Following up an in-depth March 8 story examining federal homeland security grants, the nonprofit Texas Tribune has posted a searchable database online that allows visitors to see how cities and counties in the Lone Star State have used anti-terrorism and preparedness grants since 2003.

The Center for Investigative Reporting made the records available to the Austin-based news organization after obtaining them from the Texas Department of Public Safety using open-government laws. Tribune data guru Matt Stiles built the easy-to-use application that enables visitors to compare grant spending per capita, from tiny Loving County ($1,144 for every resident) to the county surrounding the Texas capital (about $1 for each resident).

The database can also be used to search by community for a detailed list in each of actual purchases totaling more than 25,000 expenditures statewide. In Bexar County where San Antonio is located, for example, authorities spent $350,000 on an armored-response vehicle. In the sample box here you can see a $68,000 "WMD kit," i.e. weapons of mass destruction.

Reporter Brandi Grissom's main story pointed out that big cities weren't the only ones to indulge in such high-priced items. A small county southeast of Dallas with fewer than 8,000 people also scooped up a fortified military-style truck. Grissom's reporting showed that the city of Houston paid professional filmmakers $194,000 for a 22-minute movie on disaster preparedness. Read the story for much more.

"The City of Corpus Christi hasn't used the $188,000 video screen it bought with homeland security funding in 2008," begins Texas Tribune reporter Brandi Grissom in a March 8 story about federal preparedness and anti-terrorism grants. "But when a hurricane strikes, city officials will be ready to watch footage from surveillance cameras around the area -- if the storm doesn't knock them out, of course."

The Tribune examined thousands of transactions made with federal homeland security grants that were contained in a database turned over by the Texas Department of Public Safety. The Center for Investigative Reporting made the data available to the Tribune after obtaining the records through an open-government request.

Doing so is part of the center's ongoing effort to collaborate with other investigative journalism organizations focused on the public interest. It's also an essential component of our more than year-long push to report on post-Sept. 11 security spending in the United States. You can see the nationwide map we recently unveiled using similar records from around the country here. The Center for Public Integrity partnered with us in constructing the map.

The Texas Tribune and Grissom found among other things that the city of Houston purchased a $1.3 million five-man helicopter and paid $194,000 to a professional filmmaking company for a 22-minute movie on disaster preparedness. A small county 80 miles southwest of Dallas with fewer than 8,000 people acquired a $180,000 military-style armored truck.

Image: Texas Tribune

In 2007, the federal Department of Homeland Security entered into more than $3 billion worth of contracts with private companies for goods and services while not requiring that they compete against each other to make sure taxpayers receive the best value possible. That’s a quarter of all contracts awarded by the department and a major jump from 2003 when Congress created the new federal bureaucracy.

It’s known as “sole-source” contracting or non-competitive procurement, and sometimes there are perfectly good reasons for why government bureaucrats would do business with suppliers in such a way. There may be only one company that manufactures a product in demand. Or there’s unusual and compelling urgency, such as during a natural disaster, and the purchase must be made as quickly as possible.

However, government agencies are required to demonstrate why a purchase needs to be exempt from federal guidelines otherwise in place to protect taxpayers.

The Department of Homeland Security’s inspector general says that didn’t happen with dozens of purchases examined for compliance, according to a report released Sept. 15. Inspector General Richard Skinner’s office looked at $417 million worth of spending that took place in 2007 involving sole-source contracts and found that in most cases, contracts were awarded without federal regulations being followed.

The Center for Investigative Reporting found in a story earlier this month that communities in California spent millions of dollars on anti-terrorism equipment and emergency preparedness consultants using federal homeland security grants without following the same types of rules that among other things require competition.

Government auditors concluded in a March report that cities and counties across the Golden State “preferred to avoid the burden of initiating competitive procurement whenever possible” for the purchase of communications systems, night-vision goggles, bomb-disposal robots and more.

California, it turns out, isn’t alone. According to Skinner’s recent report, contract files at the Department of Homeland Security didn’t have documentation to explain why sole-source purchases were necessary. It also wasn’t always clear market research had been done so the best products could be identified. Nor did officials appear to thoroughly plan how they would manage large investments, leading to opportunities for additional waste.

In some instances, files were so disorganized and incomplete, it was impossible for the inspector general’s staff to determine if non-competitive contracts were justified, according to the report. Purchasing documents in two cases listed in the report as examples had to be reconstructed “because contract personnel were unable to locate the original files.”

Forty percent of the department’s annual budget is consumed through contracts with the private sector, but it continues to struggle with high turnover rates of personnel and an inability to hire contract officers who can effectively police major purchases and hold contractors accountable.

Department officials responded in a letter to the inspector general that the report doesn’t mention its “significant strides” in hiring qualified contract overseers. The Department of Homeland Security has doubled its contracting workforce since 2003 and increased its staff by over 20 percent since 2007, according to the letter.

Also, a far greater percentage of contracts are awarded competitively now compared to past years, the letter stated. Whether that’s something to be proud of is a matter of perception. Less than half of contract awards in 2006 were competitively bid out to multiple companies, so any improvements made by the department in saving taxpayer money could be viewed as the federal government simply meeting basic expectations.

When companies do compete for government business, the difference can be extraordinary. Taxpayers benefitted from more than $7 billion in net savings between 2003 and 2007 at the federal level due to competitive contracting, according to the Office of Management and Budget.

Concerns about wasteful spending are nothing new for the Department of Homeland Security. At this time last year, Democratic congressman Bennie Thompson of Mississippi, chair of the House Homeland Security Committee, held a hearing on $15 billion worth of “failed contracts” signed by the department for everything from fences and surveillance equipment on the southwest border with Mexico to new ships and aircraft for the Coast Guard.

According to Thompson’s office:

“Billions of dollars have been spent on contracts for programs that have been delayed, deferred and/or discontinued resulting in a waste of taxpayer money. Unfortunately, the wasting of these funds was not haphazard or as a result of conditions that could not have been foreseen. On the contrary, the department has failed to implement a ‘lessons learned’ approach, which has resulted in the same mistakes being made over and over again.”

Late last year, the Center for Investigative Reporting revealed that authorities in Oregon failed to deploy hundreds of thousands of dollars in safety equipment to the scene of a reported bomb that eventually exploded killing two police officers. The Oregon State Police has used federal homeland security grants since 2001 to purchase an ordinance-detection vehicle, two pricey bomb robots and more.

Now the Associated Press and others are reporting that federal law enforcement agencies quarreled over who would get to investigate the tragedy, one of several such incidents that threaten to undermine coordinated anti-terrorism and bomb-suppression efforts.

