House officials otherwise preoccupied, the staffer responsible for finding the right location
had dropped the ball, selecting a site in far-off suburban Virginia that Homeland Security secretary
Tom Ridge nixed at the last moment. And so, on the eve of its mandated start date in March 2003, DHS
found itself homeless, and stuck at the naval complex.

My questions about whether the department had been dealt a bad
hand were not dispelled the day of my visit, some three months later, when I announced myself on the
old-fashioned phone that hung next to the steel door. The reception area was no bigger than a cubicle,
without even room for a chair. It had a cheap suspended ceiling of yellowed acoustic tiles and was
decorated with a badly mounted blown-up photo of Ridge walking with Bush, both striding purposefully
toward the mutual goal of keeping us all out of harm’s way. The only other adornment was a large
red sign that said, “No Cell Phones, Wireless PDAs, or 2-way Pagers Beyond this Point.”
I deposited my mobile phone into one of the little post-office-box-style lockers, pocketed the
key, and stood waiting for my appointment with Bob Liscouski.

Liscouski was the assistant secretary from the Information Analysis and
Infrastructure Protection Directorate, one of DHS’s five main divisions, and his mission
was to make sure Al Qaeda didn’t blow up a power plant, bridge, or nuclear or chemical facility
somewhere in the United States. A former cop and Coca-Cola executive, he was a runner, I could see,
when he finally strode into the conference room an hour late for our appointment. He didn’t
lack confidence. “I don’t think you understand the complexity of what we are trying
to do,” he declared, after we exchanged a few pleasantries. He whipped off his suit jacket
and marched to the blackboard. On it, he drew a box divided into 13 squares, each representing different
components of our critical infrastructure—water, energy, telecoms, and so on. For the next
10 minutes he worked on a matrix, explaining the role of vulnerability assessments being conducted
to establish the overlapping risks of terrorist attacks to America’s economic backbone.
Finally I asked, “What are you doing about it?”

“We don’t do the doing,” said Liscouski. “We
do the coordinating. Our role is to look at the big picture of what is really threatened and determine
how to protect it.” I asked for an example. Liscouski said that for security reasons he didn’t
want to go into specifics. “What about the chemical industry?” I inquired. Survey after
survey has shown that the 15,000 chemical plants in the United States are probably the most vulnerable
pieces of infrastructure in America. According to the Environmental Protection Agency, more
than 100 of these plants could each endanger up to a million lives with poisonous clouds of ammonia,
chlorine, or carbon disulfide that could be released into the atmosphere over densely populated
areas by a terror attack. The military ranks a strike against the chemical industry as second only
to biological warfare (and ahead of nuclear devices) in the total number of mass casualties it would

Following 9/11, there was an urgent push to curtail some of these risks.
Democratic senator Jon Corzine of New Jersey, whose state was home to 9 of the 111 most vulnerable
factories in the country, introduced legislation to police chemical producers; the bill passed
unanimously in Senate committees and quickly garnered White House support. Named the Chemical
Security Act, it sought to codify parameters for site security, ensure the safer transport of toxic
materials (a single railcar filled with 33,000 gallons of chlorine could kill up to 100,000 people),
and establish a timetable to shift away from the use of the most noxious chemicals. Some major chemical users
have already been doing that voluntarily. In Washington, for instance, the city water treatment
plant switched in 2001 from chlorine to a slightly more expensive, but less dangerous, bacteria
remover. The change cost the average D.C. water consumer 50 cents per year, but reduced the risk
of terrorist hijackings by eliminating hundreds of chlorine tankers rumbling through the capital

The Chemical Security Act seemed set to sail through Congress. But as the
memory of 9/11 grew dimmer, the petrochemical industry launched a well-coordinated and well-
financed campaign to scuttle the bill. Led by the powerful American Petroleum Institute, lobby
groups bombarded senators, members of Congress, and the White House with thousands of letters,
position papers, and reports on the adverse economic impact of the Chemical Security Act. Chlorine
and its derivatives went into products that accounted for 45 percent of the nation’s gross
domestic product, they argued. Without chlorine components, they lamented, even the backyard
gas grill would disappear. The American pastoral would be forever changed.

The White House quickly cooled toward the idea of regulating chemical
security. The seven Republican senators who had endorsed the bill in committee withdrew their
support. And $5.7 million in petrochemical campaign contributions helped to ensure that Republicans
took the Senate in the 2002 midterm elections and that the Chemical Security Act died without a vote.
In its place, Senator James Inhofe (R-Okla.) proposed that chemical factories be allowed to police
themselves and that the government have no oversight or enforcement powers over safety rules.

