The Department of Homeland Security was only a month old, and already it had an image problem.
It was April 2003, and Susan Neely, a close aide to DHS Secretary Tom Ridge, decided the gargantuan new conglomeration of 22 federal agencies had to stand for something more than multicolored threat levels. It needed an identity -- not the "flavor of the day in terms of brand chic," as Neely put it, but something meant to last.
So she called in the branders.
Neely hired Landor Associates, the same company that invented the FedEx name and the BP sunflower, and together they began to rebrand a behemoth Landor described in a confidential briefing as a "disparate organization with a lack of focus." They developed a new DHS typeface (Joanna, with modifications) and color scheme (cool gray, red and hints of "punched-up" blue). They debated new uniforms for its armies of agents and focus-group-tested a new seal designed to convey "strength" and "gravitas." The department even got its own lapel pin, which was given to all 180,000 of its employees -- with Ridge's signature -- to celebrate its "brand launch" that June.
"It's got to have its own story," Neely explained.
Nearly three years after it was created in the largest government reorganization since the Department of Defense, DHS does have a story, but so far it is one of haphazard design, bureaucratic warfare and unfulfilled promises. The department's first significant test -- its response to Hurricane Katrina in August -- exposed a troubled organization where preparedness was more slogan than mission.
Born out of the attacks of Sept. 11, 2001, DHS was initially expected to synthesize intelligence, secure borders, protect infrastructure and prepare for the next catastrophe. For most of those missions, the bipartisan Sept. 11 commission recently gave the Bush administration D's or F's. To some extent, the department was set up to fail. It was assigned the awesome responsibility of defending the homeland without the investigative, intelligence and military powers of the FBI, CIA and the Pentagon; it was also repeatedly undermined by the White House that initially opposed its creation. But the department has also struggled to execute even seemingly basic tasks, such as prioritizing America's most critical infrastructure.
When Coast Guard Adm. James M. Loy signed on as Ridge's top deputy in the fall of 2003, "I found turmoil," he recalled, and "lack of strategic direction." When Loy left earlier this year, he believed DHS was sorely in need of "a midcourse correction." And Michael Chertoff, Ridge's successor, said in an interview that when he arrived in February, he was disturbed by the department's "insufficient focus on outcome and mission." Chertoff was so disturbed that he has already proposed a broad restructuring of DHS.
"We're not where we need to be," he said.
President Bush hailed DHS as his administration's answer to the "urgent and overriding" mission of securing the homeland. But the department designed in secrecy and haste in the White House basement and complicated further on Capitol Hill was hobbled from the start by what the branders called a "Rube Goldberg drawing" of an organization chart.
Interviews with dozens of participants in DHS's formation and operation -- including Ridge and Chertoff, White House aides, Cabinet secretaries, members of Congress, and current and former DHS officials -- suggest the sheer magnitude of the bureaucratic challenge overwhelmed the department's leaders. They worked almost full time on the merger, too busy to do much more than manage their inboxes, referee internal turf wars and wage losing battles with departments that commanded more clout at the White House.
Most corporate mergers fail, and even the successful ones often take years to produce dividends. DHS can point to some results, including hardened cockpit doors on commercial airliners, background checks for truckers and radiation detectors at ports. DHS has consolidated eight payroll providers into one system, and 22 human resources offices into seven. And there has not been another terrorist attack.
But some of the department's strongest supporters are disgusted by what it has achieved with its $40 billion annual budget. Rep. William M. "Mac" Thornberry (R-Tex.), who proposed a new department even before Sept. 11, said he was warned by several top CEOs that the mega-merger would require quick and decisive leadership. DHS, he said, never got it.
"The implementation has been a huge disappointment," Thornberry said.
Ultimately, Ridge and his team came to see their searing experience as a classic Washington morality play of entrenched bureaucracy resisting change.
"The notion that everyone was going to join hands and sing 'Kumbaya,' I don't think anybody in our leadership expected that to happen," Ridge said. "And it didn't."