The AP obtained a draft report on Sept. 15 from the U.S. Justice Department’s inspector general who found that for years agents from the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives competed to reach crime scenes first, refused to exchange information through a joint database and maintained separate facilities for training and forensics.

In another November 2007 incident, according to the AP, the two agencies argued with one another in front of local police over whether the discovery of a pipe bomb in Arizona had a connection to terrorism, a case detail needed to trigger FBI jurisdiction.

According to the AP:

So-called "battles of the badges" between different law enforcement agencies are nothing new, but the ill will between FBI and ATF dates back decades and has survived the 2002 transfer of ATF from the Treasury Department to Justice. Some had thought putting the agencies in the same department might end the feud, but the Justice Department has spent years trying to get the two sides to cooperate.

After the explosion in Woodburn, Ore., a local prosecutor asked for assistance from the ATF, but the FBI protested.

In addition, a spokesman for the state police told CIR at the time of the bombing that his department was unsure why a 28-foot long, $170,000 ordinance-detection vehicle had not been sent to the scene. He said local officials would be requesting help from the federal government to determine what went wrong.

Earlier this month, county prosecutors in Oregon announced that they would be pursuing the death penalty for a father and son allegedly involved in the explosion. Police claim to have connected the pair to a bank branch in Woodburn where the bomb was planted.

According to published reports, a bomb expert with the state police began prying into the device believing it was bogus when it detonated. He was killed along with another officer, while a third was severely injured. Officers involved in responding to the incident were also honored this month.

State records obtained by CIR show that in recent years, the Oregon State Police spent $427,000 on two bomb robots, $265,000 on an armored SWAT truck and $334,000 on more general equipment designed to defeat explosive devices. Other police and fire departments in the region have spent hundreds of thousands more in federal grants for their own ballistics gear, records show.

Reporters are discovering one unique way to examine spending from President Obama’s stimulus package: comparing it to the disarray that surrounded homeland security grants after Sept. 11. With a little help from the Center for Investigative Reporting, the Voice of San Diego produced this story on May 20. We’ve also covered California’s grant spending in the past.

In the wake of Sept. 11, 2001, the federal government flooded California with money to help the state ramp up its homeland security effort. San Diego benefited greatly from the spending, reaping more than $20 million in homeland security grants since 2002.

But while San Diego and other local governments spent the federal money, the state scrambled to keep track of where all the cash was going. As California's spending on homeland security ballooned from a few million in 2000 to more than $500 million in 2003, the state's effort to account for all the money became akin to "trying to build a bicycle while you're riding it," according to one senior state official.

It took the state more than five years to get around to checking on San Diego's spending of the federal grants, according to state and county audits. Those documents reveal that for the first few years the federal money poured into San Diego, few formal procedures existed to track whether the money was actually being spent on the purpose for which Congress made it available: Making San Diegans safer.

When the federal government did its own checking, it found that, as a result of the state of California's poor monitoring of the homeland security money, local governments had been allowed to misspend millions of dollars. California was also unable to adequately measure whether the vast amounts of money actually helped to protect the state's citizens, a federal audit concluded.

Now, the federal government plans to send California more than $80 billion—an amount that makes the state's homeland security spending look puny—via the stimulus package. The city of San Diego hopes to claim more than $56 million of that money, and the county and other local cities, schools, and agencies hope to pick up tens of millions more.

Local officials in California failed to properly account for millions of dollars spent on homeland security efforts in the state, made dubious purchases that may not make communities safer, and could have overpaid millions by not seeking competitive bidding for equipment, according to an audit by the inspector general of the US Department of Homeland Security.

In one example cited, a California county bought a $96,600 generator to provide its public works department with emergency power during a catastrophe but didn't factor in a $130,000 overhaul of its electrical system needed to accommodate the generator. So nearly two years after the purchase, the new equipment wasn't ready for a disaster and might never be, county leaders admitted.

Another county entered into a multimillion-dollar contract for communications equipment without competitive bidding, which an independent assessment found could have cost taxpayers as much as 26 percent less if other companies had participated. A third county paid more than a half-million dollars to outfit a witness interview room, which was rejected as an illegitimate use of homeland security funds.

In addition to citing municipalities for irregularities, the audit was critical of the state homeland security department's oversight of grant spending, saying it's monitoring "was not sufficient to assure grant funds were spent properly."

The report noted that only half of the local agencies in California that have received cash since 2001 were visited by state monitors as of December 2007 and the state's weak controls did not ensure purchases made were "eligible, allowable, and supportable in accordance with federal guidelines."

According to the audit: "Our reviews of several grant files disclosed that documents such as purchase orders, receipts, or delivery notices, were not present to support millions of dollars in grant expenditures. State officials explained that, in an effort to improve operational efficiency of grant management, subgrantees were not required to provide supporting documentation together with their reimbursement requests."

In a letter responding to the audit, California Office of Homeland Security Director Matthew Bettenhausen argued that the state has a system in place for approving local expenditures and that grant managers in his office receive extensive training throughout the year. A spokesman for Bettenhausen said "We're reviewing the report" but declined to address individual findings in the audit.

The March 13 report focused on $265 million given to the state from 2004-2006 through the State Homeland Security Program, only a fraction of the at least $1.7 billion awarded to California between 2003 and 2008 through the most common grant programs made available by the federal government. The state has received additional millions from Washington for projects that exclusively target port security, expanded interoperable radio systems, hiring new firefighters, border protection and more.

In overall dollars received, California is the leading beneficiary of homeland security grants compared to other states, according to Matt Mayer, a former top official in the federal Department of Homeland Security's Office of Grants and Training.

The audit also found that despite receiving hundreds of millions of dollars in homeland security grants since 2001, California has not adequately evaluated improvements made in emergency response efforts, so it's difficult to tell which areas of the state are better prepared to respond to a major catastrophe.

Bettenhausen, in his response letter, disputed that California had failed to measure changes in its ability to manage disasters. He wrote that the state has tracked improvements in its emergency response capabilities and can gauge today how it is better equipped for calamity than before California began receiving the grants. "California has gone above and beyond what is required at the federal level in the measurement of preparedness and capabilities," Bettenhausen wrote.

The audit does not name any of the counties singled out in examples of questionable grant expenditures, and Bettenhausen's office would not provide them, although it made assurances to the inspector general that the purchases were valid.

Two California counties CIR was able to independently identify from the report, Alameda and Contra Costa, committed $33.4 million to a new emergency communications system using grants funds, but they need at least $34 million more for additional equipment and are unsure where it will come from, according to auditors. So for now, the system is only partially operational. In addition, a contractor may have overcharged them, and auditors are questioning the entire investment.

