Homeland Security Watch

News and analysis of critical issues in homeland security

Homeland security grant press conference: transcript

May 31, 2006
Contact: DHS Press Office, (202) 282-8010


MR. KNOCKE: Happy to have here with us today Under Secretary for Preparedness George Foresman, and Assistant Secretary for Grants and Training Tracy Henke.

Mr. Foresman, if you’d like to go ahead and lead us off, sir.


Good morning, everybody. Good morning, everybody. You all are going to have to get a little more lively here. Thank you all for coming up. And we wanted to spend a few moments with you this morning just with some brief opening comments, but really get to the questions, because I think that’s where people always want to get to in these types of discussions. But let me preface Tracy’s little more detailed look in terms of where we are from our grant process with two or three overarching comments.

First, this year really represents the first year that we are holistically as a department getting away from simple, straight forward, formula-driven grants processes to true risk-based processes, which is one of the things that has been underscored and underscored Secretary Chertoff’s Second Stage Review — that at the end of the day, our job is to make sure that we apply resources in an appropriate manner across the full breadth of this nation, so that we get the maximum benefit out of those dollars. And the federal dollars that we’re going to talk about today represent but one part of the equation.

When we talk about national preparedness and we talk about it in the context of those things that we do to prevent, deter and protect, as well as to respond, and recover and mitigate, particularly today as it relates to the discussion about terrorism — but, frankly, what you do to prepare for terrorist events is the same stuff that you’re doing to prepare for natural disasters, so it represents an all-hazards investment on the part of us — but all of these things together, the federal piece of it is only as successful as what we do at the state and local level.

And the state and local governments contribute millions, billions of dollars annually to a variety of preparedness efforts that measurably increase our level of preparedness. So we’re talking about those resources that are designed to help us not address the ordinary, but to address the extraordinary that needs to be done at the local, state levels in terms of preparedness.

The second point I would underscore is, clearly there has been a focus on being able to make sure the United States is ready to deal with the wide range of issues posed by terrorists. And that’s particularly true in the post-9/11 environment, but that has not been an exclusive focus. And the one thing that I would underscore, going back to what Secretary Chertoff has said, is that we have got to make sure that we are ready for catastrophic events in this country, irrespective of what the causing factor is.

The dollars that we continue to provide down to states and down to communities represent dollars of investment toward capabilities to deal with the Katrina-scale events, whether it’s caused by a breach in a levee by Mother Nature, or whether it’s caused by a breach in a levee as a result of a terrorist event. And so, frankly, at the end of the day, we just simply see these as wise investments towards being able to manage our national risk.

The third and final point is this: The $1.7 billion that will go out to the states and communities today represents a very different process that Tracy and her team have put in place, and I am exceptionally pleased with the work that Tracy and her team have been able to do. I spent time at the state level. This is not simply about dollars provided; this is about dollars provided that will produce tangible results. And a large part of this process has been to make sure that we put the right levels of review into the investment justifications being made by state governments, by local governments, to make sure that those investments represent a reduction in a risk and an increase in capability.

And I got to tell you, these are not federal decisions. We brought in peer review teams, and that’s the important thing to underscore here today. The investment justification review process was state and local folks brought together to look at these application packages that were, for a whole bunch of reasons, they didn’t know whose that they were looking at, they were genericized, but to say, based on this level of risk, based on this level of need, have they justified how they want to use these critical federal dollars. And it represents a continued maturity of the process. We are better this year, we’ll get even better next year, and we’ve got to look at this as a multiyear approach.

So let me get Tracy to run through some of the specifics as it relates to it and then we’ll entertain some questions.

ASSISTANT SECRETARY HENKE: Sure. I don’t want to take up a whole lot of time because I do want to make certain that we get to the questions and answer all that you have.

To reiterate, as the Under Secretary said, this is definitely a matured process. What we’ve done this year is look at risk, risk at individual specific assets, as well as geographic-based risk. We look at — once again, risk includes threat, consequences and vulnerability. We then also have effectiveness of proposed solutions. In the past, people might have said risk and need. It’s actually, as the Under Secretary was pointing out, effectiveness of the proposed solutions that the states and the urban areas put forward.

