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PR- 214-06
June 21, 2006


Chairman King and Congressman Thompson, members of the committee, thank you and good morning. I promise I won’t talk for more than an hour and a half.

One thing that Congressman Fossella failed to mention when he described Police Commissioner Kelly’s experience – he not only has been the Commissioner of the NYPD twice; he has held every single rank in the New York City Police Department, starting out as a cop on the beat and working his way up. So certainly his experience in how to provide the kind of security the City needs is without parallel.

Let me thank you, Chairman King, for calling this hearing.  It’s more evidence of your longstanding, principled determination to make risk and threat the basis for Homeland Security funding.

Today’s hearing is entitled “DHS Preparedness Grants:  Risk-Based or Guesswork?”  That question I think certainly captures the sense of bafflement produced by DHS’s recent allocation of Urban Area Security Initiative funds, or “UASI,” funds for Fiscal Year 2006.

New York City and Washington DC – represented this morning by my colleague and co-panelist, and friend, Mayor Anthony Williams – have been, and continue to be, the nation’s prime targets for terrorist attack. 

New York is the nation’s financial capital, its media center, and the headquarters of the United Nations, for which the NYPD provides security, and for which services our City is currently owed some $75 million by the U.S. State Department.  This is debt that has accumulated for years. Perhaps this is what the critics of the United Nations are referring to when they rile against deadbeats at the United Nations. 

Our prominence explains why the streets of Lower Manhattan were the first battleground in the war on terror.  And New York City and the nation’s capital remain the only American cities to have sustained terrorist attacks originating from overseas. 

The written testimony that I am submitting to the committee discusses 18 separate planned, attempted, or successful attacks in New York City – 18 in our City’s history with terrorism.  They go back to 1990, and include al-Qaeda’s aborted plot – according to recent reports—to release deadly cyanide gas in our subway system in early 2003. 

Yet despite this history, DHS’s grant allocation reduces Federal support for vital anti-terrorist activities in New York City by 40%.  This is $83 million less than we received from DHS last year. 

The logic of that is, to borrow the words of Winston Churchill, truly “a riddle, wrapped in a mystery, inside an enigma.”

That’s not because there has been any shortage of explanations from DHS; on the contrary, we’ve heard an abundance of them.  But none has satisfactorily answered the question: “How could a rational process produce such a dysfunctional conclusion?”  

The Department of Homeland Security was created in November, 2002.  From the outset, New York City has energetically taken the lead – before Congress, at the White House, and in testimony to the 9/11 Commission – in arguing that DHS grants to localities should be allocated solely on the basis of threat and risk. 

Former DHS Secretary Tom Ridge repeatedly told us that those were the criteria he would apply to local funding if he were freed from Congressional restrictions that DHS funds be allocated using a per capita formula.

In response to our arguments, the UASI program was established in Fiscal Year 2003.  It has always been intended for “high-threat” cities.  New York City and Washington DC were originally on a list of just seven such high-risk cities. 

But, in typical fashion, that number subsequently ballooned to 50, and in this fiscal year stands at 46.  Is this the spirit of “high-threat” allocation?  No.  Instead, it makes the program the kind of political pork barrel it was specifically designed to avoid, contributing to the preposterous under-funding of Homeland Security in New York City for the current fiscal year. It’s a typical example of ‘say one thing for the press avail and do something quite different.’ And it makes the Fiscal Year 2005 Department’s Secretary’s discretion to award 60% of Homeland Security block-grant money based on risk a sad joke. This was a step forward, although we continue to believe that all Homeland Security grants should be based solely on risk. But the re-defining of ‘risk’ to include something for everyone leaves us right back where we started.

Now I applaud this committee’s decision to review the entire decision-making procedure and methodology used by DHS in awarding its grants, because it is a process that appears to be fundamentally broken.

I suggest you take a wide-ranging approach – to reassess, for example, the role of the peer review panels that evaluated funding applications. 

I urge you to ask if, by reviewing requests to protect more than a quarter-million “critical” infrastructure facilities across the nation, that DHS committed the classic error of losing sight of the forest for all those trees.  Just because a facility is “critical” doesn’t make it a likely target – and that’s the test that ought to be met in allocating “high-risk” funds.

I also hope you will also revisit Congress’s prohibition on using DHS funds for so-called “target hardening” construction projects that would make infrastructure installations less vulnerable to attack. Isn’t prevention what we should be striving for and response, the fall-back position?

