Government Executive - Authors - Neil Munro

NIH director to step down

Neil Munro — Wed, 24 Sep 2008 00:00:00 -0400

Elias Zerhouni, the director of the National Institutes of Health, is expected to announce his departure Wednesday. President Bush picked him in March 2002, and he is regarded by some experts as the administration's most successful administrator.

He managed to impose a management reform on the notoriously disorganized NIH, and successfully navigated the hot-button dispute over abortion embryo stem-cell research, even as his budget shrank slightly.

There's no word yet on where Zerhouni will go, but it's expected that he will find a top science-management position in academia, business or the universe of non-government organizations.

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NIH director steers agency through tough times

Neil Munro — Tue, 18 Mar 2008 00:00:00 -0400

Last year, Rep. Henry Waxman set his investigators on the trail of a potential scandal at one of the National Institutes of Health. The California Democrat, known for his aggressive probes of suspected malfeasance in Republican administrations, had caught wind of a complicated mess at the National Institute of Environmental Health Sciences.

According to newspaper stories and internal critics, the institute's director, David Schwartz, had diverted agency funds to his own intra-agency laboratory; steered researchers away from basic science; and sought to silence an agency journal that informs journalists, trial lawyers, and the public of emerging health risks.

Investigators from Waxman's Oversight and Government Reform Committee looked into the potential scandal, sent warning letters to NIH officials, and held a hearing in September. Then, just before the satellite TV trucks began descending on the NIEHS headquarters near Durham, N.C., Waxman let the matter drop.

What happened?

Essentially, NIH took control of the situation at the behest of Elias Zerhouni, its director, Waxman says. As the complaints mounted, Zerhouni's top deputies temporarily barred Schwartz from his 26-person NIEHS laboratory in February, and then sent the lab's 12 "guest researchers" back to Duke University, where they had worked with Schwartz. In August, Zerhouni ordered Schwartz to temporarily step aside, launched a top-level review, and promised to deliver a report to Congress. At the September hearing, Schwartz's acting replacement, Samuel Wilson, described the numerous ways that NIH agreed with Waxman's description of the situation.

"The important thing to me," Waxman told National Journal recently, "is that [Zerhouni] took the first steps to resolve the issue." Zerhouni, the director of NIH since 2002, has "been very responsive -- he moved very forcefully."

Zerhouni's feat of mess-management wasn't just a matter of distancing himself from a tainted deputy -- Zerhouni had hired Schwartz, and his senior deputies had approved the employment agreement that Schwartz cited when he brought the 12 researchers over from Duke and provided paid expert testimony in asbestos lawsuits. And it wasn't the only difficulty that Zerhouni has confronted. His budget has been painfully flat, after doubling during the tenures of his predecessor, Harold Varmus, and the acting director who followed. He has had to impose tough conflict-of-interest rules on prominent scientists who are used to having their own way. And the director's job at NIH has had relatively little authority over the sprawling $29 billion assemblage of 27 separate fiefdoms.

Yet, in his six years on the job, Zerhouni has managed to win and keep the support of establishment Washington, of industry officials, and of the outside groups that compete for NIH funds -- institute officials estimate that there are 478 of them. He has prospered because of his personal charm, his deft political maneuvering, and, most of all, his ability to rejuvenate the agency. That's no minor task; previous reform efforts stalled amid opposition from myriad heartstring-pulling pressure groups, status-conscious scientists, pork-protecting legislators, and dependent biotech executives. Zerhouni "has made an incredible difference, much more so than the former director," said Sharon Hesterlee, vice president of translational research at the Muscular Dystrophy Association.

Asked to comment on Zerhouni's performance, Sen. Edward Kennedy, D-Mass., who chairs the Senate Health, Education, Labor, and Pensions Committee, provided this bouquet: "Dr. Zerhouni leads the National Institutes of Health with extraordinary skill, vision, and integrity. I commend him for the contributions he has made to the health of the American people."

"He's been a very good leader for the NIH," Waxman said. "He's a hard worker, he respects science, he's committed to the NIH's mission, and he moved the [science] agenda forward."

That's rare praise from Democrats for a top administrator appointed by President Bush, who is regularly accused by Waxman of conducting a "war on science."

Algiers to Bethesda

Zerhouni, 56, trained to be a scientist and a manager, and to keep one eye on discovery and the other on getting things done right. One of his earliest jobs was at an engineering company in his homeland, Algeria, where he discovered that concrete castings were cracking because the builders weren't using enough fine-grain sand. Testing concrete was too prosaic for him, so he earned a medical degree at the University of Algiers. Partly prompted by a relative, he specialized in radiology, which seeks a clearer image of the body's internal workings. That defined focus distinguishes radiologists from many other biological scientists, who spend their days incrementally exploring narrow niches, such as the digestive tract of C. elegans -- a worm one-quarter of an inch long.

In 1975, at the age of 24, Zerhouni arrived in the United States with a medical degree and a scholarship. Three years later, he was chief resident in radiology at the Johns Hopkins University School of Medicine, and he became an assistant professor the next year. He left Hopkins in the early '80s, spent four years at Eastern Virginia Medical School, and then returned to Hopkins in 1985. He won a full professorship by 1992, the chairmanship of the radiology department in 1996, and then became vice dean for research, rising to the post of executive vice dean of the medical school. His career combined research -- he won lucrative patents for improving imaging technology -- with industry outreach and management at one of the nation's cutting-edge research centers.

In April 2002, Bush asked him to run NIH. Senate confirmation was smooth, and in May Zerhouni was grappling with his predecessor's legacy and with the president's curbs on embryonic-stem-cell research. Varmus, who ran NIH from 1993 to 1999, had persuaded Congress to double the agency's budget, but he didn't attempt to exercise much control over how the money was spent.

Moreover, Congress was increasingly unhappy with the modest results of its doubled spending on NIH. Legislators want concrete results -- therapies and jobs, not press releases about C. elegans's digestive tract or reminders from researchers that it takes 20 years to convert a laboratory discovery to a tested therapy. Also, the flatlining of the NIH budget after 2003 complicated Zerhouni's outreach to Congress. The earlier increases were "like the housing bubble," Hesterlee said. "It was fun when it was on; it is painful in the aftermath."

Zerhouni began his tenure by touring the 27 units of NIH's sprawling campus. These agencies, which include the NIEHS; the National Heart, Lung, and Blood Institute; and the giant $4.8 billion National Cancer Institute, had long resisted any direction from the NIH director, the White House, or Congress.

As the new director, Zerhouni had modest power, a tiny central office, and limited ability to transfer funds between the 27 centers. Congress has traditionally allocated funds directly to the centers and to favored projects, leaving the director with control over about 1 percent of the budget. That's only a few tens of millions of dollars, but it was used by Varmus's predecessor, Bernadine Healy, as the catalyst for a few new programs. Still, the director's authority was so limited that Healy, Varmus, and Zerhouni had to use the periodic agency-wide Leadership Forums to cajole top-level support for their plans.

Zerhouni titled his plan "Roadmap for Action" and established three major priorities: New Pathways to Discovery, Research Teams of the Future, and Re-engineering Clinical Research. A road map was needed, he said, because "there is no issue at the NIH that doesn't have 10 sides and 20 angles; and without a vision, you end up turning in circles."

Zerhouni also created an Office of Portfolio Analysis and Strategic Initiatives to map NIH spending and identify areas that need more funding, or less. Partly because NIH institutes and centers have their own account books and idiosyncratic medical definitions, it's difficult for the director's office to calculate how much is being spent on a particular research topic. "Believe it or not, when I visited the institutes and asked that question of the directors, it was very difficult to even find out what definitions they were using for cardiovascular disease," said Raymond Gibbons, a Mayo Clinic cardiologist and the 2007 president of the American Heart Association.

This reorganization went far beyond new offices and titles. Zerhouni ended the NIH practice of allowing each of the 27 centers to have a say in all major matters. "Direct democracy" was out, he said, because "this isn't the U.N." He also eliminated some 60 committees because "you have to destroy points of veto." He then established a top-level steering committee of only 11 members, and appointed six working groups with rotating memberships.

This compromise between centralization and the committee, he said, helps make NIH better suited to the nature of science -- the unpredictable discovery of the unknown. Industrial productivity can be planned down to the last nut and bolt, but scientific managers don't know what they're going to get from an investment, and many of the eventual breakthroughs are surprises, even to the scientists who make them. "You don't want to dictate science [or] be an ATM for science," Zerhouni said.

His reform efforts shocked the many outside groups that clamor for NIH funds -- local groups, patients organizations, and scientists unions. The patients groups are especially powerful because they can roll out public-relations campaigns with sympathetic patients and camera-ready celebrities, and can track members of Congress who have relatives afflicted by one disease or another. The scientists are influential because they have a lot of status in Democratic-affiliated university towns and because they help lead the patients groups. They fight any reduction in grant budgets: University administrators demote unfunded scientists to the lower-status task of teaching. Worse, at some institutions, "if you lose your grant, you're on the street," said Alan Krensky, director of the portfolio office.

The groups' clout was made clear when Zerhouni sought to close down the General Clinical Research Centers, which were established 25 years ago to bring scientific discoveries into university hospitals. This program needed to be replaced, Zerhouni said, because it was designed for acutely ill patients, such as heart attack victims who need surgery. These days, he said, NIH wants to focus on treatment of chronic conditions, such as heart disease. Lobbying for the $270 million-a-year program was "enormous," Zerhouni said, and to make the sale, "I had to go downtown [to Congress] and show why it's important."

Zerhouni won. Twenty-five of the 78 centers have been shut, and the program will end in 2012. But the universities didn't lose. Many are getting money to run new centers for translational science activities, which integrate the varied skills of many distinct professionals, including academic scientists, doctors, and nurses. "The universities saw the [new] paradigm; and the people who had never talked to each other, talked to each other -- because there is money on the table," Krensky said.

Similarly, Zerhouni won a fight to move money from older, established researchers to younger colleagues. Once the budget went flat in 2003, few of the postgrads could win peer-approved NIH grants amid competition from the corps of older, well-connected researchers. Moreover, "young" is a relative term in biomedical research; new scientists don't finish required postgraduate internships until they're in their 30s. By then, they need money for homes, marriages, and kids, and many take well-paid industry jobs rather than risking a long-shot gamble on winning an NIH grant request and an academic franchise. In September, Zerhouni announced a slew of new programs, including the $105 million New Innovator Awards for younger researchers.

But Zerhouni doesn't win all of his battles. For example, in 2007, lobbyists persuaded Congress to reject his efforts to cut the National Children's Study. The study is intended to track the health of 100,000 people from birth to age 21, at a cost of $3 billion over more than two decades. It is not affordable, Zerhouni argues, and the recent 2009 budget request tries to cancel the program.

Scandal Management

Even as he established his road map, Zerhouni worked to fix problems that arose under his predecessor. Varmus, during his 1993-99 tenure, had quietly boosted recruitment of top-notch academics by allowing NIH researchers to sign lucrative, off-hours consulting deals with biotech and pharmaceutical companies. The December 2003 exposure of those deals by the Los Angeles Times created a national scandal, complete with congressional hearings. "That cost Zerhouni about 18 months of his tenure," said Patrick White, vice president for federal relations at the Association of American Universities. "It practically derailed his directorship."

The double-dipping scandal wound down in late 2005 after Zerhouni imposed new regulations, which many of NIH's top scientists and recruitment experts opposed. "[My decision] was tough and unpopular, but it was right because it preserved the public trust," Zerhouni said.

The NIEHS problem is a lingering aftereffect of the scandal, in part because its director, Schwartz, was recruited from Duke University with a package that allowed him to run the agency, continue some outside work, and operate his own laboratory using a team of his Duke employee-scientists. Before arriving at NIH, Schwartz had an income just shy of $700,000, partly from fees earned for testifying in asbestos lawsuits, according to his conflict-of-interest forms.

Once Schwartz was in office, his numerous internal critics say, he tried to divert funding away from the NIEHS's basic-science researchers, whose product is most useful in disease prevention, and toward applied research, which is most applicable to therapists and drug companies. Schwartz also tried to cut 80 percent of the $3 million funding for the NIEHS journal, Environmental Health Perspectives, which outside reporters, lawyers, congressional staffers, and advocates rely upon. Schwartz's critics included the Society of Environmental Journalists, as well as professionals inside and outside the NIEHS. Waxman's staff took up the chase. Sen. Charles Grassley, R-Iowa, the ranking member of the Senate Finance Committee, also sent a flurry of letters detailing and criticizing Zerhouni's role in the kerfuffle. In short order, Schwartz backtracked, his lab's staff and budget were cut, the magazine's budget and staff were rebuilt, and he was forced to step aside in August. Schwartz did not return calls seeking comment. During the September hearing, Schwartz's acting replacement, Wilson, promised to restore funding for the magazine and focus research on prevention, and Zerhouni emerged from the near-scandal with barely a scratch on his halo. In February, Schwartz quietly resigned from NIH to take a research job in Colorado.

Although several other top NIH officials have their own labs that are funded by other NIH centers, Zerhouni forswears a lab for himself. "They're not a good idea" for the director, he said. "You can't do justice to either job."

These days, Zerhouni is looking past the NIEHS problem and toward a new conflict-of-interest initiative. He wants NIH scientists to rotate throughout industry to foster greater government-industry cooperation and to accelerate research, he said. Public trust would be ensured by top-level creation of new ethics rules, by regulations that curb secret deal-making, and by the promotion of greater public awareness of the benefits that flow from government-industry cooperation, he said.

Dealing With Congress

Throughout the double-dipping scandal, Zerhouni worked to cement his reforms with a new NIH reauthorization law. The previous reauthorization, completed in 1993, occasioned a controversial debate, complete with a bitter dispute over the use of fetal remains in medical experiments. Happily for Zerhouni, the three-year debate over the 2007 reauthorization barely made it into the national media.

The White House had wanted a major overhaul of NIH, but Zerhouni lobbied Congress for more-limited change. But even his scaled-down proposals prompted concern and backroom opposition from disease-related groups and unions of scientists, such as the Federation of American Societies for Experimental Biology and the Association of American Universities. Advocates feared that their priorities and affiliated institutes would lose out in a revamped NIH, yet they also wanted to improve NIH. Politicians, too, feared opposition from the lobbying groups, yet they also wanted to upgrade NIH management. Nearly all of "my own folks said that it would never pass," Zerhouni said.

But pass it did in January 2007 -- and now Zerhouni's management reforms are mostly enshrined in law. For example, the law created a Scientific Management Review Board to recommend top-level changes every seven years, and it gives the director up to 5 percent of NIH's budget to disburse. Zerhouni plans to direct that money toward such new projects as the Human Microbiome Project, which will explore the assortment of germs, viruses, and alien DNA that inhabit healthy human cells and organs. Researchers suspect that these biological squatters deeply affect our health and, perhaps, even our behavior.

Still, these changes leave the NIH director with far less control over his agency than that held by, say, the Defense secretary.

Zerhouni's tenure has been periodically upstaged by the stem-cell controversy. Researchers have long used embryonic stem cells from mice to study diseases, but the announcement in 2001 that stem cells could be extracted from human embryos spurred researchers' advocacy for greater use of embryos and embryonic cells. The prospect of treating human embryos as sources of raw material appalled social conservatives, and some activists worried that embryonic-stem-cell research would accelerate the development of human-cloning research.

Scientists and biotech executives lobbied hard for the use of embryos because they believe that the cells will help them make discoveries and test drugs in less time and at less cost. They opposed Bush's compromise, announced in August 2001, in which he offered federal funding for research on existing colonies of embryonic stem cells while denying funds for using new cell lines. Industry's lobbying campaign drew support from many NIH and university scientists who were loath to see their ambitions regulated by politicians, and from liberal advocates who wanted to repel arguments from conservative groups.

Zerhouni maneuvered between these factions. In congressional testimony, he periodically urged wider research on embryonic stem cells, and his staff -- including several officials originally hired by President Clinton -- sharply increased funding for embryonic-stem-cell research. "The administration substituted the views of the extreme Religious Right for [those of] scientists, and Zerhouni pushed back," Waxman said.

Zerhouni's criticisms, however, were restrained enough to prevent a breach with the White House. "He could have raised hell about it" but chose not to do so, said a congressional aide. Zerhouni's restraint was partly due to his suspicion of the embryonic-research advocates. "The hype in this field is totally unbelievable," he told NJ. He also worked the other side of the issue, ensuring continued funding for possible alternatives to embryonic stem cells.

The payoff came in November 2007, when NIH funded a breakthrough that allowed most sides to claim victory. Zerhouni didn't assign the grants or sign the checks, but on his watch, an NIH-funded researcher converted ordinary skin cells into cells that are seemingly identical to embryonic stem cells. Social conservatives applauded the breakthrough, although scientists grumble that embryonic-stem-cell research still deserves more funding and fewer restrictions. Zerhouni continues to straddle the factions, saying that embryonic-stem-cell research had yielded the secrets that allowed the breakthrough, and that more secrets would emerge from parallel research on adult and embryonic stem cells.

That's a long list of successes, yet Zerhouni failed on one bottom-line issue -- the NIH budget.

In early 2007, Bush asked Congress to increase NIH's funding by only 1 percent. Myriad advocacy groups banded together to demand a larger boost, and they persuaded Congress to approve a 3.7 percent increase. Bush, however, vetoed that appropriations bill, and NIH ended up with $29.5 billion, or a 1.1 percent increase. The prospects do not look any better for 2009: In February, Bush called for NIH's funding to remain the same. A budget of $29.5 billion may be a lot of money, but it still amounts to a cut because the costs of running a high-tech, leading-edge laboratory rise with inflation. Zerhouni failed to push the funding up for numerous reasons, all of which boil down to the fact that the White House and the Democrats have other priorities. "It is not his fault," Waxman said. "It's the president and Congress. I blame the Bush administration."

But in a town that measures success by budget growth, a slowly shrinking budget is a big, black blot.

There's background chatter about where Zerhouni will go once he leaves his post. Insiders and outsiders speculate, off the record, that he will try to snag the top slot at Johns Hopkins, or go into industry, or move to the Bill and Melinda Gates Foundation, or, if he is a masochist, to take a job at the United Nations.

Whatever happens, his successor will help determine whether his management reforms continue, or else see NIH suffer the consequences of a thousand uncoordinated research grants. Yet it is difficult to see how NIH can slide very far backward, because pressure imposed by technology, management, and business pushes it forward. "We're just bringing the NIH into the 21st century," Zerhouni said. "It's not rocket science."

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Technology cited as key to detection of immigration fraud

Neil Munro — Fri, 14 Jul 2006 00:00:00 -0400

But critics say the complex immigration bill passed by the Senate has so many citizenship options, categories, and exceptions that it is an open invitation to cheating. Fraud "is a clear and present danger," said Sen. John Cornyn, R-Texas, "and threatens to undermine all the good work we've been trying to accomplish."