Also as the Under Secretary stated, the peer review process and the involvement of our state and local partners — and I say partners in this because they have — they are definitely with us hand-in-hand throughout this process. Their input helped guide and shape our risk analysis. Their input and guidance helped provide — we worked with, as far as drafting the actual application kit.

And then once again, over 100 Homeland Security professionals from every different arena was involved in the peer review process — over 100 of them from throughout the country; 47 states were represented in that process. And they spent countless hours in reviewing the effectiveness of the proposed solutions that were submitted in the individual investment justifications.

What we then had to do, and what will be provided once again in the facts sheets and briefing materials that you will have, is we then looked at the risk and the effectiveness and, in essence, married the two, making certain that the resources that the department — the $1.7 billion made available through the Homeland Security grant program is targeted first and foremost at the best investments. Those best investments are those with the highest risk and the best effectiveness.

The process — just to make certain that you know — when you have two competing variables, for instance, the risk and the effectiveness, we use a 2×2 matrix, which you might be familiar with. It’s often used in the financial world. Stephen Covey’s time management concept is based on it. It is a very familiar tool used when you’re looking at two competing arenas, in essence, effectiveness and need. And what we do is use that 2×2 matrix to plot the individual scores, and then within that, once again, making certain that we are driven by risk. Risk being what the President, the Secretary, the Under Secretary, the department has stated, and Congress and the country have asked for in allocating our resources — and so, once again, looking at our best investments targeted on the highest risk and the best effectiveness scores.

Now, I’m happy to open it up for questions. I am certain there are several.

MR. KNOCKE: Can you do us the favor of identifying yourself and your organization and to whom your question is directed, please? That would be appreciated. Thanks.

QUESTION: Actually, for either of you. Do you think that this new process will eliminate the stories that we hear or have heard for the past four years about small fire departments buying all this biochemical hazard equipment, that it’s questionable whether they needed it or not — do you think that this is going to eliminate that?

UNDER SECRETARY FORESMAN: Let me address it and then get Tracy to put part of it in. I mean, you’ve got to break it into a couple of pieces. There is the allocations piece and then there is the spending piece. We’re talking about the allocations piece here. And on the spending side of it, there are always going to be cases in a grant program of this scope and size, with its decentralized nature down at the local and state level, where you’re going to have local organizations, state organizations making purchases that in an outsider’s view may appear to be questionable.

And so a large part of the process that we’ve asked Tracy and the team to make sure that we’ve got in place is, in addition to focusing on the product, the grant program, let’s focus more on the process. And one of the — I got a note that Tracy sent up to me the other day — we’ve got teams that actually go out and provide that level of training to those local officials and to those state officials. We’ve been so busy pushing money out the door that we have not spent as much time as a department, and we’re focused on it this year, of putting capabilities out the door in terms of training, so they know how to do a better job of being able to manage those critical dollars.

The percentage of problem areas tends to be very small in relation to the large percentage of folks who are using these dollars to increase their planning capability, their training capability, their equipment capability, and their exercise capability, in addition to others. So keep it separate.

ASSISTANT SECRETARY HENKE: If I may, as the Under Secretary pointed out, this program, the $1.7 billion, is to increase baseline capabilities across the nation. By involving the state and locals in this process there is much more transparency, there is much more involvement, and much more guidance that they have provided us and that we have provided them through our training, technical assistance, and other programs.

This, as the Under Secretary pointed out, though, is also just one program. There is also the program specific to fire grants — the SAFER program and our AFG program that also fire departments can specifically apply for, which are separate from this one.

QUESTION: Of the $1.7 billion, how much was actually subject to the risk and needs? For example, the SHSP state — you’ve got a lot of — I won’t give you all the letters, you know them, but you’ve got a lot that are subject to a congressional formula for which you can’t apply your formula. So, really, is the action in the Urban Area Security Initiative? How much of the other, which is almost a billion dollars of the $1.7 billion, were you actually able to subject to this new process? Weren’t most of the dollars in the $1 billion formula untouchable under your formula?

ASSISTANT SECRETARY HENKE: Actually, no. Out of the $1.7 billion, $1.3 billion was based on risk and effectiveness. You do have — as you correctly pointed out, there is a formula in the Patriot Act that provides base minimums for the State Homeland Security Grant Program and the Law Enforcement Terrorism Prevention Program. So that base minimum does exist; it’s .75.

