Capitalizing on the Private Sector to Protect the Homeland

By Stephen E. Flynn and Daniel B. Prieto
Special to
Friday, April 28, 2006; 12:00 AM

Nearly five years after the 9/11 attacks, Americans and their elected representatives know that our home front remains poorly protected. This was evident in the White House's failed effort to rein in the hyperbole during the recent Dubai Ports World uproar. Few took solace in the Bush administration's contention that Coast Guard and Customs officials would continue to provide security for our ports. For good reason, the earnest efforts of these woefully underfunded and overstretched agencies did not inspire much public confidence.

Absent from the ports debate was a discussion of the role private companies should play in securing the critical infrastructures they own and operate. This omission was curious since the White House's National Homeland Security Strategy assigns much of the responsibility for safeguarding the foundations of our way of life to private hands. In laying out "the broad principles that should guide the allocation of funding for homeland security [and] help determine who should bear the financial burdens," the Strategy states that, "the government should only address those activities that the market does not adequately provide-- for example, national defense or border security. . . . For other aspects of homeland security, sufficient incentives exist in the private market to supply protection. In these cases we should rely on the private sector." Ports clearly involve federally run border protection activities, but what about the security of the port facilities themselves? That responsibility-- and the tab that goes with it-- rest with the companies who operate them.

The issues surrounding public versus private responsibility for critical infrastructure protection have been the focus of a year-long project by the Council on Foreign Relations, resulting in the report Neglected Defense: Mobilizing the Private Sector to Support Homeland Security. The nonpartisan working group, comprised of outstanding private sector leaders, came to the consensus that the private sector is able-- and generally willing-- to play a far more prominent role in protecting many of America's most important assets. However, the federal government is not providing the necessary leadership and incentives to fully leverage private sector capabilities in defense of the American homeland.

Too many barriers remain for effective private-public coordination on protecting critical infrastructures. For example:

" The reorganization of the federal government since 9/11 has made it harder for the private sector to work with Washington on homeland security issues.

" The federal government and the private sector still do not share enough specific information about threats and vulnerabilities.

" Overall investment in critical infrastructure protection has been modest.

" As Hurricanes Katrina and Rita illustrated, the private sector has not been effectively integrated into response and recovery planning for major disasters, though some promising public-private initiatives have been piloted.

To fix these problems, Congress and the Bush administration must acknowledge that security is a public good that can never be fully delegated to private hands. CEOs know they cannot have the final word on how best to protect what they own when those assets are essential to the safety and well-being of the broader society. The government should always weigh in whenever there is a major security breech that endangers the public. Accordingly, absent an active federal partner, companies are understandably reluctant to make medium- and long-term security investments for measures that Washington has not endorsed.

Federal security efforts must also be tailored to address specific vulnerabilities in individual sectors. Too often federal officials treat critical private sectors generically even though the consequences of a terrorist attack vary widely. For example, the financial industry is reasonably well-prepared while the chemical and food sectors are not. Washington should focus its energies on our most vulnerable industries and those for which the consequences of a terrorist attack would be greatest.

To make America more secure, the federal government should immediately take these actions:

  •  Complete, as required by law, a national list of priorities for critical infrastructure. It is unacceptable that a list to guide federal spending and agency efforts does not yet exist.
  •  The White House and Congress need to move beyond talking about improving information sharing and hold government officials accountable for actually doing so. There is legitimate frustration among corporate security officers that talking with federal agencies is always a one-way street-- companies generously give and barely receive.
  •  The Department of Homeland Security must strengthen the quality and experience of its personnel. Congress should authorize the creation of a personnel exchange program that would allow industry experts and managers to take a leave of absence from their companies to serve in government while DHS employees work for companies in critical sectors.
  •  Congress and the administration should work closely with the private sector to establish security standards and implement and enforce regulations, especially in the chemical and transportation sectors where industry is seeking standards and regulations. Adam Smith's "invisible hand" has its limits.
  •  Congress should enact targeted tax incentives to promote investments and rapid adoption of measures that will improve the resiliency of the highest risk industries. Security is not free.
  • The enemies we face are no match for American spirit, ingenuity, and courage. But only when we marshal these qualities in our current struggle will our home front be secured against radical jihadists. The private sector can and must play an indispensable role in addressing the many problems that have plagued the nation's homeland security efforts. But the federal government must be willing and able to enlist the private sector and provide leadership for its efforts. Too much time has been lost while the threat only grows.

    Stephen E. Flynn is Jeane J. Kirkpatrick Senior Fellow for National Security Studies at the Council on Foreign Relations and author of America the Vulnerable. Daniel B. Prieto is Director of the Homeland Security Center at the Reform Institute. They are coauthors of the Council Special Report Neglected Defense: Mobilizing the Private Sector to Support Homeland Security.

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