If the bill were to become law, illegal immigrants would, for example, be able to file for a work permit simply by presenting two notarized statements saying they have been working in the country for at least two years.

"It is really hard to suppress a laugh when people suggest having an affidavit," said Cornyn, who opposes the Senate bill. "It is too easy [to] provide a [false] affidavit, and the volume of affidavits would overwhelm law enforcement's ability to investigate" their veracity.

Immigration officials have long acknowledged that fraud "is pervasive and serious," using the words of a January 2002 report by the Government Accountability Office.

"When I was commissioner, on a regular basis people would send in affidavits [falsely] saying, Joe Schmo is my nephew" and therefore should be allowed residency, said James Ziglar, who served as President Bush's commissioner of immigration and naturalization from 2001 to late 2002. "The level of fraud was incredibly high," reaching 80 percent of applications for family reunification, he said.

Critics say that the 1986 immigration reform bill led to considerable fraud. It included, for instance, provisions aimed at making it harder for employers to hire illegal aliens who did not have Social Security cards.

But employees and employers simply "made up Social Security numbers, and that was the end of the enforcement mechanism," Stewart Baker, assistant secretary for policy at the Homeland Security Department, told a June 19 Senate hearing chaired by Cornyn. "There are employers who are using the same Social Security number over and over again for dozens of employees."

The 1986 bill also set up an amnesty program for agricultural workers who could establish that they had regularly worked in the United States. "There was wide consensus within [the Immigration and Naturalization Service] that the use of fraudulent documents had been prevalent" by amnesty seekers, according to a July 2000 report, "An Investigation of the Immigration and Naturalization Service's Citizenship USA Initiative," by the Justice Department's Office of the Inspector General. Officials estimated a fraud rate as high as 70 percent among the applications for residency in the farmworker program.

Federal officials are stepping up their efforts to combat immigration fraud. In April, the U.S. Bureau of Citizenship and Immigration Services established a new directorate to focus on fraud, and several federal agencies have formed joint task forces in 10 cities to help curb document fraud and immigration-related scams. Under the REAL ID Act of 2005, the federal government is also prodding state governments to sharply curb cheating in driver's license applications.

Some experts cite improved identification technologies as one solution to immigration fraud. Ziglar, now the CEO of Cross Match Technologies, says that a database of "biometric" signatures, such as computer-readable fingerprints or retina scans, could detect an immigrant who files more than one claim for residency. Ziglar is promoting his biometric-identification technology without taking sides in the political fight.

Title III of the Senate bill would establish an Electronic Employer Verification System to ensure that job applicants are eligible to work. The EEVS would require employers to submit the names or Social Security numbers of job seekers to a federal agency for online validation.

Sen. John McCain, R-Ariz., a co-sponsor of the bill, said that technology will help to limit fraud in guest-worker programs. Back in 1986, "they did not have the technological capability to develop a biometric tamper-proof document," McCain said. "We have that capability today," and officials will use it, along with impossible-to-counterfeit embassy documents, to stop cheating, he said.

New requirements on employers will also constrain cheating, said Stephen Yale-Loehr, a lawyer who chairs the business immigration committee at the American Immigration Lawyers Association, which worked with Senate staff to draft the bill. The Senate bill demands that job applicants provide better identification, makes employers liable if they show "reckless disregard" when workers present fake documents, and requires employers to store employment documents for five years, he said.

But Yale-Loehr cautioned that the legitimate desire for rapid identification must be balanced against privacy rights. "We need some hard data" on the effectiveness of the employment-verification technology before making its use mandatory, he said.

New technologies are expensive, and if the Senate bill becomes law, implementation will be a "daunting task ... [and] we will need resources," said Michael Defensor, a spokesman for the U.S. Citizenship and Immigration Services. Federal officials say they will need roughly $9.5 billion to issue fraud-resistant, hard-to-copy Social Security cards to 240 million workers. And the administration has not yet decided whether to add biometric data, such as a fingerprint or photograph, to the card. Meanwhile, skeptics say that technology cuts both ways and can actually make cheating easier. Criminals are already using desktop-publishing software to produce high-quality forged documents, including residency cards, said Rosemary Jenks, director of government relations for NumbersUSA Action, a nonpartisan group that seeks to slow immigration.

And it's not yet clear, critics say, that U.S. privacy laws will allow the embedding of fingerprint, retina, or other physical data in identification documents or Social Security cards. Privacy laws could also restrict U.S. agency officials' ability to double-check a company's new-hire statements against employer-provided data held by the Internal Revenue Service or the Social Security Administration, said a Senate staffer whose boss opposes the bill.

Under the somewhat contradictory provisions of the Senate bill, the expectations for new technologies may also be too high. For example, the Electronic Employer Verification System is supposed to achieve a 99 percent reliability rate in resolving the legal status of new workers within roughly 50 days after they are hired. If the system fails to achieve that success rate, however, looser rules kick in and questionable employees would stay on the job until federal officials declare them to be ineligible.

The affidavit provisions of the Senate bill present perhaps the easiest opportunities for fraud, opponents say. One of the bill's "paths to citizenship" is a proposal to allow illegal immigrants to get three-year work permits if they've worked inside the United States for at least two years.

Applicants would be allowed to submit documents from government, employers, or unions that show a history of work in the U.S. But they could alternatively submit sworn affidavits showing a work history, or financial statements showing that they sent money from the United States to other countries.

Once the applicant has bolstered his or her claim with a "preponderance of evidence," according to the Senate bill, the claim must be granted unless the agency can amass enough evidence to quickly prove fraud or ineligibility in court.

The needed affidavits can be so easily faked or forged that "anybody can apply, whether they qualify or not -- all the 12 million or so illegals who are here, and anyone who can get here," Jenks said. "There is really no finite number."

Danielle Polen, an advocacy associate at the AILA, said, "The proposed bill as written doesn't flesh out a lot of the [anti-fraud] details," but "presumably that would happen during promulgation of the regulations." She added, "The critics have a valid point" about fraud, but "there has to be some trust on both sides."

Jenks said, "There's no reason to trust them. We trusted them in 1986 and look what happened."

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National Institutes of Health feels budget squeeze

Marilyn Werber Serafini and Neil Munro — Fri, 14 Apr 2006 00:00:00 -0400

Now, facing a third year of losing ground to inflation, the biomedical researchers who depend on government funds are complaining that there isn't enough money to go around. Conflicts are brewing that could pit new priorities such as finding vaccines to stop bird flu against long-standing efforts such as developing drugs to combat Alzheimer's.

Much of NIH's $28.6 billion budget flows to university researchers through the agency's 26 centers and institutes devoted to different specialties. According to the American Association for the Advancement of Science, the NIH request would fund $27.8 billion in research and development.

Traditionally, the research community's varied disease groups, such as the American Cancer Society and the American Heart Association, have presented a unified front in pressing for research dollars. That comity may erode as competition increases for slices of a budget pie that has stopped growing.

The signs of tension are sometimes subtle. The American Cancer Society raised eyebrows when it won an earmark in the Senate's budget resolution. At an April 6 hearing before the House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, members supported greater overall spending on biomedical research. They then urged NIH Director Elias Zerhouni to focus more on specific problems, such as mental health, or on particular groups, such as women and racial minorities.

"If the knives are going to come out, now is when it will happen," said Samuel Gandy, who chairs the scientific advisory panel of the Alzheimer's Association. His group depends on the roughly $650 million spent annually by NIH on Alzheimer's research. That amount, though, makes its cause an also-ran compared with the $4.8 billion devoted to cancer. But Gandy's association says it won't try to snag other groups' funding, because "we may need [support from] the dentists and cancer guys tomorrow."

The disease groups won a round on March 16, when the Senate voted to add $7 billion to the budget for health, education, and labor programs, with several senators citing the need to help NIH. In the House, the budget was pulled from the floor partly because a group of moderate Republicans led by Rep. Mike Castle, R-Del., was pushing for a similar increase, while conservatives stood firm.

In the end, "the highest likelihood is that [NIH's budget] will be flat in real dollars," said Rep. Dave Weldon, R-Fla., who sits on the Appropriations subcommittee. Other lawmakers said that Congress may find enough money to keep up with inflation, but not more. That's still enough of a squeeze to send researchers tussling for dollars.

The Bush administration requested $28.6 billion for NIH, the same funding it received in fiscal 2006. That level would result in $1 billion of lost purchasing power when adjusted for inflation, according to Rep. David Obey, D-Wis., who is the ranking member on the Appropriations Committee. (Inflation in the medical field ran about 4.1 percent last year, compared with a 3.4 percent rise in consumer prices.) Advocates say that NIH's purchasing power has fallen by roughly 10 percent since 2003.

Obey argued that President Bush's tax cuts for the wealthy should be traded for more NIH money. Obey estimates that the proposed budget would translate into 656 fewer research grants than in fiscal 2006, and 1,570 fewer than in 2004. It would cut funding for clinical trials by 8 percent over 2005 levels, he said, and for research on critical diseases such as diabetes, stroke, Parkinson's, arthritis, and Alzheimer's.

Other biomedical programs would fare no better. The $8.2 billion proposed for the Atlanta-based Centers for Disease Control and Prevention represents a cut of $179 million from the current year.

The biomedical research budget has grown much faster than other important areas, such as the funding for physical science and NASA, said Weldon, who has a large NASA facility in his district. Still, members of Congress are loath to directly reject the advocates' calls for greater funding. "I'll try for more than a flat budget," Rep. Ralph Regula, R-Ohio, chairman of the Appropriations subcommittee told National Journal, while also cautioning that money is tight.

Internal budget changes within NIH are reducing the pot of money earmarked for specific diseases. The White House is backing Zerhouni's effort to promote collaborative research by taking roughly $332 million from the semi-independent NIH research centers and placing the money in the director's "Roadmap for Biomedical Research."

Because of worries about natural and man-made plagues, the White House has been directing more funds to the National Institute of Allergy and Infectious Diseases. This year, it is seeking a 6.2 percent increase for the NIH's "biodefense research" program to bring its budget up to $1.9 billion.

To offset the squeeze this year, NIH headquarters directed its various centers to slice 2.35 percent from the funding allocated for a variety of multiyear grants. Some centers choose to impose deeper cuts in particular projects.

For example, Gandy, the director of the Farber Institute for Neurosciences at Thomas Jefferson University in Philadelphia, said that his multiyear grant to develop an anti-Alzheimer's drug was sliced by almost 20 percent.

The biomedical sector has turned to several coalition groups, such as Research!America, and professional groups, including the Association of American Universities and the Federation of American Societies for Experimental Biology, to seek budget increases. The coalitions include universities, disease groups, and industry executives. The sector's lobbyists were able to more than double the research budget from $12 billion in 1996 to $28 billion in 2004.

But away from the cameras, the disease groups also compete against each other. They race to out-organize each other, to raise more money, and to attract more volunteers and revenue from pharmaceutical companies. They competitively lobby legislators, advertise, pitch their message to the media, and recruit the most-prestigious champions from Hollywood they can find.

The American Heart Association is one of the leaders in this race; it argues that heart disease causes 40 percent of American deaths, but heart research gets only 7 percent of NIH's budget. A flat budget in fiscal 2007, said Robert Eckel, president of the AHA, would mean that funding for cardiovascular research, when adjusted for inflation, would be 15 percent less than that spent from 2003 to 2007.

The bigger groups, such as the American Cancer Society, are powerful enough to push the limits of collegiality. In the Senate budget debate, for example, the society helped win unanimous support for an amendment introduced by three senators that reserved an extra $390 million for cancer research.

That boost is "a fair, rational, do-no-harm kind of growth," said Wendy Selig, the society's vice president for legislative affairs. "There is a very, very good story to tell in cancer, and I'm not saying there are not good stories elsewhere ... [yet] the promise for the cure of cancer is enormous," she said.

These groups, both large and small, worry that the draft NIH reforms being pushed by Zerhouni will drain more money from their priorities. In particular, the cancer society fears a proposal to reduce the autonomy of the National Cancer Institute.

The institute's unique status allows its director to submit his own budget request, in consultation with cancer-related disease groups, to the Office of Management and Budget without going through the NIH director or the Health and Human Services secretary. Although the larger disease groups worry that a reform will cause some of their money to be shifted to small groups, the smaller groups fear they may lose their shirt in post-reform lobbying blitzes.

"None of the stakeholders want to change, although they agree they need to," said House Energy and Commerce Chairman Joe Barton, R-Texas, who is writing an NIH reform bill that would give the director clout to force more collaboration among the semi-independent research centers. "I'd love to give them a 10 percent increase, but there's no money, so we have to use existing funds better," he said.

No government agency welcomes a flat budget, even when it is set at almost $30 billion. But because of the peculiar economics of the research sector, a flat budget at NIH causes intense pain to many researchers on several fronts:

Grants are worth prestige -- and more. Universities want grants, in part, to boost their status vis-a -vis their university rivals. The grants also allow researchers and universities to discover drug-related ideas that can be patented and then sold to biotech or pharmaceutical companies. In 2004, NIH distributed $14.7 billion to outside researchers, most of which was spent on drug development in universities. Surgery-related work at medical schools, which has less profit potential, got only $322 million.
Researchers' careers are at stake. If university researchers can't get grants, they find it difficult to publish scientific papers or to win patents. In turn, they lose laboratory space to campus rivals. The "kiss of death," said Gandy, comes when a university prods a researcher to do more teaching, thus reducing his or her ability to pursue grants and research. Many university researchers lack tenure, and serve as franchisees of their universities' brand -- Harvard or Columbia, for example -- and they keep those franchises only if they win grants.
It's hard for scientists to switch specialties. If scientists change specialties to follow funding shifts, they may lose time getting up to speed, and they would start low on the totem pole because they're competing against established scientists.

One sign that the rat race has begun: Worried about losing their funding, researchers are submitting multiple requests, driving the total from 28,368 in 2001 to 43,069 in 2005. That reduces the percentage of grants that actually get funded, forcing down a widely tracked marker of NIH's largesse called "success rate" or "pay-out line." When the rate falls, researchers get worried -- and then submit even more backup requests.

"Depending on where we're going in the future, there's going to be an undoubling" of NIH's funding, said Sue Nelson, vice president of federal advocacy at the American Heart Association and a former Democratic aide to the Senate Budget Committee. "It's like we made all this progress only to watch it erode before our eyes. This is not the time to be doing this, when we're facing the retirement of the Baby Boom Generation."

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Programs for disabled and blind facing increased scrutiny

Neil Munro — Fri, 02 Dec 2005 00:00:00 -0500

The Javits-Wagner-O'Day, or JWOD, program aimed at employing disabled workers and the Randolph-Sheppard program for the blind are likely to be the subjects of lobbying fights on Capitol Hill. The programs' beneficiaries, including many disabled entrepreneurs and workers, are fighting among themselves for shares of available funding, even as senators sketch out possible reforms.

Sen. Michael Enzi, R-Wyo., the chairman of the Health, Education, Labor, and Pensions (HELP) Committee, says that the two programs are "well-intentioned" but "long overdue for oversight." At a committee hearing in October, ranking member Sen. Edward Kennedy, D-Mass., echoed Enzi's criticisms, declaring that "there's no excuse for fraud and abuse. The time is right for reform."

JWOD was created in 1938 and amended in 1971. Its governing board is appointed by the president. JWOD serves as the government's broker for approximately $2 billion worth of low-tech services and products, such as office supplies, janitorial services, and furniture, purchased by federal departments and agencies. The supplies and services are provided by JWOD-approved private businesses that employ roughly 45,000 disabled workers nationwide.

These businesses face minimal competition within the JWOD program. JWOD officials decide which private enterprises get particular contracts, and also set the prices that federal agencies must pay to these enterprises. Moreover, about 4 percent of the $2 billion in annual sales, or $80 million, is rebated to two JWOD nonprofit management companies, the National Industries for the Blind in Alexandria, Va., and NISH, formerly the National Industries for the Severely Handicapped, in Vienna, Va.

Commercial vendors and some groups representing the disabled have loudly criticized JWOD, saying that the program excludes them and their workers from government contracts. These critics also say that the program segregates disabled workers from the commercial market, overcharges the federal government, and generates excessive profits for the owners of the JWOD-sanctioned enterprises, most of whom are not disabled.

At the hearing, Enzi released a report that said only 2,370 disabled workers had moved from the JWOD program into the commercial marketplace in 2004, and it highlighted numerous examples of "excessive executive compensation, lavish perquisites, conflicts of interest, and self-dealing" within JWOD enterprises.

In July, JWOD officials dropped plans for new oversight rules for JWOD enterprises. These rules would have set salary caps for executives and established conflict-of-interest provisions for the enterprises' governing boards. JWOD "is planning on issuing a new proposed rule by the end of the year," a program spokesman said in an interview.

Enzi also criticized the 1936 Randolph-Sheppard Act, which puts blind business owners first in line to run kiosks and dining halls at federal buildings and camps. The program awards some lucrative contracts to blind business owners without ensuring employment for disabled workers, he said.

Enzi gave little indication of what reform would involve, but said, "We can do better than this by getting more workers into the employment mainstream." No reform bill will likely appear this year, said Enzi spokesman Craig Orfield. "We're several steps away from introducing a bill."

James Gashel, executive director for strategic initiatives for the National Federation of the Blind, said that the 2,600 blind business owners working under Randolph-Sheppard want to keep their program intact because it works well. The two Randolph-Sheppard programs, NIB and NISH, also face competition from JWOD contractors.

Gashel spends much of his time fending off efforts by JWOD enterprises to gain control of military dining hall contracts now held by 39 blind business owners. "We tried for two, three years to be accommodating with them in Congress by offering agreements that they never would accept," he said.

NISH is the leading player in the JWOD sector, in part because it serves as the back office for roughly 80 percent of the JWOD-affiliated enterprises. With its share of the rebate, NISH identifies products for inclusion in the JWOD program and searches for commercial opportunities for the JWOD enterprises, including the contracts now held by the Randolph-Sheppard businesses.

Tony Young, NISH's wheelchair-bound senior public policy director, testified to Enzi that military dining halls don't belong in the Randolph-Sheppard program. He urged greater federal use of the JWOD program, and declared that NISH is proud of the employment, wages, and dignity brought to the program's disabled workers.

Commercial vendors of office products and furniture, allied under the Independent Office Products and Furniture Dealers Association, want to shrink or change the JWOD program. The group complains that the program has taken business and jobs away from its members.

Paul Miller, government affairs director of the association, says that his group's companies can employ a larger number of disabled people, but they need incentives from the government to pay the cost of extra aid and technology for these workers. Private companies, he said, also need liability protection to avoid the legal risks involved in laying off disabled workers along with other workers.