'Zero Interest' in New Department
The White House had plenty of warning about potential failings of a new department -- it had been doing the warning. "Creating a Cabinet post doesn't solve the problem," Bush spokesman Ari Fleischer said in March 2002.
Before Sept. 11, a host of blue-ribbon terrorism commissions had recommended new bureaucratic alignments, culminating with the May 2001 finding by a panel chaired by former senators Gary Hart (D-Colo.) and Warren B. Rudman (R-N.H.) that the nation had a "fragmented and inadequate" homeland defense apparatus. In response, Vice President Cheney ordered a "national preparedness review," focused on the catastrophic possibility of an attack employing weapons of mass destruction. "They knew the government was not well configured to deal with this," former White House aide Frank J. Cilluffo recalled.
But Cheney opposed the concept of a new department as a big-government mistake, several aides recalled. And Steve Abbott, the retired admiral he picked to head the review, did not start work until a few days before Sept. 11.
After the attacks, Bush named Ridge, Pennsylvania's popular Republican governor, to head a new Office of Homeland Security in the White House. With the office just beginning, "there was zero interest in the White House in setting up a new department," a senior Ridge aide said. When Sen. Joseph I. Lieberman (D-Conn.) argued the case at a White House meeting that October, Bush was dismissive, saying Ridge could do the job out of the West Wing.
But Ridge found it difficult to get things done. In late December, he took a modest proposal to a Cabinet-level "principals" meeting -- a new "border-centric" agency that would bring together immigration officers, customs agents and other border-related personnel then scattered around the government. No Cabinet secretaries supported him.
"The only person at the time that thought it was a good idea was yours truly," Ridge recalled.
The lesson his staff took away was the need for secrecy: When bureaucracies were informed of potential threats to their empires, they tended to resist. "Everybody realized the agencies were not going to look at mission first, they were going to look at turf first," recalled Bruce M. Lawlor, a National Guard major general working for Ridge.
But soon the White House began to contemplate reversing its position. On Capitol Hill, lawmakers in both parties were upset by Bush's refusal to let Ridge testify as a presidential aide, and Lieberman's bill to create a new department was gaining momentum. While many Republicans were leery about a vast new bureaucracy, they did not want to cede the homeland security issue to the Democrats.
"That was driving decisions," one senior Ridge aide said.
In February 2002, Michael A. Wermuth, a homeland security expert at the Rand Corp., handed Ridge a two-page list of government entities that could be folded into a new department. It was the fourth of four options he offered, and Wermuth warned Ridge it was a horrible idea. He spoke "of train wrecks coming, a clash of cultures." It would take at least five years, probably 10, for the department to function smoothly. And without the proper resources, Wermuth said, "you're going to strangle yourself in bureaucracy for years."
Ridge seemed undeterred. "Option 4 is really where I'd like to get to," he said.
"We didn't scare him enough," Wermuth thought.
Everything Was on the Table
In the White House bunker where Cheney had waited out the Sept. 11 attacks, a select group of policy aides had been secretly commissioned to plot the administration's about-face.
They were called together in April by White House Chief of Staff Andrew H. Card Jr. -- five mid-level staffers known as the "Gang of Five," or as they liked to call themselves, the "G-5." Two worked for Ridge -- Lawlor and Richard A. Falkenrath, a security expert from Harvard -- and Card sent his deputy Joel D. Kaplan, associate counsel Brad Berenson and deputy budget director Mark W. Everson.
Several times a week, the G-5 met with a group of principals, including Card, Ridge, national security adviser Condoleezza Rice, budget director Mitchell E. Daniels Jr. and Cheney Chief of Staff I. Lewis "Scooter" Libby. On poster boards, they listed all the agencies that might make sense in the department. "The overriding guidance," Lawlor recalled, "was that everything was on the table for consideration."
Why not include the Federal Aviation Administration? Or the Drug Enforcement Administration? Falkenrath and Lawlor wanted to move the FBI, which was responsible for investigating threats to the homeland. But it became clear that politics would also shape the department. Card and other principals swiftly vetoed the transfer of the FBI as a non-starter. Rice scoffed that it would make the department look like the German Interior Ministry.