You then have the rest of those funds distributed on risk and effectiveness. In the Urban Area Security Initiative, all of it is. Under the Metropolitan Medical Reserve Program, that is a formula program, as is the Citizen Corps. Citizen Corps has a base minimum and then the rest based on population.

QUESTION: Just to follow that up. How did you — in the $550 million State Homeland Security Program, which was sort of the original, sort of the granddaddy of the congressionally earmarked formulas — how did you apply risk and effectiveness to that program?

ASSISTANT SECRETARY HENKE: The same as was previously mentioned. We literally had states submit their investment justifications, their state strategies. We brought in the peer review teams. We looked at — there is a risk analysis that has been done. That risk analysis literally provides us the guiding material, the guiding information we need from a risk perspective.

QUESTION: Maybe a better way to ask that question — I apologize — is, of the $550 million in that program, how much is formula set by Congress, and how much was subjected to your analysis?


QUESTION: Oh, so the .75 all comes out of that one program?

ASSISTANT SECRETARY HENKE: The .75 — there’s a base minimum — .75 comes out of the total available for the State Homeland Security Grant Program, and then also .75 out of the Law Enforcement Terrorism Prevention Program. So you’re looking at approximately 40 percent is formula, or based upon the Patriot Act formula, 60 percent on risk and effectiveness.

QUESTION: Of the total $1.74 billion, 40 percent based on formula?

ASSISTANT SECRETARY HENKE: Of the total $1.7 billion, $1.3 billion of that is based on risk and effectiveness. That’s the total dollar amount.

So you have to — each individual program — this is where it gets confusing a little bit because we do bucket these programs together. So we have the five programs. Out of those five programs, MMRS, the Metropolitan Medical Reserve Program, and the Citizen Corps program are straight formula. You then have your Urban Area Security Initiative, which is 100 percent risk and effectiveness. You then have your Law Enforcement Terrorism Prevention Program and your State Homeland Security Grant Program which has the statutory minimum which was included in the Patriot Act.

QUESTION: Okay, I understand now. Thanks.

ASSISTANT SECRETARY HENKE: It gets a little confusing, I know.

UNDER SECRETARY FORESMAN: She can balance your checkbook for you if need be. (Laughter.)

QUESTION: I’m just looking at the list and it looks like the big cities still got the biggest chunk, but New York, if I’m reading this correctly, last year got $207 million, this year is getting $124 million.

UNDER SECRETARY FORESMAN: I’m sorry, we don’t have that list.

QUESTION: I just got it off the web. Anyway, I’m just kind of wondering, why is there such a dramatic decrease in the money that New York is getting if this is based purely on risk?

ASSISTANT SECRETARY HENKE: Understand it’s based on risk and effectiveness. Also understand that we have less money this year and so the Urban Area Security Initiative is approximately $125 million-$150 million — I apologize, I’m not going to remember the exact number right now, so I might not be able to balance your checkbook, but approximately $125 million less for the Urban Area Security Initiative Program overall.

QUESTION: Okay. And then New Orleans it looks like is getting double the money, if I’m reading this correctly, from $9 million to $18 million, and this is reflecting —

ASSISTANT SECRETARY HENKE: Once again, you’re looking at risk and you’re looking at the effectiveness scores and the methodology that was utilized to provide those allocations. And one of the things that I think is important to note on effectiveness is the peer reviewers, once again, are state homeland security professionals that came in and provided — and did that peer review. We surveyed them and made certain to get their feedback on this. Eighty-three percent of them viewed the peer review process as fair, consistent, and objective.

UNDER SECRETARY FORESMAN: And, Laura, one other point, though, that we need to make — and this continues to be the challenge — we have to look at the risk of New York City in relation to the rest of the risk in the country, as well. So this is not simply looking at one particular geographic area. I mean, it’s in relative rank order, if you will, to the rest of the nation, because you’re only as strong as your weakest link. And so part of this is realizing that to the individual local community sheriff in a rural county somewhere across the country, their perception of risk is different than a major metropolitan area, but it’s their perception based on where they live and where they are. We’ve got to look at it holistically.

QUESTION: But just as a follow-up, it looks like Jersey City is getting significantly more than what it got last year. Jersey City-Newark was getting about $18 million, now it’s getting $34 million. Is there something happening over there?