I would especially ask you to focus on DHS’s clearly and frequently stated predisposition against providing grants to support recurring costs – what they choose to call “supplanting” local effort.

For New York City, this really is the heart of the matter.  This bias on the part of DHS penalizes us for our aggressiveness and diligence in protecting our City. 

To better protect New York City, we will invest close to $1 billion over the next four years in counter-terrorism initiatives. From hardening our bridges and upgrading our communications infrastructure to implementing a comprehensive security plan for the Lower Manhattan financial district, these projects are crucial to protecting all New Yorkers. In addition, to guard our City against terrorist attacks, we already spend more than $250 million per year of our taxpayers’ money in annual operating expenses.

In the face of such substantial needs, DHS’s refusal to pay recurring costs puts unnecessary burdens on our City.  After 9/11, for example, New York City very sensibly increased aerial surveillance of our watershed reservoirs.  But DHS has denied requests for funds to support this program on the grounds that, since New York City has been covering the costs ourselves, we can just continue to do so. 

Under that reasoning, if we’d been negligent, and not stepped up these surveillance flights, then we’d now be eligible for Federal funds to start them – a prime example of dysfunctional bureaucratic logic.

As I have said repeatedly, we will do everything possible to protect our City and then find a way to pay for it. But having the Federal government penalize us for doing what’s right is hardly a sensible national policy.

DHS’s bias against supporting recurring local costs punishes New York City for the effectiveness of all of our locally funded counter-terrorism and intelligence activities – efforts which have been deemed models for the nation by former Secretary Ridge, FBI Director Robert Mueller, and other leaders in the counter-terrorism community, both inside and outside of government.  I would argue that they’re better qualified to judge the effectiveness of our efforts than are members of a peer review panel who may not live in major urban areas.

In particular, consider two of the NYPD’s key initiatives: first, its Counter-Terrorism Bureau, which is so highly regarded that it has provided training to more than 800 Federal employees—including employees of the Department of Homeland Security.

And second, there is Operation Atlas, which deploys specifically trained and specially equipped patrol units to protect the City’s landmarks and critical transportation and financial infrastructure.

The effectiveness of such security was demonstrated in 2003. After repeated reconnaissance, an al-Qaeda operative called off the attempted sabotage of the Brooklyn Bridge, telling his controllers that “the weather is too hot” – a coded reference to the intense security on the bridge and in the waters of the East River.

That plot was not foiled by satellite-guided technology or other high-tech equipment; what protected our City was good old-fashioned “boots on the ground.”  And that is precisely why we continue to assign approximately 1,000 of NYPD’s best officers to the Department’s counter-terrorism and intelligence divisions. 
This year, we asked DHS to support both the Counter-Terrorism Bureau and Operation Atlas.  But unfortunately, we have been told that the Department does not intend to help cover such day-to-day personnel expenses.

Members of the committee, I hardly know where to begin in stating my disagreement.  But essentially, the question is whether you think, as we do, that investment in people is as valuable as purchases of hardware in protecting our country.

There is no doubt in my mind what the answer is. Nor is there doubt in the minds of Commissioner Kelly, or other experts in the realm of counter-intelligence and terrorism, or in the minds of the American people.  The only doubt seems to arise from the bureaucratic “group think” at DHS, which has produced such a nonsensical conclusion.

Time and again, human intelligence has disrupted terrorism planning, from the plot to bomb a major subway station in our City during the 2004 Republican National Convention, to the conspiracy revealed earlier this month to attack targets in Ontario, Canada.

To make the most of human intelligence, we must train police officers throughout their careers in how to contend with emerging threats, and how to use the equipment that Federal funds may purchase.  And we need ongoing Federal partnership in that effort.

It’s clear to me that we are still too slow in learning the most basic lesson of 9/11:
That we now live in a fundamentally altered world, one requiring that we think anew and act anew. 

In the area of Homeland Security, that means establishing a dynamic partnership, for the long haul, between Federal and local authorities.  We must, for example, recognize that the ongoing and painstaking work of training intelligence analysts in the NYPD is a shared responsibility – one vital to all Americans.   

Over the years, we have fought long and hard for the rational allocation of Homeland Security funds on the basis of risk. Now, sadly, we are losing the ground that we had gained. 
I hope that this hearing begins the process of setting things right again. Thank you very much.


Stuart Loeser / Jordan Barowitz   (212) 788-2958

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