But everyone agreed to move the border agencies that Ridge had tried to merge earlier. The Federal Emergency Management Agency was definitely in as well. Card raised the idea of taking the National Guard from the Pentagon, but as Falkenrath recalled, "we just couldn't figure out how to make it work."
Some of the decisions were almost random. Falkenrath thought it would be nice to give the new department a research lab that could bring cutting-edge research to homeland security problems. He called up a friend and asked which of the three Department of Energy labs would work. "He goes, 'Livermore.' And I'm like, 'All right. See you later.' Click," Falkenrath told historians from the Naval Postgraduate School. He did not realize that he had just decided to give the new department a thermonuclear weapon simulator, among other highly sensitive assets of the Lawrence Livermore National Laboratory.
In June, after just six weeks of meetings, the department was ready for unveiling. The secret had been kept so well that even secretaries with major turf on the line had no idea what was coming until Card put out calls to the Cabinet the day before the president's announcement.
"They were just totally bamboozled," Falkenrath said.
When the president convened the Cabinet to reveal his plan, Ridge recalled with a wry smile, "everybody said, 'Good idea, Mr. President.' " But few of them really thought so.
Health and Human Services Secretary Tommy G. Thompson launched a behind-the-scenes campaign to keep a handful of offices that were supposed to go to DHS, including the National Disaster Medical System and the national drug stockpile. "Make sure this doesn't happen!" he instructed Jerome M. Hauer, one of his assistant secretaries.
The plan had been put together with such speed and secrecy that after its release angry officials had to explain to the White House how their agencies really worked. Energy Secretary Spencer Abraham was able to beat back the total transfer of Livermore after it became clear the Gang of Five had little idea what the lab did. A similar battle unfolded over the Department of Energy's radiological detection teams, which were supposed to be folded in with FEMA. The White House had not realized that the teams consisted of employees with regular jobs who mobilized only during emergencies.
The one Cabinet official who willingly surrendered turf was Treasury Secretary Paul H. O'Neill, who angered some of his aides by giving up three prized agencies. But O'Neill was skeptical as well. "It was never clear there was a vision of what homeland security ought to mean," he recalled. And many colleagues were similarly dubious. "We all expected an ineffectual behemoth," said a close aide to a Cabinet member, "and that's what we got."
GOP Lawmakers Turn Around
On Capitol Hill, Bush's allies were left tongue-tied by his abrupt shift. In late May the White House had pushed Republicans on the Senate Governmental Affairs Committee to oppose Lieberman's bill. Now, Sen. Fred D. Thompson (R-Tenn.) told Lieberman: "I've been having a great time explaining my enthusiastic support for a proposition I voted against two weeks ago."
Falkenrath was barraged by Hill staffers with questions he could not answer: If the Immigration and Naturalization Service was moving to the new department, why were immigration judges staying at the Justice Department? Falkenrath did not know there were immigration judges. "Every one of these staffers had some little angle on something that we hadn't thought of," he said. "I was like, 'We better go figure out what we've missed here.' "
Inside the White House, some aides were appalled by the specter of "a group of people who really didn't know a whole lot about the boxes they were moving around," as one put it. White House cybersecurity czar Richard A. Clarke, the counterterrorism chief sidelined by Bush after urging more decisive action against al Qaeda before Sept. 11, blasted Ridge's office with a memo about the new department's design flaws, warning that the failure to include a policy office would leave the secretary helpless to control its independent fiefdoms.
"Creating a significant policy shop is like Bureaucracy 101," said Clarke deputy Roger Cressey. "We never heard anything back."
In fact, the G-5 had considered a policy shop. But the idea had been shot down, Ridge said, in an effort to streamline the department's upper management ranks. The White House knew Hill Republicans were skittish about a big-government scheme, and Daniels, the administration's budget hawk, told conservatives he did not want the department to spend more than its 22 agencies were already spending.