ASSISTANT SECRETARY HENKE: Part of that was the definition of the urban area that was employed this year. And so the urban area, what was counted in the risk analysis, et cetera, was broader for that area than last year.

QUESTION: How much less was New York City’s and —

ASSISTANT SECRETARY HENKE: Last year, for fiscal year 2005, the New York City urban area received approximately $207 million. This year, it’s approximately $124 million.

QUESTION: And does that reduction say something about the proposal in terms of satisfying the peer reviewers?

ASSISTANT SECRETARY HENKE: I think if you look at the list you will see that, one, New York City urban area is still getting the largest dollar amount of any of the urban areas. We do have less money in the program this year. And then, once again, the analysis and the determination is then based upon risk and effectiveness of their proposals.

QUESTION: Could you discuss the New York City application in terms of how much the suburbs would be receiving?

ASSISTANT SECRETARY HENKE: No, that information is — as the Under Secretary was pointing out earlier, this is very much a state and local driven priority, based upon their strategic plan, based upon the involvement in the working groups that exist. But they will — once they get this allocation, they will then work to determine within that allocation then how to actually allocate it to their areas that are part of that urban area.

QUESTION: Are there different guidelines for the states to divvy up those funds?

ASSISTANT SECRETARY HENKE: Different guidelines?

QUESTION: I thought Secretary Chertoff said last January that he wanted a better distribution by the states to their localities, he wanted a greater regional sharing of those resources.

UNDER SECRETARY FORESMAN: Yes, and one of the things that you’ll see in this process is, UASI being the one pot of dollars, and the State Homeland Security Program, of which the states have a great degree of flexibility of how they apply those dollars. What we’ve attempted to promote the states to do is greater regional collaboration to get away from simply using population-formula-driven allocation dollars, based on their own understanding of need and risk and capabilities, to be able to apply on a state level essentially the same process that we’re applying on the federal level.

Because, at the end of the day, we cannot manage local risk from Washington, we cannot manage state risk from Washington. Our job is to make sure that we give them the tools that give them greater flexibility to be able to manage their own risk, because at the end of the day, we’ve got a limited amount of dollars and those who are closest to the local needs, the regional needs, and the state needs need to be the ones to architect how it needs to be applied.

QUESTION: I understand that the overall pot of money has shrunk because the appropriation has gotten smaller, but I’m wondering how you can justify what appears to be a substantial drop in New York City’s funding if a threat-based matrix is being applied. In other words, the cut seems to far surpass — the cut to New York seems to far surpass the cut in the overall program. And I’m wondering why.

ASSISTANT SECRETARY HENKE: Once again, you can potentially contact New York for specific information on their proposal and what they submitted, but the process that we employed very much looks at risk, and we have — and New York, as the Secretary was talking about, is just one area. We have to look at the nation as a whole and understand that we are — we’re only as strong as our weakest link.

In allocating the resources, we used an approach that we believe and from the feedback from our state and local partners on this is that it’s a very fair and objective approach that allows us to balance those resources and ensure that they’re directed to where we can get the highest return on the best investments.

And so, there is a reduction in the program. New York City is still getting the largest amount of resources out of the Urban Areas Security Initiative. I believe the next one is Los Angeles, and Los Angeles is at approximately $80 million.

UNDER SECRETARY FORESMAN: But let me add to it. I mean, think about the fact that New York has been, traditionally, one of our stellar performers in this country in terms of their ability to be able to quantify risk, to deal with risk issues. So, one, I think the Mayor and the Commissioner and others up there have shown great insight and strategic vision in terms of how they’ve applied the dollars that they’ve already received. And it’s made some measurable impact on the risk, clearly not on a level equal to where you’re seeing the reduction.

But at the same time, there are communities across the country that did not have necessarily the level of maturity that New York had been able to gain in the ’90s, particularly from the first bombing of the World Trade Center, some of the other issues that they worked through in the ’90s into the early 2000 time frame. So part of this is driven by the fact other metropolitan areas are getting better at managing and measuring their own risk and being able to quantify it. We’re getting better at the federal level.

I mean, we have hoards of data on New York City. We didn’t have that same level of data on other metropolitan areas. But over the course of the past 24 months, as you’ve seen these programs mature, we’ve got better understanding of where we’ve got potential operations that may occur; we understand critical infrastructure better than we did. And so the data set, if you will, that informs the risk ranking for the non-New York areas is better. Therefore, in some cases, you’re seeing that they’re getting additional dollars. And when you do that on a nationwide scale it’s going to result in a reduction.