For the most part, local California recipients of the homeland security grants Congress began handing out after Sept. 11 must purchase what they need first, such as equipment and terrorism response training, before being reimbursed with federal money controlled by Sacramento. The grants have allowed cities of all sizes across the country to buy new mobile command vehicles, gas masks, hazmat suits, decontamination shelters, surveillance equipment for identifying terrorists and more.

A number of states have struggled to comply with rules created to increase accountability over the grant spending such as seeing to it that cities and counties keep their pricey new gear in a "state of readiness" and maintain documents that validate the purchases they've made.

Bettenhausen agreed in his response letter that more monitoring visits needed to occur and vowed to ramp up their frequency, but he complained that the amount of grant funds available specifically for such administrative costs are limited and a backlog of older grant years still exists. However, he promised that more on-site inspections will help ensure "funds are being expended as intended."

Suspect equipment purchases were made in cases identified by the auditors. One of the two aforementioned counties not named hired an engineering firm after determining that the $96,600 generator it had purchased with grant funds would be too difficult for its own employees to install. The consultants discovered that an electrical system would first need to be expensively renovated before the generator could be used. Because the county wouldn't put up the money needed to cover the previously unrealized costs, the generator has sat inactive for almost two years. A public works director from the county didn't believe the money would ever be made available, according to the report.

Another recipient spent nearly $600,000 on audio recorders and additional equipment to outfit a witness interview room for law enforcement purposes, but such items do not "enhance preparedness for terrorists' attacks or natural disasters," the report found. Auditors recommended that the state recover the costs of both projects.

Bettenhausen countered in his letter that the audio equipment "can be used to monitor and record suspects and witnesses involved in a terrorist event." Bettenhausen also promised to make sure that the emergency generator was eventually installed.

Many local authorities in California, according to the report's findings, also are not meeting federal procurement guidelines that require competitive bidding for major homeland security purchases, an obligation that's designed to make certain taxpayers receive the most value possible. "As a result, the grants' requirements for fair and open competition in procurement were not always practiced and subgrantees may have paid more than was necessary," the report states.

Local grant administrators bought large-ticket items but were not familiar with federal procurement rules and did not have records showing what processes they did use to purchase the gear. The report cited examples totaling $11.6 million worth of questionable transactions, including a $294,000 bomb disposal robot, $81,000 worth of night-vision goggles and a $5.1 million communications system.

Multiple purchases were made without competition, or local officials failed to prove that there weren't enough suppliers of specific goods to compete with one another. Nor did grantees conduct cost analyses to determine whether prices were "fair and reasonable" when only one vendor was used without competition.

The $5.1 million communications system was supposed to be part of a much larger regional network in the San Francisco Bay Area of northern California, designed to serve multiple dispatch centers and emergency radios so that first responders could more readily talk to one another. Two Bay Area counties, Alameda and Contra Costa, which encircle several California cities including Oakland and Berkeley, manage the interoperability project together, one of many similar but expensive efforts that exist today around the country. Because of the system's original design, according to the report, most of the equipment for an early phase of the undertaking was purchased from the same company that conceived it.

The contractor, which is not named in the report but CIR identified as Motorola by searching documents online, estimated that the larger system ultimately would carry a price tag of about $54.8 million, including the cost of transmission towers, repeaters and other equipment. A later independent assessment, however, found that Motorola had added a substantial premium to the price of as much as 26 percent compared to what the cost may have been if more than one company competed to offer a better deal.

A spokesman for Motorola declined to comment on the audit's findings. The East Bay Regional Communications System Authority has spent approximately $10 million so far against the contract with Motorola. Bill McCammon, executive director of the authority, told CIR that it has since learned of other less costly alternatives, such as piggy backing on a contract that was competitively bid out to Motorola by Riverside County in southern California. The authority will pursue those options rather than continuing with the existing contract, but McCammon admits some service fees charged by Motorola so far were overpriced.

He said that when Alameda County sought a contractor initially for a new radio system, Motorola was the only bidder. Officials chose to proceed with the company anyway because the Department of Homeland Security requires grants to be obligated quickly for projects each year after the federal awards are announced.

"It was a question of using those dollars or losing those dollars entirely," McCammon said. "Those funds need to be expended within a certain amount of time."

Regardless of the system's estimated cost now, it doesn't include the additional millions it will take to provide the police, sheriffs, firefighters, paramedics, public works personnel and others who would benefit from interoperability with individual radios, thousands of which may be needed. McCammon isn't sure how much more that could cost.

As of May 2008, the two counties were looking for a way to meet a funding gap in the project of $34 million, but according to the audit, they don't know how to fill it. McCammon responds that "we're going through a very deliberate process to evaluate our options" with the aid of a communications consultant. Nonetheless, if the system does not eventually work, auditors say that all of the money used from homeland security grants for the project – more than $33 million earmarked so far – should be relinquished.

Bettenhausen responded in his letter that the state would not be requiring an "artificial date" for completion of the communications project but would review its implementation plan to see if the system is technically feasible and compatible with other interoperable radio initiatives in the state.

The report, meanwhile, did single out another project in California for commendation. The California National Guard created a unique truck-bound system that can bridge disconnected communications systems in a disaster area. But it would still take a few hours for the system to be deployed during an emergency with the help of a military airlift. An early prototype was used during Hurricane Katrina and also California's 2007 wildfire season. Six of the units are being manufactured and will be set up in regions across the state. Other states are examining the system's state-of-the-art design.

Copyrighted image courtesy Tobias Kraft

ABC's reality show "Homeland Security USA" would have you believe that no one of suspicion will make it into the United States from Mexico without being captured by the Department of Homeland Security. What if the greatest threat to national security isn't people trying illicitly to bring goods into the United States but criminals who take them out of the country?

That question was the subject of a hearing convened March 12 by the House Homeland Security Committee.

Experts testified that violent clashes between drug cartels currently underway in northern Mexico will increasingly bleed into the United States if the near-anarchy isn't brought under control. Newly appointed Homeland Security Secretary Janet Napolitano, a Democratic former governor of Arizona, has made it a top priority to stem the growing potential for a spillover of violence, calling for "utmost attention" from U.S. officials. Mexican President Felipe Calderón has deployed thousands of armed forces in an attempt to quash a surge in brutality that resulted in 6,200 murders across the country last year, 1,600 alone in Ciudad Juarez, which shares the border with El Paso.