"The tendency to throw money thoughtlessly on problems was on full display" after Sept. 11, Daniels recalled. "It was easy to see that could happen again."
Ridge, who had won a Bronze Star as an infantry staff sergeant in Vietnam, knew he might be stepping into another quagmire at DHS. "Part of him was excited," said then-EPA Administrator Christine Todd Whitman. "Part of him thought it was a no-win situation."
Clearly, he could not count on unlimited financial support. And working in the White House, he was already learning he could not count on absolute political support, either.
One stark example was the White House's blockade of a Ridge-supported plan to secure large chemical plants. After Sept. 11, Whitman had worked with Ridge on a modest effort to require high-risk plants -- especially the 123 factories where a toxic release could endanger at least 1 million people -- to enhance security. But industry groups warned Bush political adviser Karl Rove that giving new regulatory power to the Environmental Protection Agency would be a disaster.
"We have a similar set of concerns," Rove wrote to the president of BP Amoco Chemical Co.
In an interagency meeting shortly before DHS's birth, White House budget official Philip J. Perry, who also happens to be Cheney's son-in-law, declared the Ridge-Whitman plan dead.
"Tom and I would just throw our hands up in frustration over that issue," Whitman recalled.
And not just that issue. Whitman said that Ridge was often stymied inside the White House: "He got gazumped a couple of times."
In his new job, the gazumping would continue.
The Push and the Pushback
On Jan. 24, 2003, Ridge was sworn in as the first secretary of homeland security; Bush hailed him as a "superb leader who has my confidence." Four days later, Ridge learned from the president's State of the Union address that a new intelligence center for tracking terrorists -- which he had expected to be the hub of DHS's dot-connecting efforts -- would not be controlled by DHS.
Ridge and his aides thought the center was one of the key reasons the department had been created, to prevent the coordination failures that helped produce Sept. 11. Not only had the White House undercut Ridge, it also let him find out about his defeat on television.
"We watched it and thought: 'What the hell are we doing here?' " recalled John Rollins, who became chief of staff for the new DHS intelligence section. "The White House did not support us," said one of Ridge's top advisers. "That occurred repeatedly. It was if the White House created us and then set out to marginalize us."
The first battle over DHS came when the White House tried to exile it from Washington. Initially, Daniels proposed to let cities around the country bid to host the new department as a cost-saving measure. Then the White House tried to park DHS outside the Beltway in Chantilly.
Just before the department's official March 1 start date, the Chantilly deal fell through and DHS ended up in a decrepit Navy complex on Nebraska Avenue in Upper Northwest, several miles from the rest of federal Washington. Top DHS officials had to share desks in a "gulag-like" hangar at Building 3; the White House initially told them it was temporary quarters until a new "campus" was commissioned. But the talk of a new home for the department quickly stopped.
Rollins recalled the opening days as "absolute chaos." In his intelligence office, there was no undersecretary, no assistant secretary and just 10 aides out of the 300 the office was supposed to hire. Many of the new DHS offices had been picked apart by the departments from which they came; Rollins had moved with the FBI's National Infrastructure Protection Center, one of three of the center's 150 staffers to make the switch.
At headquarters, Ridge had only a few dozen staffers to oversee a department that was suddenly responsible for everything from livestock inspections to floodplain mapping to the national registry for missing pets. He was also besieged by congressional inquiries, not to mention day-to-day security responsibilities; his first "orange alert" occurred 17 days into the department's existence. "Everyone," Daniels recalled, "empathized with Tom's near-impossible assignment."
Ridge radiated good cheer, and just about everyone liked him. But many senior DHS officials thought Ridge was outmatched. "He had no managerial ability," said one. "He was such a nice guy, and totally unwilling to knock heads and tick people off." Lawlor, Ridge's chief of staff, was more of a head-knocker, but he lasted only seven months. Former Navy secretary Gordon R. England, Ridge's deputy, was gone by the fall.
"It was one of the world's worst leadership teams," said a former White House official involved in the start-up.