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HHS weighs relaxing restrictions on inmate testing

Neil Munro — Wed, 23 Nov 2005 00:00:00 -0500

The department's Office for Human Research Protections has asked the Institute of Medicine, an advisory group that is an arm of the private-sector National Academies, to determine whether 1970s-era regulations "are overprotecting a population that would greatly benefit from research," said Julia Gorey, a policy analyst in the office who oversees federally funded prison-related research. "Many people are arguing that it is too protective, and that these prisoners have the right to participate in research."

Once the institute completes the review, Gorey said, it is likely that the OHRP will begin the formal process of writing new regulations. The review is one piece of a broader effort to change the rules that govern research involving the nation's 2.1 million prisoners held in a variety of maximum-, medium-, and minimum-security facilities.

Already, the HHS Advisory Committee on Human Research Protections, whose members are university researchers and industry advisers, has sent a letter to Secretary Mike Leavitt proposing changes that it says would help researchers and institutional review boards. Federal patient-protection rules require that university chiefs -- whose institutions do most of the federally funded medical research -- appoint these review boards to oversee experiments before they come under federal review.

Over time, the protection rules need to be "totally amended," advisory committee Chairman Ernest Prentice told National Journal. Prentice is a genetics professor and the associate chancellor for academic affairs and regulatory compliance at the University of Nebraska Medical Center. "We feel as though the regulations are not compatible," he said, "with the current penal system in the U.S., which has changed significantly since the 1970s."

In fiscal 2003, Prentice's university received $96 million in federal funds and $14 million in commercial funds for a variety of research projects, according to the National Science Foundation.

Proponents of changing the regulations say that, for one thing, new rules could allow more social-science research aimed at advancing prison reform. One supporter of new regulations is Alvin Bronstein, a New York lawyer who helped found the American Civil Liberties Union's National Prison Project, and who also serves as a pro bono attorney and advocate for sick inmates. To get reform, he said, "we just have to get enough evidence to sell it to the policy makers."

Rules changes could also help alleviate the shortage of patients eligible to serve as subjects in pharmaceutical testing. Such tests are critical for biotech companies and university researchers because the Food and Drug Administration requires that a drug be shown to be reasonably safe and at least partly effective before licensing its use. Companies also conduct tests to find new uses for existing drugs, and to showcase drugs to doctors and insurance companies.

The search for test volunteers is so intense that a global "contract research" industry has emerged to recruit and manage cohorts of patients for biomedical testing. The revenues in this new industry, which includes many universities, grew from $1.6 billion in 1993 to $10.4 billion in 2003, according to Thomson Centerwatch, a Boston-based market-research firm. In 2003, the industry earned $5.7 billion to recruit and manage 3.6 million patients in the United States. Drug companies and universities also conduct many other tests on their own. But the practice of using prisoners in biomedical testing has a sordid past. From the 1940s to the 1970s, many prisoners were subjects in university- and company-run research protocols, often with no protections from, or treatment for, debilitating side effects.

By 1972, government officials estimated that more than 90 percent of all new pharmaceuticals were being tested on prisoners, according to a 1995 report by the Energy Department's Advisory Committee on Human Radiation Experiments. By the mid-1970s, such testing had declined, as citizens and legislators recoiled from news about abuses.

From 1951 to 1974, for example, prisoners at Holmesburg Prison in Philadelphia were paid to participate in experiments by University of Pennsylvania researchers on behalf of federal agencies and pharmaceutical companies, including the Defense Department, Dow Chemical, and Johnson & Johnson, according to the 1998 book Acres of Skin, by Temple University professor Allen Hornblum.

In 2000, almost 30 years later, 298 prisoners sued for damages, but the case was thrown out because the statute of limitations had expired. "This was a business that was raking in millions of dollars, [and] nobody cared about the convicts," said New York dermatologist Bernard Ackerman, who said he helped run some experiments -- including a search for a dandruff treatment -- when he was a student at the University of Pennsylvania.

The reports about Holmesburg and other prisons emerged at about the same time the public learned in 1972 about the decades-long experiment on poor blacks in rural Tuskegee, Ala. Starting in 1932, the federal Public Health Service and the Tuskegee Institute, a historically black college, had enrolled 399 men in an experiment intended to chart the course of their syphilis until they died. For many years, the doctors prevented treatment of the men's disease, even after a cure was developed in 1947.

After these controversies, the government introduced new prisoner-protection regulations for federally funded research, but failed to complete planned regulations on private-sector research.

Since 2000, the Office for Human Research Protections has approved roughly 430 HHS-funded studies involving prisoners, Gorey said. On average, 100 prisoners participate in each study. One-quarter of the studies are biomedical tests, she said, and the others are "social-behavioral" studies investigating such issues as treatments for drug addiction and inmates' reintegration into the community.

Government officials and academics say they don't know how many prisoners are enrolled in commercially funded tests. "There is a lot out there that we don't see, and [that the HHS] regulations have no bearing on," Gorey said. The FDA says it does not have data on the number of inmates participating in medical experiments.

But in 2000, Gorey's office temporarily froze more than 200 research projects managed by the University of Texas Medical Branch in Galveston, according to a September 2000 report in The Austin American-Statesman. This action chilled the entire inmate-research sector, said Brown University professor Annie De Groot, who also owns a vaccine-research company and edits the Infectious Diseases in Corrections Report. Many of the frozen experiments were never restarted, and many universities and companies halted other private-sector prison experiments, said De Groot, who advocates additional research in prisons.

Under current federal rules, biomedical research on prisoners must offer a direct benefit to the prisoner and must pose a risk only minimally higher than that faced by a sick person outside the trial. Special approval is needed for experiments in which prisoners face greater risk or fewer benefits. Social-behavioral research does not have to directly benefit a participating prisoner, but these studies generally pose less risk than biomedical research. All prisoners must give informed consent, without the promise of financial gain.

Some elements of the rules are "almost paternalistic," Gorey contended. "We're stuck with the default position that intentionally made it very, very difficult to do any research with prisoners."

De Groot and other advocates say the rules should be changed because prisoners have a right to enroll in biomedical and social-science research, because the drugs will aid prisoners, and because the research will help identify useful drugs and penal practices that can benefit society, patients, and the prisoners.

Also, De Groot said, "we're interested in getting trials because we see it as an opportunity to improve the standard of care overall" for inmates. "If you open prison doors, you're getting better physicians in place, and you get better treatment for prisoners. Right now, it is pretty abysmal." Bronstein said that inmates can be protected from possible coercion by the use of outside experts to serve as advocates.

The debate over prison testing is dominated by political liberals. Those who support prison tests argue that prisoners will gain better health care and that they have the right to choose whether to join a test. But other liberals say the research allows powerful professionals and corporations to exploit powerless prisoners.

Opponents of prison research say that actual practice disproves the claims of benefits to prisoners. Inmates, critics say, are poorly educated and usually will grasp at any chance for a benefit or a respite from jailhouse pressure. "They are not really free to exercise choices," said Gwendolyn Chunn, president of the American Correctional Association in Lanham, Md. Prison testing should be avoided, she said, because "the potential for abuse would be too great."

Moreover, most trials fail to produce significant benefits to the participants, partly because many candidate drugs don't work, said David Egilman, a community health professor at Brown University, who also urges more health care funding for inmates.

Researchers, biomedical companies, prison-management companies, and corrections agencies stand to gain revenue from research, critics charge, even when it yields no medical benefits to the prisoners. "Each prisoner can [be] a profit center," Egilman said. "If there is money involved, there is no possibility that it won't end up corrupt," Ackerman asserted. Instead of prisoners, "let them use medical students," he said. "Let them use professors, too."

Opponents of prison research also say that university and company researchers who violate the patient-safety rules aren't punished. Gorey's OHRP "is not even a paper tiger," argued Vera Hassner Sharav, the president of the New York-based Alliance for Human Research Protection, which opposes prison testing.

The Institute of Medicine panel working on the review is expected to report back to HHS next year. But opponents say it is stacked in favor of more prison research. Sharav said that the Institute of Medicine "is no more a disinterested objective entity of scholars than is the National Institutes of Health or the FDA."

The private-sector IOM's 16-member panel consists of university researchers and professionals active in the prison sector or in the social sciences. "We try to minimize serious biases, and we try to balance biases," by choosing a variety of different panelists and by excluding people committed to their biases, said Clyde Behney, IOM's deputy director.

The institute's reliance on professional expertise does create a danger of minimizing the public's input, so IOM executives make sure to invite outsiders to testify, Behney said. The panel has heard testimony from Sharav and Hornblum.

Lawrence Gostin, who chairs the panel, said, "The IOM has very rigorous standards to prevent conflicts of interest." Gostin is a law and ethics editor of the American Medical Association's leading medical journal; he is also a professor at Georgetown University and at Johns Hopkins University, which is the leading recipient of federal biomedical research funds.

Gostin says it is too early to predict what the panel will decide. "You want to make sure you provide as much safety and protection for the rights and health of people in the prison system," he said, "and also facilitate high-quality research."

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Critics call for overhaul of program aimed at employing disabled

Neil Munro — Fri, 22 Apr 2005 00:00:00 -0400

But things changed for Safeguard in June 2004, as its seven-year contract was about to expire. The company, which had about 70 employees working at the Reagan Building, offered to cut its price to just under $157,000 a month over a new contract period of five years.

Still, Safeguard lost the contract to a nonprofit organization in Baltimore called Chimes Inc., which hired 72 people -- 34 from Safeguard's own workforce -- to clean the Reagan Building for $216,000 a month, or $59,000 a month above Safeguard's offer.

Why would the GSA dump a longtime contractor and hire a new one that charged a much higher price? The answer is that federal janitorial contracts -- as well as a slew of contracts for other services and supplies purchased by the feds -- are controlled by the little-known Javits-Wagner-O'Day, or JWOD, program. Chimes is an approved JWOD contractor, but Safeguard is not.

Established in 1938 by President Franklin Roosevelt, and expanded in 1971 by then-Sen. Jacob Javits, R-N.Y., JWOD creates paid work for people with disabilities. The independent federal body that runs JWOD has a clunky name: It's the Committee for Purchase From People Who Are Blind or Severely Disabled. But the people who run the committee are appointed by the president and wield considerable power: By law, they can require any federal department or agency to buy thousands of products and services -- from pens to pillowcases -- from JWOD-approved contractors using disabled workers who provide at least 75 percent of the hands-on labor.

JWOD's managers pick the nonprofit vendors, or "partners," that are allowed to manufacture or sell goods or provide services for federal agencies. They also select companies to distribute JWOD-made goods to government buyers. What's more, the federal managers govern the prices that federal procurement officers must pay to the JWOD vendors. On top of all that, 4 percent of the cost of every sale or contract between a vendor and federal customer is remitted to JWOD's management offices to pay for running the program.

The JWOD program has been growing rapidly. In the early 1980s, the value of JWOD-related sales to the government amounted to some $200 million a year. By 2004, sales had reached $2.05 billion, according to JWOD. Ten years ago, JWOD contractors employed 31,000 blind and disabled workers; in 2004, they employed 45,303.

Despite the growth, the program has received scant oversight from Congress or attention from the media. One reason may be a reluctance to examine a program intended to create jobs for people who have physical or mental disabilities and would have trouble competing for work in the commercial marketplace.

A second reason may be the effectiveness of JWOD's lobbying. In 2004, for example, JWOD lobbyists killed a proposal in the House Small Business Committee that would have let officials from the federal Small Business Administration speak -- but not vote -- at meetings of the JWOD procurement committee. Since then, the situation has temporarily cooled down. In a statement to National Journal, JWOD said its management committee met with top SBA managers and extended a standing invitation to the SBA to have a senior official attend JWOD meetings.

JWOD critics -- many of them small, privately owned vendors that want to slow the loss of their contracts to JWOD partners -- argue that the lack of oversight prevents the government from weighing JWOD's benefits against its costs. Every job handed to a JWOD contractor, critics argue, is a job taken away from a private company that employs other workers -- including many poor, disabled, or disadvantaged people.

These critics are trying to rally support on Capitol Hill for oversight and reform of the program. "If you want to find ways to save tax dollars while doing the right thing by blind and handicapped people, this is the place," said Paul Miller, director of government affairs for the Independent Office Products and Furniture Dealers Association, whose 1,300 members have lost much business to JWOD-approved vendors.

Joining Miller's group is the Service Employees International Union Local 82 of Washington, D.C., some of whose members have been laid off from janitorial jobs because of JWOD's expansion. "We want workers, whether they are disabled or not, to be treated fairly and get living wages," said Valerie Long, the president of Local 82.

JWOD represents "command-and-control regulation direct from the 1930s," said Pittsburgh-based lawyer Scott Pavelle, who represents companies in legal disputes with the JWOD program. He has urged closing down JWOD and replacing it with a system that would give an advantage to any federal contractor that hires disabled workers. "You would make every contractor in the world all of a sudden start looking for ways to use these people, and that would achieve untold benefits for the handicapped," said Pavelle.

So far, the efforts of Miller, Long, and other JWOD detractors haven't resulted in change. "It is difficult," Long concedes, because no lawmaker "wants to be seen as being against the disabled."

Thousands of Products
The Committee for Purchase From People Who Are Blind or Severely Disabled is composed of 10 officials from federal departments and five private citizens from nonprofit agencies. JWOD publishes a catalog of more than 160 pages offering janitorial, switchboard, and mail-room services, plus thousands of products that range from pencils, folders, staplers, and shredders to liquid cleaners, sleeping bags, animal traps, furniture, flags, and even fast food. The catalog can be seen at www.jwod.com.

Committee Chairman Steven Schwalb, who is the designee from the Justice Department and is also chief operating officer of Unicor, the government corporation that runs Federal Prison Industries, says that JWOD needs to grow even larger because the vast majority of the country's disabled still need paying jobs.

In fiscal 2004, according to JWOD, the program generated $2 billion in revenues and paid $366 million in wages to disabled employees. The average hourly wage was $10.46 for employees working on service contracts, and $6.21 for employees working on product contracts, according to a statement from the JWOD program office. JWOD agencies are allowed to pay their workers less than the minimum wage when their disability reduces their productivity.

Every JWOD-affiliated nonprofit works under one of JWOD's two nonprofit subsidiaries -- the National Industries for the Blind, located adjacent to the JWOD offices in Alexandria, Va.; or NISH, formerly the National Industries for the Severely Handicapped, based in Vienna, Va. Robert Chamberlin, president and CEO of NISH, says that JWOD workers receive an equally important, if intangible, benefit beyond their pay. "What comes with that job is self-esteem and self-worth," he said.

One expectation is that JWOD employment will help a disabled worker graduate into the commercial job market, but the program has no quotas or goals for such movement. In 2002, only 1,685 workers graduated into commercial jobs, according to JWOD documents.

Competition does not set prices for JWOD-delivered products and services. Instead, prices emerge from negotiations involving the JWOD committee, the JWOD-approved vendors, and federal customers. In many cases, these prices are significantly higher than commercial alternatives -- Safeguard's lower price for cleaning the Reagan Building is one example.

Many products in the JWOD catalog are priced higher than similar items for sale on the Web. JWOD was recently offering a plastic chair mat for $53.82, while Staples was selling a comparable product on its Web site for $36.99. Recycled copying paper from Staples was $30.99 for 5,000 sheets, but JWOD's price was $59.03. Some JWOD items are cheaper. For example, a single mop from Staples was selling for $14.99, while JWOD was offering a box of six mops for $26.68.

Normally, when JWOD managers pick the nonprofit partner on a contract, the nonprofit's managers declare how much revenue they need if they are to complete the job. If a federal contracting manager or purchasing officer refuses to accept that price, the JWOD committee can mediate the disagreement. According to a statement that JWOD submitted to National Journal, the program performs at least 1,000 negotiations each year, with impasses being declared in far fewer than 1 percent of cases. From 2002 to 2004, the committee ruled in favor of federal contract managers 11 times and in favor of the nonprofit once; it had a split decision in three instances, according to the statement.

"We're not the least price, not the highest price, but fair value," said JWOD Executive Director Leon Wilson, explaining that in price negotiations, if government officials "agree to that [JWOD] price, we think it's a fair price." JWOD does not promote competition among its nonprofits for JWOD work, because JWOD managers want "to ensure they don't undercut each other," Wilson said.

The enterprises that win JWOD contracts pay roughly 4 percent of the contract revenues to NISH or NIB -- adding up to approximately $80 million in 2004 on sales of just over $2 billion. Program officials say that the funding allows NIB and NISH to hire teams of experts to find new markets for their nonprofits, to train nonprofits' managers, and to generally help the nonprofits find new work for disabled people.

NISH has a reputation for aggressiveness, even toward other programs for the disadvantaged. Last year, NISH officials sought to win contracts held by blind vendors through the federal Randolph Sheppard program, a 70-year-old program that gives blind business owners a preference in winning contracts for vending facilities in federal buildings and on military bases. Change is needed, NISH Director of Governmental Affairs Tony Young said in 2004, because "we've been losing jobs to Randolph-Sheppard," so reducing job opportunities for the JWOD program's blind and disabled workers.

Staffers for Sen. John Ensign, R-Nev., brokered a deal last year between NISH and Randolph-Sheppard. But Kevan Worley, the blind owner of Worley Enterprises, which operates a dining hall at Buckley Air Force Base in Colorado, says the deal "is coming apart because [NISH officials] are going after our sites."

Good Deal for 3M
JWOD also resells products manufactured by non-JWOD companies. JWOD's Web site, for example, offers a U.S.-made nylon American flag, 3 feet by 5 feet, for $30.46. JWOD buys the flag from Advantus, a distributor in Jacksonville., Fla., and sells it at 75 percent above the $17.48 price that the company charges its retail customers. That price is offered as a convenience to JWOD's customers who might want to add a flag to their order, and is lower than those of most other commercial distributors of the same Advantus-sold flag, according to an e-mail from JWOD spokeswoman Annemarie Hart-Bookbinder.

The suppliers of JWOD vendors also include large corporations, such as 3M. For example, at Blind Industries of Maryland, JWOD employees decant vats of 3M chemicals into smaller containers for use by JWOD-affiliated janitorial workers, or by soldiers, contractors, or civil servants. That's a good deal for 3M and other big companies, as it places their product closer to the top of the government's procurement-preferences list, said Frederick Puente, president of Blind Industries of Maryland, a JWOD nonprofit.

Without JWOD, the large companies' access would be ranked behind that of small firms, as well as firms owned by women, Native Americans, or African-Americans. But, according to Puente, "we get them [moved up] in the food chain from 12 to two." In the case of 3M, JWOD workers cut 3M's tape into smaller sizes for distribution, adding value, he said.

JWOD affiliates also resell products that are made abroad. In some cases, said Wilson, no U.S. company makes the required product, such as surgical gloves. "Everyone goes to the same [overseas] source, but we find a way to get jobs for disabled groups," he said.

Overall, "we are very sensitive to the threat of being [seen as] a front" for larger firms seeking to jump ahead in the priority list, Wilson said. When affiliates simply resell corporate products via JWOD, "we shut that down." But if there is a dispute, he added, "we will err on the side of getting a job for someone who is disabled or blind."