QUESTION: So are these communities — are they hiring better grant writers? Are they writing better grants? And also, I did want to ask whether — you have to look at some of the cities, for example, Louisville area, $8 million — as we all know, the House Chairman of the Homeland Security Subcommittee on Appropriations is from Kentucky. Are political considerations part of this process?

UNDER SECRETARY FORESMAN: Let me be very clear. Political considerations play no part in the allocation process — none whatsoever. And I’m unequivocal on that. The thing that plays the part in the process — and we’ll use that metropolitan area as a prime example — we intuitively have better intelligence of what may or may not be occurring in that community in terms of suspicious activities. And that information is being reported both through the FBI and through other channels in making its way up to inform our national threat understanding. We understand much better today than we did 24 months ago what critical assets are in Louisville. And right off the top of my head, I don’t happen to know what they are.

And so it goes to the point that as local jurisdictions — as the process matures, so does the quality of the information. And that’s going to cause an adjustment. It’s kind of like a grading curve in college, of which I was very familiar with because I was always on the lower end of the grading curve. And those rare occasions when I did well, it meant a change for everybody else on that grading curve.

QUESTION: So just to follow up then, it’s not that you feel that the risk is any less in New York, it’s that you understand the risk better in the rest of the country now?

UNDER SECRETARY FORESMAN: In relation to the rest of the country, yes.

ASSISTANT SECRETARY HENKE: And if I may make a quick point, just for your information, not counting this year’s award, New York urban areas — which is not just New York City, there is one other one — to date, from fiscal year 2003 to fiscal year 2005, have received approximately $445 million, not including this year’s award.

QUESTION: If you can’t say how New York’s would be spent and its suburbs, how are you measuring how these states and localities would be using the money effectively? Don’t you have an idea of what they would be spending it on?

ASSISTANT SECRETARY HENKE: Yes, we do have an idea of what the state’s strategy is. And we’re looking at, once again, the sustainability of the strategy, the impact of that strategy. We’re looking at — once again, their proposals from a state perspective, their statewide strategy that they will then employ in those urban areas or suburbs that are part of that urban area. So the peer reviewers looked at a variety of factors. But once again, whenever you look at a proposal, you’re looking at, once again, the sustainability of it. You’re looking at the impact of it. You’re looking at the best investments. That’s what the peer reviewers did.

QUESTION: Can you characterize what some of these investments are? Are they just buying equipment? Are they building protections around vulnerable facilities?


QUESTION: There’s no what’s the most popular?

ASSISTANT SECRETARY HENKE: It’s based upon individual state strategies. And once again, as the Under Secretary pointed out in his opening remarks, one of the things about the program this year is this is the first time that we’ve been able to link the resources available from this program to the interim National Preparedness Goal and the national priorities. And so the investments made by the states and the urban areas will reflect those national priorities, those target capabilities, which will help us improve as a nation our capabilities nationally, and our level of preparedness nationally.

QUESTION: Two questions. One is, could you give us a sense of how many applications were turned down and where they tended to be from?

ASSISTANT SECRETARY HENKE: In this case, none were turned down. Every state receives a base allocation, for instance, under the Law Enforcement Terrorism Prevention Program and under the State Homeland Security Program. As you will see from the list that you have, every state is a recipient of resources.

QUESTION: I see that. But, obviously, there were some applications that you reviewed and you accepted some and didn’t accept others.

ASSISTANT SECRETARY HENKE: No, it’s not individual applications that were turned down. The reality is, as we look at their overall application, and then through the risk analysis and the effectiveness of proposals that they submitted and the effectiveness of proposals that were peer reviewed, we determined — we allocate resources to every single — to all the states. And states —

QUESTION: Everybody gets something?

UNDER SECRETARY FORESMAN: Everybody was going to get something, no matter what.

ASSISTANT SECRETARY HENKE: Yes, no matter what we did.

QUESTION: The question was how much did each applicant for whatever — for all these categories —

ASSISTANT SECRETARY HENKE: That goes to the base minimum that we talked about earlier. There’s a base minimum in the Patriot Act.

QUESTION: So if someone has got only the base minimum, did you tell them why they didn’t get more and what was missing in their application?

