Council on Foreign Relations Policy Symposium: “Making New York Safer” Session 3: What Individuals and Organizations Can Do

Friday, September 8, 2006

PAULA ZAHN: Unfortunately for all of us, this is the fifth year marker of the 9/11 attacks. I couldn’t be any more delighted to be joined by such an esteemed panel, who I will introduce to you in Cliffs Notes fashion because I’m sure you know everything on their biography, and you’ve studied it carefully before came here today.

To my immediate left, Stephen Flynn, of course, who is with the Council on Foreign Relations; to his left, William Raisch, who is the executive director of the Center for Enterprise Preparedness; and Jeff Runge, to my left, who is a chief medical officer for the Department of Homeland Security.

Before we tap into this enormous brain reservoir up here, I’d like to remind you of some of the house rules. You have your BlackBerrys turned off, correct? Cell phone—I just turned my Sponge Bob cell phone message off so you won’t have to be subjected to the different sound that my children program into my phone every day. And I just wanted to remind you, at one point we will entertain some of your questions. I will not have a stopwatch on it, but please, no speeches. Keep the questions short so we can take advantage of the enormous wealth of knowledge up here.

I’m sure you’ve heard the president in a number of speeches over the last couple of weeks say that we are safer today than we were five years ago but we are still not safe. And the charge of this panel today here is to figure out how we can more effectively bring together the resources and assets of the public-private sector. So without further adieu, I’m going to start with Steve Flynn who can, I think, give us a pretty good sense of what your special report in the Council on Foreign Relations showed about that. And the conclusion, if I’ve interpreted this properly, is the government has not done enough to harness neither the assets nor the capabilities of the private sector. Why is that?

STEPHEN E. FLYNN: Well, there are a number of reasons. You know, the administration actually came out shortly after 9/11 with a strategy—a homeland security strategy that was published in June of 2002. And by the way, did you all know that this is National Preparedness Month? Actually some people here—good, good, good. All right. So this is one of our challenges of all of us. We’re in the throes of National Preparedness Month—

ZAHN: You can’t see all the duct tape. (Laughter).

FLYNN: Yeah, yeah. And this is, of course, some of the activities supposed to be going on. But it’s been a real challenge to get the nation to focus on this issue of preparedness. And part of the problem has been an assumption that was made that I think just turns out to be wrong, at least this is talking to private sector players, which is, early on, the administration said in the strategy when it came to figuring out how do we safeguard particularly critical infrastructures that we rely on that there’s, quote, “sufficient incentive within the market to safeguard these assets.” And that the job of the federal government is essentially the over-there war and borders. But when it comes to protecting these critical infrastructures, the responsibility lies on private shoulders as well as states and locals. And so, there’s a little bit of a—we shouldn’t be surprised when there’s not a whole lot more forward leaning than what we have here from the federal government, because they basically said we’re out of here, to a large extent, on playing this role.

Now, why isn’t the private sector filling it in? Because the data is that we’ve basically seen, over the course of five years, about a 3 percent increase in overall spending across the sort of Fortune 500 level in security. That’s not exactly a number that gives one a great deal of sense that the private sector has suddenly woken up and seen vulnerability and has rallied resources to safeguard them.

There are three sort of critical challenges that make this difficult for the private sector to do. One, overall security is a different animal than, clearly, things like safety, and that is very difficult to sort of measure and assess. If you’re asking any good CEO to make a decision about things, he’s doing it always in trade-off terms—there’s limited resources, so what do I do? When we drive a car into a wall, we know basically, okay, what kinds of things we can do to keep it from disintegrating and we have it measured and we can make some decisions. But security is an information that’s almost all in the public sector’s hands. Not that there aren’t important clues in the private sector, but (slightly less?) there.

So first, we begin the issue of well, what’s the threat? What am I trying to secure against? That’s basically under the cone of silence. The government has it, and it can’t share it. So you’re asking all those private sector to Ouija board, all right, what do we think is the threat here that we have to secure against? And we haven’t got this information sharing quite right yet, so that’s been a problem.

The second piece of it is just a classic level playing field problem. If you’re asking the market to do this, there’s no single unity actor in any sector. So if you ask one of them to do this, then what are my folks to the left and right doing? Security has costs; I incur these costs. And am I really securing a system or a network if I’m doing it independently and nobody else is following my lead? And so, it’s a tragedy of the commons kind of issue here: I do the right thing, nobody left and right is doing it; or I worry they’re not going to do it. So I incur costs without qualitatively improving this.

There are also this sticky wicket issue of liability to some extent. Do I fully acknowledge I have a vulnerability, try to take a reasonable measure to deal with it here and it turns out it’s not enough? And then it comes back to haunt me. Well, you obviously recognized you had a problem. So we get some general counsels in this that sometimes muddy the waters.

But here is the real clincher: Everybody knows that post the event, what the government right now is saying, largely, we’re hands-off; you guys know best; you own and operate the infrastructures; you should secure it the way you think; you wouldn’t want us messing in your knickers, we’ll only screw it up. Well, guess what happens the day after an event? The gloves come off. Congress with the able assistance of 26-year-old legislative assistants—(laughter)—write laws like the Aviation and Transportation Security Act, and voila, this is the new way of doing business. You can’t ask private sector to make potentially huge investments with this uncertainty knowing that if it fails or we have an event the rules are going to be written.

And so fundamentally, it’s about forging the partnership now. Partnership on threat—we need to have very candid discussions. There’s a lot that the private sector knows about their vulnerability that people, frankly, in the government don’t know. And so that has to be a mature conversation.

There also, clearly, have to be standards that are enforced. Some market tools can enforce that, but sometimes you need government to make everybody behave, so you level the playing field, so market knows what to do to deal with the uncertainty.

And finally, there’s got to be a sharing of accountability. Because right now, when you ask the private sector, secure it, if things go wrong the federal government does like well, who would have known the levees break? You know, you get this kind of hey, this is not—hey, we were both joined at the hip. We went through and said these are the desirable things to do. We’re vested in it. If it’s wrong, we’ll work together to fix it. You build trust and you can move forward.

But the bottom line here with the partnership, on the private side particularly, we really haven’t had sufficient U.S. government engagement with the private sector for it to move forward. That was the conclusion we drew from our project.

ZAHN: All right.

William, you’re Mr. De Facto Government. You’re going to represent all of government here today. (Laughter). Now, what might not be known to a lot of people in America is that—

JEFFREY W. RUNGE: I thought I was the government.

Paula Zahn, Stephen Flynn, William Raisch, and Jeffrey Runge

MR. : (Inaudible.)

ZAHN: Way down at the end.

There is actually a plan with a number and a letter attached to is that doesn’t seem to run off the lips of an average American that would give corporations guidelines on how to achieve some of the things Steve was just talking about. Can you run us through that?

WILLIAM G. RAISCH: Well, let me—I’ll pass off relative to the national preparedness plan—or National Response Plan—really to the esteemed gentleman from DHS to my left.

But let me also speak, though, to the question of what I think you’re saying here particularly is, is there any guidance out there for the private sector to respond to this issue? I had the opportunity in working with the 9/11 staff and hosting a diversity of roundtable discussions with business and government in the aftermath of 9/11—actually, a year or two years afterwards. And essentially, two questions came out, and the key one was, what to do? There, quite frankly, were as many cuts on preparedness as there were consultants, and oftentimes two to three per consultant. So the consequence of that was looking for some sort of guidance on a general basis.

I think certainly Steve touched base on this in terms of maybe the importance of standards. And I can tell you that there was a voluntary standard that was identified by both the 9/11 commission as well as subsequently endorsed by DHS and also endorsed by the American National Standards Institute, and it’s called the National Preparedness Standard, or NFPA 1600. And quite frankly, it’s no more than at least a high-level listing of the basic criteria that a firm or organization should undertake in terms of developing its own program.