Some of Ridge's problems were structural. The White House and Congress had left his powers unclear, and many key tasks had to be shared with other departments under contradictory laws and presidential directives. In some ways, Ridge's aides came to believe, they had even less power than when they were mere presidential staffers.
"You had a platform at the White House. Whenever you called a meeting at the White House, the other agencies came," Susan Neely said. "Now we're over at the department and the agencies didn't come; they came up with all sorts of excuses."
Ridge said he constantly faced "aggravating, annoying pushback," and he did not enjoy pushing back against the pushback. He let Tommy Thompson, the HHS secretary, have his stockpile back; he let FEMA keep its name. He could not even persuade agency heads to work out of a single DHS command post for a counterterrorism exercise. "Why the hell shouldn't you be in a single operations center?" Ridge asked.
The strongest pushback came from the Justice Department, where the mention of DHS inspired jokes about duct tape and chartreuse threat levels. Justice officials believed DHS had "too much focus on marketing and not enough on substantive delivery," in the words of one aide to then-Attorney General John D. Ashcroft. "They were consumed with their public perception," said Mark Corallo, an Ashcroft spokesman.
Indeed, one of the new department's biggest intramural furors was a branding fight with the FBI. It began when the director of a new DHS agency known as Immigration and Customs Enforcement -- or ICE -- decided to keep the catchy acronym but change the name to Investigation and Criminal Enforcement. The FBI, it turned out, had some proprietary feelings about the word "investigation."
"Over my dead body," Mueller, the FBI director, told one aide.
Loy had sensed trouble. "When I saw that one go by, I didn't have the time. . . . I said, 'Oh . . . surely, for God's sake, we're not going to waste time on that,' " Loy remembered. "But it just festered." In fact, Mueller brought the matter to the White House. "It got to the top, sadly," Loy said.
At the FBI's insistence, the White House had already forced ICE to give up its Operation Greenquest program investigating terrorism financing -- and forced Ridge to sign a memo pledging to keep his department away from similar investigations. But Ridge thought this spat was just silly; nobody was going to mistake ICE for the FBI.
Nevertheless, the White House told Ridge to back off.
"Folks at higher levels than yours truly said, 'We side with the FBI,' " Ridge recalled. "We thought it was as clear as the nose on your face. Bob [Mueller] disagreed. Bob prevailed."
Still Undone: Infrastructure Plan
In the early days, recalled former DHS inspector general Clark Kent Ervin, Ridge's senior staff meetings were dominated by "weekly, even daily talk about structure, 'branding' the department, coming up with a mission statement and bringing a sense of esprit de corps." But, Ervin recalled, "there wasn't a lot of focus on substance and specifics -- exactly what do we do and how? What are key vulnerabilities?"
Early on, Ridge and his aides realized they had no way to focus on long-term planning because they had lost the battle for a policy shop, a decision Ridge aide Robert B. Stephan called "the kiss of death." In the summer of 2003, Ridge asked Stephan to troubleshoot the flawed first draft of the department's National Response Plan for catastrophes. Stephan did not have a staff. "I'm like this magician up on stage, spinning plates, and I'm so far from the first plate that I'm not sure it's spinning anymore," he recalled.
Eventually, Ridge named Stephan, a retired Air Force colonel, to head a modest "integration staff" that would focus on big-picture thinking. But Stephan spent much of his time troubleshooting problems such as the department's plan to protect America's "critical infrastructure." The first DHS draft arrived a year late, and was little more than a list, with no analysis of what was most vulnerable or vital.
"The most common term used to describe DHS was 'frustration,' " said Harris N. Miller, who headed industry's Partnership for Critical Infrastructure Security. "Most of the world didn't see it until Katrina. We saw it all the time."
The infrastructure plan is still not done, which prompted the Sept. 11 commission to argue in a report card earlier this month, "It is time we stopped talking about priorities, and actually set some."