UNDER SECRETARY FORESMAN: This is going to be one of the clear processes. We are going to go back to all of the states and provide them feedback, and to all of the metropolitan areas on how they did with their investment justifications. And one of the pieces here, though, is Tracy has got — we just don’t talk to these folks when there’s an application to be done. We’ve got an ongoing regular discussion and dialogue with the state and local officials. And the people are down there designed to say, how did you do on your investment justification? Here’s what you need to do better on in the future. At the end of the day, some states did really well; some states didn’t do well. Some localities did really well; some localities didn’t do really well.

The critically important thing, though, is what Tracy said earlier, that the investment justification represents a portion of the allocation decision process, but the predominant driving factor continues to be quantitative risk.

QUESTION: Who did well and who didn’t do well?

ASSISTANT SECRETARY HENKE: Well, on this — just real quickly — states will be provided, and this is the first time that the department is doing this — we are providing detailed information back to the states, back to the urban areas to help them understand the risk calculations, the effectiveness calculations, their individual investment justifications and how those were viewed. This is, once again, a collaborative process and something that we are working hand-in-hand with, with our partners in the field, wanting to make certain that they understand the process that was employed and now how they move forward from here in allocating those resources.

UNDER SECRETARY FORESMAN: And to that vein, we spent time with them yesterday. Tracy and Chet Lunner, our state and local director, spent time on the phone. There were more than 200 state and local officials on that conference call with them. Tracy and her team went through in excruciating detail the process. And they’ve been involved in this discussion so it was no surprise to them. We will continue to provide the feedback to them. But at the end of the day, this is not about us holding a scorecard on how well a state or a community does with effecting this justification. This is about making sure that we’re getting resources out to the state and local level that they can use to measurably reduce the risk that they face and that their citizens face on a day-to-day basis. But part of that process piece is we got to get better.

And let me just say, I’ve been outside the department. Now I’m on the inside of the department. We’ve come a long way in three years, but we’ve got to do more on our core business processes, and this is one of those core — it’s not fancy, it’s not exciting, it’s not front page headlines. But it’s core, good old-fashioned management the same way that when your editors get your travel voucher, there are certain things that you all have to do to make sure that you follow the process right, otherwise they’re not going to reimburse you for that meal.

QUESTION: Can you also say how it is that a city like Atlanta might get more than Miami, which would seem to be because it’s a harbor area and so forth, might be more vulnerable?

UNDER SECRETARY FORESMAN: Well, again, it comes back down to continuing understanding of the pieces and parts that go into risk — ongoing investigations, suspicious activities, presence of critical infrastructure. What I’m telling you is, we’re getting better and better at understanding the nature and the environment in each community and each state. They’re getting better and better at understanding themselves, and that is going to cause changes in this.

If this were a program that were 10 years old, it would probably raise an eyebrow. But this is a new program. It’s an evolutionary program. And as it matures and as it’s nurtured, it’s going to cause change.

ASSISTANT SECRETARY HENKE: One of the things that you guys will have is when you see all the information, the additional information on peer review, on effectiveness, on the risk analysis, I believe we’ll have that information for you as you walk out the door. Or if nothing else, it also will be available on the website. That will provide some additional clarity to some of the questions.

QUESTION: The investment justification, you said it’s only considered as a portion of the whole. How much of a portion is that? Because New York — the overall UASI grants were cut 13 percent, and New York is seeing a 40 percent cut. So how much of the investment justification —

ASSISTANT SECRETARY HENKE: Within the 2×2 matrix, risk — in each individual bucket, for lack of a better description, risk is two-thirds. Effectiveness is one-third. Once again, the department, the administration, the President — and as the Under Secretary just pointed out, the emphasis must be on risk. However, we want to ensure that we’re getting and we’re targeting the best investments, and that’s where the effectiveness of the proposals comes in.

QUESTION: And the peer reviewers, the 17 percent that didn’t think it was fair, why didn’t they think it was fair? And were they from New York?

UNDER SECRETARY FORESMAN: I’m going to get Tracy to answer that, but the important thing to understand about peer review is you provide anonymity in terms of the package that is being reviewed.

QUESTION: How do you do that? You just say one chemical plant, two airports, a big national monument? (Laughter.) You can’t say the Statue of Liberty.

