From NY Times:

City Has Itself to Blame for Terror Cuts, U.S. Says

By AL BAKER and DIANE CARDWELL

The federal agency distributing $711 million in antiterrorism money to cities around the nation found numerous flaws in New York City's application and gave poor grades to many of its proposals.

Its criticism extended to some of the city's most highly publicized counterterrorism measures.

In a report that outlines why it cut back New York City's share of antiterrorism funds by roughly 40 percent, the Department of Homeland Security was so critical of some highly viewed local measures — like Operation Atlas, in which hundreds of extra police officers carry out counterterrorism duties around the city each day — that the Police Department and other city agencies must now seek further federal approval before drawing on the money they were given to pay for those programs.

In a flurry of charges and countercharges, federal officials said yesterday that the city not only did a poor job of articulating its needs in its application, but it also mishandled the application itself, failing to file it electronically as required and instead faxing its request to Washington.

City and state officials insisted that they had made no mistakes. And a state official provided a written acknowledgement from the federal government saying that the city's application for grant money has been "successfully submitted" and said that the city could "log in" any time to view the application.

New York City received $124.5 million from the Department of Homeland Security, about 40 percent less than the $207.5 million it received the year before. Many smaller cities around the country, like Charlotte, N.C., saw their shares increase sharply.

Mayor Michael R. Bloomberg questioned yesterday whether old-fashioned pork barrel politics was at play in doling out the money in an election year. He was one of several elected officials who moved on different tracks to uncover how the decisions were made, with an eye toward revising that process.

"We tried to do an analysis of some of the moneys and whether or not they were given out for political reasons, and in fact in many of the places where they got money — but arguably there's no threat — there are close elections either at the Senate level or the House level," the mayor said. "Now, whether that was their motive I have no idea."

The White House tried to minimize the effect on New York. The grants will be reconsidered each year and could change if "some grand and unforeseen need arises," said Tony Snow, the White House press secretary. "The point of homeland security, as I said before, is to provide security for the entire homeland," he said. "And certainly no disrespect meant to New York with $124 million for this coming year."

The report, obtained yesterday, pointed out opposing views held by cities and the federal government over how antiterrorism money should be spent and, as an extension of those views, how terrorism should be fought.

City officials have used federal money to subsidize continuing costs, like paying overtime to officers. The federal government, on the other hand, wants the grants to pay for semipermanent safeguards that can increase security over the long term, like improvements in communications systems, better gas masks and increased training.

The report faulted the city for not adequately explaining why the money being requested could reduce risks.

Though the report said the city was in the top 25 percent of urban areas at risk, it rated the city in the bottom 25 percent in the quality of its application. It rated the Police Department's counterterrorism program and Operation Atlas as below average in sustainability, a criticism of the continuing overtime costs.

Eight of the city's programs including the counterterrorism division and Operation Atlas, as well as some health and training programs — fell in the bottom 15 percent, meaning any federal money used toward them will need to be specifically approved.

Elected city officials were especially stunned that the report said New York had no national monuments or icons. The city's application was evaluated by so-called peer-review panels of five to seven people with varying backgrounds from 47 states and affirmed by government analysts at the Department of Homeland Security.

Angry officials in New York zeroed in on the peer review process yesterday, trying to determine who evaluated the programs and whether their judgments were clouded by a desire to steer security money to their own areas. City officials questioned whether the reviewers had expertise in antiterrorism efforts.

Members of New York's Congressional delegation presented a united front in pledging action to change the allocations. Representative Peter T. King, a Republican and chairman of the House Committee on Homeland Security, said he would hold hearings to investigate the process, while Senators Charles E. Schumer and Hillary Rodham Clinton, both Democrats, wrote letters to Michael Chertoff, the secretary of the Department of Homeland Security, demanding a full explanation.

In Washington, Mayor Anthony A. Williams described the decision to cut his city's allocation by 40 percent as shortsighted.

A spokeswoman, Sharon Gang, said the Homeland Security Department did not give much of a rationale for the cuts and that their proposals rated average or above average on almost all counts.

"It sounds like they made a unilateral, gut decision not based on our application," Ms. Gang said. "And they scored other locations higher."

Officials in New York said the impact of the cash drain would be felt.

"We have a counterterrorism center that would deal with all of the potential scenarios that we have been studying that we have to be prepared for that could be dramatically affected by any cut in funding," said Fire Commissioner Nicholas A. Scoppetta. "It's as though Washington is not going to be convinced of the need until they have another terrible incident in a place like New York or Washington."

Paul J. Browne, a senior aide to Police Commissioner Raymond W. Kelly and the department's chief spokesman, said: "The N.Y.P.D. will continue to do what it needs to do to keep the city safe," he said. "We'll just be doing it without D.H.S. stepping up to the level expected of it."

He said the department's counterterrorism work had been essential in defending the city since 9/11 "What more evidence do they need?" he said.

Stephen C. King, a lawyer who specializes in emergency-response and domestic security issues at Hunton & Williams in New York, said he could not understand the 40 percent cut to the city. "I'll have to look at it closer," he said, "but I can't wrap my arms around that one."

Though the federal officials said the city did not file properly, the city said state officials filed its package, and a state official said its package of applications was filed electronically on March 2, the deadline.

In an interview, George W. Foresman, under secretary for preparedness as the Department of Homeland Security, applauded some of the security work being done by New York, while raising the question of just what is the proper use of the federal funds.

"Do you pay for what are viewed as basic capabilities; law enforcement, fire, E.M.S., public health, emergency management?" he asked. "Whose role is it to pay for that, versus whose role is it to pay for specialized training and equipment for fire, E.M.S. and law enforcement?"

Mr. Chertoff said yesterday: "There was no suggestion about anything we did that New York is not the No. 1 terror target. But I do think it's fair to ask this question: After a city gets $500 million, more than twice as much as the next-largest city, is it correct to assume they should continue to get the same amount of money year after year after year after year with everybody else dividing up what remains?"

Still, Mr. Schumer called the episode an "absurdity," saying the grading system did not make sense.

"It would be as if you got 800's on your boards and Stanford Law School rejected you because you put the stamp on upside down," he said.