Bridging the gap

What makes public/private security alliances succeed? It’s not just about the money — except when it is

Government efforts to foster goodwill and get industry to cooperate on major national security partnerships — such as the Homeland Security Department’s new initiative to secure freight — will require more than patriotic appeals to private-sector executives if they are to succeed.

A look at several of those alliances sheds light on strategies that work and mistakes that can ruin even the most ambitious efforts. These snapshots make it clear that for the secure freight program to succeed, DHS and Energy Department officials must demonstrate decisive leadership and spell out clear expectations.

Perhaps most importantly, federal leaders must prove to private partners that companies stand to gain something by participating in the program.

The success or failure of public/private partnerships is often determined at the beginning by the tone set by federal leaders. Companies want proof that the government will kick in its share of resources. In the case of the secure freight initiative, officials must come on strong, said Daniel Prieto, senior fellow and director of the Reform Institute’s Homeland Security Center.

“DHS needs to be a reliable partner and provide leadership,” he said. “That means DHS needs to show that it truly understands the complexities of the global shipping business and of port operations.”

The department’s track record so far in fostering public/private initiatives has been somewhat spotty, Prieto said. “DHS has had difficulties due to resource constraints, high personnel turnover and the general unsettled nature of the agency as a new organization.” He added that the department will need stability in its working relationships with private-sector players to ensure that the secure freight initiative and other high-profile partnerships succeed.

Meanwhile, public/private homeland security partnerships come in many flavors and have varying degrees of effectiveness. The benefits largely depend on the participants sitting at the table.

“Regardless of whether it is digital security or physical security, the key ingredient to success is invested people,” said Randy Abrams, director of technical education at security software company ESET, which has participated in several security-related initiatives involving law enforcement. “Initiatives shine when people on both sides are passionate about their work and the issues, and meet face-to-face and develop trust and respect for each other.”

Dedication and active involvement are major factors that determine the success of public/private partnerships, but other factors also come into play, as illustrated by the following examples.

Initiative: Anti-money laundering and terrorist financing programs
Lesson: Enforced compliance brings industry along

The Patriot and Bank Secrecy laws prescribed public/private information-sharing alliances in a partnership that works, primarily because of a stringent statutory framework.

“There are specific regulations, guidelines and penalties in place regarding the scrutiny that financial institutions need to apply to financial transactions to prevent fraud and laundering,” Prieto said.

The partnership requires financial institutions to develop anti-money laundering (AML) programs, which entail new policies and control procedures. It also calls for the designation of compliance officers, audits and training for employees.

The Treasury Department’s Financial Crimes Enforcement Network leads the partnership, which has allowed the AML watchdog agency to reach out to more than 45,000 points of contact at more than 27,000 financial institutions to track suspicious accounts and transactions.

Initiative: National Infrastructure Protection Plan
Lesson: Efforts often languish when participation is voluntary and goals are ill-defined

DHS’ Infrastructure Partnerships Division is charged with encouraging industry to share security-related information to thwart threats to critical sectors, such as information technology, energy, public health, finance, telecommunications and transportation. However, information sharing is not required by statute or regulation.

Privately run Information Sharing and Analysis Centers (ISACs) are clearinghouses for information about national security threats. ISACs gather and analyze threat information from their members, who often submit it anonymously, and law enforcement officials. The centers contain databases and tools to analyze information and reports. They also have communications systems that alert members to threats and suggest responses.

Government and industry fund the ISACs, although great disparity often exists in commitment levels — financial and otherwise — among the centers, Prieto said. For example, nuclear power plant operators have high levels of participation because of regulatory reporting requirements, but chemical manufacturers cooperate voluntarily, partially to reduce potential liability problems, he said.

Without regulatory teeth or mandatory compliance, the technology industry’s ISAC faces challenges in getting companies to participate and share threat and vulnerability information, said Guy Copeland, a vice president at Computer Sciences Corp. and past president of the IT ISAC.

Companies perceive that sharing such data could give their industry competitors an advantage, even though the National Infrastructure Protection Plan has mechanisms to keep reported threats from being widely disclosed or released under the Freedom of Information Act.

“In terms of competitiveness and reluctance to share information, we have not taken care of that completely, and in some ways, those issues may never go away,” Copeland said.

The IT ISAC is trying to deal with those concerns and increase participation by creating more awareness of the center’s role as a neutral clearinghouse for information and developing more formal methods for sharing data and organizing responses, he said.

In a broader effort to increase industry participation in ISACs, government and industry players recently crafted revised missions and goals. “We had joint writing teams,” Copeland said. “We all worked together in order to show what the government believes it needs and what industry considers doable and
achievable.”