The strongest source of opposition to the JWOD program comes from a variety of private contractors -- office-supply distributors, furniture sellers, janitorial services, food-services companies, to name a few -- that have lost, or fear losing, work to JWOD partners. JWOD is a "well-intentioned federal program gone completely berserk," said Michael Liberman, president of Valley Forge Flag of Womelsdorf, Pa. He said that after JWOD started reserving a portion of the flag business, "we lost probably 100 jobs, and our main subcontractors also lost jobs."

Minimal Oversight
The JWOD program is so little-known that media reports rarely describe it, and Congress has held hearings on it only twice in the past 22 years -- in 1983 and 1996. JWOD is exempt from nearly all federal procurement rules, such as requirements for competition. Federal contract officers have little incentive to push back, in part because JWOD officials have the legal authority to set the price for every contract. Moreover, the transfer of a category of service or product into the JWOD program ends the procurement officer's obligation to conduct a time-consuming competitive awards process.

JWOD's managers do exercise some oversight. During fiscal 2002, 2003, and 2004, JWOD officials intervened against 12 nonprofits that had employed too few disabled workers. JWOD regulations require that 75 percent of "direct labor hours" be performed by disabled workers; this excludes work performed by managers.

But JWOD's oversight is limited: Of the 29 staffers at the JWOD committee, only three are involved in overseeing the roughly 620 nonprofits on compliance matters.

The lack of oversight has caused some embarrassments. In 2003, The Baltimore Sun revealed that Chimes' board had created a subsidiary controlled by board members and that this subsidiary paid those members $2.4 million over three years. Chimes defended the compensation as reasonable.

In 2004, Chimes officials said that they had misunderstood accounting rules in 2002, when they incompletely reported the CEO's compensation to the IRS. The correct value was $714,592, not $257,625, Chimes officials said. Also in 2004, Chimes officials voluntarily released additional accounting information showing that two board members of Chimes ran companies that received payments close to $1 million apiece in fiscal 2003 for leasing property and transportation services to the charity. Another board member got $129,422 for "strategic planning."

In Wisconsin, a JWOD contractor, ORC Industries of La Crosse, paid its president $625,000 in 2002 and set up a retirement account for her worth nearly $1.1 million, according to tax records cited in an article by the La Crosse Tribune. The paper also described a deal in which the nonprofit rented a factory building from the president for $46,317, a figure one-third higher than the local rental rates.

In response to the articles about Chimes and ORC Industries, the JWOD committee last November announced new draft regulations that would require the nonprofits, as well as NIB and NISH, to make public their accounts every year. They would also have to establish independent oversight boards and rotate them annually, disclose internal conflicts of interests, and limit the "reasonable" compensation of top managers to about $207,000. In 2003, the average compensation for the top five executives at NIB and NISH were, respectively, $204,000 and $185,000.

"The committee is now looking at more oversight and expecting NIB and NISH to do more oversight than was historically expected," said James Omvig, a blind lawyer whom President Bush appointed to the JWOD committee in 2003. Any major change to the program, such as allowing competition from companies that adequately employ disabled workers, would require changes to the 1971 law, he said, although "it would be great when the day comes that people with disabilities are employed in companies like anyone else."

The proposed rules have generated protests from a variety of JWOD nonprofits. The JWOD committee doesn't have the authority, or good reason, to impose the new rules, according to statements from executives at Chimes, NISH, ORC Industries, and many other nonprofits. "The [nonprofit] organizations have a lot of oversight by JWOD itself, by NISH, and by the IRS," ORC President Barbara Barnard told National Journal. Under IRS rules, the nonprofits have to disclose to the public an annual Form 990, providing some details of their finances. These documents can generally be found at www.guidestar.org.

According to JWOD executives, other factors and rules already hinder their program. Trade with low-wage countries like China have put pressure on their manufacturing programs, they said. Changes to government procurement rules in the 1990s and the growing use of online shopping have prompted some government procurement officers to bypass the JWOD catalog, they complained. The program gets only one-half of 1 percent of all government procurement dollars, Wilson said.

Critics of JWOD face an uphill task, largely because legislators have little incentive to push for an investigation of the program, given the likely pushback from its officials, supporters, and nonprofit partners. A key factor, said Safeguard President H.T. Brown and other critics, is that no legislator wants to be portrayed on television as a hard-hearted opponent of work for disabled Americans. "NISH threatens to have disabled people lined up outside [a lawmaker's] office if they go against them," said Liberman.

Angela Styles, who headed the Office of Federal Procurement Policy until September 2003, says she can imagine "a way to properly approach the [JWOD] program without scaring people." Styles is now in private practice with the D.C. law firm of Miller & Chevalier. Reform, she said, should "improve the program so that it works more for the disabled and less for people trying to make a profit from it."

JWOD Sales by Year

JWOD sales have grown steadily for more than a decade, but the accelerating growth since 2000 has pushed the program's annual revenues to around $2 billion. Revenue from services has grown faster than revenue from products, partly because JWOD officials have focused increased attention on the relatively better-paying service contracts.

(In millions of dollars)

	Services	Products
1994	$310	$245
1995	350	310
1996	345	380
1997	345	440
1998	350	490
1999	380	500
2000	425	580
2001	485	650
2002	700	780
2003	902	902

SOURCE: JWOD

JWOD Employees
The labor force available to JWOD has expanded in recent years, since Congress broadened its criteria for "disabled workers." The broader definition allows the JWOD program to find enough workers for service contracts, such as those providing janitorial work in buildings owned by the General Services Administration.

(in thousands of workers)

1994	27
1995	31
1996	32
1997	33
1998	34
1999	34
2000	37
2001	37.5
2002	39
2003	41.9

SOURCE: JWOD ]]>

NIH tries to balance scientists' interests with taxpayer interests

Neil Munro — Fri, 13 Feb 2004 00:00:00 -0500

These nonmonetary conflicts of interest surfaced during a January 22 Senate hearing into recent revelations that NIH officials and outside companies have struck roughly 1,500 financial deals over the past five years. NIH officials testified that they recruit top-flight scientists by offering them a compensation package with pay rates that can reach $200,000 a year, the right to make financial deals with outside companies, and the freedom to use the institutes' well-fitted laboratories to pursue their own discoveries.

This freedom to pursue long-term research is an intangible but very real incentive for scientists, said NIH Director Elias Zerhouni after the hearing. He characterized it as a necessary means of attracting scientists who might otherwise choose to remain at commercial and university-based research centers. "Recruiting to NIH is one of the hardest things I've done," he added. Other scientists at the hearing, including Stephen Katz, director of the National Institute of Arthritis and Musculoskeletal and Skin Diseases, echoed Zerhouni's statement about the need to offer the opportunity to make discoveries. This intangible, nonmonetary benefit "is really important to understand," Katz said. "It does get to the crux of what passion the NIH scientists have."

This passion to explore has two elements. One is the desire to discover biomedical patterns that can eventually lead to medical therapies. Scientists "have a passion to see what they are doing to benefit mankind," Katz said. Taxpayers want those benefits, and so do the legislators who appropriated $28 billion for NIH in fiscal 2004.

The other part of the passion is the desire to make discoveries that win peer recognition. "The strongest motivation for scientists is being respected by leaders" in science, said Bruce Alberts in an interview with National Journal last year. Alberts is a biochemist and the president of the National Academy of Sciences, a private organization of U.S. and foreign scientists, entrepreneurs, and policy advocates. "We care a lot about how other scientists think about us, and we don't care a lot about others who are not scientists." This intangible, nonmonetary recognition can earn scientists very tangible benefits: new NIH grants, new jobs, prizes.

NIH witnesses at the January 22, 2004 hearing also cited the importance of having the respect of fellow scientists. "Psychologically, it will make many an NIH scientist feel [like] second-class citizens to some of their academic colleagues" if corporate deals were banned, said one. "It would not be a favorable decision," said another, who also warned that scientists might leave NIH if they didn't have the same opportunities as private-sector scientists.

But the passion for discovery can create a conflict of interest with taxpayers, because some taxpayers want more short-term gains in medical therapies, preferably treatments that come with a minimum of ethical controversy. It's this taxpayer preference for health care therapies that prompts politicians to complain about NIH's focus on science at the expense of health care. For example, at an October 2 hearing, Sen. Hillary Rodham Clinton, D-N.Y., asked Zerhouni to undertake more comparisons of medical therapies, but Zerhouni responded that NIH didn't have the money for such extra work. The issue came up again at the January 22 hearing, when Sen. Tom Harkin, D-Iowa, the subcommittee's ranking Democrat, said he wanted NIH's science converted into advances in health care. "It is not the National Institutes of Basic Research. It is the National Institutes of Health," he said.

NIH's mission is "increasing knowledge," Zerhouni said at a September 30 press conference to publicize a draft plan to reform NIH spending. Scientists contend that their focus on basic research will yield enormous health care benefits in the long run.

In promoting the reform plan, Zerhouni has complained that scientists at each of NIH's 27 institutes and centers are reluctant to pool their funding. If Congress gave him the authority to force such collaboration, Zerhouni said, he could accelerate the availability of the therapies desired by taxpayers.

Scientists' passion for discovery also generates ethical controversies. The most prominent debate concerns NIH research into stem cells taken from human embryos. In August 2001, President Bush decided that NIH could use only existing lines of embryo stem cells for this research, but NIH officials continue to emphasize embryo-cell research, rather than research on the noncontroversial stem cells taken from adults.

Conflicts between scientists' priorities and the public's wishes would be very difficult to track, said subcommittee staffers. If Congress tried to restrict the scientists, "they might all leave," one said. The staffers said the subcommittee has not looked at such conflicts.

Throughout the hearing, Zerhouni declined to say that he would end the deal-making, but he announced the formation of a 90-day advisory panel to be co-chaired by Alberts and Norman Augustine, a former Pentagon official.

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Congress wants payoff from increased NIH funding

Neil Munro — Mon, 03 Nov 2003 00:00:00 -0500

The money flows to scientists at NIH and also to research centers scattered throughout legislators' districts. The rising tide of funds has helped to boost many local economies, but, so far, the money has produced limited benefits for patients, in part because scientists direct so much of it to their colleagues for basic research. NIH's research promises a big payoff someday, but, given the complexity of human biology, converting hopes into therapies can take 10, 15, or even 20 years.

In Congress, the debate over the benefits of increased NIH funding is shaped by politicians' ambivalent approach to their oversight of the science sector. Administration officials and legislators want better management at NIH, but they are reluctant to second-guess scientists' spending policies. They want NIH to develop treatments more quickly but are loath to shift money away from basic science and into near-term therapies. They want more transparency in NIH's activities, but they also want to minimize regulation of science and technology.

These policy dilemmas were fully visible on Oct. 2 at a joint House-Senate hearing on a possible reorganization of NIH. Sen. Judd Gregg, R-N.H., chairman of the Senate Health, Education, Labor, and Pensions Committee, lauded the institutes' scientific accomplishments but also questioned funding priorities: "Does [the NIH] peer-review process adequately balance results to the population as a whole, the health care results?" he asked. "Where are we closest to getting something, versus just the academics and the basic science?"

This debate is likely to gather momentum next year and culminate in the first reauthorization of the institutes since the NIH Revitalization Act of 1993. The complexity of the science that NIH sponsors, and the reluctance of politicians to redirect the prestigious and lucrative science sector, have opened up opportunities for NIH Director Elias Zerhouni.

Independently of the Health and Human Services Department, within which NIH resides, Zerhouni is promoting his five-year "road map," which would focus management resources and $2.1 billion on his stated priorities, expand clinical testing, and remove some of the obstacles that delay the evolution of treatments from the laboratory bench to the hospital bed.

National Journal interviewed key players and representatives of powerful political forces in the debate over re-engineering NIH. Their comments reflect the varying experiences of different constituencies and reveal the difficulty of instituting change.

A New Map for NIH: Director Elias Zerhouni

Zerhouni told legislators at the joint hearing that his road map would create new offices and programs to accelerate important research and to help the director coordinate some of NIH's myriad research projects. Currently, nearly all of those projects are run by the directors of NIH's 27 autonomous institutes and centers.

Over the decades, Congress has created and funded these institutes and centers to focus research on priorities such as cancer, drug abuse, medical imaging, and the human genome. Congress appropriates nearly all funds directly to the 27 centers, not to the NIH director. For example, the National Cancer Act of 1971 created the National Cancer Institute and gave its director the authority to submit budget requests directly to the president, bypassing both the NIH director and the Office of Management and Budget. In 2002, Congress appropriated $4.17 billion to the NCI. The cancer institute has asked for $6 billion for 2004.

This decentralized process leaves the NIH director with little management clout. Under a 1992 authorization law, the director is allowed to reassign only 1 percent of the NIH budget.

Zerhouni argues that the scale and style of modern science demands much greater coordination among the "27 old cats." He told Congress that lack of coordination leaves promising treatments on the shelves for many years. He cited the anti-cancer drugs tamoxifen and Gleevec as examples. "If I could leave one contribution as a director," he said in an interview, "it is to say, 'It is important for an agency of the critical nature of NIH to have a sense of where the elephant needs to be steered.'" He added, "Even though it has 27 parts, it is still an elephant that has to go somewhere."

Zerhouni said he doesn't need legislative approval to implement the first stage of his road map in 2004. But some of the more-ambitious elements, such as new planning groups and multidisciplinary research projects, require authority and funding from Congress.

"I would like for them to mandate such a process-it would serve everyone-and also to fund it, because right now it's almost a voluntary plan," he said. "You can't leave the dynamics of change to a voluntary exercise."

The Power of Research: Harold Varmus

Zerhouni said he developed his plan with advice from "300 to 400-plus of the top leaders in science," including his immediate predecessor at NIH, Harold Varmus.

At the joint hearing, Varmus said the directors of the 27 centers "are under tremendous pressure from their constituencies to try to fund more grants [for them] rather than donate money to a common pool." During his term from 1993 to 2000, he said in a later interview, "we got very little support for trans-NIH activities."

Varmus, however, is not just Zerhouni's predecessor. He's now the president and chief executive officer of the Memorial Sloan-Kettering Cancer Center in New York City. It's a big enterprise: He's got 8,000 employees, treats 19,000 patients a year, and managed $1.1 billion in revenue in 2002. More than 80 percent of the center's annual revenue comes from patients, but the center also got $240 million in 2002 from a mixture of grants, patent royalties, contracts, and other sources.

Industry paid Sloan-Kettering much of that $240 million budget chunk in exchange for the use of the cancer center's patents and for the center's testing of promising medications on patients. But $83 million came from NIH grants.

NIH awards 85 percent of its sizable budget to outside scientists and their employers. Over the decades, roughly 220,000 scientists at 2,800 institutions, including Sloan-Kettering, Stanford University, and Harvard University, have received this funding. These research centers convert the grants into new discoveries, then into patents and tested therapies, and-eventually-into successful products and treatments in the nation's $1.4 trillion health care market.

That kind of economic power gives the research sector enormous political power, making Varmus's support for Zerhouni's plan all the more significant. Nevertheless, Varmus predicted that although he endorses an "extreme change" that would give much greater authority to the NIH director, such a change "is just not going to happen." In a fallback position, Varmus argues that NIH should create "clusters" of centers, allowing each center to retain much of its autonomy while promoting coordinated research on priorities such as brain science, cancer, "human development," and internal medicine.

Varmus also backs Zerhouni's efforts to bolster the clinical trials that NIH funds. Thousands of trials are launched every year to test promising medical therapies on patients. But an expanded effort is needed, Varmus said, partly because there are too few patient-volunteers to test all of the candidate therapies. Even in places such as Sloan-Kettering, he said, "we have difficulty in providing enough time and incentives for our best clinicians to do clinical research."

Advocating Cures: The Cancer Community

Each of the 27 NIH centers has its supplicants and lobbyists, all hoping to promote cures for particular diseases-and funds for their own projects. The centers distribute their grants according to the advice of peer-review groups drawn from pools of academic and research-center experts. This gives NIH officials free access to the best scientists' expertise, and has led to medical advances that have extended the lives of millions of Americans. But the advice comes entangled with the peer-review scientists' professional, financial, and personal interests. As a safeguard, NIH officials try to minimize conflicts of interest in the peer groups, and they keep control of funding decisions. But most of the NIH officials making the decisions are also scientists, and they have their own ties to the complex of professional and commercial centers within the scientific community.

The way an NIH center interacts with advocacy groups is illustrated well by the National Cancer Institute. NCI customarily sends a draft copy of its budget for comment to roughly 450 outsiders who work in cancer-research centers, patient groups, hospitals, and universities. Through this budget-review process, "the concerns of the scientific community and the patient-advocacy community are taken into account," said Carolyn Aldige, founder and president of the Cancer Research and Prevention Foundation, based in Alexandria, Va. The foundation, she said, "represents the interests of the research community…as well as the patient community." Aldige gets a draft copy of the NCI budget for review, but, she said, "I rarely disagree with the way [it] is drafted." The chairman of Aldige's foundation is Catherine Bennett, a vice president at Pfizer, the pharmaceutical company.

Zerhouni's call for greater central coordination at NIH raises "a concern that the [NCI] budget could be tapped for other purposes," said Aldige, who is also president of the National Coalition for Cancer Research. The coalition brings together 26 groups of doctors, scientists, managers, patients, and donors. The current director of the NCI, Andrew von Eschenbach, is a former board member of the coalition.

The American Cancer Society boasts 2 million unpaid volunteers, and 20 million donors who give an average of $32 a year.

"Our approach is not to be a pass-through, a front for other groups," said John Seffrin, CEO of the ACS, which also opposes any constraints on the cancer institute's independence. "I know of not a single cancer group ... that believes any diminution of [NCI's] importance is desirable," he said. Indeed, Seffrin argues, the system has worked so well for patients that NIH's 26 other centers would gain from similar independence. He says that the 27 centers already cooperate, and that Zerhouni hasn't presented any cases where rivalries among the centers stymied research.

A Patient's Resolve: Will Ambler

In 1992, at age 24, Will Ambler was paralyzed in a motorcycle accident. Doctors don't have a cure for his spinal cord injury, so he sought help from various scientists. But he found none willing to turn away from the laboratory to test possible treatments on patients, Ambler said from his home in Solvang, Calif. This focus on science rather than therapy, he said, is driven by scientists' preference for professional success, and also by NIH funding policies. NIH "provides funding for scientists if they show scientific progress; they don't have to deliver [therapeutic] results," he said.

Ambler and a group of like-minded patients have raised $200,000 to hire their own university researcher to investigate whether paralyzed rats can be treated with their own stem cells. If the animal tests are successful, the scientists will then need to test whether Ambler's own stem cells can repair his damaged spinal cord. The test, for which Ambler will pay $50,000 of the cost, will likely be performed by Dr. Michel Levesque, director of neural repair at Cedars-Sinai Medical Center in Los Angeles. He has already used one adult patient's stem cells to eliminate most traces of the patient's Parkinson's disease.