ZAHN: Has anybody ever heard of that? Okay, good.

RAISCH: Okay, some of them. Quite frankly, though, a big part of it is education is critical. I think we touched on this in the earlier session and the importance so many of these things—there’s no such thing as just in time education that’s effective, whether we’re talking about the difference between what a nuclear bomb is or an RDD, a dirty bomb.

We need to, essentially, both on a corporate as well as a general public perspective, take on the educational challenge, just as it was referenced earlier, in terms of really the—you know, I wasn’t a World War II generation, but I did early ‘60s. I did spend my time under my desk at different points in time—God knows why in retrospect—but certainly it was part of the culture. We learned the why behind it. And I think the why or the what to do in that regard—I want to introduce also the issue of the why. Quite frankly—this was also touched on by Steve—but all of these what to do’s don’t mean anything absent a why to do it.

We talked about really the challenge of all these great resources. I can tell you that New York City OEM has some tremendous resources out there on their website, readynewyork. DHS does—Department of Homeland Security— The reality of it is that many of us haven’t addressed them. Many of us haven’t accessed them. Why? Because we don’t see that motivation to do so. And businesses are not distinct from that. Businesses, similarly, as was referenced, are bottom line-oriented machines. They’re looking at, essentially, P&Ls on a monthly basis. If they’re public corporations, they may be evaluated on a quarterly, certainly an annual basis. And they’ve got to, essentially, make decisions with limited resources. Until we address the issue of why, the what, quite frankly, is secondary.

And some of the areas that we’re actively looking at are insurance incentives. Working collectively with the insurance industry, moving with them to a greater connection between if I prepare then here’s the benefit I get in terms of premium and, if you will, pricing as well as other elements of terms. Looking at rating agencies—Standard & Poor’s and Moody’s. We have conversations currently with them to say you know what—and there’s a concurrence on their end how well an entity is prepared will directly impact how well it can in fact meet its debt obligations post event.

We’re working also very much so with the legal community—the American Corporate Counsel Association representatives, senior corporate counsel folks—to say in that aftermath of the event—where Steve mentioned the fingers start pointing afterwards—is there something—inevitably there will be accountability. And within the corporation, I think increasingly shareholders and certainly employees are looking to their senior management and their boards to do something in advance.

What we’re looking to craft collectively with the industry is some sort of, at the very least, a mitigation strategy. If you undertake reasonable efforts in advance of disaster, here’s how you will mitigate or minimize your exposure to litigation afterwards. We’re also, quite frankly, looking at what might be at least a selected safe harbor, an opportunity for corporations—if they’re compliant with a particular standard, perhaps NFPA 1600, at least on an emergency management business continuity, then they’ll have some shield from what is a very litigious society in that regard.

So we need to again address much of this when we look at corporate governance, insurance issues, rating agencies and the like, and really have the compelling why to do in addition to the what to do.

ZAHN: So, Jeff, in addition to what William was just talking about in terms of having some guideposts here and trying to achieve some of the things he’s talked about, what is preventing us from getting there now?

RUNGE: Well, I’m going to respond a little bit to something that Steve said a minute ago.

I think it’s true and it’s going to always be true that not enough is being done. I hear that phrase more than any other phrase since I’ve come to Washington: Not enough is being done. I heard it when I was the head of highway safety for the country; I’m hearing it now in Homeland Security.

ZAHN: Do you think it’s true?

RUNGE: Well, of course. I mean, it’s rhetorical. It’s always going to be true. It is a line that never reaches 100% for being prepared.

What we have here, though, is a situation in which there is a tremendous amount of activity being done with the private sector. We have a Private Sector Office headed by an assistant secretary, Al Martinez-Fonts, who was here in New York yesterday doing a Safe America event and recruiting this sort of effort. Under HSPD-7—Homeland Security Presidential Directive 7. DHS responds to certain authorities and Homeland Security Presidential Directives and congressional authorities. HSPD-7 says that DHS will protect the nation’s critical infrastructures. And under that plan, there are sector-specific elements that are developed in concert with the private sector in order to do those exact things. This seems laborious and somewhat glacial. However, it has to be done. Eighty-five percent of the critical infrastructure in this country is controlled by the private sector.

I think standards are a terrific idea. When I was head of highway safety (the National Highway Traffic Safety Administration), I advocated for voluntary standards for the motor vehicle industry. Ask them how they like the motor vehicle safety standards and being regulated. Now, we could regulate preparedness, but I don’t think this administration is going to take that point of view. I believe that moving towards a vision and a standard does constitute preparedness and is the way to go. I do think it is in the private sector's interest to get involved and to be prepared, just as FedEx and UPS figured out that if they make their drivers buckle their safety belts their costs go down.

ZAHN: So you think you can get compliance without making this stuff mandatory or regulated?

RUNGE: We will increase compliance as we begin to talk about what should be done and make some more normative statements about what is to be expected.

During the last session, hands were raised around the room when the question was asked about how many of you have a gallon of water per person per pet per day in your house. And a few hands went up. How many of you have a rally point for your family to go? How many of you understand what I mean when I say "shelter in place"? I would like to take this even further. How many businesses here have a gallon per person per day in their offices so that they can in fact shelter in place, so that people don’t evacuate into a hot zone? I know you have CEOs, you have CIOs, you have CFOs. How many of you have a chief preparedness officer? I believe there’s some corporate responsibility here that we should be including in our planning. Frankly, this element of our planning has been off of the radar screen.

ZAHN: You raise an interesting issue, because when you look at this statistic, it strikes me there’s a huge disconnect between what we all say and what we do. And I think you were citing a statistic that showed 90 percent of all Americans are either concerned or very concerned or somewhat concerned about their personal security. But when you dig deeper into the numbers, less than half of them have done anything about that.

So until we on a personal level are willing to accept responsibility, what are we realistically talking about with this private-public partnership?

FLYNN: Well, the question works at all levels, because there’s no substitute for—at the private sector—for the leadership, the senior management of the organization to say this is something we’re going to do, and from the COO on down. You know, the council in fact after 9/11 put together a preparedness tape and program—we improved here as well—it’s available even on our website. But it starts with, you know, our former president, Les Gelb, coming on saying hey, this is important. And it goes down to our senior managers saying these are the things that we’re doing and a little spiel on the threat. But it basically—it’s, you know, talk to your people saying these are the things why we need to do this here, and there’s direction from the top and engagement from the top to do this. And so that just is so very important.

But, you know, there are three reasons—I mean, I think the key here is that folks disconnect between what they sense is a fear that’s something they should do this and the reality they’re not acting on that. And so I think, you know, motivation should be really three things.

One, I think we could do a much better job making the case around civic duty, good citizenship. What you heard from the last panel here, and this is the very best in the world in terms of being able to respond to things—like the fire, emergency management and public health, this is the top bar—but clearly for major events it’s going to be overwhelmed. You shouldn’t be a part of the overwhelming because you’re not prepared. So I think the basic way in which you can get the message out and take it out of your, you know, jeez, we all got to be worried because, you know, my children talking around the table here, because we may be in the fodder here where, you know, we’re all hurt. You say, you know, why we’re preparing, why we’re putting this plan together is so that we’re off the books in terms of the pressure on the emergency management system. We’ll be calm, we’ll be cool, we’ll know what we’re doing. We’re able to shelter in place for three days. So therefore, we’re good to go, and the people who really need help, who are in a life and death situation, our emergency responders can attend to them.