As a result, three years after 9/11, virtually anyone can still gain
entry into thousands of chemical sites across the country. I had witnessed this myself in places
like Baltimore and Los Angeles, accompanying city officials eager to expose the lack of security
measures. Liscouski, though, appeared unmoved. Was DHS working on any mandatory security codes
for unprotected chemical plants? Fencing requirements, cameras, lights, guards? “Our
job is not to regulate,” he said. “By regulating, we could be missing out on important
gaps. Not all chemical plants produce materials with the same levels of toxicity. Regulating is
not our role,” he repeated. Why not? I asked.

“We are not going to turn this country into a fortress,” he
snapped. “I have every confidence that the private sector will act responsibly, that they
will do the right thing on their own.” That was quite a leap of faith. Last year The Economist
published a survey of 331 large corporations, finding that their security spending had risen by
just 4 percent since 9/11, and that much of the increase was a result of higher insurance premiums.
Only one in five of the companies said their spending would continue to increase. “Left to
themselves,” notes Stephen Flynn, a homeland security scholar at the Council on Foreign
Relations, “factory owners will do nothing. They have no incentive to. If factory A, say,
spends a million dollars on security upgrades, its products can’t compete with factory B down the
street, which spent nothing. Only legislation can level the playing field.”

Liscouski started to glance impatiently at his watch. I still had no clear
idea of what his infrastructure protection division actually did, other than draw Venn diagrams.
“We’ve sent people to two dozen chemical plants we’ve determined are the highest
risk,” he finally offered.

“To shore up security?” I asked.

“No,” he said, getting up to leave. “To advise them on what their vulnerabilities are.”

Special interests routinely trump security
at DHS. Several of Tom Ridge’s former aides now lobby for companies in the security industry.
So does Tim Hutchinson, a former Republican senator from Arkansas and the brother of DHS undersecretary
Asa Hutchinson, who heads the department’s massive Border Protection and Transportation
Security Directorate. (A meeting Tim Hutchinson had arranged for an Arkansas client with his brother
in D.C. was strictly “social,” the undersecretary assured reporters when word of the
get-together was leaked to the Washington Post.) In the 18 months since the idea of a homeland security
department was first floated in 2002, registered counterterror lobbyists multiplied fivefold
in Washington, according to the New York Times. The lobbyists’ cruder pitches included wooing
potential clients with promises of “securing your piece of the homeland security pie”
and advice on how “to avoid the land mines and find the gold mines of homeland security.”

The lobbyists have been busy in Congress as well. One lawmaker from Missouri
infamously slipped a last-minute provision into the homeland security bill to benefit his campaign
donor Philip Morris. What exactly the tobacco giant had in common with counterterrorism was anyone’s
guess. But bowing to business has seriously undermined some DHS programs. Take the much-hyped
national smallpox vaccination drive that President Bush launched with great fanfare in late 2002
by having himself inoculated on television. The plan called for 500,000 emergency personnel to
be vaccinated by mid-2003, but by the June deadline fewer than 40,000 had done so. At a hospital I
visited in Denver, only 7 out of 2,000 employees had gotten the shots. Why so few? In part, according
to a doctor at the hospital, because the Bush administration had sided with HMOs and insurance companies
to deny paid sick leave to people who might develop adverse reactions to the vaccine. “It’s
unfair and makes people suspicious that the government doesn’t have their best interest
at heart,” says Dr. Stephen Cantrill, who runs the hospital’s emergency room.

But deference to special interests is just one of DHS’s problems. Entrenched bureaucratic
interests and especially a lack of high-level political support have all played a role in thwarting
the agency’s development and its ability to attract topflight staffers.

Born blind because it was denied the capacity to collect or properly analyze
raw intelligence, DHS must rely on the fiercely territorial Federal Bureau of Investigation to
be its seeing-eye dog. That the FBI’s counterterror division has not been folded into the
department, as logic and the experience of other nations would dictate, is a severe handicap, and
a clear sign that the new department does not enjoy favor with the power brokers at 1600 Pennsylvania
Avenue. Its lack of prestige has been demonstrated in many ways, from Tom Ridge having to cede control
of key antiterrorist responsibilities (such as tracking terrorist financing) to John Ashcroft,
to near-mutinies by Secret Service agents disgruntled at having been assigned to the DHS B-team.
In one notable humiliation that shows how little clout a DHS badge carries in the capital, the Washington
Post reported that only 22 of the 92 FBI agents in a cybersecurity unit that was transferred to the
department opted to come on board, because remaining at the Bureau gave them higher status. And
in 2003 alone, 15 prominent members of Washington’s intelligence community turned down
offers to head its intelligence analysis unit before a taker was finally found.