Most patients, Ambler said, lack the knowledge and resources to challenge the scientists and doctors who are promising cures. "Right now, there is no power at all in the hands of the patient, whether it is knowledge, or money, or some kind of structure that provides an equal footing." To fix the problem, he said, doctors should give patients more information, and NIH should pressure scientists to convert science into therapies and give them rewards when they do. "To effect a change, you have to rock the boat."

Respected scientists echo Ambler's complaints about NIH funding priorities. Helen Blau of Stanford University and Catherine Verfaillie of the University of Minnesota have argued, for example, that NIH officials are underfunding research on the capability of adult stem cells to repair damaged organs. Rival scientists within some NIH peer groups have made it difficult to get grants for such research, charged Levesque of Cedars-Sinai. He hopes that other NIH panels that focus on emerging therapies will provide funding for a planned 15-patient test of his Parkinson's treatment.

But these endless rivalries among scientists and research centers, according to Zerhouni, provide a valuable benefit. He says they impose a discipline on NIH policies, and he points out that advisory panels and NIH analysts also provide a check on policies. His road map includes a new program to award grants from the NIH director's office to nonmedical experts, young scientists, and others doing groundbreaking research. Zerhouni is also keenly aware of the complaints from Gregg, Ambler, and many others about the slow conversion of science into health care. The answer, he said, "is not so much a question of incentives, [but rather] removing the obstacles." Still, NIH will remain focused on science, not therapies, he said. "We're not changing the balance, we're supercharging the NIH."

Setting Ethical Limits: Daniel Callahan

To some extent, scientists' self-interest provides ethical limits on research. For example, many scientific groups are pushing for a genetic privacy law, partly out of concern that without it, patients will refuse to enroll in clinical trials.

But in their competitive profession, many scientists are reluctant to let ethical concerns restrain their research, said Callahan, a director at the Hastings Center, an ethics think tank based in Garrison, N.Y. In seminars for young scientists, he said, "we try to spend quite a bit of time explaining how to get away with being socially active and not be shot by their peers." Such career concerns are valid, he said, because scientists depend on peer friendships for grants, jobs, and publishing opportunities. "Professionals can gossip and ruin reputations in a way that is very hard to pin down," and fear of that punishment keeps many from raising objections to a line of research. "There's very little incentive for a scientist to look at a major development and say, 'Gee, there's a problem; let's slow down.'"

To minimize this social pressure, Callahan said, NIH should foster a "critical mass" of scientists willing to suggest ethical limits. He proposes a standing NIH panel that has a majority of nonscientists, but includes enough scientists to ensure credibility with the outside scientific community. The panel he envisions would not have authority over spending, but would report regularly to NIH and to Congress.

Such a panel could highlight for the public and Congress the enormous political consequences of NIH's advances, Callahan said. For example, retirees' wonderfully lengthened lifespans are increasing the total cost of health care; new brain-related research is changing the public's understanding of free will, child-rearing, and mental health; embryo-related research is creating the potential for a commercial marketplace in "designer children."

At the hearing, Zerhouni firmly defended scientists' self-governance, but he also acknowledged the value of oversight by NIH, advisory panels, and the Office for Human Research Protections at HHS. NIH welcomes whistle-blowers, Zerhouni said: "We want to provide every incentive to every scientist out there [to raise ethical questions], because it is in the best interests of science." To make his case, Zerhouni cited the science sector's response to the death of Jesse Gelsinger during an experiment at the University of Pennsylvania that was overseen by researcher James Wilson. Before the 1999 experiment, Wilson "was at the top of the world," Zerhouni said. "He was one of the touted stars of biomedical research, and when the Jesse Gelsinger thing happened, he lost his scientific reputation, he lost his job, his own boss lost his job, the entire university system was redone. Where's Jim Wilson now? He's gone." Wilson was unavailable for comment. In July 2003, Wilson resigned from the university's gene-therapy institute. He now heads a 12-person team investigating cystic fibrosis, Ebola disease, and other health issues. In 2002 and 2003, Wilson won 14 NIH grants worth at least $4.6 million, according to NIH's Web site.

Many groups are pushing for ethical changes in NIH practices.The Alliance for Human Research Protections, based in New York City, wants tighter oversight of NIH's clinical trials, for example. Other groups call for changes in medical research to reduce the costs of drugs, and additional research focusing on women and minorities.

Voicing Minorities' Concerns: Rep. Stephanie Tubbs Jones

Nearly every player in the NIH debate says that politics should not interfere with science. And nearly every player also says that politics does indeed shape science. Ohio Democrat Jones used her time in the Oct. 2 joint hearing to plead for more attention to minorities' health issues. She told Zerhouni and Varmus, "I come here to Congress as a result of political stands that I take ... [and] some of the research that has been done specific to African-Americans and minorities came as a result of the political push of the body politic." She added, "I don't want you to be swayed by the issues of political life, but I also don't want you to be immune to the importance of the body politic saying to you, 'This is an issue that is important.'"

"I agree entirely with your point," Varmus responded. "That's the body politic bringing facts and figures to us, and it's an important role you play." But Varmus also noted that it is science that shapes funding decisions for disease research. And Zerhouni, without agreeing to Jones's request, replied, "Society...[is] the basis upon which we work."

Jones and Sen. Barbara Mikulski, D-Md., are pushing the Uterine Fibroid Research and Education Act of 2003. They say that one-quarter of all American women in their 30s and 40s-and a much higher percentage of African-American women-will need medical care for the condition, which can cause heavy bleeding and fertility problems. Yet NIH spends only $5 million a year researching its causes and treatments. The bill authorizes twice that amount.

Calling-Softly-for Improvement: Rep. Mike Rogers

Push-back from the science sector can make it difficult for Congress to impose change on NIH. In July, social conservatives in the House drafted an amendment to strip a total of $1.7 million-a tiny percentage of the NIH budget-from five NIH grants. One funded a study of drugs and sexually transmitted diseases among prostitutes in San Francisco; another funded a study in which students were paid to drink alcohol and view pornography; a third supported research on the relationship between pandas and humans in China. The legislators and their staffs drafted the amendment because they did not expect NIH officials to drop the grants at their request. Rep. Pat Toomey, R-Pa., led the effort for the amendment, which failed on a vote of 210-212.

Toomey and his allies lost partly because most Democrats and some Republicans were receptive to lobbying by universities and professional societies. These groups cast the amendment as an attack on the peer-review process, which scientists prefer over alternatives that would give a bigger role to politicians or other nonscientists. Also, the House's debating rules barred Toomey from offering an amendment to redistribute the $1.7 million to other research into diseases such as juvenile diabetes or breast cancer. But reluctance to micromanage NIH also played a critical role.

Toomey's faction hoped to win support from Michigan's Rogers, a rising star in the GOP leadership. But Rogers told Zerhouni at the Oct. 2 hearing that he voted against the amendment "because I wanted to make sure that you had the right and ability to make those decisions, and Michigan State University actually was doing some research [on the pandas] that ... made a lot of sense."

Rogers's message to Zerhouni was mixed, however. He promoted his bill authorizing NIH to spend $60 million a year on pain-management research, and urged NIH to make its operations and spending more transparent to legislators. Getting information from NIH about the disputed grants was difficult and demeaning, Rogers said in an interview.

"There is a culture that is very homogenous in the NIH ... [and] if they don't feel they have to be accountable, that's another problem." Zerhouni's consolidation plan may help by giving Congress a single go-to office at NIH, Rogers said. But he added that he was not slamming NIH, only calling for improvements. "We're doing great things [at NIH]. Let's do incredible things."

Reluctant to Regulate: Congress

The tale of the five grants reflects the deep divisions in Congress over NIH oversight. Legislators are often willing to boost popular research-the doubling of NIH's budget is proof-but don't want to direct funding decisions. Liberal Democrats are reluctant to regulate scientists, academics, and their allied professionals, partly out of ideological sympathy for intellectual exploration, and partly because those groups help generate many jobs. Free-market Republicans are as loath to regulate job-creating universities as they are to regulate job-creating companies, even when university researchers challenge social conservatives' positions on human experimentation and genetic engineering.

The result is that Congress steadily increases NIH appropriations but can't settle the many policy disputes created by that spending. This reality was evident at the Oct. 2 joint hearing. Sen. Hillary Rodham Clinton, D-N.Y., used her time to ask NIH to test existing therapies and gauge which best serve patients, eliciting a demurral from Zerhouni. Rep. Henry Waxman, D-Calif., decried the Toomey amendment as political interference in sex-related research, but then acknowledged that left-of-center groups also have their agendas for research. Rep. John Dingell, D-Mich., the ranking member of the House Energy and Commerce Committee, used his time to ridicule the administration's outsourcing initiative, which would put some NIH jobholders in competition with outside contractors. Dingell said the policy is driven by "ideological idiots" in the administration and is causing great disruption to NIH administrative staff. "I trust the scientists," he said. "I try to see this thing [NIH] as a national treasure outside the general political hurly-burly."

But Dingell also endorsed continued oversight of NIH. The Republican leaders who control the House "don't know how to do oversight," he said, "and are not predisposed to do it," partly because the GOP also controls the executive branch. So far, Republicans "have put a huge amount of money into research, yet they didn't put a lot of money into administration to see that it was well spent."

Both Republicans and Democrats support Zerhouni, not least because his road map promises to improve NIH without forcing Congress to micromanage spending or settle painful, high-stakes ethical debates. Zerhouni's plan "falls in line with the tradition of excellence that the NIH has always shown," said an Oct. 22 statement from Rep. Michael Bilirakis, R-Fla., who chairs the House Energy and Commerce Committee's panel on health.

Gregg wrapped up the three-hour hearing with a strong indication that he favors a much bigger role for Zerhouni, and no suggestion that he envisions a greater role for legislators or other nonscientists. "There are things which apparently we must do in order to give the director the authority to accomplish the many things that we are talking about," he told Zerhouni. "Give us some suggestions, so that we can sort of help you to help all of us."

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Debate on NASA coming, but no big changes expected

Neil Munro — Fri, 12 Sep 2003 00:00:00 -0400

At a price of roughly $500 million per shot, the astronauts are launched from Florida, with backup facilities in Texas and Alabama. Many private-sector companies in many other states are also involved in the launches.

"I find it highly unlikely that anyone would pay the political price of ending that," said Robert Park, a scientist at the American Physical Society who has long called for an end to the manned space program. Chances are "probably closer to 1 in 100 than 1 in 10."

Congress and the White House must continue the manned space program, said Howard McCurdy, a professor of public policy at American University, "unless one wants to de-orbit the manned space station; and I don't think there is any politician of any stature who wants their fingerprints on that decision."

Even now, after the highly critical report on the Columbia disaster, legislators who suggest a change to NASA's manned program do so sotto voce: "You cannot resolve the issue about NASA's basic mission without looking carefully and in a fresh way at the direction of the manned space program," said Sen. Ron Wyden, D-Ore., at a September 3 hearing on the recommendations of the Columbia Accident Investigation Board. "Within 90 days, or at most six months, NASA should prepare and furnish this committee a cost-benefit analysis on the manned space program," Wyden said. His press secretary declined to comment further.

Legislators who urge deep changes to the manned program don't see much prospect for change. "We're not going to be changing or increasing the NASA budget in 2004," said Rep. Nick Smith, R-Mich., the chairman of the research panel of the House Science Committee.

The accident board, chaired by Adm. Harold Gehman, blamed NASA's management and culture for the loss of the Columbia. Yet the report's authors don't offer much confidence that the problems will be fixed. Aside from a consensus that the nation needs a way to get people into space, the report said, "the U.S. civilian space effort has moved forward for more than 30 years without a guiding vision, and none seems imminent."

One possible vision, said James Oberg, a Texas-based space consultant and author, would call for NASA to dust off proposals to send astronauts on a two-month mission to a passing meteorite or asteroid by about 2015. Such a mission would be easier than a trip to Mars-which is priced by some at $500 billion over perhaps 40 years-and would yield useful knowledge about such potentially dangerous bodies. It would also provide NASA with a stepping-stone for further exploration. The project, Oberg said, could be funded over the next 15 years within NASA's current budget.

But NASA's chief problem, in McCurdy's view, is that it has failed to develop a better way to get into space. The price of getting one pound into orbit is much the same today as it was in the 1950s-anywhere from $5,000 to $10,000, he said. The shuttle was slated to decrease that price by 90 percent, but technological and political considerations, including President Nixon's re-election commitments to California's aerospace industry, prevented any cost reduction, he said.

In all likelihood, McCurdy predicted, NASA will try to develop a new, reliable, low-cost launcher over the next 10 years, leaving the nation "trying to do what we were supposed to do in the 1970s."

McCurdy also noted that cultural change across an entire agency "has happened before, but it is slow and torturous." The most difficult problem is making sure that agency officials really change their beliefs, he contends, because "after three to five years, they slip back" into the old ways of doing business.

But Smith says he has faith in Congress's ability to govern NASA. "I'm not that cynical, to think that Congress is not going to very carefully evaluate the safety and cost and benefits of manned space flight," he said. The Science Committee is planning to hold four hearings on NASA, he added.

Leadership will come from the president, not from Congress, predicted Hans Mark, deputy NASA chief from 1981 to 1984. "When the president says go, Congress goes along," partly because "nobody has ever gotten elected or thrown out of Congress because of anything to do with NASA."

But no one can predict whether Bush will set a new direction for space exploration, said Mark, who is a teaching professor at the University of Texas. "Nobody knows.... Not even Bush."

The long-range plans in Bush's 2004 budget request did not include significant spending increases for NASA, either for manned missions or for the less-glamorous series of robots that it is dispatching to Mars and other planets.

Over the next 15 months, NASA will try to launch another shuttle, the Chinese space agency may try to land on the moon, the presidential election will be fought and won, and various unforeseeable events will occur, McCurdy noted. Bush "may be forced to make some sort of a decision, and if history teaches us anything, it could be a bold decision."

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War and peace

Neil Munro — Tue, 13 May 2003 00:00:00 -0400

The army's arrival was cheered as a liberation, but soon its patrols were searching neighborhood houses and detaining local youths. Then, a protest march turned bloody as army paratroopers shot dead 13 of the demonstrators. Iraq in 2003? No, Northern Ireland on January 30, 1972. Since that Bloody Sunday, British troops have been stuck in Belfast at an enormous cost in lives and money.

The long and painful experience in Ireland has given the British army much expertise in the delicate task of peacekeeping-and some of that expertise has been transferred to the U.S. military as its combat units in Iraq recast themselves as peacekeepers. In this new mission, troops are dealing with everything from looters and supplicants to electricity breakdowns and thirsty children crying for water.

The difficulty of this transition was highlighted in Falluja, a town west of Baghdad, where U.S. soldiers said they were fired upon in late April while facing a group of demonstrators. The U.S. troops fired back with their automatic weapons, killing at least 13 people, including two children, and injuring many more, according to local Iraqis. The U.S. soldiers, who had earlier tried to disperse the demonstrators with smoke and loudspeakers, insisted they acted in self-defense.

"We went [to Iraq] to fight a war, and now we're changing [to peacekeeping] ... that's extremely difficult to do," said Jim Lasswell, a leading urban warfare experimenter at the Marine Corps Warfighting Laboratory in Quantico, Va. The keys to this transformation, he said, are the mid- and low-level officers, who, although well trained, frequently dislike peacekeeping missions. "We found a lot of resentment and pushback" from officers, Lasswell said.

Nevertheless, both U.S. soldiers and marines in recent years have received extensive training in peacekeeping, and many have gained real-world experience in such places as Kosovo and Haiti. In Falluja, roughly half of the 150 U.S. soldiers had served in Kosovo, Army 2nd Lt. Devin Woods told an Associated Press reporter on the scene. Without that training, experts say, the death toll could have been higher in Falluja. Sgt. Nkosi Campbell, another soldier in the unit in Falluja, said that his troops held their fire until approval was given to shoot back at gunmen.

U.S. Marine units, meanwhile, are moving to help secure southern Iraq. The Marine peacekeeping training, said Lasswell, benefited greatly from the British army's experience in Ireland. It "was a huge case study.... It was very good for us," he said.

Still, the circumstances in Iraq are far different from those in Northern Ireland, whose residents shared the same culture, language, citizenship, and laws as the British soldiers among them. Despite the common heritage, it still took more than 10 years for the British army to learn to distance itself from the warring parties, to work hand-in-glove with the local police forces, and to minimize protest-creating errors.

In Iraq, in contrast, American troops are dealing with a culture completely new to them. Nevertheless, some lessons from Northern Ireland should stand U.S. troops in good stead. For example, "the avoidance of spectacular, grievance-generating gestures is crucial," said Richard English, a professor of politics at Queen's University, Belfast. Because of the Bloody Sunday shooting and other events, "Northern Ireland descended deeper than was necessary into chaos." Overall, "the less violence the army comes to be associated with, the better," English said. Good intelligence-gathering-especially from local sources-greatly aids a softer approach, he said.

There are also a variety of more mundane lessons, many of which have found their way into the U.S. military's tactical manuals. For example, U.S. troops should meet with residents and chat with bystanders when out on patrol, partly because such meetings reduce potential disputes, but also because they can provide tips about possible ambushes, Lasswell said. In Northern Ireland, British troops initially treated Catholic youths very roughly, and this treatment created immediate grievances that spurred the IRA's growth from a very small number of activists, said Ed Moloney, author of A Secret History of the IRA.

U.S. forces should also work with residents to create militias and strong local governments that can take over security duties, said Lasswell. These tactics are standard elements of the Marines' civil-action platoons, and they will help the Marines accelerate the transfer of authority, he said. U.S. Army Special Forces are working in a similar fashion in other towns, such as Abu Ghayrib, a suburb of Baghdad, where U.S. soldiers helped to run an election that created a city council for the town's 1 million residents.

Few experts expect the task to go easily or swiftly, and many expect additional errors, perhaps even more shootings as occurred in Falluja. Indeed, that incident was followed two days later by the shootings of two more demonstrators. But the lessons have been learned from past campaigns, the training has been completed, and the troops will do as they are asked, Lasswell said. If the military is not performing well, he continued, the first people to be questioned should be the uniformed leadership.

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New NASA focus unlikely given pull of space station, shuttle programs

Neil Munro and Erin Heath — Tue, 11 Feb 2003 00:00:00 -0500

NASA's greatest natural obstacle is Earth's gravity. Gravity clutches at its spaceships and space stations, and it compresses air into a thick barrier against returning spacecraft. It rarely forgives an error by managers or engineers.

But there's another force that rivals the power of Earth's gravity: the pull of existing programs, such as the $92 billion International Space Station and the $3.5 billion-per-year space shuttle program. This colossal force clutches at legislators' hearts, managers' calculations, and the public's dreams-and it hinders NASA from redesigning its manned space programs for greater efficiency and productivity.