UNDER SECRETARY FORESMAN: Yes, and Pete, generalization helps do that —

QUESTION: I’m just wondering if you can give us an example. You said that before and it was intriguing. How do you generalize? Do you just say so many — you have to be somewhat specific, right? So many chemical plants, so many tunnels and bridges? What would the reviewer see? How much specificity would they see?


ASSISTANT SECRETARY HENKE: Here’s the thing. In this process it’s impossible to provide anonymity —


ASSISTANT SECRETARY HENKE: A hundred percent anonymity in this process. The key to peer review process is making certain that we have appropriate representation from the urban areas, from the rural areas, from the states, from the different homeland security disciplines. And so reality is, is we had teams of peer reviewers — 17 teams made up of five to seven individuals that reflected a make-up of the different professionals, et cetera, and urban and rural areas, making certain that we had an appropriate balance across the board, also making certain that a peer reviewer didn’t review their own state’s application, nor did they review an adjoining state’s application. We tried to make certain that we had appropriate regional representation as part of that, too — western, central and eastern when we were doing our homeland security disciplines, as well as our urban versus rural. It’s a very complicated process. Once again, in the peer review paper, you will find some more on it. But, no, there was not a hundred percent anonymity. That’s impossible to provide in a situation like this.

QUESTION: Would you say the peer reviewers — I’m interested in the pool of reviewers — when you say it was appropriate, do you mean that it’s appropriate in terms of percentage of the population, i.e., if the United States urban population is 40 percent, 40 percent of the peer reviewers were urban? Or are you saying that every state was represented among the peer group?

ASSISTANT SECRETARY HENKE: What I’m saying is that all 17 panels that we had were made up of five to seven individuals that had state representation, urban area representation. Within the state representation, we had a large as well as a small.

QUESTION: Within the five to seven?

ASSISTANT SECRETARY HENKE: Within the five to seven. So every single peer review panel had representation across the board to provide that objectivity in reviewing the investment justifications that they had.

QUESTION: So in other words, on each panel at least one-fifth, or possibly one-seventh of the representatives would have been rural, even though the rural population is I think 2 percent of the United States?

ASSISTANT SECRETARY HENKE: Yes, small states. When you’re looking at — I view it as small state versus large state and that is, for instance, a Delaware versus a California.

UNDER SECRETARY FORESMAN: But let me make a point. The reason we went to a peer review process, if you’re an official from a rural area or an urban area, applying resources to deal with a chemical problem or a radiological problem or information sharing, there are differences, but the fundamental pretext is the same. So if someone comes from a rural area, we’re asking them not to judge an application based on, is this a good justification for an urban area, but had they been able to quantify their risk and need and then apply the dollars towards addressing it. So it’s less about geographical or urban — rural versus urban and more about the professional skill set needed to do the peer review.

ASSISTANT SECRETARY HENKE: I was just going to say that the peer reviewers were provided and identified by the states and by the urban areas themselves. Every state got the opportunity to — and 47 states were represented.

QUESTION: May I ask each of you a question? For you, Mr. Foresman, how does this allocation of dollars do on the perennial per-person, per-capita — do you see that evening out more? Obviously, it would appear that some sparsely-populated states like Wyoming are still going to get more than New York?

UNDER SECRETARY FORESMAN: Let me answer the question this way. We haven’t run the numbers — unless Tracy and her shop has run them. I’m sure that someone is going to run them. But the per-person numbers — and I’m going to use Virginia as an example — were always inaccurate, because in the case of Virginia when you looked at it, it didn’t include the National Capital Region, for which Virginia was one-third of the National Capital Region, if you will. And so those numbers were never all that meaningful in terms of this context.

The important message here is this represents a clear shift towards making sure that we’re applying resources towards risk and towards measurable results.

ASSISTANT SECRETARY HENKE: And understand that there is a base minimum that we can’t —

UNDER SECRETARY FORESMAN: And Laura is probably doing the calculation on her computer right now.

QUESTION: Okay, and then my question for you if I may is, you’re much more familiar with these numbers than any of us is, can you just run through some of the ones where we have seen dramatic changes, or substantial changes. We’ve talked about New York City. What are some of the other state-by-state or city-by-city changes where we see dramatic changes from the year before, significant changes?