The federal Bureau of Alcohol, Tobacco, Firearms and Explosives estimates that as many as 90 percent of the firearms fueling bloodshed south of the border aren't obtained in Mexico, where gun laws are far more restrictive than those in the United States. They're coming from firearms retailers in New Mexico, Texas, Arizona and California, exploited by warring narco-traffickers who use straw buyers with clean records to buy the weapons here. The Houston Chronicle, citing investigations by the ATF, revealed in late November that the southern Texas metropolis has become a top source for firearms slipping into Mexico.

"All the weapons the drug syndicates are using in Mexico come across the border from the United States," Mexico's ambassador to the U.S., Arturo Sarukhan, told the Chronicle.

Authorities linked an M-16 assault rifle purchased at a Houston sporting goods store to the murder of four police officers in Acapulco. Another rifle allegedly purchased at a Houston gun store was connected to the killing of a man kidnapped in Mexico during a soccer game, according to the newspaper.

A cell of weapons smugglers bought as many as 45 assault rifles from just one gun shop, and Mexican officials believe the vast majority of thousands of weapons so far seized or found at crime scenes on the southern side of the border originated in the United States. An ATF office in Houston has beefed up its attention to the area, but officials told the Chronicle that legal interpretations of Second Amendment freedoms bar the federal government from keeping a detailed database of weapons and ammo buyers, which hamstrings investigations into the source of the gun flows.

Kumar Kibble, an Immigration and Customs Enforcement deputy director, described for the committee last week the case of Ernesto Tornel Olvera-Garza who allegedly began sneaking hunting rifles into Mexico during the summer of 2005. ICE agents concluded that he used straw buyers with no criminal record to fraudulently buy as many as 50 weapons on the U.S. side of the border that were later smuggled southbound, one of which appears to have been involved in the killing of two Mexican soldiers, according to Kibble's testimony.

The Department of Homeland Security last year officially launched Operation Armas Cruzadas, a joint campaign with the government of Mexico, to fight gun smuggling networks, and Kibble told the committee that the effort has netted more than 100,000 rounds of ammunition and hundreds of weapons. "The challenge in countering the smuggling activity is compounded by the reliance on the technique called 'ant trafficking,' where small weapons are smuggled through multiple ports-of-entry, on a continued basis," Kibble said at the hearing

Despite ICE's new operation, the chaos seems only to be growing worse. The Los Angeles Times reported March 15 on a harrowing new development that's making the bid by Mexican and U.S. authorities to stop drug trafficking truly resemble a war: military-grade weapons being used by cartels to attack one another and police. The list includes armor-piercing ammunition, antitank rockets and grenade launchers.

Many of the weapons are shipped over ocean channels from Central America, according to the Times, but some remain from the anti-revolutionary campaigns the United States once helped fight in that region. Others come from illegal global arms networks, redirected from once-legitimate sources with the help of corrupt government officials onto the black market after being manufactured in South Korea, Israel, Spain—and the United States.

The Mexican government claims to have seized more than 2,200 grenades over the last two years. In one case, a U.S.-based company with a manufacturing facility in Mexico was robbed of bomb-making equipment.

According to the Times story:

The fear of guerrilla warfare was compounded in February when 270 pounds of dynamite and several hundred electric detonators were stolen from a U.S. firm in the state of Durango. On Valentine's Day, about 20 masked gunmen, led by a heavyset man wearing gold rings and chains, stormed the warehouse of a subsidiary of Austin Powder Co., an industrial explosives manufacturer, according to official accounts. They overpowered guards and emptied the warehouse. … In addition to grenades, high-powered guns such as the .50-caliber Barrett sniper rifle have become a weapon of choice in narcotics traffickers' arsenals, [ATF Spokesman Thomas G.] Mangan said. Unlike grenades and antitank weapons, the .50-caliber guns can be obtained by ordinary citizens in the U.S. and smuggled easily into Mexico, like the tons of assault rifles and automatic pistols.

The possibility that Mexico might actually become a "failed state" due to the intensity of the drug war is being considered openly by U.S. military intelligence and members of Congress, a serious matter given that Mexico is a major economic trading partner of the United States.

The Homeland Security Committee's vice chair, Democratic Rep. Loretta Sanchez of California, said during the March 12 hearing: "We must not overhype the dangers in border cities, such as El Paso, which has seen declining crime rates. However, we know that cartel members are present in some 230 U.S. cities, often times masquerading as local gang members who engage in drug-related kidnappings and home invasions.

"In addition, it should be noted that over 200 U.S. citizens have been killed in this drug war, either because they were involved in the cartels or were innocent bystanders. With those concerns in mind, it is essential that the Department of Homeland Security, along with other relevant departments, continue to pursue a contingency plan to address 'spillover' violence along our border."

NOTE: The Center for Investigative Reporting spent the last several weeks offering alternative news on the Department of Homeland Security that typically didn't make it onto ABC's reality show "Homeland Security USA." After seven episodes, it appears that the show has been taken off the air without completing the season, perhaps due to poor ratings. It's not clear yet if the remaining episodes will run later, but our reporting on the department will certainly continue.

Readers might recall that during the election season last year, the Center for Investigative Reporting published an in-depth look at how Republican vice presidential candidate Sarah Palin's modest hometown in Alaska spent the millions of dollars it had received in antiterrorism grants since Congress began doling them out in huge portions to cities big and small after Sept. 11.

We reported the story using detailed grant spending records obtained from officials in Alaska through the state's open-government laws. Recently, we decided to go back and have a second look at the documents after another tiny Alaska community, Skagway, population 823 (see photo at right), made a celebrity appearance in episode seven of ABC's ongoing reality television show "Homeland Security USA."

Skagway plays host to what is probably the most isolated point of entry into the United States, guarded resolutely by a pair of Customs and Border Protection officers. As the show's narrator describes it, Skagway is "nestled between the frozen peaks and icy waters of the Yukon just a snowball's throw from Canada."

Despite its small size, records show that between 2003 and 2007, Skagway received at least $1.2 million in homeland security grants from the federal government. The town was awarded another $352,414 by the feds between 2002 and 2005 through the Assistance to Firefighters Grant, for which fire departments apply directly from the Department of Homeland Security.

Town leaders could argue that their border crossing is as important to protect as any other, but Skagway is so small and lightly populated that its police force has just four officers. The Skagway Fire Department has only two full-time employees, otherwise relying on volunteers to answer "over 200 calls annually," according to its website.

The cash infusions from homeland security allowed Skagway to purchase a $54,000 "incident response vehicle," an $842 pair of stabilized binoculars and $1,700 worth of traffic cones. Another $13,600 was spent on ballistic shin guards, shields and level IV vests, and $2,000 covered hazmat suits, gloves and chemical-resistant boots, while even more went toward decontamination showers and shelters.