This force is demonstrated by NASA's total reliance on the shuttle to build and service the space station. With the three remaining shuttles temporarily grounded after Columbia's demise, completion of the space station is on hold while NASA relies on Russia's rockets to ferry astronauts and their victuals to and from the 200-ton, three-person station. Without the shuttle, no vehicles are available to haul the station's remaining heavy pieces.

But NASA can't do without the partially built station, say its advocates, because it provides the only way to learn how to keep people in space for the long periods that would be needed to fly to and from Mars-a longtime NASA ambition.

That means NASA, the space station, and the shuttle need one another-at least for the next several years. "I don't think there's any option of going in a new direction, at least with human space flight," said John Logsdon, director of the Space Policy Institute at George Washington University. "There is no viable replacement for the shuttle in a six-, eight-, 10-year time frame."

The only homegrown alternative is still a paper airplane, the so-called Orbital Space Plane, which was sketched out last fall by NASA in a budget amendment. This passenger-carrying spacecraft may be ready in 2010-or several years later. It won't be ready much sooner, because NASA officials canceled a variety of alternative space-plane projects over the last 20 years. Even if the space plane is ready in 2010, the only rockets likely to be able to carry it into space are being developed by private companies with money from the U.S. Air Force, not from NASA. The new rockets-one developed by Boeing, the other by Lockheed Martin, mostly for the disappointing commercial-satellite marketplace-are scheduled to carry their first military satellite into space this month at a cost of less than $100 million per shot, far less than the amount it takes to launch each shuttle.

NASA's space plane, say its advocates, holds much promise because it is modest in design and would carry only a few passengers. The plane, as a result, would be smaller, lighter, and simpler than the shuttle, which was designed to lug large cargos and several astronauts into orbit. The shuttle's bulk-even when the cargo bay is empty-has boosted its cost per launch to more than $500 million and heightened the risks to astronauts' lives. That enormous cost, most of which is paid to contractors Boeing and Lockheed Martin, has sucked money away from other projects. The space plane is "relatively low-risk" and could replace the shuttle as a passenger vehicle, an industry official said. Cargo, meanwhile, could be sent up on other low-cost rockets, he added.

The space plane's other allure is its development cost of $2.4 billion over the next four years. That money is far less than the planned expenditure of $16.6 billion on the shuttle fleet over the next five years; yet the amount is large enough to give politicians and contractors a stake in the program, because the armies of contractors and support personnel form a significant constituency in several states. "Can you get a space plane before 2008? If you pour a lot more money into it, probably," said former Rep. Robert Walker, who is now chairman of Wexler & Walker Public Policy Associates. Last year, Walker chaired the Commission on the Future of the U.S. Aerospace Industry, which urged increased federal support for space programs.

Although the space plane is designed for efficiency, "it is not sexy" enough for NASA engineers, the industry official said. Many NASA engineers dislike expendable rockets, preferring NASA's long-held vision of replacing the shuttle with a completely reusable spaceship, he said. That vision, said the official, won't die easily because "in some ways, that unfulfilled vision about reuseable vehicles has its own ideology" with its own clutch on NASA's engineers. Hopes for a fully reuseable spaceship were dashed again late last year, when top NASA officials killed a $35 billion shuttle-replacement plan in favor of the space plane. For the moment, NASA is headed toward embracing the new space plane and abandoning the old vision, he said.

There's little chance that the shuttle and space station will be sidelined in favor of something else, such as a mission to Mars, said Rep. Dave Weldon, R-Fla., a member of the House Appropriations Committee. "If you are seriously going to talk about changing direction and talk about going back to the moon or to Mars, it would require a lot more money," he said. That's more money, not money freed by the retirement of the 30-year-old space shuttles.

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OMB puts the brakes on effort to double science budget

Neil Munro — Fri, 01 Nov 2002 00:00:00 -0500

"Taking an arbitrary number of just doubling, it is not how we advocate funding," Amy Call, an OMB spokeswoman, told National Journal. "We look for programs that can show performance and results."

"Doubling really is an arbitrary thing," said John Marburger, director of the White House Office of Science and Technology Policy, who opposes the House and Senate bills that would double funding. "You can't just say, 'I need another billion dollars, and don't ask me what is the usefulness of what I discover, just give me the money.'"

Said one of the bill's disappointed advocates: "The Republicans do not double anything in government unless it is a tax cut. It is really a cultural issue ... `government' and `doubling' out of the mouths of Republicans will not come."

On Oct. 23, Marburger and OMB Director Mitchell Daniels met with eight university chancellors, all of whom belong to the Association of American Universities, which represents top research universities. The meet-and-greet was entirely positive, said Ralph Cicerone, chancellor of the University of California (Irvine), although Daniels "told us that it is not going to be a good budget year for everybody."

The doubling plan is being promoted in Congress by lobbyists for universities, scientists' groups, and some high-tech companies. In June, the House voted overwhelmingly to authorize an NSF budget increase of 50 percent over three years. The Senate Commerce, Science and Transportation Committee voted in September to double the agency's budget, but over five years. That bill was headed for approval on the Senate floor until the Bush administration expressed its opposition.

The administration has not, however, announced its opposition to the bill through the usual mechanism, a Statement of Administration Policy. Without the SAP, the administration's position is not entirely clear, said Carol Guthrie, a spokeswoman for Sen. Ron Wyden, D-Ore. Wyden chairs the Senate Commerce Subcommittee on Science, Technology and Space and supports the bill.

"It is unclear why anyone would not support a doubling for NSF when so much of the nation's security and economic future depends on scientific development," Guthrie said.

Wyden's home state includes several high-tech companies, such as Intel, that support the bill. The administration's opposition to the doubling bill is made clear in a Sept. 17 letter from the NSF to Wyden, Marburger said.

Other advocates share Wyden's confidence in the bill's merits.

"We don't think [doubling] is arbitrary at all.... The [scientists'] peer-review process works very well, and they know where they need to be," said Robert Boege, executive director of the Alliance for Science & Technology Research in America.

Advocates also say that the doubling bill is needed because spending on life-sciences research has far outpaced research in other areas, such as electronics, physics, and engineering. Such hard-science spending, meanwhile, has declined as a share of gross domestic product, and as a share of federal research spending, partly because of a buildup in federal health care research. The NSF doubling plan can help balance spending on these two sectors, advocates say, especially if the government also doubles spending at the Energy Department's research centers and at NASA, which fund much hard-science research.

According to the latest figures available on the NSF's Web site, university research spending on physical sciences, math, computer sciences, and engineering has grown from $2.24 billion in 1973 to $7.6 billion in 1999. University spending on life sciences has grown from $3.9 billion in 1973 to $12.8 billion in 1999. Further increases in life-science spending are expected, because Congress has doubled the National Institutes of Health's budget over the past five years to more than $27 billion, partly at the behest of university and science lobbies. Four of every five NIH dollars are awarded to universities and other non-governmental research centers. In his fiscal 2003 budget request, President Bush sought a 16 percent boost in the NIH's budget; he also asked that the NSF's budget be increased by 5 percent, which would bring its funding up to $5 billion.

Marburger agreed that it is important to balance spending. But, he said, simply doubling the NSF budget is not the best way to restore balance between life sciences and hard sciences. That goal, he said, would be better served by a careful accounting of the government's many agencies that fund research into engineering, physics, and other hard sciences.

Overall, the science community is improving its lobbying skills but still needs to directly address politicians' concerns regarding national security and economic growth, Marburger said.

Science advocates remain generally optimistic.

"In a very nonpartisan way, members of the science community have to make their case," Boege said. "They have to keep repeating the simple things and ask politicians to see reality out there, and they'll come to see reason."

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Cybersecurity regulations imminent, industry and government warn

Neil Munro — Mon, 30 Sep 2002 00:00:00 -0400

In the debate over national cybersecurity strategy, most of the participants insist they don't want new regulations. Instead, they say, they want the marketplace to create cyberdefenses against hackers, viruses, and other Information Age threats.

But regulations are coming anyway, some industry and government officials warn, in part because the high-tech sector is reluctant to take on new burdens during an economic slowdown. And some factions in the debate actually want regulations that would boost information-sharing within industry, increase federal spending for industry's priorities, and encourage lawsuits against companies that have sloppy computer defenses.

Congress and public concern will pressure tech companies to strengthen cybersecurity with a blend of threats, broad regulations, and publicity, according to James Lewis, director of the technology program at the Center for Strategic and International Studies. A similar mix of pressures in the early 1900s led to improved safety in the food, mining, and railroad industries, Lewis said.

The White House released its draft plan on September 18, "so that everyone in the country can tell us what the strategy should be," said Richard Clarke, the administration's cybersecurity chief. The report does not call for legislation or regulations, but instead offers "17 priorities and 80 recommendations." The plan largely limits government's role to boosting public awareness, funding extra research, fostering information-sharing, and operating its own cyberdefenses, officials said. "The government cannot dictate. The government cannot meddle. The government cannot alone secure cyberspace," Clarke declared.

This language is reassuring to the business community, which fears regulation as much as it fears cyberattacks such as "distributed denial of service" incidents that can stop online purchases.

Clarke's language reflected the White House's decision to strip many detailed recommendations for new laws and regulations from the draft plan before it was released. For example, earlier drafts had called for board members to assume liability for corporate security policies; the preliminary language also would have required Internet service providers to supply their customers with new types of anti-hacker software. Industry officials are still wary that such regulations may reappear in the final version that is to be signed by the president.

Industry executives also fear that stringent regulations will turn off consumers-and that tech companies will lose money as a result. And they worry about liability risks, said Stewart Baker, a partner at the law firm Steptoe & Johnson who has clients in the high-tech industry. Customers may reject security measures they find intrusive, he said, and sales of security services may not be high enough to cover companies' investment costs.

For the computer industry, which has a hard time predicting security problems or the cost of compensating victims, liability is an increasingly significant issue. The White House is continuing to prod company auditors, insurance agents, and citizens to pay more attention to information security, industry experts say. So far, a few entrepreneurial lawyers have sought economic damages for computer-security problems but the suits have largely failed, in part because the claims are still so novel.

Occasional comments from government officials tend to heighten industry's concerns about liability. For example, on September 18, Howard Schmidt, vice chairman of the White House Critical Infrastructure Protection Board, compared computer security to seat belts, which were at first treated as an inconvenience but are now an accepted part of driving. Because many lawsuits grow out of complaints about automobile safety, Schmidt's comment "is a little too close to the surface for industry's tastes," Baker said. "There is a real worry that, sooner or later, [liability] will be seen as an attractive way for the government to get people to do what they want: Sic the lawyers on them."

But on the other hand, the White House's efforts to boost public awareness of cyberdefense issues can create demand for new products, some executives say. "The debate is going to get the public engaged in a constructive way," said Bill Sweeney, head of global public policy for Electronic Data Systems in Plano, Texas. It "will also highlight opportunities for the market and technology to address some of these real problems," he said.

Industry officials also hope for some largesse from Congress. For example, many executives backed a measure drafted by Rep. Fred Upton, R-Mich., that would have granted corporate tax breaks for investment in information-security programs. "As American business recognizes the increased cost of security, that bill will come back up," Sweeney predicted. "At some point in time, you're going to get into a cost discussion," he said, which might include some kind of surcharge on information technology that would be used to pay for the security add-ons.

So far, marketplace conditions are not helping to boost security, said Ira Parker, general counsel for Genuity, an Internet firm. Many telecommunications companies are already in bankruptcy, and others are trying to cut inefficiencies in ways that increase cybersecurity vulnerabilities, according to Parker.

The White House security plan is "essentially an appeal to the private sector to do something," said Warren Axelrod, a senior computer-security executive at the financial services firm Donaldson, Lufkin & Jenrette. "If the private sector does not respond, they will only have themselves to blame if along comes a slew of burdensome laws and regulations."

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Risk-averse managers targeted in homeland security debate

Neil Munro — Wed, 19 Jun 2002 00:00:00 -0400

Creating such incentives, he said, "is a matter of tone, of example, of exhortation, [and] of strategic planning in assigning top priority to these matters." It is easier to create incentives for a new organization than to incorporate them into a long-established bureaucracy, he added.

President Bush has recognized this information-flow challenge, not only by pushing for a centralized homeland security command but also by urging low-level intelligence experts to push back against risk-averse managers.

"If you're a front-line worker for the FBI, the CIA, some other law enforcement or intelligence agency, and you see something that raises suspicions, I want you to report it immediately," Bush said on June 6. "I expect your supervisors to treat it with the seriousness it deserves."

A critical test, said Bromwich, will come when an intelligence official sparks a firestorm, perhaps by opening himself or herself to charges of racial profiling. "There will be a lot of media and congressional pressure to hang him out to dry," Bromwich predicted.

Lower-level officials must be protected if those higher up want the new organization to be willing to act on incomplete information and make potentially controversial decisions, such as shutting down an airport the day before Thanksgiving, say intelligence experts.

"In the past, Congress and the press have excoriated CIA and FBI officers for alleged misdeeds.... From the point of view of the career officers, people were out there taking risks, and they got in trouble for it," said Jeffrey Smith, who was general counsel to the CIA in 1995 and 1996 and is now a partner at the law firm Arnold & Porter.

A new Homeland Security Department will help deal with managers' aversion to risk because the department head's only responsibility will be homeland defense, said Stewart Baker, who was the general counsel at the National Security Agency from 1992 until 1994. The chief "has got to get that job done, and so he is less likely to be deterred by things that are potentially painful-bad press-than would someone for whom it is one of six jobs," said Baker, now a partner at the law firm Steptoe & Johnson.

Moreover, once they are gathered in a focused organization, the lower-level intelligence experts and their midlevel managers should see a clear set of top-level customers for their work and also get constant guidance and support from the top, Baker said.

But Bill Arkin, an independent military analyst, argues that the government needs better intelligence analysts, not another bureaucracy. "Our problem from 1990 to the present is that we face a crisis of intelligence analysis ... because who wants to have a high-level job in the U.S. government as an intelligence analyst?"

Getting the right analysts and other staffers for the proposed department won't be easy, said Bromwich. They have to be trained well, understand how their enemy thinks, and, preferably, speak his dialect. "It is a lot easier said than done," Bromwich said.

Technology can help, but only after the department mission is made clear and a supportive bureaucratic culture starts to grow, Baker said.

"The culture comes first, not the technology," he said. But once culture and technology are in place and become complementary, each will foster the other, he predicted.

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Bioterrorism preparedness plan expected this summer

Neil Munro — Fri, 03 May 2002 00:00:00 -0400

Top administration officials intend to announce in June or July a comprehensive plan for defending the nation against biological warfare. Senior officials are hoping that by then they can offer enough details to reassure citizens and to guide lower-level officials, said Anna Johnson-Winegar, deputy assistant secretary of Defense for chemical and biological defense.

The plan, she said, is to include details on the availability of gas masks, the process for quarantining attack areas, the creation of a "national vaccine strategy," and an office to oversee the development of disease-fighting vaccines. One reason the details of the bio-war plan matter, according to Johnson-Winegar, is that they will help "reassure the public that we know what to do." She added that the prospect of quarantines--which would be intended to restrict fleeing people from spreading a deadly disease--is "scary to a lot of people."

The plan will be announced by Condoleezza Rice, the national security adviser, and Tom Ridge, the director of the Office of Homeland Security, Johnson-Winegar said. President Bush, she added, may also approve new national security directives to bolster the defense effort.

"We will be releasing a national strategy this summer," said Illa Brown, a spokeswoman for the Office of Homeland Security. Brown declined to detail the plan.

All of this is good news for Carl Feldbaum, the president of the Biotechnology Industry Organization, which includes many companies and universities that would like to participate in the government-funded programs. But the industry can't move ahead unless there is a published bio-defense strategy, Feldbaum said. So far, the strategy "is not written in concrete, which is what it takes to convince outside investors" to fund initiatives.

Feldbaum met with Ridge in late April to discuss how the members of his organization might contribute to the new defense efforts, and to seek regulatory changes that might speed deployment of vaccines and other therapies to be used against biological weapons. "It was an excellent meeting.... [Ridge] fully understands the need for the Food and Drug Administration to be on board in terms of fast-tracking vaccines and therapeutics for our troops [and seeing that they] will be available for the rest of us as well," Feldbaum said.

On April 30, roughly 360 biotech-industry executives--almost twice as many as had been expected--congregated at a hotel in Arlington, Va., to hear Pentagon officials describe current plans for bio-war defense programs. The increased attention to biological threats comes in the wake of the anthrax attacks in October, which in addition to killing five people caused more than $1 billion in damages, according to Ken Alibek, president of Advanced Biosystems. Alibek developed bio-war weapons for the former Soviet Union.

Since the anthrax attacks, senior administration officials, including Ridge and Health and Human Services Secretary Tommy G. Thompson, have prodded state and local governments to prepare response plans for biological attacks. Thompson, in January, authorized $1.1 billion for state governments, set up a national center to track attacks, approved production of an anthrax vaccine, and asked for $4.3 billion in the fiscal 2003 budget for biological defense programs. The Pentagon is also pushing ahead with plans, which include procuring up to 900 devices for identifying lethal biological attack agents.

The new national strategy should appear soon, Feldbaum said, although some elements "will be very sensitive and classified." For example, he said, the details of some contracts for developing countermeasures against certain diseases may be kept secret.

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White House ambivalent toward national driver’s license system

Neil Munro — Wed, 23 Jan 2002 00:00:00 -0500

After September 11, however, now-Attorney General Ashcroft--along with President Bush--successfully pushed Congress to approve a wide expansion of police powers.

The administration's ambivalent position on high-tech data collection gives some assurance to opponents of the proposed national license, who fear it may evolve into a full-fledged national ID card. It "goes against the core American value of freedom of movement, liberty, and anonymity in transactions," says Mihir Kshirsagar, a policy fellow at the Washington-based Electronic Privacy Information Center. Also, "the potential for abuse and theft becomes much worse" because such a license could be used in so many transactions, he said.

In mid-January, officials at the American Association of Motor Vehicle Administrators announced plans to develop high-tech driver's licenses that will make it easier for states to share data on motorists. According to Linda Lewis, chief executive officer of the AAMVA, the cards will help prevent crimes, among them the use of an out-of-state license to conceal a bad driving record.

Advocates of the new licenses also say the cards could contribute to the anti-terrorism campaign. For example, states could coordinate their databases, to make it more difficult for terrorists to get driver's licenses. The system could also ensure the automatic expiration of a license when the holder's visa expires.

The new system, said Lewis, would build on two federally mandated computer systems already in operation: One records basic data on all vehicles; the other tracks license approvals for drivers of commercial vehicles, such as hazardous-materials trucks.

To build the broader system, Lewis said, AAMVA would need money and a mandate from Washington. The mandate would allow AAMVA to act as a regulatory, standard-setting group. Moreover, she said, states collectively would need an extra $100 million over the next five years to knit their databases together. AAMVA is seeking support from the Justice and Transportation departments, and from the White House's Office of Homeland Security, Lewis added.

