Washington, D.C. U.S. Chamber of Commerce April 29, 2005

Secretary Chertoff: Tom, thank you very much. That was very well said. I appreciate the invitation to speak before this very distinguished group. We appreciate your leadership and Andy Howell's leadership here at the Chamber, which I think is an important forum for us to deal with some of the challenges that we face at the beginning of the 21st century against a threat that is very different than the one we faced at the end of the 20th century.

The Chamber's steady partnership and support has been important in the past; it will continue to be important, even more important in the future. And I look forward to working with you and speaking with you and having conversation with you as we move forward to talk about how it is we can erect a long-term and sustainable architecture that both maintains and enhances our security but also fosters our freedom and our prosperity. We want to defend our country, but we also want to defend our way of life.

In some ways, two-and-a-half months into my tenure, I look at the Department and I say we are really a 21st century entity, in some ways more of a 21st century entity than a lot of the older departments. We obviously have the traditional bricks and mortar, we have the buildings, we have planes, we have ships, we have people. But we are also, in many ways, a network, and our value lies in our network, which is a very 21st century business model. Much of what we accomplish, and much of what we have to accomplish, will come not through our ownership of assets or employment of people who directly do services, but through our working with the private sector and with government partners who control 85 to 90 percent of the assets in the country and who employ by far the larger number of people.

And by networking with these groups and with this partnership, we have the advantage of going in to meet the challenge of terrorism. Our goal is to create a security environment that works with the grain of commerce and doesn't cut against it, and that takes advantage of and leverages with the great American ingenuity, which is our principal weapon in dealing with those benighted individuals who want to turn the clock back to an intolerant age that goes back maybe seven or eight centuries ago.

And I want to talk a little bit philosophically and at a high altitude level about the ways in which I think we can work with business and want to work with business as partners in promoting security.

First of all, one of the things we have done and want to continue to do is to offer choices to our partners that expedite and reinforce security while, in fact, enhancing our efficient movement of goods, services, people and products. We have various programs like the FAST program, Free and Secure Trade, or the Customs Trade Partnership Against Terrorism, which build upon choices that we offer to the private sector to submit to vetting, to put in place enhanced security in return for efficient movement of goods and services, streamlined screening, streamlined inspection. Our vision at the end of the day through these kinds of programs is to say to businesses, look, if you will put into place the kinds of robust screening and security protections that will assure us that goods and services and people are not a threat, we can offer you expedited processing, streamlined movement, and at the end of the day, a more productive result.

And in fact, our CTPAT program, which is involved, is a cargo partnership that moves vetted cargo rapidly through screening and through inspection. It was launched in November 2001 with seven companies and now has more than 9,000 companies. So businesses are seeing the tangible benefits, both from a security standpoint and a business standpoint, in working with us and taking the choice to do this kind of vetting and operating within this security envelope.

Similarly, border security creates a great opportunity for us to offer choices of screening and -- both background screening and increased information exchanged as a way of expediting the movement of goods and services. And one of the things I want to point out is, our efforts the President announced in Crawford in March, to work with our Canadian and Mexican trading partners, to create a security and prosperity partnership, an initiative that will increase our cooperation, enhance our border security, and streamline the legitimate movement of commerce.

By the end of next month, we are committed to go back to the Presidents of the United States and Mexico and the Prime Minister of Canada with specific goals and implementation dates, to build on our past partnership efforts and move towards the goal of this new enhanced partnership. And we're working with the Chamber and members of the Chamber to get private sector input on this critical border security effort.

A second thing we are doing and want to continue to do is removing barriers to participation in our homeland security efforts. You know that the great advantage we have in this asymmetric warfare is our ingenuity, our technology and our process, entrepreneurship, that brings to bear the millions of minds that are creative and have experience in the marketplace and brings their solutions to bear on this problem of security.

And Tom mentioned the SAFETY Act, and I think that's a resource and an opportunity for us that we have not fully succeeded in exploiting. And I want to tell you here today we are very committed to fully exploiting that. My understanding is that if we are to really embrace the kind of technological solutions and services solutions which are out there in the marketplace, we need to be able to afford actors a real opportunity to present those without the fear of undue litigation and unduly high transaction costs that come out of the possibility of lawsuits.

I know that there have been issues with the application process. We have addressed some of those. We're looking more comprehensively at what we can do to make the SAFETY Act program efficient and hospitable, to do the job that Congress intended it to do, which is to create limited liability protection and some safe harbor for those entities that are creating the homeland security solutions of the 21st century, and doing it in a way that's careful but also efficient and embraces the new technology as opposed to pushing it away by setting unduly high barriers.

I know Dr. McQueary met with you, I think, last week to talk about these issues. I am telling you that this is our philosophy in the Department from top to bottom.

I was a judge. I was a lawyer. I have a great deal of respect and understanding of the importance of our legal system. But I also know how important it is that the legal system not create unduly high and burdensome transaction costs that do not allow us to make the kinds of rational decisions we have to make in order to protect ourselves.

We need to get the kinds of proposals, the kinds of technology, and the kinds of services that will save live and keep our prosperity and our liberty in place. And there are difficult tradeoffs we have to make to optimize costs and benefits in pursuing these various goals. We ought to make them, but we ought to be able to make them without undue fear that after the fact lawsuits will shift the balance and shift the burden and cause us to become overprotective or overly cautious or overly burden our efforts to pursue these very, very important goals. And so the SAFETY Act, I think, is a critical element in our homeland security strategy.