Nearly $4,000 allowed the purchase of a personal identification badging system (we're struggling to imagine that Skagway's municipal workforce is large enough to lose track of who's who), $9,000 went toward constructing new fences and gates and a similar amount covered the deployment of surveillance cameras, plus $7,300 for a thermal-image camera. Another $171,268 helped cover two 32-foot Packcat public safety boats (one of which you can see at the bottom of the page here), at least $186,223 was spent on new digital radio equipment and another $498,000 went toward purchasing a communications base system.

A CBP officer from the Department of Homeland Security named Boyd Worley guards the quiet Skagway border outpost with his wife. Both became federal employees in the 1970s, and even their daughter works for the department at the Port of Dutch Harbor in the Aleutian Islands off the southwest corner of Alaska's mainland.

The Skagway port of entry doesn't experience a lot of action, which is why the producers of "Homeland Security USA" thought it would be amusing to profile the border point in the first place. As Boyd Worley says, hardly 30 trucks a day pass through the area. Conversely, there are about 50 million border crossings each year from Tijuana, Mexico, into the United States via the San Ysidro port of entry near San Diego.

"Skagway may be a small port far, far away from the lower 48 states," Worley tells the camera. "But still, if a terrorist were trying to get into the U.S., once he got by us, it's domestic all the way to Washington, D.C."

As the show's producers ride along with Worley in his Chevrolet Suburban, he tells them how sometimes motorists traveling the highway toward Skagway don't realize they're approaching a roadblock until the last minute when they see the sign. "They freak out and throw their dope out the window," Worley snickers.

Suddenly he gasps and turns serious.

"Oh my God, right here in front of us," he exclaims. "Look at that." It's a boulder that had fallen from a nearby rock face at some point in the past and is just sitting right there in the middle of the highway! "That's quite a boulder," he adds. What will the Department of Homeland Security do? "What we'll do is go back to the station and phone the Department of Transportation guys," Worley assures viewers. But the oversized rock will have to wait a little while, he says, because everyone in that equally small office had punched out at 3 p.m.

Whether any town in Alaska is likely to be hit by terrorists or not, the state on a per-capita basis is among the top recipients in the United States of the most common emergency preparedness grants distributed annually by the Department of Homeland Security. Former Vice President Dick Cheney's sparsely populated home state of Wyoming is one of the few that ranks higher than Alaska in per-person grant spending.

Between 2002 and 2008, the federal government awarded Alaska at least $87 million dollars in major grants, which state officials then distributed to local cities and boroughs (the state's equivalent of a county). Alaska received another $18.2 million from the assistant to firefighters program during that period.

Our story from late last year combined spending totals for Palin's hometown, Wasilla, population 7,028, and the Matanuska-Susitna Borough that surrounds it. The area has benefited from at least $4.2 million in grant funds over the last five years. Among the purchases were two incident response vehicles costing a combined $1 million. One of the two vehicles, a mobile command communications truck, is specially outfitted with a four-wheel drive chassis, a conference room with a projector screen and an incinerator toilet that operates without water.

Another $130,000 in grant funds was required to outfit the new truck with interoperable radios that could reach the state's emergency communications system and a satellite for Internet access and video conferences. A local emergency services director told us then that the fire department had trouble figuring out where to keep the vehicle, so it was being stored in a commercial building next door to a firehouse in Wasilla. Leasing expenses for the space at that time cost at least $9,000 in grant funds, records showed. We weren't able to reach the Central Mat-Su Fire Department recently to find out where the truck is now.

Wasilla also spent $250,000 to build a 100-foot tall communications tower on behalf of its small police department for "detecting, disrupting and responding to acts of terrorism," city officials wrote in a progress report.

Other small towns in Alaska made high-priced purchases, too, not just Wasilla and Skagway. A city called Whittier located about an hour from Anchorage spent nearly $30,000 on two Anthrax detectors. The state's Department of Health and Social Services told us there'd never been a reported case of Anthrax infection in Alaska history.

The port city of Bethel spent $6,300 on a "surveillance shotgun listening device," more than $20,000 on video surveillance for its water treatment plant and $44,000 on seven ATVs. The town has fewer than 6,000 people.

The Center for Investigative Reporting’s weekly blog feature examining the reality television show “Homeland Security USA” is taking a break to bring you this public service announcement regarding President Barack Obama’s call for an army of new intelligence specialists.

Overlooked in media reports of President Obama’s proposed 2010 budget was $260 million for the Department of Homeland Security to pay for thousands more state and regional intelligence analysts. These are the folks who work to improve the quality of available information on potential terrorists and encourage the wider sharing of it among law enforcement authorities.

But the analysts would most likely be staffed at controversial fusion centers that grew quickly across the country after Sept. 11 to collect and examine data in search of evidence that terrorists are planning an attack. California has four fusion centers, and many around the nation are jointly staffed by state police, FBI agents and federal analysts from the Homeland Security Department.

The use of such domestic intelligence forces raises serious questions about potential civil liberties abuses and has the familiar ring of the FBI’s scandalous domestic counterintelligence program, COINTELPRO, and so-called police Red Squads that had to be reined in after committing widespread constitutional offenses in the 70s.

At the very least, such a significant expansion of domestic intelligence gathering and analysis comes as a surprise considering Obama’s pledge that the era of government secrecy is over. On the contrary, some fusion centers have proved reluctant to provide watchdogs and reporters with information about what they’re up to. Last year, EPIC sued the Virginia State Police to force open records describing the activities of its fusion center.

Intelligence-led policing is the latest trend in law enforcement, but the concept—and many enforcement tactics—are not new, which is why some civil libertarians are worried. Half-a-century ago, local police spy units sought to unravel communist conspiracies in the United States—now their focus is the never-ending War on Terror. Cops obviously want to expose and preempt major crimes before they occur, rather than simply investigating the deadly aftermath when it’s too late to save victims. But since so many states are unlikely to be struck by terrorists, fusion centers have had to expand their intelligence mission to cover all crimes and potential hazards, partly to convince local legislators they’re worth financing with taxpayer money into the future.

A refresher course on this subject is offered in the late ACLU attorney Frank Donner’s definitive 1990 book on domestic intelligence gathering, Protectors of Privilege: Red Squads and Police Repression in Urban America. In it, he noted that local law enforcement for decades eavesdropped on thousands of people and groups with abandon and then shared the information with other cities, thus tarring as subversive anyone who appeared in the mountains of collected data files and suspicious activities reports, regardless of whether they’d actually committed a crime.

The super-secret Red Squad in New York City, known euphemistically as the Bureau of Special Services, or BOSS, spied and compiled data on every person and organization even loosely involved in political activism and deemed by police to be seditious or radical, including civil rights activists and elderly peace protestors. The bureau even spied on Mensa, the social club for braniacs, and neighborhood organizations that protested noise coming from a nearby airport.