But if we’re down to our last pill in our medicine cabinet, and therefore we’re now running to the emergency room because we didn’t bother to actually have a little extra stuff in stock because we have a 24-hour pharmacy around the corner, so what the heck. We get into this just-in-time lifestyle where we basically take our—(word inaudible)—here and then we’re going to be a problem. Because if we don’t have our diabetic medication, we don’t have other things, we end up very quickly compounding the real casualties. So one motivation is this is a big act of citizenship, and I think we can do a lot better on that as a message.

The second is a peace of mind message. And I use the analogy, you know, nobody goes on a camping trip or goes off on a recreational boat ride here and doesn’t do basic things like, you know, check the life preservers out and make sure the flashlights work and so forth here. We don’t do that because we’re paranoid. We do that because it gives us peace of mind when we’re on the camping trip, you know, where we know we’re away from everything. What we have to start treating is that in urban life, particularly today, there are times when the lights are going to go out. There’s time’s when things are not going to work out quite as planned—so checking the flashlights in advance. But anybody who basically heads off the mountains and doesn’t do the basic stuff—no first aid kit, didn’t check the tent out or anything else—we say those guys are nuts when they get in trouble. Well, we’re acting collectively like nuts knowing that these things are going. But it’s a peace of mind issue. Again, you don’t do this—you enjoy the camping trip, you enjoy the boat ride because you know this is taken care of. So that’s another way.

And then there’s just the practical nuts and bolts that makes a world of difference. You know, it makes a big difference whether you have the ability to shelter people in place or be exposed in the area where there’s a lot of bad stuff. And so companies can do a great service by having the ability to put their employees in the building and not sending them out into a contaminated issue. It’ll make a big difference to the quality of life at a relatively low cost.

ZAHN: What other incentives can be dangled out there for corporations to get more actively involved in this?

RAISCH: First of all, I think that there’s what’s called—I want to term it kind of the tyranny of isolating risks. I think we need to make it simple, and we need to chime in on something that Michael Berkowitz from Deutsche Bank mentioned earlier, which is the concept of all-hazards.

I think we get wrapped up individual risks. We talked about a dirty bomb earlier in the program. We talk about hurricanes. We talk about this, that. And we tend to dispense with each one of those risks individually saying, well, a certain probability of that, a certain probability of this.

The reality—that is—particularly corporation-wise—that something’s going to happen, and especially in this world of globalization—there was a study recently done by an outgrowth of Oxford University, Oxford Metrica, where they looked at the global 1,000 corporations over a five-year period of time. And they found an 80 percent probability over a five-year period of time that a significant event would occur, a crisis, but they didn’t define whether it was a plant fire or segregate it as to whether it was workplace violence, et cetera. It was a significant event that resulted in a 20 to 30 percent loss of the corporate stock price—the market capitalization.

And I think part of it, we need to realize that if it’s not one thing it’s the other. It will happen. That’s a probability issue. We need to get over the perceived risk sense that nothing’s going to happen. It will happen. But we also need to know, in terms of capability, there is an all-hazards approach. There are some basic things that, irrespective of whether we’re a family or whether we’re an organization, that we do. We communicate with each other. Sometimes we shelter or evacuate.

These basic elements make it simple and it doesn’t become overwhelming for the corporation to say, listen, I need a plan for this and a plan for that and a plan for this where your core is the same. Maybe you have different appendages, different, you know, annexes that address particular nuances, but I think we need to realize there’s a significant risk out there. We need to realize that it’s an impactful risk that’s going to impact us and our organizations. And we need to realize that there are responses out there that are not overwhelming, at least at their core.

That all translates, I think, to basic accountability. Because that finger pointing that was mentioned earlier by Steve, if you—my equation in this is if there’s high probability that something’s going to happen, which arguably I think there is, generally, high impact and there’s a capability to do something about it, then we all—whether we’re parents or whether we’re CEOs or board members, we have an accountability to do something about that in advance. And I think that’s perhaps one of the most compelling elements that we should focus is that arithmetic of high probability plus high impact; some capability to do it equals accountability and we all share that accountability.

ZAHN: I see you nodding in agreement, Jeff. What else can we do—

RUNGE: Well, absolutely.

ZAHN:—to increase those odds?

RUNGE: You know, we’re talking in levels here. We talk about the federal government, which is neither vast nor fast—well, perhaps it’s vast, but it’s certainly not fast. It takes 72 to 96 hours to mobilize many of the Federal resources that are required to respond to a disaster. Some medical responses can be there in 12 hours, but others take a while to mobilize. That’s why we put such a tremendous emphasis on state and local governments having plans, integrated under the National Incident Management System, to respond.

You heard the chief say earlier today the department has a four-minute response time in New York City. It’s the best fire department in the world, best police department in the world, best public health system in the world. But the fact is, four minutes is not going to buy you security. It’s not going to buy you preparedness. The first responder to arrive gets there in four minutes. People must understand that they have personal responsibility as well. They can leave it up to their employer, which is somewhat of a default we seem to be taking here. I would disagree with that a bit. It's an individual'sresponsibility to make sure they know what “shelter in place” means, that they know where their kids are and that their school has a plan for sheltering in place.

You know, there’s a little gizmo here that is put out by that is a family plan. And it fits in your wallet and it tells you to prepare by getting a flashlight, batteries, three days supply of nonperishable food, prescription drugs, a first aid kit. It’s your responsibility to do just the very minimum things so that you are not part of the problem.

And I think our fault, if we have one here so far, is that we have not consolidated the message. You know, if I say to you, “Things go better with Coke,” you know, you’ve heard that. If I say to you, “When you’ve had a Bud, you’ve had it all”—how many of you have heard of “Click it or ticket”? Come on, be honest with me. Okay, sure. How many of you have ever heard of Well, there’s a crowd that’s, you know, that’s web aficionados, but—(laughter)—but the fact is that, you know, we have not consolidated the message to change public behavior.

Now many of those slogans were done probably not a mile from here. You know, where are our resources in communicating to the public a need for change? You know, “Click it or ticket”—I’ll take credit or blame for getting this to the country. It made people buckle up to a point of 82 percent across the country. Well, we haven’t done that for preparedness yet. We haven’t done it for, you know, it’s your responsibility. If you are not prepared, you’re part of the problem.

Frankly, I’m not a marketing guy. I’m a doctor. So I don’t know exactly how to do that, but I just know that we have to get it done.

ZAHN: So if we look at the enormous strides you all think we need to take here, what is the chief thing standing in the way?

FLYNN: Well, I think we’ve sort of hit it across—it’s hard to see—(word inaudible)—there are so many levels here. We’re not, I think, coming clean about the extent to which we remain vulnerable. I think that’s clear. And then we’re not following it up by having a coherent, straight message about, take a deep breath; we can manage it.

I would argue we’re sort of in this environment right now where it’s essentially like we’ve gone to a doctor’s office and the doctor said: “You know, you’re extremely high risk for heart disease. Have a nice day.” We’re under this umbrella of terror and the threat. He doesn’t tell us we can make lifestyle changes. He doesn’t tell us that there is actually some medications that do work, but he’s just sort of sent us on our way.

One of the problems here is that, you know, overwhelmingly our war on terror is being fought out of body, you know, overseas. We do it over there so we don’t have to do it here. The best defense is a good offense. So to some extent, that’s created this lull in the sense of okay, well, if they’re doing it out there, I guess I can pursue happiness here. And so the messages are very confused.

And I think what we really need to say is that we hope that works and we’re putting, obviously, a lot of effort here, but it’s not always going to work. And therefore, take a deep breath, there are some lifestyle changes we can make. They’re relatively modest—the kinds of things we talked about here. That’s like going on a camping trip for an all-hazards kind of approach, and that can work at the company level as well as the individual level. Good peace of mind, good citizenship and so forth. Drive that home here, and then, obviously provide the capacity for us to do that, to make the issue of our preparedness as much of a component—and I would argue increasingly it needs to be more of a component than even what we’re doing on the offense.