For Washington’s ambitious, experienced technocrats, DHS
simply hasn’t been a career choice. One notable exception, Paul Redmond—a 33-year
CIA veteran who had accepted a key post in the department—resigned last summer shortly after
testifying to Congress that his office had been able to attract only 26 intelligence analysts.
Part of the problem, he said, was that there was not enough space at department headquarters. But
the key issue was that because the White House had decided that DHS’s intelligence unit should
rank lower than the FBI and the CIA, the department’s computers were not secure and couldn’t
even receive classified data.

Aside from being hamstrung by its reluctant
architects, DHS simply has not been able to compete with Iraq in the battle for resources. With the
president’s tax cuts trimming government revenues, and budget deficits reaching levels
not seen since the Vietnam War, money is tight for programs the White House does not see as top priorities.
Homeland security has been a main target of domestic penny-pinching—one reason why officials
at department headquarters have had to share phones, why firefighters and other first responders
across the country still don’t have radios that work on the same frequencies, and why airline
cargo is still not being properly screened.

Like much about the homeland security effort, DHS’s balance sheet
looks healthier on paper than it is in reality. At $40 billion, the figure sounds impressive at press
conferences and allows the president to say that he is spending big bucks not just in Baghdad, but
at home as well. But that number is somewhat misleading. For one, about a third of the total doesn’t
go to DHS, but to other agencies
such as the Pentagon. And most of the remaining $27 billion is not new money—as opposed to
the $150-plus billion that has been spent toppling Saddam Hussein. Much of it simply lumps together
the pre-existing budgets of the 22 federal agencies that make up the department. Between them,
the Coast Guard, Customs, the Immigration and Naturalization Service, the Federal Emergency
Management Agency, and the Lawrence Livermore National Lab alone accounted for $19 billion in
federal spending before 9/11. The Transportation Security Administration and its roughly $5
billion annual budget are new expenditures, but most of the other agencies have received only marginal
increases since being folded into DHS. The truth of the matter is that homeland security is very
much a shoestring operation—so much so that worried Democrats in Congress keep trying to
throw more money at it.

The financial crunch is most keenly felt by the people on the front lines—at
ports and borders, among firefighters and hospitals, transit authorities, biohazard labs, and
rail hubs—who are invariably understaffed, underfunded, and ill-equipped. Just to properly
outfit emergency personnel with radios that work on the same frequency, and prevent the tragedy
that occurred when firefighters and police at the World Trade Center could not warn one another
of the buildings’ impending collapse, $6.8 billion is needed, according to a study by the
Council on Foreign Relations. But not only are first-responder programs slated for large budget
cuts in 2005, the Bush administration and the FCC are considering giving the radio frequencies
earmarked for the public safety communication spectrum to private telecommunication companies,
a $5 billion gift.

The first responders are not alone. Money woes got so bad at DHS this year
that in March the department had to announce hiring freezes at its two largest frontline agencies—the
Bureau of Customs and Border Protection, and the Citizenship and Immigration Service, as the INS
is now known— due to a $1.2 billion budget shortfall. (The freeze apparently didn’t
apply to DHS’s public affairs division, which at the time was advertising a $136,466-a-year
position for the director of an Entertainment Liaison Office in Hollywood, whose principal responsibility
is to make the department look good in the movies.)

Because of the administration’s tight hold on the purse strings, the
men and women manning the barricades must often make do with antiquated equipment never designed
for counterterror duties. At the Howland Hook Marine Terminal on Staten Island, I watched Customs
inspectors screen cargo containers for nuclear materials. They were using crude little radiation
detectors that were about the size of beepers, could be set to vibrate or ring, and could measure
radiation spikes on a scale of 1 to 9. A reading of 1 indicated a negligible 7 micro-roentgens per
hour, essentially harmless background radiation. “Nine means run like hell,” explained
inspector Bill Henehan.

Customs hastily bought 4,000 of these radiation pagers after 9/11,
at a cost of $1,600 apiece, and then, upon discovering that they were unreliable, issued contradictory
directives not to use them, to use them, not to use them, before finally settling on using them in
tandem with more sophisticated backup detectors.

The pagers have an extremely limited range and are prone to false alarms.
Twice the Staten Island terminal has had to be evacuated because of faulty readings, and in 2002
a ship from Italy was sent back out to open sea under armed escort by the Coast Guard because the radiation
pagers registered Chernobyl-like readings. “It turned out to be a type of ceramic tiles,”
recalls Chief Inspector Kevin McCabe. “They emit natural radiation.”