The Red Squads also used paid infiltrators in attempts to provoke political activists into violating the law, conducted raids and arrests without warrants and beat protestors in the streets, all of which eventually caused enough of an uproar that many of the intelligence units agreed to legal settlements limiting the range of allowable surveillance tactics.

Not surprisingly to those who remember the past, much of the same problematic conduct is again being revealed. Some of it is the result of a modern-day development–electronic surveillance—that has been added to the menu of law enforcement tools

The Washington Post has published recent stories showing that the Maryland State Police collected intelligence on dozens of peaceful advocates and groups, including Amnesty International, labeling them in a database as terrorists. The Department of Homeland Security, according to the Post, provided officials in Maryland with information about upcoming antiwar demonstrations gleaned from e-mails that the federal government had somehow acquired. An organizer of the protests told the Post that federal agents would have had to infiltrate his group’s email lists to know about its plans.

The New York Times examined video footage in 2005 showing NYPD officers not just participating in protests undercover but actually seeming to incite reactions from demonstrators. The Times reporter who wrote the story, Jim Dwyer, has widely documented covert modern-day intelligence gathering on political activists by police in New York.

In 2002, the ACLU helped unearth spy files revealing a decades-long push by the Denver Police Department to collect intelligence on thousands of people and hundreds of organizations, including peace activists and mainstream human rights groups. On Feb. 26, the Texas Observer obtained a confidential and “bizarre, conspiracy-laden” memo from a fusion center warning local law enforcement of recent alleged threats to the Lone Star State from Muslim organizations and antiwar groups.

(For even more on contemporary surveillance techniques that pose complex issues for a free society, see the eye-opening 2005 book from Washington Post reporter Robert O’Harrow, Jr., No Place to Hide, published in partnership with CIR. O’Harrow is currently a CIR advisor.)

Congressional investigations in the 70s led to significant reforms of how law enforcement can handle data collected on individuals and political organizations. The Justice Department for years imposed regulations on electronic data systems maintained by local police requiring that intelligence be collected only on individuals reasonably suspected of having committed a crime. If the data becomes “misleading, obsolete, or otherwise unreliable,” the information is supposed to be purged after five years to protect the privacy rights of innocent Americans.

But following 9/11, police and federal authorities mounted a resistance effort against landmark 1970s-era privacy laws in a drive to expand information collection and sharing. No one is sure if all the fusion centers even comply with the guidelines, according to an early 2008 report from the Congressional Research Service: “The federal government has no formal and systematic means of auditing whether each center is appropriately protecting civil liberties, or using federally funded intelligence analysts in a manner that is consistent with national goals and objectives for fusion centers.”

In any case, during the waning months of the Bush Administration, Justice Department officials quietly proposed lightening many of the restrictions so that police could keep data on Americans for much longer than the previously established five years. It would also be far easier for police to exchange the sensitive information with their federal counterparts, as opposed to the past when it could only be transmitted on a “need-to-know” basis. The changes were unveiled as part of a larger effort by the Bush White House during the final moments of his term to make it easier for everyone in law enforcement, from the FBI to local patrol officers, to engage in domestic intelligence collection.

Regarding the proposed change, the Justice Department wrote in the Federal Register last July that “The five-year retention period was established before the events of 9/11 and the advent of the current terrorist threat environment. This relatively short retention period may not be long enough to cover terrorist planning cycles and/or the need for historical data for terrorism threat assessment. New technologies for data storage and analysis make possible the extended retention and potential usefulness of this information for purposes of such threat assessments.”

CIR placed several calls to the Justice Department’s press office in recent months while working on another story to ask about the status of the proposed changes, but no one has returned the calls. You can find more on the proposed changes here and here.

The Department of Homeland Security has moved to create recent guidelines for fusion centers specifically, including recommendations on how to respect civil liberties. But besides helping to finance their establishment, federal officials have mostly avoided regulating fusion centers, leaving them to fall under state laws. Nearly 60 fusion centers exist across the United States today, and their construction came with the help of $400 million in federal antiterrorism grants handed out between 2001 and 2006.

Former Homeland Security Secretary Michael Chertoff initially attempted to limit how much states could use the grants to pay overtime costs for personnel and hire new intelligence analysts in an effort to keep them from becoming too reliant on the money. But he was forced to change his tune last October when Congress mandated through a new bill that Chertoff allow up to half of the $1.7 billion doled out nationally from major emergency preparedness programs during 2009 to be used for covering intelligence specialists and other staff positions.

Much of the energy behind fusion centers is coming from the Democrat Party. While it seems that groups such as the ACLU would have an easier time finding sympathy with the Democrats now in control of the White House and Congress, the party is still out to convince voters it can do a better job than Republicans securing the homeland, and that means not appearing to coddle terrorists.

Newly appointed homeland security secretary, Democrat Janet Napolitano, testified in Washington Feb. 25 that partnering with state and local governments would be a major priority during her tenure. “The fusion of information between the federal, state and local levels is what makes the intelligence-gathering process critically valuable to preventing threats from materializing. … The creation of a seamless network we can use to share this information among levels of government is a critical part of improving our partnerships.”

A “seamless network” of domestic intelligence outposts operated by police who may not have sufficient experience in handling sensitive data is exactly what worries the ACLU, EPIC, and other pro-privacy organizations. Her comments were no doubt welcomed by Congressman Bennie Thompson, chair of the House Homeland Security Committee and also a Democrat, who has rarely missed an opportunity to criticize the Bush White House for not doing enough to back fusion centers and other antiterrorism initiatives. When Democrats retook the House following the 2006 midterm elections, their first legislation was the 9/11 Commission Act, which among other things codified the Department of Homeland Security’s role in supporting fusion centers.

Now comes President Obama to reinforce the administration’s support for fusion centers by endorsing a significant increase in the number of intelligence analysts.

There is no question that good intelligence can lead to better law enforcement and possibly avert terrorist activity, and it is possible that better communication between law enforcers could have detected the activities of the terrorists who committed the Sept. 11 attacks. At the same time, intelligence gathering run amok can produce unconstitutional abuses, as groups such as the ACLU and EPIC have pointed out. Simply throwing thousands more analysts into this complex area of law enforcement without due regard to that risk might produce other than the desired results.

