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EXCLUSIVE: Beset By Strife at Chemical Security Office, DHS Internal Report Claims Anti-Terrorism Program Now In Jeopardy

A federal program aimed at securing potentially dangerous chemicals is now in jeopardy after being beset by a series of deep-seated problems, including wasteful spending and a largely unqualified workforce that lacks "professionalism," according to a scathing internal Department of Homeland Security report obtained exclusively by Fox News.

In 2007, Congress established the Chemical Facility Anti-Terrorism Standards program, which directs DHS to collect and review information from U.S. chemical facilities to determine whether they present a security risk. It is overseen by the Infrastructure Security Compliance Division -- or ISCD.

As the Congressional Budget Office describes it, CFATS' mandate is to ensure that facilities deemed a high threat develop a security plan, and in turn, DHS "conducts inspections to validate the adequacy of" and compliance with the plan.

But that's not how it is happening. The report, which suggests that administration officials are possibly being misled about the program’s success, says the office has yet to conduct a "compliance inspection" and it only recently began approving security plans.

The report identifies several human resources problems, including inspectors who see their jobs within the context of prior law enforcement careers, which the report says has hindered effectiveness, and office employees who are unduly bound by union shops.

The report says several of the challenges identified "pose a measurable risk to the program." A top-ranking DHS official characterized that conclusion as "very true."

"The question here is whether or not we can move this program to a level of completion and sustainment," Rand Beers, undersecretary for DHS’ National Protection and Programs Directorate, told Fox News in an interview Tuesday. Beers has overseen the program since 2009. "As long as I'm here, I'll certainly strive to do that."

One Democratic Hill staffer called the report's findings "disturbing" and "disappointing."

The report, initiated at Beers' behest over the summer, is accompanied by a detailed "action plan" and shows a clear effort by DHS, which has spent hundreds of millions of dollars for the four-year-old program, to correct issues that have been tolerated -- if not condoned -- since the previous administration.

But a growing concern named in the report is “the prospect that DHS leadership and those within the administration are under the impression that the program is further along than it actually is."

The internal report cites several "serious staff-related challenges," including "numerous" people not qualified to do the work; a training department with staff lacking its own professional training or educational qualifications; and managers who lack managerial knowledge or experience but in some cases were hired based upon "an established relationship with the selecting official."

While the "vast majority of employees are talented, hardworking people, there are numerous exceptions," the report reads.

With about 200 people employed full-time to work on the CFATS program, more than half are assigned to "inspections and enforcement." But many of the inspectors were hired before the job requirements were properly defined and as a result have "misaligned expectations about the job of a chemical inspector," the report says.

"For example, certain employees feel that they are entitled to work only on projects that interest them; others have demanded that they be paid if we expect them to answer their cell phones during lunch."

Many inspectors were recruited from the Federal Protective Service, or elsewhere in the law enforcement community, and even from the military, according to Beers.

"Despite their lack of law enforcement authority, some still actively seek the right to carry a firearm," the internal report reads. "They wear their uniforms as a symbol of identity and authority rather than a tool to be used when performing work inappropriate for office attire. The insistence upon titles such as 'commander' further demonstrates an emotionally charged reluctance to let go of past false assumptions about the nature of the work."

Other challenges stem from the office being unionized.

"The presence of the union at this stage of the program will have a significant negative impact on the ability of the program to proceed in a timely fashion" because, "as a 'start-up' program," CFATS is still being tweaked, and ISCD is "obligated to bargain on how any new or changed work assignment is implemented," according to the report.

"These efforts alone could potentially set back implementation of the program by months, or even years," the report reads, noting that ISCD is currently engaged in a months-long dispute over whether inspectors should record their vehicle mileage once a day instead of once a month -- a move that has already cut vehicle usage in half.

"Insofar as a simple change in how we report our vehicle usage has been under discussion for more than 16 weeks, one cannot help but speculate on the length of negotiations on more substantive workplace practices," the report reads.

A source with intimate knowledge of CFATS called the report "honorable," saying the authors "did the right thing" in trying to identify and address the office's problems.

Beers is banking on newly-installed ISCD Director Penny Anderson and her deputy, the authors of the assessment, to salvage CFATS.

Asked who is to blame for the problems now facing the program, Beers said he is "ultimately responsible" because "I am the undersecretary." But, he added, others within DHS, including former ISCD leadership, "all had some responsibility for failing to deal with this" and failing to "ask for help."

Beers noted that when a new organization is "asked to perform" immediately, "you're going to have problems." It's a sentiment echoed in the report, which says "extraordinary pressure" early on "to proceed at an impractical pace" and "without a well developed direction and plan" created several "unintended" consequences.

One of those unintended consequences, according to the report, is "problems with how we have spent our money, and how we are managing those funds." For example, ISCD bought first responder equipment like hazmat suits and rappelling ropes, even though "as a regulatory entity we do not have a first responder role."

ISCD has also paid more than $20,000 each year to be a member of an international security association.

Morale is also "a significant issue" for ISCD, the report reads, because the culture has not tolerated or valued "professionalism, respect and openness" with those who express a "non-conforming professional opinion."

Those who think outside the box are often being "castigated" while people in leadership positions are accused of using "foul language," the report reads.

In addition, while the program is intended to perform compliance inspections, that has not happened because the procedures and processes for compliance inspections haven't been designed yet.

As for security plans, the precursor to a compliance inspection, about 4,200 have been submitted, and 38 have been approved since the conclusion of the assessment in November, according to a senior DHS official.

"There's no question that this program has not achieved the time goals that were laid out at the beginning," Beers said.

"We were more ambitious or aspirational than reality," he said, noting DHS was supposed to have approved all plans for high-risk facilities by the end of last year.

Through public hearings on Capitol Hill and private letters with lawmakers, Beers has previously acknowledged major setbacks with the program. Earlier this year, DHS leadership determined that perhaps hundreds of chemical facilities had been erroneously deemed high-risk. The issue has since been resolved, but it was another indication that CFATS might need a closer look, Beers said.

Beers said he now hopes to approve all plans for high-risk facilities by the end of next year, but, "I have been proven wrong with each of those goals that I have set, so I am a little wary of making a hard and fast prediction."

The program, though, has had some tangible benefits, Beers said.

Since CFATS began, about 1,300 facilities have removed all "chemicals of interest." Another 600 have reduced their chemical levels to a point where they are no longer regulated by CFATS, a trend Beers said he expects to continue.

CFATS is currently funded through September 2012, and lawmakers on Capitol Hill are now engaged in negotiations over whether and how to authorize the program beyond then. For lawmakers still in town ahead of Christmas weekend, DHS leadership will be briefing them later this week on the report's findings and the "action plan" accompanying the report.

That "action plan" lays out more than 80 specific ways to address each of the problems identified. To address staffing issues, the action plan calls for more personnel with regulatory compliance experience or reassigned to more appropriate positions.

"I am presuming that this is a program that the American people and the Congress of the United States want, and that we will continue to improve our ability to (implement it)," Beers said.