Because at the end of the day, it’s not about what the terrorists can do to us that is the biggest threat here. The real threat is what we can do to ourselves when we have acts of terror on us and we get spooked. It’s about resiliency overall, our state of national resiliency to deal with acts of terror that I think is what is most critical to address. And it won’t get addressed until we essentially put that out on the table and then invite people in, in a conversation to deal with it.

ZAHN: So what kind of a timeline are you all talking about here before you would be satisfied with this level of preparedness and partnership between the public and private sector?

RAISCH: I think we’d all be honest to say it’s an ongoing evolution. And I think speaking as an old Eagle Scout, I mean, “be prepared” has been around for a long time. How much we do about it varies. What I do think is it’s probably measurable, you know, there’s metrics there. You know, Jeff was mentioning, really, “Click it or ticket” as an example. And to really reflect on, really, what Steve just said in terms of good citizenship, I think that’s wonderful.

I guess I, you know, if we don’t—if on the basis of, you know, what we think is an outside threat and so forth, we haven’t done anything so far and we’re five years out of 9/11, I’m not going to count on good citizenship really to take us too much further. I really do think we need a compelling message. I think as everyone—and you’re arguing this as well—a compelling message, but we need some sort of an impactful, whether they’re incentives or some sort of a motivator for both the general public as well as the individual organizations.

Now, “Click it or ticket”: Why did it work? It was—it was click it, because generally, if you get in an accident you’ll be much more likely to survive and so forth. It’s good health policy. What was the latter part of it? It was ticket.

Now, I’m not suggesting—I really think there’s some market-based approaches that will work with this, whether they’re insurance incentives, whether they’re issues of readiness acknowledgment, corporate governance. Maybe we should be reporting, really, what it is that we do on a corporate basis, on a public reporting basis to consider so we can identify those corporations on a voluntary basis that we’re doing all these good things. You know, we think it impacts both the safety of our supply chain, but also it’s good citizenship.

So I think we need to get the why behind the “what” as well, and I think unless we deal with both of those in concert, that we’re not going to have the most effective results.

ZAHN: So Jeff, what are some of the other motivations that could be provided?

RUNGE: Are you speaking corporately?

ZAHN: Corporate.

RUNGE: Well, the corporations, you know, we were—we’ve had a lot of discussion around businesses in general. And I do think we have to be a little bit more specific about incentivizing certain businesses.

When it comes time to respond to and recover from a disaster, there are lots of different businesses—whether they are the petroleum industry, whether it’s electronic grids keeping the lights on, whether it’s hospitals that are taking care of people. It may not be as simple as—I would sort of defer to the business guys here. But you know, when I think about health care, for instance, you know, we have a “just in time” society.

We have squeezed all of the overhead out of our health care system, and I suspect probably many other businesses as well. So there’s—the way that health care is financed, and I suspect the way that other businesses are financing their business, there’s not a lot of room for investment in preparedness for something that is extremely unlikely to occur to you. However, if it does occur, then the consequences are very high. So it’s, you know, it’s low occurrence, very high consequence. How do you make an investment decision around that to spend precious overhead on that? I frankly don’t know.

I do know for the health care system—I believe that we need to program into health care spending the issue of medical surge capacity, which does not exist—it doesn’t exist in this city or any other city—just generally how we do medical preparedness. So it’s a question that I really can’t answer, other than to say that I think we do need to be more specific about targeting incentives for businesses.

RAISCH: If I could just add briefly to that, and I think it—whether we’re talking health care or the like—certainly I think there’s a strong role for the public sector, government in particular, and perhaps some of those incentives look at tax incentives, tax credits, et cetera. If we can—are protective of our agricultural industries and we can look at the varying depreciation rates of hogs versus, you know, cattle and so forth, then we can have some tax policy that looks at saying, listen, the private sector and the public sector are in this together. Eighty-five percent of the private sector—85 percent of the critical infrastructure is controlled by the private sector. The government needs to take a proactive stance and have a cohesive program, I think, to encourage that.

And I think one of the vehicles, certainly, would be the tax credits, tax incentives in that regard. And I think you’ve touched on that, certainly, in some of your research, Steve, as well. But I do think that it does have to be a cooperative effort and we need to do this now, not in the aftermath of the next event.

ZAHN: Steve?

FLYNN: I can just—that’s an interesting point that Jeff made. And this was important when we went through our own work here. While not surprising with the task force here in the council, we drew heavily from the financial community who occupies here. But when you go through it sector by sector, of course, the private sector is a very diverse set of players.

The correlation between where we’re making progress on security is where the relationship between the federal government and largely regulators and the industry is very robust, because there’s an effort, but there’s both an awareness of common sets of problems and challenges and there’s an element of trust, albeit always a little bit of a push and take, but that’s there.

You go to places like the chemical industry or the food industry that have traditionally been managed state and local level, where there’s very little federal capacity. So one is you find the industry is going: “Who the heck in the federal government actually knows my sector? Who’s going to come in here and tell me how to do stuff?” All right? And that’s a legitimate concern, because if they’ve been loosely regulated, there’s no capacity there for it.

Secondly, there is this, you know, how’s the dance work? It hasn’t been well developed. But the reality is we need to look sector by sector and figure out—calibrate where the incentives are. But what is the dominant message that came out of—everybody on our task was a private-sector player, except for myself and—(name inaudible)—who wrote the report. But (Don’s ?) message is, we’re willing to play; we can play; we bring tremendous capability; but the federal government, you have to be much more forward leaning than we are right now.

And it’s basically, in some cases, it will be standards; in some cases it will be regulations. The transportation industry, as you know, Jeff, from your—(inaudible)—they live and die by standards. And you know, the box has to fit on the train, the truck—we can’t negotiate this. It’s to be 40 foot by eight foot by eight foot. All right? One each. If we don’t come up with that, it’s not going to work. The key is, the conversation needs to be informed, perhaps even led by the private sector. But at the end of the day, it’s the government’s responsibility to say, here’s the game plan. This is how we’re going forward. Here’s the carrots: tax incentives or breaks. Here’s the sticks: the ticket if you don’t play by the rules. End of discussion. And then they’ll move. It can move very quickly, as we’ve seen with other sectors.

But as long as we operate under this passivity mode here, which we’ve been really operating under five years—this coaching and hoping and this kind of thing—we’re simply not going to be able to deal with this reality in the private sector that, you know, you need a little bit firmer ground here for people to make decisions.

ZAHN: So (do you have any ?) faith the federal government ultimately will goose this in the way you want it to?

FLYNN: Well, it simply has to. And let me just add another feature, you know, here at the Council on Foreign Relations, why this so important. Many of the things are being regulated at the state and local level. These are increasingly global infrastructures. You know, if you ask the Port of New York-New Jersey to raise its bar in security, it’s competing with the Port of Halifax. Now, the governor in New York can’t negotiate with the government of Canada to say, we’ve all go to raise this bar together. But guess what. If it gets too costly to come in here, people make the business case to go into Halifax. Same with chemical industry: these are global markets now. So the federal has to be there not only to unify effort here at home but also to leverage into making sure internationally we’re all trying to raise the bar across the board, because the risk isn’t just here.

RAISCH: And if I could chime in—I think clearly the government needs to be an actor on this. And I think we’d all at this table, though, agree that it’s not just the government. The last thing we want is standardization that is conceived of an all due deference, you know, some place in the District of Columbia that has no relevance to the outside world.

In fact, there are very positive elements right now. There’s a—the American National Standards Institute is the United States standards organization and it has a homeland security standards panel that has representation by both government as well as predominately private sector. And it’s those type of initiatives where there’s cooperative elements where essentially the business can more or less ground much of these elements—and there’s logic behind standards from an efficiency perspective—that we’re all on the same page. That issue, that even Steve touched on before, that one company wants to get out and—if it decides to make investments beyond what normally it would be, it doesn’t want to necessarily be the only guy out there doing it on a civic pride basis and find that its competitors are undercutting its expenses by taking the short route, if you will.