So does granite, certain marbles, cat litter, even bananas. But the
battery-operated pagers cannot distinguish between gamma radiation from cesium or cobalt and
far nastier neutrons blasting from plutonium or weapons-grade uranium-235. After a string of
embarrassing false positives, Washington last year ordered handheld 400 Exploranium GR-135
spectrometers that could identify different isotopes, but as of this summer not all ports and border
crossings had them. “We’re working with what we got,” shrugged Henehan. “But
I wouldn’t say no to a nice reliable portal.”

Radiation portals are larger, more powerful, and more sensitive detectors
set up permanently at border crossings, ports, or airports. In 2003, an internal Customs report
spelled out the urgent need for 1,600 of these portals to be deployed nationwide. But the 2005 budget
provides for only 165. “If protecting ourselves from a dirty
bomb isn’t a national priority,” laments one 20-year Customs veteran, “then
we’ve completely lost track of what we are supposed to be doing.”

Henehan, at least, got his wish. Staten Island’s Howland Hook terminal
received the country’s first maritime radiation portal last fall, after ABC News reported
that it had managed to send 15 pounds of depleted uranium through the terminal in a container from

Last summer, the Coast Guard invited me to spend a few days at the mammoth
port facilities at LA/Long Beach, the largest in the country. The port handles more than half of
the 5.7 million seaborne cargo containers that arrive in the United States every year. Yet it has
only four of the giant gamma-ray scanners that can detect contraband or weapons—such as SA-7
portable anti-aircraft missiles, a canister of smallpox, or dirty-bomb components—in
cargo containers. Essentially oversized versions of the machines used to screen carry-on luggage
at airports, the $1.3 million devices allow inspectors to see through a container’s steel
walls. They save time and money, and dramatically heighten security. Yet, in part because only
200 gamma-ray machines have been deployed nationwide, 95 percent of cargo containers still enter
the U.S. without any sort of physical inspection whatsoever. “We have budgetary constraints,”
conceded Robert Bonner, the commissioner of Customs and Border Protection, when I asked about
the shortage.

Even something as simple as fuel can be a problem for those trying to secure
America’s busiest port. Following 9/11, the Coast Guard intensified harbor patrols and
began sending out cutters to intercept and board suspicious vessels before they come into port.
But those extra patrols and missions have been burning up tremendous amounts of diesel. At LA/Long
Beach, Coast Guard captain John M. Holmes told me he was cutting back on his sea marshalls’
boardings of suspect vessels because he couldn’t keep up with diesel costs. “At first,
you just open up your wallet,” he said. “But after a while you realize, ‘Holy crap,
this is costing a fortune.'”

Several weeks after my visit to LA/Long Beach, ABC sent its batch of depleted
uranium through that port. The shipment again got through undetected.

Priorities have shifted in the three years that have passed since 9/11, and both time and complacency are now working
against the homeland security effort. “The momentum appears to have waned,” a bipartisan
commission on terror preparedness chaired by James Gilmore, the former governor of Virginia and
former Republican National Committee chairman, concluded in December 2003.

There are signs of the slippage on almost all fronts. FBI monitoring of terrorist
funds, according to the Government Accountability Office, fell behind in 2003. But when the Bureau
put in a request this year for money to hire 80 additional accountants and analysts to track terrorist
funding, it was turned down. Halliburton, meanwhile, is landing contracts in Iraq whose value
is far more than the FBI’s entire $5 billion annual budget.

Local municipalities are hurting, too, as monies already earmarked
for counterterror expenditures get snared in red tape. According to an angry September 2003 report
by the United States Conference of Mayors, 90 percent of 168 cities surveyed had not received a penny
of the $1.5 billion designated for them in 2002 under federal security assistance programs. And
when money is being doled out, there doesn’t seem to be much logic to the process: Alaska and
North Dakota get twice as much federal antiterror funding per capita as New York. Wyoming gets four
times more than California. Part of the reason for the discrepancies is that DHS has missed almost
all its planning deadlines, including one for a comprehensive vulnerability survey to formulate
priorities for the disbursement of funds.

If things seem a mess at the Department of Homeland Security, it’s
not necessarily the fault of the people who work there. They are doing the best they can with the tools
that have been given, and it would be unfair—and untrue—to say that no progress has been
made since 9/11. A great deal, in fact, has been accomplished in a relatively short time. Skies are
safer, borders are tighter, critical pieces of infrastructure like tunnels and bridges are more
secure. Yet much more could have been done if the Bush administration had given the endeavor its
full political and financial backing. With $150 billion spent on the war in Iraq, it remains debatable
whether the United States is safer because Saddam is gone. Homeland security, however, has undoubtedly
paid a price.


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Learn more in “Less Dreading, More Doing,” where we lay out this wild moment and how we can keep charging hard for you. And please help if you can: $5, $50, or $500—every gift from every person truly matters right now.

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