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Port-Security Grants Misdirected, Audit Says by Eric Lipton, The New York Times Seattle Times - February 20, 2005

WASHINGTON -- The Department of Homeland Security has given hundreds of millions of dollars to protect ports since Sept. 11, 2001, without sufficiently directing the money to those that are most vulnerable, a policy that has compromised the nation's ability to better defend the most critical ports against terrorist attacks, the department's inspector-general has concluded.

The department distributed $517 million in grants for port security between June 2002 and December 2003, but less than one-quarter of the money had been spent as of September, the inspector-general found in an audit. Despite the big price tag, "the program has not yet achieved its intended results in the form of actual improvement in port security," according to the audit.

The findings, released this month, were the latest to criticize the Homeland Security Department's anti-terrorism grant program, which has come under attack as setting poor priorities. For example, Wyoming has received four times as much anti-terrorism money per capita than has New York, according to a congressional report.

A Homeland Security spokesman, citing the department's defense of the port-grant system that was included in the audit, declined requests for further comment.

Ninety-five percent of all international commerce enters the United States through the nation's 360 public and private ports. But nearly 80 percent of that trade moves through only 10 ports, with the biggest loads passing through Los Angeles, Long Beach, New York and Oakland.

Tacoma and Seattle share ninth place among U.S. ports for volume of container shipping, according to the U.S. Maritime Administration. The Puget Sound ports collectively rank third behind ports in the New York-New Jersey area and the Los Angeles-Long Beach area.

That is why the nation's biggest ports are seen as particularly attractive as terrorist targets; severely damaging one of them would not only potentially cause deaths and injuries and property damage but also could disrupt the flow of many basic goods, port officials say.

Strategic ports were aim

The grant program was intended to limit awards to what were considered strategic ports, meaning terminals that handle large volumes of cargo, high numbers of passengers, or that are next to military facilities or where hazardous cargo is handled.

After examining four rounds of port grants, the inspector-general found that the department appeared to be intentionally distributing the money as widely as possible, instead of focusing dollars on the biggest ports or certain other locations that intelligence reports suggested were most likely to be future targets.

Major ports received large allocations. But smaller grants went to ports in such places as St. Croix in the Virgin Islands, Martha's Vineyard, Mass.; Ludington, Mich.; and six locations in Arkansas, none of which the audit said appeared to meet grant eligibility requirements. The department, as a result, "had no assurance that the program is protecting the nation's most critical and vulnerable port infrastructure and assets," the audit said.

David Schaefer, a spokesman for the Port of Seattle, said port officials don't feel Seattle has been shortchanged relative to other ports, but they have been concerned that the federal government has done too little to prevent terrorists from bringing explosive devices into U.S. ports.

The port's chief executive, Mic Dinsmore, wrote a newspaper column last fall in which he said the nation may have adopted excessive airport security while leaving ports vulnerable.

The ports of Seattle and Tacoma have been jointly testing procedures for tracking containers from their ports of origin to their U.S. destination ports under a $27.5 million grant under Homeland Security's Operation Safe Commerce program. That program has been championed by Sen. Patty Murray, D-Wash.

The Coast Guard recently has added new patrol boats and recently established 500-yard-wide security zones around ferries and cruise ships. Other ships and boats must slow to minimum speed in those zones.

Grants to ports are only a small piece in the more than $2.5 billion given out last year by Homeland Security to local and state governments, as well as private enterprises. The money is to be used to help prevent attacks and to help equip public-safety crews in the event that they need to respond to an attack.

The audit results appear to support criticism voiced in September by Sen. Frank Lautenberg, D-N.J., who in a letter to President Bush complained that the methods used to grant the awards did not make sense.

"Your administration awarded port-security grants in the states of Oklahoma, Kentucky, New Hampshire and Tennessee," he wrote. "While there may be some form of maritime facilities in these locations, I question whether, of the nation's 361 maritime ports, these locations are truly the front lines on the war on terror."

Changes pledged

In objecting to the findings, an administrator at Homeland Security, Anna Dixon, wrote that the grant program "continues to enhance security and address real or potential vulnerabilities in our nation's ports and waterways." She said the grants were given "where they are needed most to improve security in U.S. ports."

But Dixon, who works for the department's chief financial officer, also stated that Homeland Security intends to put several of the auditor's recommendations into effect in order to allocate future money to the highest-risk ports.

Part of the problem, the audit found, is that the annual grants were given out based on applications submitted by ports and then awarded even when department staff found submissions that lacked merit. Instead of withholding funds because of a shortage of viable projects, the department disbursed the money to finance dubious security initiatives, many of which are detailed in the 70-page report. The grants are described in some detail, but the names of the winners and losers are not disclosed.

Grants also were given to private-sector projects that "appeared to be for a purpose other than security against an act of terrorism," the audit said, or simply to replace existing security.

Homeland Security requires that the grant money be spent within a year of the award, but few recipients met this provision, the report says. The auditors found that few of the projects were ready to initiate construction at the time of the award, despite the one-year requirement.