So far, AAMVA has won backing from Sen. Richard J. Durbin, D-Ill. But there's no sign of support from the Administration. The AAMVA proposal "does raise privacy concerns that need to be addressed.... We will focus now on enforcing existing laws before taking another step," said Gordon Johndroe, a spokesman for the Office of Homeland Security. The proposal "is an issue that we will be looking at,"; said Paul Takemoto, a spokesman for the Transportation Security Administration. And the Justice Department, a spokesman said, is "reviewing it as a policy issue."

Ashcroft's record indicates that the AAMVA will have to work to get his support; in December, he announced that he would not allow federal law enforcement officials to share data gathered during background checks of prospective gun buyers.

Opponents of the new license system can count on support from various privacy groups and from some prominent legislators, such as Reps. Ron Paul, R-Texas, and Bob Barr, R-Ga. They can also count on broad public suspicion of data collection by government.

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Feds take minimal role in patching holes in cyberspace

Neil Munro — Fri, 04 Jan 2002 00:00:00 -0500

Consider the relatively simple task of distributing software patches. These patches close up holes in software through which malicious hackers can seize control of other people's computers. The nation's cyber-defense czar, Richard Clarke, is pressing software companies to push such patches on their customers and to ensure that each hole is closed soon after it's discovered.

But that task isn't as easy as it sounds. Constant innovation by industry requires consumers to constantly tinker with security software. "It is not as easy as turning off the light switch," says Harris Miller, president of the Information Technology Association of America.

Assume that a critical hole is discovered in a software company's flagship product. Theoretically, the company can e-mail a patch to its customers, along with detailed instructions on how to apply the patch. Or the company could apply the patch itself, via the Internet. But even with the best instructions, a patch could cause more problems than it fixes. It could, for example, disable the provider company's other vital software programs. If that happens, "You may irrevocably harm your relationship with your customer," Miller said.

If the software company wants to avoid causing such additional problems, it could tailor the patch for each of its customers. But that would require the company to have intimate knowledge of each customer's computer networks, custom-designed software, and software purchased from rival software makers--information too intimate for the customer to divulge.

"A lot of individuals and organizations are paranoid about Microsoft," said Miller, who has worked with Clarke for several years on cyber-defense issues.

"Some people have suggested we push out patches a lot more," said Vint Cerf, a vice president at WorldCom Inc., a telecommunications giant. "It's an attractive idea, but I don't know how we go about making it work," he told technology executives and government officials at a December 12 conference organized by the ITAA.

The demand for better distribution of software patches comes from Clarke, who is using his office and title--adviser to President Bush on cybersecurity--to pressure industry officials into upgrading their software.

Patches are only one item on Clarke's checklist of cyber-security proposals, and they are by no means the most complex item. The others include getting Internet providers to monitor their networks for dangerous viruses and false Internet addresses, and getting large software companies to make their Internet servers capable of suppressing hacker attacks that result in service denials.

Clarke's checklist, however, does not include any threat of government intervention or imposition. In his speeches to industry, Clarke repeatedly says the government will rely on the free market to produce cybersecurity solutions.

Industry officials welcome this hands-off policy, as well as Clarke's promise to fix the government's flawed security practices. "Everyone would agree the government has a long way to go ... [but] the government is making the right steps," said Robert Holleyman, president of the Business Software Alliance, whose members include major software companies such as Microsoft Corp. A promising step, he said, is the increased pressure being put on the agencies by the security-conscious Office of Management and Budget.

There are many positive developments in the industry, say executives and government officials. For example, to deal with the software-patching problem, government officials are reviewing software that automatically patches holes and helps companies centralize and manage their myriad computer devices. They are also examining new software-design standards that could help many companies simplify the patching tasks.

Members of the industry, especially companies that develop anti-virus software, are developing and using many of these techniques. Microsoft is already upgrading security in its software because of marketplace pressure, said Steven Lipner, the company's director of security assurance. Senior managers are also working with Washington, he said, adding: "We're pretty supportive of the agenda [Clarke] set."

If the software industry fails to find solutions to its many security flaws, however, something new will have to be done, argues an administration official. "We will start putting pressure on these companies," he said.

One concern among executives is that trial lawyers may begin to sue companies on behalf of clients who are economically injured by computer-security flaws. That would be an unhelpful development, Miller said. Accountability is important, he said, but "there's always the issue of people trying to point blame" and thereby slowing innovation.

"The lion's share of what needs to be done [is that] consumers really need to meet the accountability tests," Holleyman said. "That's the most important issue."

But if no progress is made, "Dick Clarke and his team will do what it takes to get [industry's] cooperation," said the administration official. "It is too important to national security not to get this thing done."

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In intelligence revamp, technology challenge is just the beginning

Neil Munro — Mon, 03 Dec 2001 00:00:00 -0500

Technology helps intelligence experts gather, analyze, and share important data in new and innovative ways, say its advocates. Those on the other side of the issue say that technology can foster a risk-averse culture that favors high-tech gizmos over agents who gather information on the ground in dangerous parts of the world.

At stake is the control of a large bureaucracy: The high-tech spy agencies currently run out of the Pentagon have budgets totaling at least $10 billion a year.

Technology is a critical component of any overhaul, but "the most important [need] is to build a culture that is programmed to constantly challenge assumptions," Sen. Bob Graham, D-Fla., the chairman of the Senate Select Committee on Intelligence, told National Journal. "We've got to break down the [bureaucratic] culture" of inflexibility, said Sen. Richard C. Shelby, R-Ala., the committee's ranking member. "It will take leadership, it will not be done overnight, [and] it will involve moving people out and new people in," he said. "Will we do it? I'm not sure."

The war on terrorism has pushed the issue of restructuring intelligence agencies onto President Bush's desk amid growing pressure from legislators and other advocates seeking a major overhaul. Congressional leaders are considering several alternatives, but the onus is on the White House to act, say most advocates of change. "Major reforms will only occur with strong presidential leadership," Graham said.

"The President asked for a comprehensive review of U.S. intelligence in May," said a White House official. "The review has been under way since then and will be presented in the coming months." Two panels will offer recommendations. One is made up of senior government officials, the other of private-sector experts who are led by Brent Scowcroft, a former national security adviser to Presidents Ford and George H.W. Bush.

The main problem that the panel members are confronting is the inability of the nation's vast intelligence apparatus to collect and share information on plots to mount surprise attacks, such as the one that occurred September 11, say legislators and other advocates.

Currently, the nation's intelligence structure consists of multiple agencies reporting to multiple chiefs. The Pentagon controls many agencies: the four military services' intelligence agencies, plus the Defense Intelligence Agency, the National Security Agency, the National Imagery and Mapping Agency, the National Reconnaissance Office, and several others. Outside the Pentagon, other agencies include the intelligence divisions of the State and Treasury departments; the Justice Department's FBI; and the independent CIA. The head of the CIA is also the Director of Central Intelligence, who directs the nation's intelligence apparatus but has only limited oversight authority over agencies' programs.

The anti-terrorism law passed by Congress in October removes some legal barriers to collecting information and sharing it among agencies. Top officials have followed up the legal changes with new policies designed to bolster anti-terrorism efforts.

"We must instill a new culture of cooperation," said Deputy Attorney General Larry Thompson. For example, to put the FBI's focus on preventing terrorist attacks, the bureau is changing its organizational structure and reducing the amount of attention given to routine crimes, such as bank robberies. Also, the FBI is distributing to other agencies a "daily summary ... of significant developments in the terrorism investigation, including information developed through [formerly secret] grand jury investigations," Thompson said on November 8.

But such increased coordination is not enough, say some observers. One advocate for deeper change is Scowcroft, who, according to an article in The Washington Post, is recommending that control of the biggest high-tech spy agencies at the Pentagon be transferred to the Director of Central Intelligence, currently George J. Tenet. The three agencies affected would be the National Security Agency, which conducts worldwide electronic eavesdropping; the National Reconnaissance Office, which designs spy satellites; and the National Imagery and Mapping Agency, which directs the satellites, analyzes their pictures and data, and produces maps.

If their collective budget of at least $10 billion were to be transferred from the Pentagon to the DCI, the director would have greater leeway to divert money from the construction of satellites and other data collectors and put it toward new computers intended to study, translate, and share the intelligence collected by the satellites.

Observers expect Defense Secretary Donald Rumsfeld to fight such a transfer of authority. Pentagon officials have long struggled to better integrate their intelligence agencies with combat units and weapons-development programs.

Defense officials' differing priorities have complicated that task: Intelligence officials often want to hoard their information to prevent leaks to the enemy; soldiers want the data sent quickly to the battlefield; and program managers want the information used to develop new weapons. Greater integration would be harder to achieve if the three Defense agencies were placed under the control of the DCI, who does not report to the Pentagon.

Opposition to the transfer can be muted by giving oversight over roughly half of those three agencies' budgets to the Pentagon and Congress's armed services committees, said Robert Steele, a former intelligence official who is now the chief executive officer of Open Source Solutions Inc., an intelligence company in Oakton, Va.

Steele, who has long advocated a major overhaul of the agencies to deal with terrorist threats, says that some Senators can be brought on board if negotiators can show that a transfer would not result in job losses in their states. He also said that reformers should seek governors' support by creating state-level intelligence centers where federal intelligence experts can be linked to local emergency crews.

But in the battles for power in Washington, "you can't go wrong by betting on the status quo," said Stewart Baker, a partner at the law firm Steptoe & Johnson and a former legal counsel to the NSA. "It is very hard to overcome the status of the Defense Secretary during wartime ... [although] if anyone can do it, it is Brent Scowcroft," Baker said.

Better central oversight of U.S. intelligence efforts is needed, said Shelby, but "just moving people around and seemingly changing the structure will not do it." He advocates a more innovative system that pays intelligence officials more and uses private-sector expertise. "Many people would do this because they know we're in a war," he said.

Graham said that Scowcroft's proposal to give the DCI more oversight authority should be closely examined. He also said that the intelligence agencies need extra funding to rejuvenate themselves and to develop promising-but risky-technology.

During the late 1950s, for instance, the intelligence agencies launched 13 experimental spy satellites before the first one succeeded in sending photos back to Earth in December 1960. Those photos showed the much-touted Soviet superiority in nuclear-tipped missiles to be a fiction, according to material declassified by the CIA.

One approach under consideration, according to a congressional staff member, would create an agency to promote the development of spy-technology software that could automatically detect significant data, translate it into English, correlate it with other data, and present it to analysts. But any overhaul of agencies must also change incentives, the staffer said; otherwise, officials will continue to hoard information.

For example, the CIA-developed Intelink, a classified Internet system on which spy agencies can theoretically swap top-secret data, was undermined when agency heads barred lower-level officials from sharing raw data, intelligence officials said. Only "finished product," such as briefing books on particular threats and countries, is now posted on the site, they said.

Technology may actually hinder reform, said Reuel Marc Gerecht, a former CIA field agent. "New and better technology will not crack the grip of `inside' officers-the fake diplomats-over the culture and modus operandi of the [CIA]," he argues. Instead, he said, the CIA's directorate of operations--the office that handles agents--must be reformed so that agents are willing to spend years in far-off, dangerous regions, learning strange languages and quietly cultivating contacts and friendships that may someday prove vital.

"To the extent that technology takes the foreground in any discussion of the clandestine service is the extent to which the conversation is fluff," Gerecht said.

Others make a similar point about the nation's extensive array of spy satellites, which, because they are immensely valuable and politically uncontroversial, have contributed to the agencies' reluctance to use networks of hidden spies. According to Thomas Donnelly, an analyst at the Washington-based Project for the New American Century, the CIA is touting the success of its missile-armed drones called Predators in Afghanistan in an effort to offset its failure to detect the Sept. 11 plot or to recruit spies in Afghanistan.

Reform must reach beyond the intelligence agencies, some observers say. Congress needs to appropriate more money, said one intelligence official now trying to improve an underfunded intelligence agency. Also, said Baker, "if the American people want to have better intelligence, everybody has to recognize that the best intelligence operations go bad, and the reaction can't be to hang the people who had the imagination and audacity to take risks."

He added: "If the body politic says, 'Nice try, next time don't get caught,' it will work." In turn, such risk taking could spur the development of innovative spy technology, Baker said.

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Goals of open government, cybersecurity in conflict

Neil Munro — Fri, 02 Nov 2001 00:00:00 -0500

Open government means efficient information-sharing among government officials across the country, as well as easy access for citizens seeking computerized information in areas such as health care, taxes, and the environment. In contrast, cybersecurity requires barriers: passwords, authorization procedures, background checks and punishment for privacy violators. Over the past two months, President Bush has laid out strategies to pursue each of these divergent goals.

One part of the open-government strategy, which has been unveiled in stages since mid-August, is to make government more responsive by improving management. The White House has drafted two proposals: The Freedom to Manage Act of 2001 would speed up congressional debate on future reform bills, and the Management Flexibility Act of 2001 would give federal managers more options to adjust pay and hiring rules, as well as policies on the use of government property.

The parallel cybersecurity plan, unveiled in an October 16 executive order, creates a top-level, multiagency group, the President's Critical Infrastructure Protection Board, which would promote defenses against hackers, data thieves, and other Information Age criminals who threaten government computer systems. The board will also push companies in the energy, transportation, and financial sectors to improve their information security. Since the mid-1990s, government officials have been worried that terrorists or hostile nations might try to disable key computers and thus damage government operations, oil and gas distribution networks, banks, telephone systems, and other critical infrastructures.

The executive order, titled "Critical Infrastructure Protection in the Information Age," put Richard Clarke, the President's chief cybersecurity adviser, at the head of the board. Only six days earlier, Clarke had previewed the next step in strengthening government cybersecurity when he asked industry for suggestions on how to design a government-only communications network dubbed "Govnet." The network, according to a memo to industry released on October 10, would provide voice, videoconferencing, and data services for a limited core of critical government officials.

Clarke, who has served in the White House since the late 1980s, has seen his authority wax and wane under three Presidents. In 1989, he was appointed assistant secretary of State for political-military affairs under President George H.W. Bush; Clarke's authority expanded under President Clinton, when he served as the chief counterterrorism official in the White House. In the current administration, he will head the newly created board, whose members include nine Cabinet Secretaries or their designees, plus top officials from 11 other agencies, including the office of the new homeland security chief, Tom Ridge. The executive order charges the board with promoting information security, but gives control over spending to the individual agencies and the Office of Management and Budget.

"I'm very pleased that Dick has received this appointment," said Harris N. Miller, the president of the Information Technology Association of America. Miller, who has worked with Clarke on cybersecurity for several years, says the President's backing will help Clarke "very much use the bully pulpit to promote ideas and praise the sectors that are being collaborative and cooperative, and to damn with faint praise those that are not living up" to others' progress.

Clarke is already promoting the plan. Govnet would ensure the security of a critical core of government information, while leaving other data available to citizens via the Internet, he said in a late October speech to information-security experts. "We want to build as secure an intranet as possible--one that taxpayers can rely on to be 100 percent safe ... a network that is separate from the routers connected to the Internet," Clarke said in comments reported by National Journal's Technology Daily. Agencies won't be allowed to connect to the proposed Govnet until they meet a demanding level of anti-hacker defense capability, he said. No agency had yet reached that level of security, he said, adding, "Our enemies are smart, and they know how to use our technology against us." Over the past year, computer virus attacks have increased by 66 percent, and the viruses are becoming more dangerous, according to Clarke. The trend makes a "devastating cyberattack" on government computer systems more likely, he said.

The key issue for Clarke is determining the necessary level of protection for various classes of information and networks, said Frank Prince, an analyst with the market analysis firm Forrester Research Inc. An anti-hacker system that merely segregates critical government networks from the outside world could succeed, he said, but only if it is limited in size and scope.

As the networks expand--for example, if the FBI were to try to electronically share its anti-terrorism data with local police forces--it becomes more difficult to guarantee security, said Prince. He predicted that Clarke's Govnet plan, modified with advice from industry, will become "some combination of a separate, highly secure network on a small scale and [a partly secure] open Internet" that will help government agencies share noncritical information with one another, with citizens, and with businesses.

It is difficult to protect government data from hackers while also ensuring its availability to those who have a right to view it, Prince said. However, some government agencies, such as the Internal Revenue Service, are making step-by-step progress by working with technology companies. In any information-security program, "all of the complexities of the real world are recreated in the electronic world-the jurisdictional rules, the way people react, the things they want to do," Prince added.

The new presidential directive on cybersecurity contains a variety of other measures, as well. For example, Clarke will also chair the National Infrastructure Advisory Council, which will include industry representatives such as Miller and will promote government-industry cooperation. The NAIC will oversee the private sector's Information Sharing and Analysis Centers, where executives from different industry sectors meet to privately share information on threats and defenses. The council will be staffed by the Commerce Department's Critical Information Assurance Office, which is headed by John Tritak.

According to Miller, "John is very important as a liaison with industry" and is now leading discussions with the insurance companies and financial auditors to ensure regular professional oversight of companies' plans to deal with information security.

Although management reform efforts intended to make government more open will increase the need for cybersecurity, they can also aid security programs, Harris argues. The government needs more information-security experts and needs to give its managers more flexibility in getting the most out of existing spending, he said. With changes, agencies will be able to quickly hire cybersecurity experts via commercial Web services. With proper management, cybersecurity and open government can work together, just as automakers have been able to simultaneously improve both performance and safety in cars, Harris said.

New technology is already helping civil servants to cooperate across agency lines, said Mark Forman, the associate director for information technology and electronic government at OMB. But the full value of computer systems, he maintains, can only be achieved if lower-level government officials are given more authority to make decisions. "The choice that has to be considered is whether we have to have command-and-control [from the top of bureaucracies] or distributed decision-making" among many technology-linked experts, he said.

For example, security officers in different agencies, such as the Coast Guard and the Customs Service, can now use technology to share anti-terrorist information, Forman said, without having to pass that information through their separate bureaucracies. Other officials are informally sharing information between their agencies, he added. On October 29, Forman announced 22 federal projects, involving several agencies, that are intended to boost government efficiency with computer technology. The projects are one element of a $100 million, three-year plan to improve the government's use of information technology.

Harris cited a number of other trends that are already pushing the government toward change: Many civil servants will be retiring over the next few years; computer technology is getting cheaper; more citizens expect to access information online; and much government work is already provided by technology companies. "That's an opportunity for reform because there will be fewer people with an interest in maintaining the status quo," he said.

However, Bush's plans have plenty of skeptics. "Our union will certainly do anything it can to educate members of Congress about the dangers of this," said Jacqueline Simon, the public policy director for the American Federation of Government Employees. To reform government, she said, "you have to have better pay and get rid of this constant threat of contracting out and privatization." She said the 600,000-member union opposes many of the administration's measures, such as a proposed change in the law that would help companies bid for work against government agencies.