Those plans are awaiting review by the Homeland Security Council, a forum of senior federal executives that President Bush created by presidential directive in October 2001. The plans include recommendations for increased industry participation and more frequent real-world exercises, such as Operation Cyber Storm, a simulated cyberattack and response drill scheduled for 2008.

“There has been a realization among government officials that a centrally directed approach from a headquarters facility wouldn’t work,” Copeland said. “DHS officials are now taking much more of a partnership approach and holding town hall-like meetings.”

Initiative: Controlled Substance Tracking System
Lesson: Tangible financial incentives can spur industry support

The Drug Enforcement Administration is working with pharmacies and private health care practitioners that are interested in electronically submitting information on prescribed medications categorized as controlled substances.

DEA doesn’t require electronic submissions or specify the technology to be used. Instead, the agency elicits private-sector participation by emphasizing the financial benefits of electronic filing.

“In making the transition from paper to electronic tracking, the average cost of a transaction decreased about $33,” said Dick Thelen, director of Nortel Government Solutions’ public-key infrastructure center. DEA enlisted Nortel to act as the certificate authority to issue and maintain certificates that private-sector health professionals use when they electronically order and distribute controlled substances.

Each paper transaction costs about $40, but it only costs about $6 when completed electronically, Thelen said. “Other benefits include faster transactions and increased flexibility.”

Industry took the first step to form the partnership with DEA. Major pharmaceutical associations approached the agency seeking to cut transaction costs and smooth information-sharing procedures. “Industry organizations played a big part in bringing the government and private sector together for a winning partnership,” Thelen said. Organizations such as the Healthcare Distribution Management Association and the National Council for Prescription Drug Program helped DEA develop requirements for electronic submissions, he said.

Initiative: the National Cyber Security Alliance
Lesson: Strong government leadership can focus private-sector energies for the common good

DHS’ National Cyber Security Division established an alliance to reach leaders in corporations and institutions of higher education, in addition to educating consumers and small-business owners about cyberthreats. The alliance’s efforts include awareness campaigns, cybersecurity workshops and outreach programs for schools.

Comprised of representatives from the FBI, Commerce Department, Federal Trade Commission and other government agencies, the National Cyber Security Alliance has solicited support and participation from major corporations, including AOL and Microsoft. Nonprofit organizations, such as the National Consumers League and Chambers of Commerce, have also joined.

The NCSA’s ability to reach almost 200 million people in a single month is the result of strong government leadership, said Ron Teixeira, NCSA’s director. “A government agency must play a central leadership role in developing a public/private partnership,” he said.

Initiative: National Security Agency Domestic Technology Transfer Program
Lesson: Allow companies to commercialize products of the partnership

The National Security Agency’s technology transfer program is among several public/private research and development efforts in which federal researchers develop advanced technologies and allow industry to develop commercial applications based on those technologies.

Those R&D efforts provide clear benefits to industry and facilitate information sharing between government and specific industry sectors as common technology tools are deployed.

For example, many financial services companies have bought solutions that incorporate NSA technology. Technical commonality between the intelligence community and commercial sectors enables better exchange of information, said Ed Hammersla, chief operating officer of Trusted Computer Solutions, a company based in Herndon, Va., that used NSA-developed technology to create an information-sharing application.

Trusted Computer Solutions developed an application based on NSA’s NetTop architecture. The application runs in a protected environment that is separate from and unaffected by other user applications. The use of that application helps the intelligence community and industry meet information assurance requirements.

“Business executives do care about national security and participate in voluntary meetings with government all the time,” Hammersla said. “But fundamentally, it is not the responsibility of private companies to protect national security. They want to do it, just as any patriot would. However, they have a legal and fiduciary responsibility to return money to shareholders. If they tank earnings 50 percent to protect national security, there will be trouble.”

Prieto said government officials must show private-sector players the benefits of cooperation. And for those partnerships to be meaningful, both sides need to seek benefits they would likely not pursue on their own, he added.

McAdams is a freelance writer based in Vienna, Va.
3 steps government can takeGovernment agencies can form productive partnerships with industry to improve homeland security. Here are tips on how to do it.
  • Mine pre-existing regulatory relationships and enlist industry players that have worked with specific agency groups.
  • Show private-sector players how participation will ultimately protect their infrastructures or business interests.

  • Emphasize the business benefits of security-related initiatives, such as lowered operating costs and reduced liability, and the marketing benefits of being “good citizens.”
Source: Reform Institute
4 factors that make joint initiatives workIndustry is more apt to participate in a public/private partnership if it meets certain conditions. A good partnership:
  • Is based on an easy-to-understand policy.
  • Requires minimal change to operations.
  • Is technically feasible.
  • Produces verifiable results.
Source: Women Impacting Public Policy

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