Non-homeland security missions:
• Marine safety
• Search and rescue
• Aids-to-navigation
• Living marine resources
• Marine environmental protection
• Ice operations

Homeland security missions:
• Ports, waterways and coastal security
• Drug interdiction
• Migrant interdiction
• Defense readiness
• Other law enforcement (such as blocking illegal incursions into U.S. waters)

In recent installments of "The Outtakes" focusing on ABC's reality television series, "Homeland Security USA," the Center for Investigative Reporting has posted some intriguing statistics for readers gleaned from federal reports that show how much the U.S. Coast Guard has spent executing its more traditional responsibilities such as search and rescue compared to its so-called "homeland security missions," expanded significantly after 9/11.

We already know that the FBI's big push into securing the homeland meant fewer agents were available to investigative Wall Street corruption and real estate fraud during and after the market meltdown. The bureau today is still dedicating only a fraction of the resources and personnel to financial fraud that it did for the savings and loan scandals of the 80s and 90s.

But the Coast Guard's area of expertise is uniquely water bound. Figures we looked at showed the Coast Guard budgeted $100 million more in 2009 to finance drug and migrant interdictions—both of which are considered "homeland security missions"—than it set aside for reducing maritime fatalities and injuries and conducting search and rescue efforts, arguably its core mandate.

However, we stopped short of wondering aloud whether the Coast Guard is sacrificing some of its older missions. Perhaps Congress or the White House applied pressure on the Coast Guard to stop more immigrants and drug smugglers from attempting to enter the United States via the open seas, even though a battery of other federal agencies have similar responsibilities. Or maybe there are just fewer fishermen being threatened by dangerous waters and in need of help.

Now, a recent December report from the Inspector General's Office in the Department of Homeland Security says the Coast Guard is spending more time on law enforcement-type activities and that could mean it's less capable in the future of meeting its marine safety and environmental protection obligations. According to the report:

"Our analysis of the Coast Guard's mission performance, resource hours and budget projections shows a clear trend toward emphasizing the homeland security missions, which will lead to continuing difficulty in meeting future performance targets for the non-homeland security missions … Coast Guard budget projections in dollars and personnel from [fiscal years] 2007 through 2009 illustrate decreases for the non-homeland security missions in contrast to significant increases for the homeland security missions, especially for the ports, waterways, and coastal security mission."

The report also seems to make clear why Coast Guard officials would so vigorously dispute the inspector general's findings and insist homeland security isn't taking over its time and resources. Section 888 of the Homeland Security Act of 2002, which laid the groundwork for the creation of the department by folding numerous agencies into one mammoth bureaucracy, specifically instructs that the Coast Guard's responsibilities not be altered as a result of its inclusion in the department:

"Notwithstanding any other provision of this Act, the authorities, functions, and capabilities of the Coast Guard to perform its missions shall be maintained intact and without significant reduction after the transfer of the Coast Guard to the Department, except as specified in subsequent Acts. … No mission, function, or asset (including for purposes of this subsection any ship, aircraft, or helicopter) of the Coast Guard may be diverted to the principal and continuing use of any other organization, unit, or entity of the Department, except for details or assignments that do not reduce the Coast Guard's capability to perform its missions. … The Secretary may not substantially or significantly reduce the missions of the Coast Guard or the Coast Guard's capability to perform those missions, except as specified in subsequent Acts."

For good measure, the law then mandates that the inspector general review the Coast Guard's performance each year "with a particular emphasis on examining the non-homeland security missions" to make certain that Section 888 is being followed.

The Coast Guard's homeland security apparatus, meanwhile, made a star appearance in episode four of ABC's "Homeland Security USA."

In one segment, intelligence received by Customs and Border Protection indicates that 93 Dominican migrants are attempting to make their way illegally to the U.S. territory of Puerto Rico in what's known as a "yola," a rustic wooden boat that's mostly ill-suited for raging deep-ocean waters.

A CBP prop plane stuffed with sensitive radars and night-vision cameras spots the hapless craft where its engines have failed and the people onboard are at risk of tumbling into the ocean amid a brewing storm. As part of a joint operation involving numerous agencies charged with protecting Puerto Rico's 434 miles of coastline, a Blackhawk helicopter and Coast Guard cutter known as Matinucus are dispatched to the Mona Passage to scoop up the migrants before the yola capsizes.

"We called our command center and told them that all law-enforcement aspects of the case would have to be put on hold—that this was a search and rescue case because of the sea conditions," Jay Guyer of the Coast Guard tells the audience.

The boat's passengers are plucked from the whitecaps during a three hour-long operation and given food and water before being escorted back to the Dominican Republic. The show's camera team interviews a few survivors as Matinucus leaves the battered yola in its sizeable wake.

"Unfortunately," one says in Spanish, "I will have to do this again because the economic situation in our country doesn't permit us … there is no source of work, there is no work. You must go out and risk losing your life for a future."

The yola's captain is allegedly a well-known human smuggler named Manuel de la Cruz, or "Bigfoot," who is arrested on camera and faces up to 10 years in prison for violating U.S. immigration laws, viewers are told. But most of the CBP and Coast Guard officials involved cast the mission as a Good Samaritan gesture to save the Dominican migrants from certain tragedy rather than an assignment to enforce American boundaries.

"I think the significance of this operation is there's multi-agencies working together to put someone behind bars for endangering aliens on the high seas out there," U.S. Border Patrol Chief Mike Debruhl says.

"The law enforcement aspect is a very important job, but also from a humanitarian aspect—I feel we absolutely saved 93 lives tonight," Guyer adds.

Behind the scenes, Puerto Rico's civilian population is apparently not always excited about its role of hosting U.S. law-enforcement authorities. In a job description for the area posted online, the Coast Guard warns applicants and transferees, "Do not travel to Puerto Rico in uniform. Wear civilian clothes. Although patriotism is on the rise here, uniforms will still make you a target in the metro area."

As for its homeland security missions, Coast Guard officials complained that budget projections used as data for the inspector general's recent conclusions could be misleading.

But the independent watchdog office also looked at where the Coast Guard has applied its resource hours and personnel since 2001, not just its budgeted dollars. The amount of time devoted to non-homeland security missions has dropped with fair consistency and now makes up less than half the total number of resource hours even taking into account the Coast Guard's search and rescue role in the aftermath of Hurricane Katrina.

Far more hours were spent during 2007, for example, on drug and migrant interdiction and defense readiness than on marine safety, search and rescue and environmental protection. That might explain why the Coast Guard has failed to meet some of its traditional performance targets. The Coast Guard promised to limit the five-year average number of commercial deaths and injuries on oceans and waterways under American jurisdiction in 2008 to less than or equal to 225. But 244 actually occurred.