So I think the key to all this is that public-private. It’s cooperatively working together. It’s looking to, I think, lead with market base. But to a certain extent, certainly governmental roles, whether they be tax incentives or some other element of incentives, need to be considered, but it’s got to be a joint effort to make it really work.

ZAHN: Jeff, do you want to add anything to that?

RUNGE: It’s hard to add anything to that. I mean, I do believe that businesses are going to have to—in fact, I’d sort of like to know, without soliciting speeches from the room, you know, how many really are willing to make that investment? And as Steve said, people in this room are competing on a global basis. And if it costs money to be prepared, how are you going to compete on a global marketplace? I frankly don’t know.

I do think there are—there’s a lot of things that we can do that are not expensive. And maybe we should start with just the basics and we talked about some of those things today. But I do believe that leadership from senior executives in a company that says, “This is important”—just like FedEx and UPS saying, “Guys, you’ve got to buckle your safety belts”—to have—to insist that its employees have a family plan and let them know that they are in fact safe sheltering in place—in their place of business would be a good place to start.

ZAHN: Tell me what kinds of differences you’ve found in the level of preparedness—preparedness between small, medium-sized companies and large corporations?

RAISCH: I know we had briefly touched on this perhaps before, and we in fact just recently completed in cooperation with the American Red Cross in greater New York a survey of small- and medium-sized businesses in the city of New York here. And this was just completed in the last month or two.

And the sum total is that there is a dramatic differential. I mean, as much as—quite frankly, I think probably our representation here is predominately on the larger size corporate-wise, and there’s a lot to be done in that regard. Without question, the dearth in terms of preparedness is on the small- to medium-sized corporations. Statistically, we found essentially just one-quarter, 25 percent, of all firms surveyed had anything in the way of a formal preparedness program. Furthermore, only about four out of 10 employees had received anything in the way of preparedness information, preparedness training.

So clearly, you’ve got the small- to medium-sized business that’s looking at next week’s payroll and how much advertising they should do, et cetera. And unfortunately, they are—the better part of us, as we know statistically, the better part of our employees, the better part of where all of us work in a collective basis in the United States—and there’s a tremendous need both for, I think, general education in that regard in terms of the importance of preparedness and also the tools and resources that are offered by programs such as Ready New York and and so forth, that, unfortunately, are resources out there that aren’t generally widely known but they could be a great asset, coupled with, again, that why—the motivation to do so.

ZAHN: I don’t see any of my bosses out here from Time Warner today, but I want to say with pride, when we moved to the new wonderful headquarters—which happens to be, we were told, a premier terror target—we were all given pretty substantial terror preparedness kits. And I know we didn’t use to take disaster drills or fire drills too seriously, and we’re now routinely now working on that. So I’m wasting my time, because my boss isn’t out there.

FLYNN: I’m pleased to say, because my boss is here—(laughter)—that we also have for both our employees—but also because we have a lot of guests here all the time here—kits to help, basically, us survive in place here: the basic things like analog lines—when the lines go, we can still make calls out—remote websites, and an effort to let other people (how to know ?) on a sort of small scale. So we tried to put, here at the council, put our sort of “walk the talk” to a large extent.

And some of this issues, though—and this really, you know, sometimes it seems all so complicated. It seems all so much. We’re trying to secure our chemical sector. I mean, how do you begin? When it is things like—Ken Damstrom is here with Lehman Brothers. And one of the things they have done, it’s very straight forward, is when there’s a fire drill, an evacuation drill, they turn it into a town meeting. And it basically is a way to which you get people to talk about, okay, what are the things that are concerning and worrying you here? And a chance for the security people who are there to, you know, take messages on boards.

It’s sometimes very small things like that that can make a world of difference to employees’ sort of sense of well-being, “who is actually out here looking for me?” And you get a good list, usually, out of that that you can go and hunt down.

And whenever you—you know, it’s a core—(word inaudible)—principle, whenever you get feedback from somebody, whether it’s a threat or whether it’s an idea, is you’ve always got to go back to them. If you want to stifle any sense of initiative and engagement here, make sure you—you know, you have just a voicemail that receives the call, and never call back.

So some of it’s not—it’s not rocket science here, you know, this preparedness thing. It’s just a changing of mind-set that we need to take. But there are clearly some heavy liftings—I mean, big vulnerabilities with huge sectors that we’ve (roundly disrupted ?), that both the private sector’s lack of engagement to date in any serious way, as well as the federal government’s engagement, are big holes that we need to address.

ZAHN: Now we’re going to turn to you for your input. Just a reminder that I want you to state your name and your affiliation, and no speeches, please.

Sir? Please stand.

QUESTIONER: I want to get back to—my name is Stuart Weiss; I’m from the Center for Health Care Preparedness. I want to get back to the—and ask you for comments on the prepared-for-what comments that you made initially. When I look at the federal government now—and to borrow one of my colleagues’ terms, I look around and I see random acts of preparedness. I see New York City doing one thing and then I look across the river and I see every one of the 682 towns in New Jersey doing something different. And some people are buying garbage trucks and some people are buying, you know, whatever else they want, with Homeland Security money. So it seems—I’m not going to make a speech, I promise. (Laughter.) But it seems problematic—

ZAHN: The clock is ticking.

QUESTIONER:—yes—from the private sector side, to understand what to prepare for, when we look at the government and we see all these random acts and no standards and nothing else. So I don’t know if you can comment on that.

RUNGE: Let me take that first, Steve, and as a—(inaudible)—you can talk about effects-based planning when I’m finished with this.

There is in fact a Homeland Security Presidential Directive Number Eight which tells the DHS to come up with target capabilities. And it’s part of a National Preparedness Goal that has been ongoing for a long time and in fact, it’s virtually finished, and while it’s never going to be totally finished it will be living document. But the fact is that you can’t plan unless you know what capabilities that you want to achieve at the end of the day, and to understand your current status and then where those gaps are. And from that gap then comes a cyclical planning process that generates requirements.

Now, the thought being that yes, we do need a national architecture for preparedness, but the needs of the state and local governments are quite different. The needs of the fire department in Shanksville, Pennsylvania, where United 93 went down are vastly different than they are in Lower Manhattan. So it would be a mistake to be prescriptive about how those monies need to be spent, and we have to give the communities flexibility in order to that.

Now, the caveat is that they have to actually do the planning. They have to identify the capabilities and they have to then figure out where the gaps are in order to spend the money. In reality, I think some sectors have been very frustrated—notably health care and EMS—because the big hogs at the trough are lining up and getting all the corn. Pardon my North Carolina metaphor. (Laughter.) But in fact, there are people who do get left out because they are simply not in a political position to make those inroads. And since you’re from the Center for Health Care Preparedness, I suspect that I’ve probably hit that nail on the head.

We do owe it to all sectors to make sure that this architecture in fact is being accomplished at the state and local level, and in fact we probably have not been, in some ways, prescriptive enough about certain sectors that need to take advantage of those grant funds. I appreciate your question.

ZAHN: Did you want to—

FLYNN: Yeah, just that a key, I think, challenge here has been—and a lot of this is—our thinking is still pretty fuzzy on this. The federal government, for reasons of that—traditionally, preparedness and response is done at the local level and states, for lots of good reasons—but has basically said we’re not going to set minimum standards or requirements or capabilities here because we don’t really know this stuff. States and locals know it. But actually, they work through states. Well, it turns out, actually, most states really don’t know this stuff either, because the expertise is really at the local level. And now you’ve created a real political problem for a governor. Do I give all the money to New York City? You know, how would that work with folks up in Buffalo? And so you’re really putting the state in the middle road, and what you see here time and again, from people I’ve talked to at all these levels, is the locals basically look up at the state, the state says the federal government should be doing it, the federal government says the states and locals should be doing it here, and you end up with essentially this, okay, money comes and it’s not against any standards.

