Federal, State and local governments' capability to respond to the consequences of a terrorist act, and this was essential in developing the Office of Homeland Security.

We are delighted to welcome you, Governor Gilmore.

STATEMENT OF HON. JAMES S. GILMORE, III, FORMER GOVERNOR OF THE COMMONWEALTH OF VIRGINIA, AND CHAIRMAN, ADVISORY PANEL TO ASSESS DOMESTIC RESPONSE CAPABILITIES FOR TERRORISM INVOLVING WEAPONS OF MASS DESTRUCTION, RICHMOND, VIRGINIA

Mr. GILMORE. Madam Chairman, I want to thank you for the chance to be here today in my capacity as Chairman of the Advisory Panel to Assess Domestic Response Capabilities for Terrorism Involving Weapons of Mass Destruction. I have submitted a written submission which is quite comprehensive. Let me give you some summary remarks, hopefully as close to the 5-minutes as possible. Congress created this Panel in 1999 as part of the National Defense Authorization Act. It was clear then, and remains so today, that our national efforts to deter and prevent and respond and recover from terrorist acts, while up to this point have been considerable and laudable and well-meaning, we still need a cogent focus to ensure a higher level of safety and security for our citizens. That is still true today. In the aftermath of the September 11 attacks, Congress extended the work of our Panel for an additional 2 years.

Senator this past week we met in Indianapolis and spent the majority of our meeting time hearing from a lot of the key stakeholder groups representing State and local officials who are working around the clock in partnership with Federal agencies to make the Nation more secure.

Our Panel has benefited from a unique composition. The same disciplines at the local, State and Federal levels that are now wrestling with homeland security issues have been represented around our table for the past three-and-a-half years. I think this is critical in terms of input and the reports themselves.

The challenges that we face are not Federal issues, simply. Beginning with the first annual report that we did in 1999, the Panel noted that the nature of the threat we faced and how it would be manifested against our citizens and how as a Nation would respond required a national approach. And by “national," we mean the combined efforts of local, State, Federal and private sector organizations working toward this common end.

So the perspective of our members, I think, is even more salient today, as many of us are directly engaged with actions in communities, States, and businesses. So the perspective of what is happening on the front lines, combined with the 3-year experience of our Panel, I think, is going to give us some insight that will be of benefit to the Senate.

As you have stated, you have invited me to address this issue of the Department of Homeland Security. This type of major restructuring was not what our Panel recommended. We recognize the issue that you raised in your opening remarks regarding mixed missions of all the different agencies, which is why we did not adopt this model.

Our recommendation provided for the creation of an office in the Executive Office of the President to better strategically integrate the activities of a wide range of agencies with responsibilities in this area. This recommendation was informed, in part, by a recognition that attacks on the Nation could cause profound strategic, economic, and health and safety problems. It could take the form of conventional or weapons of mass destruction or cyber attacks.

The plethora of scenarios and the needed focus on prevention and deterrence was not within the single mandate of any one Federal agency or level of government. Our Panel, Senator, viewed the issue as one of management and organization, which is different from the issue today, which is, of course, structure.

We believe that the needed coordination could be more effectively done at a higher level than Cabinet agencies to minimize the potential for turf wars that are inevitable when it comes to competition for resources, human and financial, and even prestige within the Government.

Now, this is not to say that what the administration is proposing now isn't the right answer. Clearly, as a nation, we now have the benefit of the September 11 experience. Our Panel, the Hart-Rudman Commission, and the National Commission on Terrorism made our recommendations without the benefit of this painful knowledge that we gained from September 11, and I think that the experience will allow us to be stronger in our conclusions.

Now, let me offer several points very quickly. First, the proposal to create the Department of Homeland Security has been described as the largest reorganization since World War II. But the proposal you have before you today has implications beyond the Federal Government.

In local communities and States across America, public officials and the private sector are engaged in securing the homeland and protecting against the lawlessness of terrorists who would seek to do our citizens harm. A major reorganization at the Federal level will have to be very carefully implemented. I can't stress this enough. There is a real concern here in the local communities that the whole idea of the reorganization could break the momentum on program delivery that is just beginning to catch full speed right

now.

Second, we need to have a clear understanding of what problems reorganization is attempting to solve. Our Panel noted a wide range of problems with national preparedness efforts, and I say national, not Federal. The Federal Government must play a leadership role, but solving the problems is going to need integration of local, State, Federal and private. As a Nation, we have to be clear in defining what those problems are.

We noted in our second and third annual reports the problem with the ability to collect, analyze, and disseminate critical intelligence. You have noted in your opening statement that there was a stovepipe problem.

Senator it is a horizontal stovepipe, not a vertical stovepipe. You were addressing the issues of CIA, FBI, DEA, NSA. The issue is beyond that. It is Federal, State, and local, and how that information goes up and down in the vertical stovepipe, not just the horizontal one.

Third, there are issues about the role of State and local governments in defining the problem. The administration's proposal provides for State and local coordination with the new entity, but it is critical that the State and local partners are engaged in the design and implementation phases, the need for communication back and forth with the Senate and the Governors, for example, not to mention the key local people around the country.

One of our local members that has served on our commission suggested that we leave the Federal business to the Federal authorities from time to time. This may not be the best model at this point in time. It may be that the States and the locals must participate.

Local responders, it must be remembered, are not helping the feds out. They are taking on the front-line responsibility in this war on terrorism. They are helping out the feds; it is not the feds that are necessarily helping out the locals.

The fourth part concerns the continuing need for a clear national strategy that continually articulates what we as a Nation are seeking to accomplish. The proposed department is not the national strategy, but will become the engine to implement the national strategy once it is developed.