ASSISTANT SECRETARY HENKE: Understand that we’re dealing with significantly less money, and so you’re going to see some substantial drop because overall we’re looking at close to $600 million total in less funds than we had last year. And so I’m a little hesitant in responding to that only because once again you’re looking at significantly less money overall.

Once again, you can look at New York. You can look at — there’s always cities that people are going to look at and do comparisons on. Those would be New York, the National Capital Region, Los Angeles, and potentially Miami, Houston. But once again, we’re dealing with significantly less resources — $600 million less than what was provided through appropriations, and approximately $350 million less than what the President requested last year.

QUESTION: Well, but overall, though, is there a pattern here? We talked a little bit about New York and the reasons why, understanding the risk better. Maybe you know the answer to this and maybe you don’t, but as you assess these figures yourself, is there sort of more money now to some of these areas, smaller cities — Indianapolis, that kind of thing — that maybe haven’t had as much attention to them paid in the past as some of the larger cities — Chicago, Houston, Miami?

UNDER SECRETARY FORESMAN: Pete, here’s what I would offer. I think you’d have to characterize it and say is as much attention paid them as in the past? I think our knowledge base is much greater than it was in the past. And therefore, there are those metropolitan areas that because of the inadequacy and the lack of clear data, we may not have resources at the level commensurate with a true risk management approach. So I think it’s fair to say that we continue to evolve and people get better.

One of the things — we’re not going change the risk funding formula all that much this year. We try to evolve it every year, but we said, let’s put a hold on it. Let’s make sure that the data sets that inform our decision processes — whether it’s data sets that come from state and local government, that come from the FBI, DHS, the intelligence community — let’s make sure we’ve got the right accurate data sets because you all have heard discussions about local communities that have said, well, gosh, you didn’t give me credit for this, or you counted this and that’s not the case any more. So we really want to focus on data quality.

QUESTION: Just real quick, was there any change this year in the risk formula in the relative importance of natural disasters versus manmade disaster? Or is that pretty much the same as it has been?

UNDER SECRETARY FORESMAN: Well, natural disaster doesn’t go into this. But, Pam, ultimately that gets to the larger multi-year issue of our ability to assess risk in a state or in a community and to give them the tools to do it. Natural disaster risk is very well quantified in this country. The risk of terrorism is not. So a governor or a local mayor can turn to their experts who advise them on a day-to-day basis and say, what is my relative risk of earthquakes, tornadic activity, severe storms, hurricanes, whatever it might be? They don’t have that same capability. Where we need to get to in this country — and this is part of the Secretary’s longer-term vision for preparedness in America — is making sure that we’re giving the tools to the states and the communities so that they can manage their risk without respect to a specific hazard or threat set, whether it’s terrorism or natural disasters.

This is a fundamental shift for the better in this country because we’ve always reacted to the last threat or hazard rather than reacting to a risk continuum, which is precisely what the whole Second Stage Review is about. It’s not looking back at the last but looking forward to the future.

QUESTION: Can you just give an example of what you mean by that? What would a state have discovered this year that it hadn’t put in its application in the past? What would it have been looking at or saying —

UNDER SECRETARY FORESMAN: Let me give you a prime example. Fusion centers that you’re hearing a lot of states focus on in terms of trying to amalgamate information. There have been states in metropolitan areas that didn’t have full visibility on the number of “terrorism-related investigations” that were precipitated by anything from tangible information to someone simply videotaping a building, and it gets labeled as that. And I guess, what I’m offering to you is, we’re getting better visibility on data of that category. And if a local police department two years ago got a report of a suspicious person videotaping a nuclear power plant, that is important information that we need at the federal level because it might be part of a larger pattern. But two years ago, they may not have passed it up the chain. What’s better today is we’ve got better information sharing, and when you get better information sharing, you get better risk analysis.

And in many ways, this incentivizes the fact that state and local governments need to be collaborating with their federal partners on what’s going on in their community. And we need to be collaborating with them on what’s going on so that we’re creating that full picture. And, frankly, the full picture has not been there in the past. I guess, in many ways there’s an incentive for better information sharing in grant dollars.

QUESTION: Just for the record, I do see that I messed up — that I just want to say that I do see that New Orleans is getting $4 million. I read the Boston line, which is $18 million. So I double-checked my numbers.

MR. KNOCKE: Thank you for that, and thank you all very much for your time.

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