What we clearly need to do is identify a tiered level of what community readiness, minimum, should be. I think there’s (wary ?) in Washington doing this, because somebody’s going to say well, who’s going to fund it? If you’re setting it as a minimum requirement, there’s some purse strings associated with it. When you make it voluntarism, then they’re off the hook for the cash, and that’s a lot what’s going on here. It’s all about money, all right? A lot of this is all about money. You know, the U.S. government can’t respond in 96 hours or—(inaudible)—that’s a choice we make as a society. And the fact was, after the earthquake of 1906, William Howard Taft had trains leaving Washington in 24 hours with medical supplies going across the country. That was 100 years ago, all right? So it’s not that it can’t be done; it’s a choice issue that we make.

But the bottom line here is we need to, with the input of people of expertise—again, you don’t want this cooked up in the cone of silence up in DHS or anywhere in Washington. Here is a standard, but the federal government says, tiers one through six. The minimum thing, everybody in the community should have this, and if they can’t get there, we’ve got to figure out how we pay for it. And that’s the conversation we’d have. But as long as we do this “Hey, you guys know best,” and at the local and state level they’re kind of doing a shrug too, you’re going to end up with a kind of catch-can approach to spending the money resources—(inaudible)—the capability we need.

ZAHN: In the back row?

QUESTIONER: Hi, I’m Irwin Redlener from Columbia University again. I think Steve has just pointed out to the key, core problem here. There’s an unbelievable disconnect between the federal rhetoric around preparedness and the reality that we’re seeing in communities. And it’s not just a question of Topeka’s fire department having different needs that New York City’s. We’re talking about adjacent fire departments in rural states where they’re using their DHS money on one side to buy a new fire truck and on the other side to paint the fire station. This is literally happening. I think there’s—you know, you talk about an understanding that the federal government needs to communicate to companies and the private sector. The fact is you have a 15-person office in DHS needing to communicate with 25 million American businesses. It’s—there’s preposterous disconnects, resulting in incredibly disorganized and dysfunctional reality on the ground, and this is one of the things I think we’re deeply concerned about.

So my question is, how are we going to move the federal government’s capacity and ability and funding really to do what they say they are attempting to do? Because it’s just simply not working. It’s just too disconnected. What is being recommended, say, for pandemic flu is the mother of all unfunded mandates. There’s never been anything like this in American history—so much money being spent with disorganized results, on the one hand, and tremendous mandates that are going out there without dollars behind them. And this is paralyzing, I think, really, the ability of the country to improve its overall level of preparedness. It’s not going to happen until those roadblocks are met with and dealt, so—

MR. : Was that a question? (Laughter.)

QUESTIONER: That’s a question.

ZAHN: Jeff, do you want to take that one on?

QUESTIONER: What are you going to do next, Jeff?

RUNGE: Yeah, actually, a lot of those points are very, very well taken, and I would like to point out that DHS is—it’s fundamentally a year and a half old. Of Secretary Chertoff’s 23 direct reports, 21 have come on board in the last 14 months. There has been a tremendous reshaping of how things are going, and in fact, that 15-person office is seven times larger than the office, and it’s twice as large as the chief medical officer’s office, even though nominally we’re supposed to be responsible for coordinating biodefense. So we do have growing pains.

We are—it’s a constant negotiation, and the problem is we operate on one-year budget cycles. Well, we’ve got a Senate Appropriations Committee right now that is looking to cut one-fifth of the science and technology budget out of DHS. So I’m not sure exactly how to respond to that question, other than “I feel your pain.” (Laughter.) You know, the pandemic flu implementation plan calls for 136 actions by DHS, 56 of which we are the primary agency to accomplish. The price tag for those is, on the back of an envelope by our CFO, about $300 million. And yet Congress gave us $47.3 million in avian flu supplemental funding in order to accomplish those goals.

So what we have here is capabilities that we are generating and we have a gap, and then what should happen—I left the part out about once you start to plan and generate requirements, those requirements then should drive a budget. Now, the military does this all the time, and they do it with great success. We have not really started doing that process very well until very, very, very recently, and we haven’t yet sold it to Congress.

Now, with respect to the fire departments—I know we’re being webcast, and so I want to be very careful because there are a lot of fire chiefs out there. But you know, “thief” and “chief” rhyme with each other. (Laughter.) There are—it is very difficult to tell people what to do to make their departments better unless you are in those departments. And the fact is that these capabilities, as they are generated, are in fact—the target capabilities list in fact was done by locals. We pulled in hundreds of locals and state and local government officials, people from the private sector, professional organizations, you name it. They were the ones that developed the capabilities. And so there’s another iterative, long, metamorphic process going on here, just to develop what looks like a general capability when in fact things are very different from community to community.

So this is—I think that right now we are stuck providing an architecture, without getting right down into the local level and being prescriptive about what exactly they have to pay for, and we do in fact yield to local politics. And so—who said it?—all politics is local. Preparedness is just as local. And as we begin to talk about these things more and more and more, the public will hold their local officials accountable for a level of preparedness. It’s just going to take a while, and that’s the best answer—

ZAHN: Let’s come back to the core of the question, because you were saying in the end this all comes down to money. So Irwin, the core of that question was posing, I think, something that we’ve all debated. What is it that the government’s got to be armed with to be able to accomplish what it says it wants to do?

FLYNN: Well, we’ve got to start with the fact that, I mean—let me just make this clear. The people who work in the Department of Homeland Security are doing God’s work, under the most impossible of circumstances, the most horrific sets of expectations, with some of the worst levels of support in terms of office space, basic—there’s no back bench. And a lot of it is then contracted out, because we won’t pay for the people. And this is this disconnect between the rhetoric and here, which comes from, obviously, Congress and from the administration, that has said this is priority but we’re starving this entity that essentially has to execute it.

You know the problem, the challenge at DHS, they inherited agencies that were basically orphans in their former departments and got virtually no care and feeding for 20 years. But they were—(inaudible)—synergies by putting them under one roof. This was crazy. It is resources, it is real commitment.

The disconnect here is the war on terror, when it started, when the president first gave his speeches two weeks after 9/11, it was an “over there” and “here.” But now we’re entirely over there, and when you look at—and the numbers are pretty straightforward. We’ve spent $300 billion to date, in the three years, on the war in Iraq—330 billion. That’s a burn rate of $250 million a day. And we’re talking about the basic needs here to make our society resilient, giving the ongoing terrorist threat. It’s a bit of balance that we have not got here.

ZAHN: Sir?

QUESTIONER: Good morning. I’m Scott Graham from the American Red Cross in Greater New York. Yesterday we had an outreach program with our partners from the Office of Emergency Management here in the city. It touched thousands of New Yorkers with preparedness information—very helpful, very basic types of things that they can take home to their families. The problem is the reach isn’t effective. We partner with the two prestigious universities that are represented here this morning, NYU and Columbia. Again, the reach.

Recently we’ve been working very diligently to extend an arm out to the faith-based communities. We’re trying to get into the mosques, the synagogues and the churches, and I believe that that’s a fertile ground for opportunity for us to expand the messaging to our communities and really get some horsepower at the grassroots level, and I’d like your thoughts on that perspective.

FLYNN: Well, I’ll fully endorse it. You know, one of the biggest things that helped in the case of New Orleans—because the decision was made so late to evacuate, to do the mandatory evacuation, when they finally went forward with that—the thing that sort of saved the day was the outreach of the state to the local preachers who could start (to give ?). And a lot of the people got out who were the folks with the least means were because parishioners helped their neighbors out to get them out. So there is an untapped capability out there.