But Forman said he is already working closely with Democrats such as Sen. Joe Lieberman of Connecticut, the chairman of the Senate Governmental Affairs Committee. Lieberman has introduced the E-Government Act of 2001, which he developed with Sen. Conrad Burns, R-Mont. The bill, which is also backed by several other Democrats, including Senate Majority Leader Tom Daschle, D-S.D., would create a chief information officer for the executive branch, authorize an e-government budget of $200 million per year, train more federal workers in the use of computers, and help citizens get access to federal information and services, despite restrictions on agency jurisdictions. If properly managed, predicted Forman, "there is congruence between e-government and security."

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Office of Management and Budget

Neil Munro and David Baumann — Fri, 29 Jun 2001 00:00:00 -0400

Established: 1970
Address: Eisenhower Executive Office Building, 17th St. and Pennsylvania Ave. NW, Washington, DC 20503
Phone: 202-395-4840
2001 Budget:: $69 million
Employment:: 513
Web Site: www.whitehouse.gov/omb
Function: The Office of Management and Budget assists the President in overseeing the preparation of the federal budget and supervises its administration in executive branch agencies. OMB evaluates agency programs, procedures, and policies; assesses funding demands among agencies; and sets funding priorities. It also oversees and coordinates the Administration's procurement, financial management, information, and regulatory policies.

Mitchell E. Daniels Jr.
Director
202-395-4840
A veteran of the Reagan White House and Capitol Hill, Daniels was a natural choice for the new Bush Administration. But Bush raised more than a few eyebrows by nominating Daniels to be budget director, because Daniels had no direct budget experience. Bush emphasized the Hoosier's experience in government and in business, and Daniels has surrounded himself with the budget wonks he needs to crunch the numbers. Daniels, 52, began his career with Richard Lugar when Lugar was mayor of Indianapolis. When Lugar was elected to the Senate, Daniels followed him to Washington and served as his administrative assistant. During the 1984 election cycle, Daniels became director of the National Republican Senatorial Committee. Following that stint, he went to the Reagan White House, but left in 1987 after a public clash with Chief of Staff Donald Regan over how the Iranian arms scandal was handled. A graduate of Princeton University and the Georgetown University Law School, Daniels joined the Hudson Institute, an Indianapolis-based think tank, after leaving the Reagan Administration. In 1990, he moved to Eli Lilly and Co., where he served as senior vice president of corporate strategy and policy, before joining the Bush Administration. Allies have praised Daniels's understanding of how policy and politics intersect. And while he pledged during his confirmation hearings to place more of an emphasis on the management side of his office, Daniels was forced to prepare a budget quickly after Bush took office. He has promised to try to work with Congress to repair the budget and appropriations process, which has often dragged on well past the start of the new fiscal year.

Sean O'Keefe
Deputy Director
202-395-4742
O'Keefe's nomination as deputy director is a sure sign that OMB plans to play a more active role on defense issues, OMB Director Mitchell Daniels said in an interview. O'Keefe, 45, served as comptroller and chief financial officer for the Secretary of the Navy during the first Bush Administration-giving him close ties to Vice President Dick Cheney. O'Keefe also has Capitol Hill experience, having served as staff director of the Senate Defense Appropriations Subcommittee. Before his nomination, he had served as a professor at the Syracuse University Maxwell School of Citizenship and Public Affairs. O'Keefe, who grew up in New Orleans, is a graduate of Loyola University in that city and holds a master's degree in public administration from the Maxwell School. Daniels said that O'Keefe will play a significant role in the Administration's plans to reform the military, noting that OMB typically has steered clear of defense issues. O'Keefe also brings important appropriations experience to OMB.

John D. Graham
Director (designate)
Office of Information and Regulatory Affairs
202-395-4852
The choice of Graham to head OIRA was one of Bush's more controversial nominations. Some consumer groups charged that as director of Harvard University's Center for Risk Analysis, Graham showed a pro-industry bias and may have produced results favoring the interests of sponsors. Graham has said that his center "simply followed the scientific data and analysis, wherever they happened to lead us." OMB Director Daniels called Graham, 44, "absolutely" the best choice available, adding that he will "bring great credibility to the regulatory review process." A native of Pittsburgh, Graham received a B.A. from Wake Forest University, a master's from Duke University, and a doctorate from Carnegie-Mellon University. From 1985 until his selection at OIRA, Graham taught risk analysis, risk communication, and cost-benefit analysis at Harvard's School of Public Health. He launched the risk analysis center in 1990. During confirmation hearings, Graham pledged to stimulate "more analytical thinking" on major regulatory issues, and said he will "work to achieve regulatory reviews that are timely, transparent, and rigorous."

Mark A. Forman
Associate Director for Information Technology and E-Government
202-395-3080
As a candidate, Bush promised to upgrade federal computer networks to improve government's interaction with citizens. As President, Bush has given the job to Forman, formerly an executive with Unisys Corp., a computer-services firm. In his new role, Forman will report to OMB's deputy director for management, who also oversees areas such as the Office of Information and Regulatory Affairs and the Office of Federal Procurement Policy. Bush has asked Congress to give Forman $100 million over the next three years to build up the electronic connections between the citizenry and the government's myriad computers. That's a token amount, but Forman's clout will be considerable, because OMB can reject the agencies' technology plans, and because Forman will direct the government-wide council of agency technology chiefs. At 42, Forman has worked on high-tech issues for almost 20 years. Before his stint at Unisys and a tour at IBM, he worked on the Senate Governmental Affairs Committee, where he helped draft several procurement-reform and computer-management laws. Forman grew up in Ohio. He received a B.A. from Ohio State University and an M.A. in public policy studies from the University of Chicago.

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Commerce Department

Peter H. Stone, Neil Munro, and Louis Jacobson — Thu, 28 Jun 2001 00:00:00 -0400

Established: 1913
Address: 14th St. and Constitution Ave. NW, Washington, DC 20230
Phone: 202-482-2000
2001 Budget:: $5.2 billion
Employment:: 38,774
Web Site: www.doc.gov
Functions: The Commerce Department promotes economic development and technological advancement. The department encourages exports and foreign tourism; regulates trade; monitors oceans and the weather; oversees regional economic development, measurement, and products standards, patents, and trademarks; administers the census; and performs economic analysis and telecommunications research and development.

Donald L. Evans
Secretary
202-482-2112
Evans is a Texas oilman who has seen both boom and bust. Since November, he's clearly been enjoying a boom, but the Senate power shift may send things downward for him. Evans, however, has great resources to draw upon. He is one of Bush's earliest Texas friends, and one of his most trusted advisers. As governor, Bush appointed Evans to the Board of Regents of the University of Texas system. And as the chief fundraiser for Bush's presidential campaign, Evans raised more than $120 million. Also, Democrats back his use of the Commerce Department to promote economic growth, and he won easy confirmation in the Senate. Evans is clearly good at making friends; he won warm praise from Al Gore's campaign manager, William Daley, even before his Senate confirmation. Evans's job puts him at the nexus of politics and business. Daley said, "There's nothing wrong with mixing the two," adding that Evans will go out of his way to avoid improprieties "because he is an honorable man and has to protect the President." Evans, 54, can also tap his years of top management experience. He'll need it to direct the many missions of the department, including promoting exports, developing technology, overseeing patents, and supporting small and minority-owned businesses. Evans was born in Houston and received a bachelor's degree in mechanical engineering and an MBA, both from the University of Texas. He then moved to the Texas oilfields, quickly rising by age 33 to head Tom Brown Inc., an energy firm whose fortunes have tracked the boom-and-bust oil economy over the past 20 years. Evans was chairman and CEO when Bush tapped him for the Cabinet.

Samuel W. Bodman
Deputy Secretary (designate)
202-482-8376
Bodman-like his immediate boss, Commerce Secretary Evans-is an oilman in an oil-rich Administration. Thanks to his career path, however, Bodman has spent most of the past three decades in the Northeast. Until his appointment at Commerce, Bodman, 62, was chairman and chief executive officer of Boston-based Cabot Corp., a $1.5 billion, publicly traded chemical company that is the world's biggest producer of the industrial pigment known as carbon black. It was during this time that he got to know Evans and other oil executives. Before his 14-year stint at Cabot, Bodman spent 16 years at Fidelity Investments, eventually serving as president of the mutual fund giant's parent company, FMR Corp. Upon his appointment, Bodman-once an informal adviser to former Gov. William Weld, R-Mass.-told The Boston Globe that he has maintained a "good relationship" with Evans over the years. Bodman, who was born in Chicago, earned his bachelor's degree from Cornell University and his Ph.D. from the Massachusetts Institute of Technology. Bodman has no specific statutory duties; the deputy secretary often handles tasks delegated by the Secretary.

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The procurer

Neil Munro — Mon, 05 Mar 2001 00:00:00 -0500

Administrator, Office of Federal Procurement Policy

Unless you are a government contractor, you can go through life without giving a moment's thought to the Office of Federal Procurement Policy. This small part of the Office of Management and Budget oversees the government's procurement of more than $200 billion worth of products and services each year. President Bush has yet to name an administrator to head the office, but whoever gets the job may be thrust into several high-stakes controversies, including oversight of faith-based-initiative and affirmative action contracts.

Under President Clinton, the office was used to streamline government procurement practices, and it successfully reduced red tape and cut costs, say industry officials. Now, groups such as the Information Technology Association of America want Bush's OFPP to continue to improve along those lines, said Harris Miller, the association's president. To that end, the association has given its support to one of several applicants for the office, Miller said. He declined to name any of the applicants but said they have experience in both government and industry. "We care a lot" about the OFPP, he said. "It has a lot of impact."

But the Bush Administration may have its own focus. John DiIulio, who directs Bush's Office of Faith-Based and Community Initiatives, says the government needs to develop new yardsticks to measure the performance of faith-based service providers, who will bid for contracts overseen by OFPP. The new yardsticks should measure outcomes, he said, such as how long a faith-based organization's clients stay off drugs. Any proposed yardsticks are bound to spur criticism from opponents of the faith-based-initiatives program.

Bush's OFPP will also have to deal with some Clinton Administration legacies, specifically its "blacklisting" policy. Under this regulation, issued on Dec. 20, government contract officers were encouraged to examine bidders' compliance with a wide range of federal laws, including civil rights, antitrust, and tax laws. Industry officials fear the new regulation gives government agencies more power to penalize them for real or alleged violations, even if their contract bids are judged to offer the most value to government buyers. On Feb. 2, the General Services Administration issued a memo saying the rule should be voluntarily lifted for six months, and sparked protests from three Democratic Senators.

Also, if the Bush White House decides to reform affirmative action programs -- or even if it merely decides to leave Clinton-era policies intact -- the OFPP will find itself at the center of subsequent disputes because it is responsible for the details of contract policies that steer more than $5 billion per year to minority-owned firms through the Small Business Administration's 8(a) and Small Disadvantaged Business Certification programs. Return to main story

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Commerce Secretary is lifelong friend of President

Neil Munro — Wed, 07 Feb 2001 00:00:00 -0500

All of that might have been enough to spark partisan suspicion during his nomination hearing on Jan. 4 before the Senate Commerce, Science, and Transportation Committee. But instead the mood was light, with Democratic members congratulating him while describing their own concerns in areas such as steel imports, fishery regulations, and the census. Evans, 54, declared he had "received nothing but the most gracious kind of welcome" in Washington. He promised to focus on global trade and the export of democratic values. He also vowed to work closely with Congress.

Both parties have adopted a tradition of giving the Commerce Department job to someone who is a close political ally of the President and has close ties to industry. Recent examples are George H.W. Bush's nomination of Robert Mosbacher and Bill Clinton's selection of Ron Brown and William Daley. Evans worked hard to recruit Bush's "Pioneers," a group of fund-raisers who each collected $100,000 for the Bush campaign. Evans' ability to raise money from executives in the energy, high-tech, banking, and telecommunications industries-all of which are to some extent regulated by the Commerce Department-contributed heavily to Bush's fund-raising success.

Bush describes Evans as "my lifelong friend." The friendship began when Evans provided a place for Bush, then struggling to make a living as a novice oilman in Midland, Texas, to wash his clothes and relax. When the inevitable turf fights over trade and technology arise in the Bush Administration, this friendship will boost Evans' clout, according to former Secretary Daley. "There's no one in government closer to the President," he said. And Evans, said Daley, can make friends quickly: "He's a straightforward, decent human being of a type that you don't find in this business, in this town." Daley said he has spoken with Evans many times since the resolution of the bitterly contested presidential election, in which Daley and Evans were on opposing teams. Evans repaid Daley's compliments, saying during his confirmation hearing that Daley "is one who I will seek advice from frequently."

Evans has the management know-how and business experience to help him run the sprawling Commerce Department, with its $8.6 billion budget, 132,000 employees, and myriad tasks: granting patents, managing export curbs, promoting technology development, collecting data, aiding small businesses, and overseeing federal minority contracts. In 1980, Evans became a director, and then CEO, of Tom Brown Inc., an oil and gas company. In the mid-1980s, the company was worth $2 billion, but by the late `80s that figure had fallen to $75 million, and the company had lost all but 50 of its 1,600 employees. Today, its value on Wall Street is $1.2 billion.

Despite the smooth confirmation hearing, a variety of legislators and supporters warn that Evans must be careful not to mix politics and business too much. "One of the most important missions of the Commerce Department is to remain politically neutral," Sen. John McCain, R-Ariz., told Evans at the hearing. "Commerce Secretaries Daley and [Norman Y.] Mineta made great strides ... [after a period of allegations that] seats on foreign trade missions were sold to major donors and that Commerce Department officials were directly involved in political fund raising."

Evans must be most cautious in his dealings with the oil and pharmaceutical industries, which have weak ties to Democrats, said Larry Makinson, senior fellow at the Center for Responsive Politics, a nonprofit group that tracks connections between political donations and government decisions. "In those industries, the Democrats might attack what is seen as a quid pro quo," he warned.

Daley, however, scoffed at these worries. There's nothing wrong with mixing politics and government, he said, because Evans is a political appointee working for the President. Evans "understands he carries a burden, and he will go out of his way to avoid anything [problematic], because he is an honorable man and has to protect the President," said Daley. His first step, Daley predicted, will be to pick smart, hardworking, and loyal deputies who know where the boundaries lie.

But because the department can wield great political influence, there are plenty of opportunities for controversy. For example, the department's oversight of the census gives it some influence in congressional redistricting. For the past few weeks, state officials in Republican-dominated Utah have been complaining that they unfairly lost out to North Carolina for an extra House seat because of the federal government's decision to include all of the overseas military personnel based in North Carolina in the census count, but not the overseas Mormon missionaries based in Utah. If that seat is switched to Utah, it will likely result in one additional Republican Representative in the closely divided House.

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National Security Agency retools its image

Neil Munro and National Journal — Tue, 10 Oct 2000 00:00:00 -0400

Here's a happy oxymoron made possible by the West's victory in the Cold War: Family Day at the supersecret National Security Agency.

The great day came on Saturday, Sept. 23, after weeks of preparation, during which the [number classified] NSA employees removed all [classified] material from view, filed away documents pertaining to its [classified] budget, and locked the door to its [classified] computers in the [classified] control center at its home at Fort Meade, Md.

About 16,000 family members, preceded by a gaggle of curious journalists, then trooped through the agency's headquarters building, restaurant, printing plant, antenna-testing chamber, security center and other once-hidden facilities. It was a day to "celebrate who we are," said Air Force Lt. Gen. Michael Hayden, the NSA's director. It was also a day to mark the agency's first internal reorganization since the Cold War, and an occasion to reshape the agency's secretive image, Hayden said in a brief chat with journalists in his corner office.

Still, if it wants to succeed, the agency responsible for what is known in the business as "signals intelligence"-namely, eavesdropping-can't reveal its most important technical and spy secrets, which are hidden inside safes and bolted buildings. Those secrets include the technologies that search the world's airwaves for whispered conversations and scrambled e-mails among foreign generals and politicians, spies and soldiers, terrorists and bomb throwers and bribers and smugglers. Just as important, the agency also hides from visitors the secret design of the encryption technology used to prevent foreign eavesdroppers from listening in on White House and Pentagon conversations.

This secrecy is the NSA's blessing and curse. It is a blessing because it has allowed the agency (and its predecessors) to gather extraordinarily sensitive intelligence-for example, the combat strengths of Nazi divisions down to the last rifle, and what the Soviet premier was saying on the telephone in his limousine during arms control talks. But the most obvious price for this secrecy is the continuous suspicion, in many quarters, that the NSA could simply go too far. This fear comes from major companies wary of government regulation and privacy advocates and reporters who worry about civil liberties.

Overseas, suspicions have begun to crystallize around the NSA's "Echelon" system, which reportedly collects information beamed through commercial communications satellites. European journalists, as well as politicians in the British, German, and pan-European parliaments, allege that Echelon steals business secrets on behalf of U.S. companies, allowing them to snatch jobs away from European workers. U.S. officials deny any such information-sharing, which is illegal under U.S. law, and the NSA recently invited German legislators to tour its eavesdropping center in Bad Aibling, Germany. But it is hard to prove a negative, so the NSA may never be able to kill the Echelon story.

There's another cost to secrecy: inflexibility in the face of rapid political and technological change. During the many decades of the Cold War, the NSA performed secretly, brilliantly, and nearly always without domestic complaint. But it has had great difficulty reorienting itself to the post-Cold War world, where commercial companies sell NSA-defeating, data-scrambling gear to any and all buyers, hire away promising employees, and lobby against NSA-backed laws before a Congress increasingly sympathetic to business concerns. The most obvious example of this congressional sympathy came in the fight over data-scrambling encryption technology, when U.S. companies persuaded the Congress and the White House to dismantle the Cold War rules that barred the export of U.S. encryption products.

The agency now is putting more emphasis on hacking into other countries' computers-and on the corresponding defense of U.S. computers from other countries' hackers. But this new emphasis irks many legislators, companies and privacy advocates who are very reluctant to give the NSA any major role in defending the nation's critical computer-controlled networks-telephone, banking, oil distribution, transportation, air traffic control, and so on.

Another symptom of the NSA's problems came in January, when the agency's central computer systems crashed after what inside and outside critics said was years of inadequate management and investment. In response, the NSA asked for help from its stepchild, the U.S. computer industry, which was nurtured on billions of dollars in Cold War research grants, many of them funneled through the NSA. Thus, the NSA hired an outside manager from SSDS Enterprise Network Systems to reorganize and upgrade its computer networks, and brought on a new finance manager from Legg Mason, a financial services company, to run its accounting system. The agency has also stepped up its efforts to hire and keep the very best technical experts, countering the private sector's efforts to lure away talented employees by offering higher salaries.

Hayden said that change at NSA is vital and that holding Family Day was the right thing to do. "The American people need an image of this agency so there is not a vacuum" that, he said, could be filled by bad press and unrealistic movies.

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