- The Washington Times - Wednesday, September 25, 2002

The important, though complex, public-private partnership in the war on terrorism includes government supporting business, industry aiding government, and impediments to further cooperation between the two players. This trend is likely to become a permanent fixture during this decade and beyond.
In the next few years, government expenditures on homeland security products and services will reach the hundreds of billions of dollars. The antiterrorism efforts of the Transportation Security Agency and the Department of Health and Human Services include spending billions of dollars on explosive detection devices and pharmaceuticals, respectively.
To improve the safety and immediate stability of commercial airlines following the September 11 attacks, the $15 billion Airline Transportation & Systems Stabilization Act was quickly enacted. In subsequent months, the newly created Air Transportation Board agreed to guarantee loans of US Airways (now bankrupt) and America West Airlines, totaling about $1.2 billion combined. Thus far, more than a dozen airlines have applied for loan guarantees under the $10 billion backstop support system.
The Environmental Protection Agency funded an existing water company association Web site that would improve communications among such firms should a terrorist incident occur. The public sector likewise provided funding and elementary research to homeland security firms focusing on pathogen antidotes and explosive detection equipment.
Since September 11 of last year, government officials alerted various sectors financial institutions and housing of possible impending terrorist attacks. The benefits of disclosing possible threats must be couched by the risks that excessive, unfounded warnings may create hysteria, hurt sales and lead to the public ignoring future credible warnings of possible attacks.
At the same time, industry provides information to the public sector about potential terrorist threats. In fall 2001, a Minnesota flight school notified law enforcement officials about the suspicious behavior of Zacarias Moussaoui, the alleged 20th hijacker on September 11. Financial institutions have also cooperated in freezing the funds of alleged terrorists. Diverse businesses, including chemical companies and nuclear power plants, heightened security measures in light of perceived threats.
Government may place restrictions and oversight on business so terrorist threats are reduced. For instance, new regulations place additional obligations on business to provide information on employees and customers that may be connected to terrorism. In the case of a national crisis, government may pressure companies to provide critical goods, such as pharmaceuticals, at lower prices.
Similarly, post-September 11 laws instituted significant changes on the way aviation security is conducted. The airline industry was affected in many ways, including:
Security screening was federalized.
Cockpit doors were reinforced.
And security training for flight crews was overhauled.
Revised government guidelines on baggage screening and parking lot placement delay construction plans to modify airport terminals, roadways and parking garages.
Strict and lengthy security measures that force passengers to spend more time at airports enable airport concessionaires to benefit as customers purchase more food and retail items than when security was lax.
To cover the costs associated with improved maritime security more government agents monitoring crews and cargo the government is considering whether to impose user fees on importers and exporters. Airline passengers are subject to a security fee that partly covers the outlays associated with increased aviation security. Rising costs associated with complying with new government rules associated with "Know Your Customer," (e.g., avoiding doing business with terrorists), may lead to businesses, such as banks, to pass on these expenditures in the form of higher consumer fees.
In June 2002, President Bush called for establishing a Department of Homeland Security (DHS). This proposal, if ultimately implemented, would affect multiple governmental institutions the Immigration and Naturalization Service, Customs Service, and Federal Emergency Management Agency that presently interact with various players, including foreign workers, importers and exporters, and homeland security companies. The massive shift of government staff and duties likely associated in the creation of DHS will impact this facet of the public-private partnership on terrorism.
Even when industry can produce goods helpful in reducing the impact of terrorism (e.g., vaccines) government obstacles may arise. For instance, a lengthy regulatory approval process may undermine the speedy market entry of a product (e.g., Bioport's anthrax vaccine).
The developing public-private partnership in homeland security must be attended to with sufficient energy and gravity as economic security, national security and public safety are at stake.

Yonah Alexander is professor and director of the Potomac Institute's International Center for Terrorism Studies in Arlington, Va. Dean C. Alexander is a fellow at the International Law Institute in D.C. The authors published "Terrorism and Business: The Impact of September 11, 2001" (Transnational, 2002).

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