It speaks writ large of the overall biggest untapped thing that’s happened since 9/11 is the inherent patriotism and the civicness, I think, that’s out there. It just hasn’t been given direction. And it is not all about money in this case here. It’s about basically making the ask, and organizations like yours, superb organizations like yours who have these relationships but are still somewhat disconnected over what the overall plan is because there hasn’t been much of an overall plan of where we’re going to go and where we should be. But there’s incredible capacity in our civil society.

One of the things that I think you’d benefit from by taking this more all-hazards approach is—one is—the reality is most of us are going to be (factored ?) by these other hazards. It’s often the same things we need to do. But also, we tend to be much more open about these things than we do, obviously, about the issue of terror. And the extent to which terrorism has so dominated the conversation, it automatically closes the conversation, typically, and really can get in the way of bringing in key players. When you get into this business of classifying and securing everything, you end up cutting out the very people who need to execute this.

You know, we got back and forth on this. We were talking this morning in the very first panel about things like power plants and—nuclear power plants, electricity, and geez, how much should we talk out here in the open? A case that I would make to you is the one that we’re all so familiar with here—United 93. The big difference that kept that plane from hitting, potentially, our White House and Congress were the people on that plane knew, unlike the other three planes, that a plane was going to be used as a missile. Armed with that information, with no air marshals on board, citizens essentially saved their seat of government by being empowered with information they needed for their own well-being, as well as for being able to serve the rest of us.

But we’re in a disconnect right now where we talk about terrorism as something that’s done under, essentially, the national security apparatus that largely keeps us at arm’s length, tells us to be prepared, but we’re not going to be able to tell you much about what to prepare against, because we’ve got it here under this cone of silence. And all this is very confusing to the America people. And not surprisingly, we’re getting—we’re seeing some of that irrationality play itself out. Candor, openness, that’s how we empower folks, and we tap what’s really the greatest strength of the country, the power of our private sector, the civicness of our people. The outpouring we saw after Katrina, I mean, is incredible. It’s not that we’re all hedonistic individuals. We really will help our fellow man, but we need direction and we need structures and institutions that can support that.

ZAHN: William?

RAISCH: If I could just elaborate—and certainly I think Steve’s hit a lot of key points here. And it is, I think, that there’s a tremendous resource, albeit the money side of government, certainly even the U.S. government, is limited. But the private sector does stand ready to be a substantial resource, both in the preparedness as well as the response-and-recovery side. But it is an issue of unity of message; it’s an issue of logic of message and actionability. I think we all went—after 9/11, you know, it was a question of how much more diligent and vigilant we could be. We hosted a conference here for—a small seminar, really, for DHS prior to the Republican National Convention, and they elevated at that point in time, at least locally, the alert rate. And the various elements of the private sector that were there were, you know, what can we do? What does it mean, red-to-green, orange, purple or, as I—FBI at one point in time; I had someone there and she offered a compromise with lions and tigers and bears as the potential elements.

And we need to be clear and actionable. You know, this idea of being more vigilant, better prepared and so forth—again, clarity, whether it’s standards, whether it’s clarity—even across DHS, whose relationships with the private sector are not just in the private sector office, which Irwin was talking about, which has 15 people, but there’s a diversity of other elements that touch the private sector that have individual conversations going. Well, that’s fine, as long as at least they’re coordinated and they’re in a larger context that makes sense.

So I think the real challenge is effective communication, leverage of the private sector. The private sector I know stands ready at this point in time in many regards—there’s a number of programs out there—to provide resources post-disaster. But the question is that’s not best done with the CNN footage running in the background during the event itself and people trying to decide whether or not my two or three truckloads of athletic socks are of value. Those are relationships that are developed in advance, they’re developed programmatically where both sides can talk about what the potential needs are, and they’re relationships where the private sector has been able to have a say in it and had communications that started in advance.

So again, I think, of all the elements that we have, it’s not just what Chief Pfeifer earlier—communications issue between first responders. It’s a communication issue between government and the private sector, and within the private sector, within business as well as the general population.

RUNGE: Let me make one quick comment in response as well. I want to just publicly thank the American Red Cross for being there. They are part of our emergency support functions.

Faith-based organizations do in fact step up. There are several anecdotes I’ve heard recently about churches that are actually giving readiness kits to their members. I mean, you know, the original readiness people or the Latter-day Saints, you know, who have four months of stuff stored up in their basements. It’s part of their religious construct. You know, I read John Barry’s book when I was learning about pandemic flu a year or so ago, and I remember him saying in his book that in prior to World War I, 40 percent of Americans were Red Cross volunteers, and they were doing everything from making bandages to collecting peach pits to—whatever was needed to do, they did. This was a citizen corps. Now we have a new citizen corps that we call Citizen Corps, but, in fact, Red Cross volunteers have been a citizen corps for a long time. I have no idea how many Red Cross volunteers there are now, but I suspect it’s a tiny, tiny, tiny piece of the pie chart, and infinitesimal compared to that 40 percent.

One more point—if I may respond to Steve, because I can’t let it go—the threats that we face are not under a cone of silence. We know what they are. There are 15 national planning scenarios. And if you want to know what I’m worried about, I’ll tell you. It’s anthrax, plague, smallpox and pandemic, and a little bit of botulinum. I’m worried about an improvised nuclear device. I’m worried about a radiological dispersion device. I’m worried about bombs in mass transit. Our planning scenarios will tell you what we are worried about, and they are not confidential. They are public, and they are—and if I may say so, those who are interested in preparing can also use those scenarios to figure out, what do I do if a bad guy sprays anthrax spores going down FDR Drive, and so forth. So there is no cone of silence, and we’re happy to discuss it with anybody who wants to prepare.

ZAHN: Go ahead, ma’am.

QUESTIONER: Karen Monaghan, the Council on Foreign Relations.

Just to follow up on something you were talking about, as the private sector is an untapped resource, to what extent has the federal government or state government or city identified firms that can actually help in a recovery, kind of developed a plan with them, such as FedEx, to do delivery of emergency equipment, or Home Depot, or the New York private ferries to evacuate New Yorkers if there is a disaster?

RAISCH: Could I actually speak to that? I think there is a great prototypical program actually right here in the city of New York developed by Commissioner Bruno and the Office of Emergency Management. It’s called PALMS—any organization or any effort has to have an acronym to be of value. So that acronym means Private Assets and Logistics Management System. And what they’ve done, appropriately, is to say, listen, let me identify in advance—again, from an all-hazards perspective—what my logical needs might be. I think we heard some of them on the wish list in the earlier program. We talked about maybe it’s warehousing, maybe it’s transportation capability, maybe it’s back-office telephone operations, et cetera. And the city has done that, basically posted that, and then made an outreach selectively. I think this—it’s probably, unfortunately, not a high-profile program. But they essentially have a database, and what is involved in that process is not a hard and fast commitment, but an availability that’s indicated by the businesses themselves—“I’ve got this; call me up. I may not be able to—you know, it all depends on where the trucks are and how I feel.” And you know, there needs to be some commitment that this is a true disaster; it’s not just we’re augmenting, you know, a low budget at this point in time.

But programs like that, and there are national programs—the Business Executives for National Security, Disaster Recovery Network. We’re actually, oddly enough, working currently with the World Food Program, which is the U.N.’s logistical arm, to do the same thing for the U.N.’s response. These are very—they’re embryonic or fledgling programs. It can be done, but the conversation has got to start way before the CNN, you know, videos start running. They’ve got to start in advance, and there’s got to be effective communication during the whole process.