For all practical purposes, the department's real policy shop was in the White House, where the Homeland Security Council oversaw almost every detail of its work. The Washington Post reviewed one memo to DHS with a lengthy checklist of items the White House wanted regular updates about, including uniforms for border guards, the curriculum for teaching border inspections, the selection of a single firearm for DHS training academies and "batch processing" for new hires.
"White House staff micromanaged the department in the worst of all ways," Lawlor said. Loy called the White House's involvement "very much a heavy process."
After a December 2003 presidential directive outlined a new program of preparedness planning for DHS, the White House took the lead in deciding what scenarios the department was supposed to prepare for. A group led by White House aide David Howe produced a list of 15 likely catastrophes, including a nuclear dirty bomb and a Category 5 hurricane. It was an obvious job for DHS, but the White House did not trust the department to execute it.
Ridge's lack of influence inside the administration became painfully clear after an off-message moment on Memorial Day 2004. Ashcroft had taken to the airwaves warning of a dire terrorist threat, while Ridge had been publicly reassuring. The president took Ashcroft's side, according to sources in DHS and the Justice Department, and ordered Ridge to back down.
"There was an attitude in [the White House] that the department couldn't do anything right, that the department was not competent, and that carried through on almost everything you tried to do," one of Ridge's senior advisers complained.
Ridge's Plan Hits a Dead End
From his first day at DHS, Ridge pushed to create what he called "mini-me's," eight regional directors who would manage the department's assets in their areas during a crisis. It was Ridge's one major effort to put his own organizational stamp on DHS, and it was meant to ensure better preparedness for a disaster, the thinking being that "you can't plan a response in Los Angeles out of Washington, D.C.," Lawlor said. With hurricanes in mind, Ridge wanted one region to have headquarters in New Orleans.
Like so many DHS initiatives, Ridge's regions plan went nowhere.
Lawlor wrote the first draft, giving the mini-me's full control over the department's various fiefdoms within their regions. "That went over like a lead balloon," Ridge recalled. The opposition was led by some of Ridge's own deputies, such as FEMA's Michael D. Brown, who appealed to the White House.
Ridge worked hard to come up with a more acceptable regional structure, and he repeatedly announced at staff meetings that it was about to be unveiled. But the White House kept declining to approve the idea, and the impasse became increasingly embarrassing for Ridge. "On numerous occasions the secretary and deputy were saying: 'There's nothing more important than getting this regional structure set. We're going to roll it out next week,' " Ervin recalled.
By the time Lawlor left DHS in the fall of 2003, he had already concluded the plan was dead. "The White House killed it," he said. It was "too difficult of a political nut to crack" for the White House, Brown believed, since it would require DHS agencies to close their existing regional offices.
But Ridge, usually conflict-averse, continued to pursue his regions war. He sent Loy to the White House for another pitch, and even persuaded budget director Joshua B. Bolten to arrange a special appeal overseen by Cheney. Ridge decided to leave the department after Bush's reelection, but he left a memo for his successor pushing his regions plan, among other changes.
Ridge and Loy knew the department had lingering problems, and they left behind an array of reorganization ideas, from an intelligence directorate to a chief medical officer to a policy shop. Ridge's successor, Chertoff -- a former prosecutor who was Bush's second choice after former New York City police commissioner Bernard B. Kerik withdrew -- launched a sweeping "second-stage review" of DHS in February, and soon adopted almost all of their proposals.
Except the regions plan.
Chertoff said he concluded that Ridge's pet project would be a "disaster," further dividing a fragmented DHS into regional silos. But Chertoff agreed with Ridge that DHS needed to be much readier for the next catastrophe.
"I wasn't happy about where we were on preparedness," he said.
The next catastrophe was on the way. And DHS wasn't ready.
Staff writer Spencer S. Hsu and researcher Julie Tate contributed to this report.
FEMA's war with DHS
Tom Ridge and assistant Susan Neely, who worked to give the new Department of Homeland Security an identity designed to convey "strength."
The Department of Homeland Security from the air. The new organization was located in an old Navy complex on Nebraska Avenue NW, miles from federal Washington.