The Coast Guard further promised to save 87 percent of mariners facing imminent danger last year, but the percent actually reached was 83 percent. Translated, that means 808 people lost their lives in such situations during 2008, an increase of 20 over 2007, despite the fact that the number of cases involving endangered mariners dropped significantly during that period, which arguably should have meant fewer deaths rather than more. Four of six non-homeland security performance targets were not met in 2006 and 2007, and the Coast Guard's promise to enforce federal fishing regulations and protect marine environments hasn't been fully met since 2003.

On the other hand, the Coast Guard has mostly succeeded in meeting its homeland security performance targets for the last several years. For instance, it set a record during 2007 for the pounds of cocaine seized in the Caribbean, Gulf of Mexico and Eastern Pacific, a total of 355,754. In addition, its resource hours devoted to stopping undocumented migrants from entering the United States have skyrocketed since 2001.

One of the most notable areas the Coast Guard ventured into heavily after Sept. 11 is so-called "defense readiness," i.e. its role in promoting national security and participating in defense operations with other entities such as the Navy. Resource hours there have climbed 500 percent in recent years and the Coast Guard has made major purchases of state-of-the-art ships known as "national security cutters," part of a buying spree of new "Deepwater" assets.

The U.S. Coast Guard’s national security cutter Bertholf, built by private contractors, cost $256 million more than anticipated and was delayed by two years.

The Deepwater program is a years-long $24 billion effort to upgrade the Coast Guard's vessels and aircraft by acquiring hundreds of new boats, planes and helicopters and modern surveillance and reconnaissance systems. It started in the mid-1990s and is the largest acquisition campaign in the Coast Guard's history. But the program has suffocated under extraordinary cost overruns, differences with a private sector contractor over what was to be delivered and a Justice Department probe.

A joint venture by Lockheed Martin and Northrop Grumman received an immense $17 billion contract to administer Deepwater in 2002, but the Government Accountability Office warned at the time that there could be serious risks associated with such a large, single acquisition. Rather than buy big new assets individually like different sets of ships and helicopters, the Coast Guard decided to purchase everything in a single package hoping that by doing so it could foster more integration across all of its systems (such as among communications links).

Watchdogs like the GAO and inspector general later found that the contractors were allowed too much authority in defining performance standards, the contract's operational requirements were vaguely worded, and the contract award and incentive fees paid to the companies as work progressed were based on "attitude and effort" rather than clear and successful outcomes.

According to a Congressional Research Service report on Deepwater published in October 2008:

"Some observers expressed the view that using a [private contractor] to implement the Deepwater program made a complex program more complex, and set the stage for waste, fraud and abuse by effectively outsourcing oversight of the program to the private sector and by creating a conflict of interest for the private sector in executing the program."

The first three of eight scheduled national security cutters were supposed to cost an estimated $863 million total, but the price tags for each of them have essentially doubled due to a series of unanticipated costs so that now the overall amount is expected to be an eye-popping $1.6 billion. One of the main reasons for the massive cost increases are new post-9/11 specifications for the cutters requiring upgraded weapons systems, increased defenses against chemical, biological and radiological attacks and communications systems that are interoperable with the Defense Department and other homeland security agencies.

Two GAO investigators, Stephen Caldwell and John Hutton, testified to the House Appropriations Subcommittee on Homeland Security in March 2008:

"The new and modernized assets the Coast Guard expects to acquire under the Deepwater Program are intended to be used to help meet a wide range of missions. After the September 11, 2001, terrorist attacks, the Coast Guard's priorities and focus had to shift suddenly and dramatically toward protecting the nation's vast and sprawling network of ports and waterways. Coast Guard cutters, aircraft, boats, and personnel normally used for non-homeland security missions were shifted to homeland security missions, which previously consumed only a small portion of the agency's operating resources. Although we have previously reported that the Coast Guard is restoring activity levels for many of its non-homeland security missions, the Coast Guard continues to face challenges in balancing its resources between the homeland and non-homeland security missions."

The first national security cutter was to be delivered in 2006, but it fell two years behind. Then, in early 2007, the Inspector General's Office released a scathing report on the cutters finding among other things that the Coast Guard started construction on the ships while aware that potential design flaws in their hulls existed, which could result in them being too weak to survive a 30-year service life.

The Coast Guard originally conceived of building 12 national security cutters. But in a bid to promote efficiency through innovation, the number was reduced to eight after officials decided they could outfit the cutters with vertical unmanned aerial vehicles, or predator drones, and use them to expand the range of ocean on which the Coast Guard could conduct surveillance.

Early proposals called for buying 45 new drones at a cost of half-a-billion dollars. Instead, the House Appropriations Committee later concluded in a report that the unmanned aerial vehicle "has not worked as planned, and the Coast Guard has nothing to show for the $114,550,590 it has obligated for this project."

Further, delays in obtaining new patrol boats have forced the Coast Guard to pay for maintaining its older ones, and Deepwater consumes nearly all of the money the Coast Guard sets aside annually for general acquisition, construction and improvements. "This leaves relatively little funding for non-homeland security assets," according to a GAO report published last year.

Attempts to modernize eight existing patrol boats led to the discovery of structural damage in their hulls and other problems. The Coast Guard ultimately had to scrap them and acknowledge in 2007 that the effort to refurbish the boats was a failure, but not before spending $96 million, which federal officials sought as a refund from Northrop and Lockheed last year. Media reports eventually surfaced that the Justice Department was investigating certain work conducted as part of the contract, including the national security cutters and the installation of communications systems on new and renovated Coast Guard ships.

Making the public aware of all this bad news hasn't been easy for overseers. The Congressional Research Service noted last year that the Coast Guard and its contractors had in the past resisted attempts by the inspector general to investigate problems with Deepwater and officials "appeared to have altered briefing slides on the [national security cutter] effort so as to downplay the design flaws to certain audiences."

The program's troubles finally led Coast Guard Adm. Thad Allen to make a series of frank public statements in April of 2007 admitting problems with Deepwater and announcing reforms that are still underway today, including the removal of private contractors from some management duties:

"We understand all too well what has been ailing us within Deepwater in the past 5 years: We've relied too much on contractors to do the work of government as a result of tightening budgets, a dearth of contracting expertise in the federal government, and a loss of focus on critical governmental roles and responsibilities in the management and oversight of acquisition programs. We struggle with balancing the benefits of innovation and technology offered through the private sector against the government's fundamental reliance on robust competition. A useful balance can be achieved, but it requires due diligence on our part. … Both industry and government have failed to fully understand each other's needs and requirements, all too often resulting in both organizations operating at counter-odds to one another that have benefited neither industry nor government. … [B]oth industry and government have failed to accurately predict and control costs. We must improve."

So far, the producers of "Homeland Security USA" haven't found time to address the Department of Homeland Security's pricey procurement headaches.