U.S. Government Failing to Mobilize Private Sector in Homeland Security Efforts, Warns Council Special Report

Domestic Infrastructure Remains Largely Unprotected

May 3, 2006—“The federal government is not doing enough to harness the capabilities, assets, and goodwill of the private sector to bolster our national state of preparedness,” concludes a new Council on Foreign Relations Special Report. Nearly five years after the 9/11 attacks, public-private coordination on protecting America’s most critical infrastructure remains stunted. As a result, the nation faces catastrophic consequences when terrorists next strike, say coauthors Stephen Flynn, Council senior fellow for national security studies, and Daniel B. Prieto,director of the Homeland Security Center at the Reform Institute.

Neglected Defense: Mobilizing the Private Sector to Support Homeland Security is the product of a year-long project informed by a working group of senior executives in the private sector. The group found a core assumption of the White House’s 2002 National Strategy for Homeland Security to be flawed:

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.

The Council Special Report cautions, “The White House and Congress wrongly presume that market mechanisms on their own will provide sufficient incentives to provide the necessary level of security in the absence of decisive federal leadership and involvement….Security and safety are public goods whose provision is a core responsibility of government at all levels.”

Flynn and Prieto identify problems that have kept this public-private partnership from maturing:

• Federal government reorganization 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 address these and other shortcomings, the report urges Washington to change its approach, which tells companies to protect themselves. Flynn and Prieto recommend specific actions the federal government should take immediately, including:

• Quickly complete, as required by law, a national list of priorities for critical infrastructure. It is simply unacceptable that a list to guide federal spending and agency efforts does not yet exist.
• The White House and Congress need to stop 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 (DHS) must strengthen the quality and experience of its personnel. One solution is for Congress to 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.
• Congress should establish targeted tax incentives to promote investments and rapid adoption of measures that will improve the resiliency of the highest risk industries.

According to Flynn and Prieto, “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.”

Founded in 1921, the Council on Foreign Relations is an independent, national membership organization and a nonpartisan center for scholars dedicated to producing and disseminating ideas so that individual and corporate members, as well as policymakers, journalists, students, and interested citizens in the United States and other countries, can better understand the world and foreign policy choices facing the United States and other governments.

Contact: Lisa Shields, VP, Communications, 212-434-9677 or [email protected]