So we can't afford an exclusive focus on discussions about the new department and not address the large strategic needs that will define the long-term national and international success in countering this terrorist threat. The national strategy is key to the efforts in determining how the proposal for the Department of Homeland Security can best be structured.

We have confidence, of course, that the U.S. Congress, though the budget and the legislative process, will take a considerable role in this structure, and the States and the locals must also be a part of that process.

Thank you, Senator.

[The prepared statement of Mr. Gilmore appears as a submission for the record.]

Chairperson FEINSTEIN. Thanks very much, Governor.

Now, I would like to introduce David Walker, the Comptroller General of the United States and head of the General Accounting Office. Mr. Walker is head of the premier agency dedicated to improving the performance and ensuring the accountability of the Federal Government.

The GAO has done really a fine job helping the Judiciary Committee, and in particular this subcommittee, and I want him to know I am very grateful. Mr. Walker began his 15-year term in 1998, following extensive executive-level experience in both government and private industry.

Welcome, Mr. Walker.

STATEMENT OF HON. DAVID WALKER, COMPTROLLER GENERAL, UNITED STATES GENERAL ACCOUNTING OFFICE, WASHINGTON, D.C.

Mr. WALKER. Thank you, Madam Chair, members of the subcommittee. I am pleased to be here this morning to testify on the President's proposal to establish a new Department of Homeland Security.

As you know, Madam Chair, last Friday afternoon we were asked to testify before this subcommittee. As a result, while time was limited, a number of GAO professionals have worked very hard to prepare a comprehensive statement that we believe will be of interest to this subcommittee and the Congress as a whole. I would respectfully request that that entire statement be entered into the record. Chairperson FEINSTEIN. That is this statement of June 25? Mr. WALKER. It is.

Chairperson FEINSTEIN. Thank you very much. It will be.

Mr. WALKER. Thank you. I will now move to summarize the major points.

The President's proposal represents the largest proposed restructuring of the Federal Government since 1947. His proposal is in some ways consistent with other homeland security-related legislative proposals, such as Senator Lieberman's, and past homeland security-related recommendations by various commissions, including those of the two Chairs seated to my left, and the GAO. It is, however, more comprehensive than most people expected.

While most people will probably agree that the establishment of some new Department of Homeland Security has merit, reasonable people can and will disagree regarding which entities and functions should be consolidated into the new department.

The President's proposal is premised, in part, on the notion that it is desirable to consolidate certain homeland security-related entities and functions in order to improve efficiency and effectiveness over time in this critically important area. He also recognizes that a number of other Federal entities and functions that have important roles to play in protecting our homeland will not be consolidated into any new Department of Homeland Security.

As a result, additional steps will be necessary to improve communication and coordination between these entities and with DHS in a number of areas, including knowledge-sharing and operational execution.

Irrespective of which entities and functions Congress ultimately decides to include in any new Department of Homeland Security, there are a number of critical planning and implementation factors that must be addressed in order to maximize the likelihood of success and manage any related risk.

Realistically, any proposal to create a new Department of Homeland Security likely will take a considerable amount of time and will cost significant amounts of money above the status quo baseline.

While consolidation and integration of certain entities and activities into a new Department of Homeland Security can serve to improve economy, increase efficiency, and enhance effectiveness over time, it can have the opposite effect in the short term during the transition and transformation period, which is likely to take a considerable period of time.

One major factor in this regard is the human element. Many employees of the new department will naturally be concerned with how any proposed reorganization will affect them personally. This can cause a reduction in productivity and effectiveness.

Timely and effective communication of both the proposal and related implementation efforts are critical to minimizing any related

adverse effects. We have seen this both in public sector and private sector mergers and consolidations, and I have a fair amount of personal experience with both.

Past large-scale government and private sector reorganizations and consolidations have disclosed a number of important implementation challenges. Effective design, planning and implementation can help to reduce the related costs and risks.

In order to assist the Congress address this important and complex issue, GAO has developed a proposal organizational and accountability framework for considering the President's proposal and addressing key related implementation recommendations.

Specifically, we have identified certain key criteria that Congress may wish to consider in connection with establishing any new department, determining which entities and functions should be consolidated into it, and assuring effective implementation and related reorganization over time, and that starts on page 6 of my testi

mony.

In my full statement, I have noted a number of key comments and questions that the Congress should consider in connection with the President's proposal and I would like to comment on a few at this time.

For example, GAO previously noted the need for a comprehensive threat and risk assessment and an overall national homeland security strategy. While the administration has committed to perform and provide these, ideally they should have been completed prior to any proposed realignment. In any event, these should be completed as soon as possible and used as a basis for any final design and implementation issues associated with any Department of Homeland Security.

Other key implementation issues will also be of critical importance. For example, short-term priorities must be set, including the need to pull the new department together and focus on a range of common elements from the outset.

For example, clearly defining the department's overall mission, core values, and primary objectives, filling key leadership positions, determining key skills and competencies that will be required, integrating key communications systems, and aligning institutional unit and individual performance measurement systems will be critical to success.

Any related consolidation will take years to implement and involve a range of transformation challenges. In this regard, the new Department of Homeland Security should be subject to all the major management reform legislation such as GPRA, the CFO Act, and Clinger-Cohen, and could benefit from having a chief operating officer who would be appointed on a term basis to focus on the many important planning and implementation issues that will span key players both within and between administrations.

In the final analysis, the key to any successful reorganization will not be the new organization chart, but the quality and commitment of the leadership and the people who must carry out the missions of the department.

While planning, processes, technologies, and environmental factors are important, people, policies, and practices will be the key to success. The creation of this new department provides us with