Finally, we want to acknowledge and recognize that ultimately, the marketplace itself creates a very strong incentive through business self-interest in enhancing security. The reality is, in today's threat environment, active security measures are critical to businesses themselves, because the cost of an attack often outweighed the cost of protection. We saw that right after 9/11 when the New York Stock Exchange was closed down for several days because they didn't have a sufficiently robust backup capacity to deal with the consequences of that attack. And so, from a business self-interest standpoint, which is the way the marketplace operates, the stock exchange has taken steps now to create redundancies and a private fiber-optic network to link up member firms and a backup trading floor, precisely to avoid such a consequence again. And we need to provide business with the tools necessary to act in its own self-interest to promote security for our economy and for our people.

So where are with our vision of homeland security if we stand back? We want a homeland security strategy that is sustainable over the long run, that balances the need for security with a need to preserve our freedom, our privacy, and our prosperity. We want to look ultimately to creating a security envelope, a worldwide security envelope, within which we have a high degree of confidence that people and goods are vetted, are not threats to our society or to our people, and therefore can move efficiently an effectively without paying high transaction costs.

We do not want a fortress state. We want a state that is open and robust and preserves the best of America while preserving American lives. We want to take a risk-based approach to the decisions we make. We want to look at consequence, vulnerability and threat as the template for all of the decision making we make at our Department. And I know businesses understand that, because you all have to make those judgments every day in your own operations.

And finally, we want to bind together this Department that has been stood up through a tremendous effort put into place by my predecessor, Governor Ridge, and his leadership team, who built it really from scratch. We want to now take it to the next level. We want to integrate ourselves, we want to be more efficient, we want to be more cost-effective.

And we're going to look the private sector, again, as we are conducting the current review that Tom mentioned, to get some advice and insights as to what we can learn to make us operate better as an organization.

In fact, the Chamber has been very helpful to us specifically in our second-stage review in reaching out to the private sector. Next Wednesday, members of the team that are working at the highest level of performing this review at DHS are going to be sitting here at the Chamber in a listening session to make sure that we are hearing the concerns of our private partners and getting your input as we complete the process of looking at what we're doing.

So I'm delighted to be here today. I'm delighted to be here at the Chamber in the shadow of the White House, seeing within this small geographic area the genius of America, the marriage of government and the marriage of the private sector harnessing all of our resources.

You play a critical role. You are our partners. You are also, frankly, the spouses and the parents of the people who we're trying to protect. We're all in it together and we all have the same mission, and what we need to do is unleash our energy and our creativity to work together to carry out the mission in a way that is consistent with the vision and the goals of this country.

Thank you. Thank you for listening to me, and I look forward to working with you again.

Mr. Donohue:  Mr. Secretary, one of the things we're facing in the states and on a national level is the extraordinary expansion of the role of the National Guard, many of them serving now overseas, and at the same time, they're put to work not only on disasters, but more and more on the question of homeland security. Do you have a message about some of your view of dealing with the Guard, and some of the essential role that they may play?

Secretary Chertoff:  Well, I can't begin to answer the question without paying tribute to the tremendous sacrifice that the Guard makes in carrying out our mission overseas. I mean, I think the President's had a critical insight in recognizing that the first line of defense against terror is taking the war overseas against the terrorists. And the President had the vision to understand that if the terrorists are busy worrying about their own lives, they have less time to carry out their missions against us. And disrupting their training camps, disrupting their laboratories, putting them into hiding, has been and is continuing to be the number one defense we have against terrorists who are committing an offense. The National Guard carrying out that mission is critical.

I also have to recognize the tremendous burden it puts on family members who see their loved ones go overseas; of course, businesses. And we all join together in supporting the National Guard.

They have another mission, too, which is homeland security, and if we were to have an event here, we would look to the National Guard as a critical part of our response, in terms of the ability to manage an emergency.

So there's an unprecedented number of demands placed on the Guard. I want to thank the business community for working with the Guard and supporting the people who are making these sacrifices, which is -- you're making a sacrifice, as well.

Mr. Donohue:  Thank you very much. Do we have -- we'll go over there in that corner. Please introduce yourself.

Question:  Sir, do you have any plans to use SIX SIGMA techniques in your improvement of the Department?

Secretary Chertoff:  I'm afraid if you move a little bit -- the microphone a little bit further away, it will be easier for me to hear.

Mr. Donohue:  I'll help quickly, and then -- are you going to use the SIX SIGMA techniques at all to try and figure out how to get the greatest efficiency out of your operation?

Secretary Chertoff:  You know, I -- for better or for worse, I come from the background of being a lawyer, where we didn't actually do the management technique analysis. But the short answer is, we're going to be looking to the business community, and we have brought people in who are very experienced in management in business, including integration. We've brought people from the military in and people from other disciplines, and we're going to draw on all of those tools in order to set up the most efficient and the most well-integrated Department we possibly can.

Mr. Donohue:  Lots of hands. Right here - grab this mic. The guys with the mics have to move a little quicker. Thank you.

Question:  Thank you.

Mr. Donohue:  You're young. Get going.

Question:  Welcome back, Mr. Secretary. Critical infrastructure protection. Many of us are very happy with your message that the Department isn't going to try to protect everything from everything else. On the critical infrastructure side, could you share with us your views about the extent to which you're focusing on protecting critical infrastructure of the government itself, critical infrastructure on which the government depends, and then the rest of the critical infrastructure? Thanks.

Secretary Chertoff: That's a very important point, I thank you for the question, because there really are three elements of critical infrastructure, and we have to deal with them differently and they're all very important.

Let me begin by saying, first of all, this risk management approach applies to infrastructure, too. And part of what I'm trying to do as I speak is be pretty blunt about what risk management means. It means not everything gets 100 percent protected because there isn't enough resource in the country to do all of that. We have to prioritize and we also have to share the responsibility with the private sector and with state and local government.

Clearly, when it comes to federal facilities, the federal government has the burden of protecting that infrastru