FLYNN: Well, one of the real good examples is just starting to unfold. So it hasn’t got there, but I think it’s quite an exciting one, which is being developed in Los Angeles. It’s a reach out—it’s an outreach to the “big box” players—the Targets, the Wal-Marts, the Home Depots—essentially setting them up as evacuation places. And in figuring out ways to subsidize, they’re having stocks of materials that you would need in crisis, so that they’re able to rotate through their inventory so they can sell it. So it’s much lower cost than putting in a cave and, you know, having to—particularly when you talk about medical, Band-Aids, these kind of things are very perishable. But you build an arrangement where you give them a buffer which is subsidized. And everybody knows where the Wal-Mart is. Everybody knows where the Home Depot is. You know, it’s a little easier—so you start to build this—and they have huge parking lots, and they’ve got a lot of warehouse, and the logistics system knows how to feed it. And so that’s the kind of conversation that I think we can move forward, and of course, we saw some of that play out in (laissez ?) ad-hoc fashion post-Katrina. The (folks ?) that they got there was coming there by the people in the transportational logistics, which was not FEMA. It was these agencies.

And I don’t want to beat up on FEMA—I mean, I’ve said most people don’t know—I mean, FEMA is only 2,200 people—2,200. That’s it.

RUNGE: It’s over 10 regions.

FLYNN: It’s over the country.

RUNGE: Over 10 regions.

FLYNN: Over 10 regions. Okay? So if you think FEMA is flying out of, you know, airplanes to help people, that’s not what it does. FEMA writes contracts to provide support. But it’s 2,200 people. You know, so we bludgeon FEMA up here. We need to start pulling back the curtain and saying, what is it? You beat up the Department of Homeland Security. How many people are really there? They’ve got a wonderful program. The president announced a civilian corps. There are three people in the Department of Homeland Security overseeing this national initiative to reach out to every community in the country. Three! All right? And they’re very busy, and they’re extraordinarily dedicated. I mean, this is the best in our civil service. But come on.

RAISCH: And FEMA’s budget’s been effectively halved over the last two years, roughly thereabouts. So it’s coming back, surprisingly now.

ZAHN: We have time to take one last question before lunch is served.


QUESTIONER: Hi, Terry Bischoff from the American Red Cross in Greater New York.

We’ve heard today that we are likely to have an event across all of these hazards, and we know here in the city we have them very day. We also heard that we’re not going to be prepared—and thank you, Dr. Runge, for talking about the American Red Cross and our activities. We responded to Katrina with 250,000 volunteers that came from your organizations and your families, most of them untrained before the disaster. I haven’t heard any conversation here about the importance of volunteering before a disaster to get trained to be part of the response. Since it’s not going to be FEMA, it’s not going to be government, it has to be our communities, and yet I haven’t heard that talked about today.

RUNGE: Thank you. That’s a great comment. You know, I came to my job on September the 6 th, 2005. Katrina hit on August the 29 th. On September the 2 nd, I thought I’d get in one last weekend of golf down in Myers Park Country Club in Charlotte before I hit the pavement at DHS. And I spent the first 12 holes on Friday afternoon talking to my physician colleagues in emergency medicine from all over the country who had my cell phone number who asked, where should they report to go help with Katrina victims? And my answer was the same: “If you haven’t signed up already and you’re not trained and you’re not credentialed and you’re not privileged, have a nice weekend because you’re not going anywhere; you’re going to become part of the problem.” The time to be exchanging business cards is not in the middle of a disaster. So you know, the issue of the Medical Reserve Corps—again, New York’s got, you know, I mean, they have pre-signed up, pre-credentialed thousands of medical professionals as part of the Medical Reserve Corps. And this is a community effort. You know, this is open to every community in the country. Citizen Corps, exactly the same thing. American Red Cross volunteers, exactly the same thing. This is a message point that we just, frankly, have not hammered home.

You talk about preparedness, and you want to help, and people have this amazing capacity for volunteerism in this country. And yet, the time to do it—we need to give them a mechanism to do that ahead of time. That’s just an excellent point, and sorry we didn’t make it earlier.

FLYNN: I guess I may only add to—the biggest thing that makes a difference, as we found with Katrina especially, and I think as we saw here in New York for all of us who were here on 9/11, is more about the human capital than it is about all the bells and whistles. And yet we’re only willing, typically, to pay for toys—technology, sensors, and so forth—but we’re not investing in the training. You know, if Chief Pfeifer needs $10 million a day we should get it to him, because that’s, at the end of the day, the quality of the people. You know, the Coast Guard, my own organization, did a superb job down in Katrina, rescued 33,000 people. There was one working satellite phone. All right? There was no communications. They had the ability to—people from—the aircraft there for 24 hours coming from Kodiak, Alaska, could take crews off that plane and put in another plane with people who’ve never served with each other before and go out and pull people off of roofs in the (middle of ?) urban center which they’re not trained to do. But they have the—(inaudible)—and the competencies invested. It’s human capital. And they’re old, broken planes, by the way, because we haven’t replaced them in 30-odd years. But it’s the quality of the people that makes the difference, and as long as we continue to profess that, basically, service in government is something to be depreciated and that the people that we depend upon to help us when we’re in need are something not worth investing in, then we’re going to get essentially what we deserve when things go wrong.

ZAHN: Bill, you get the last word.

RAISCH: Actually, it gets back to that issue of leveraging the private sector, and it probably builds on Terry Bischoff’s comments from the Red Cross. And certainly, (there’s ?) a program is an example that the resources exist and—I know you have an outreach, I think, that will allow a corporation to train its individuals in a diversity of areas. There’s a willingness and interest in that, but only if effectively communicated in advance and done not, again, in the midst of exchanging business cards with, you know, smoke and sirens in the air. So I think the key with all of this is realizing that, unfortunately, we all get religion right after an event. And that’s the period of time during which we all want to do something, and as wonderful as that is and as wonderful a human statement that is, we need to do things in advance. And I’m going to charge and say—really, I’m going flip the chairs for a moment here, Paula, on your end—I think media has a tremendous role in all this. In all due deference—

ZAHN: (Inaudible)—consolidating the message.

RAISCH: Well, consolidating the message, but consolidating it beforehand. I mean, it’s sexy when there are the explosions in the background. We can stand over our right or left shoulder with, you know, the various elements of a hurricane, perhaps, breaking on the shore. We need to be able to work with media effectively to get the word out and to educate in advance, to make sure—one of the key issues that came up in some work we did on the dirty bombs was that differentiation we touched on before between a dirty bomb, which is, to my mind, a—you know, an issue of, as Isaac mentioned, mass disruption. I would say actually it’s mass hysteria, because one of the things we came out with was a clear understanding that there’s no such thing as just-in-time education on that, that as soon as people hear “radiological,” radiological equals in their minds nuclear. Nuclear equals Hiroshima, Nagasaki, “get off the island.” And the challenged there, at least that we found—was we’re talking about really relatively low amount, probably a disturbance that might impact a thousand feet, roughly, plus or minus the situation. And the importance that media can play in educating in advance and in working perhaps in that same element that was mentioned before about, really, the old civil defense corps of sorts, getting word out there, letting people know what threats are and what they’re not, and also sort of giving them information about the nature of threat and what to do.

So I think that’s something I think the media has an obligation, certainly as a provider of information but also inasmuch as, quite frankly, it one way or another benefits from all this equation in terms of eyeballs. When something does happen, let’s use that same pull prior to the event.

ZAHN: I think we’ve all gotten a charge here today, whether it is as individuals, members of family, members of corporations. I’ve learned a tremendous amount. I hope you have as well. I wanted to thank Steve, Bill and Jeff for their time and their expertise, and to remind you all that there is lunch waiting for you, a fabulous buffet lunch about a hundred yards away. Thank you so much for your attention today.

You all were great. Thank you.








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