Not only did FEMA perform disastrously in failing to respond adequately to the flooding of New Orleans and the devastation of Hurricane Katrina, it also allowed scores of billions of dollars worth of bloated reconstruction contracts to be approved without adequate scrutiny and it paid out more than $1 billion in fraudulent insurance claims.

Last week the Homeland Security and Governmental Affairs Committee of the U.S. Senate served notice that it had had enough. It approved legislation to shake up FEMA from top to bottom and give it exclusive status within the DHS.

If the legislation goes through Congress substantially unchanged, it will be an enormous loss of power and public humiliation for Chertoff.

The new legislation, listed as S. 3595, responds to the "serious failures in leadership and urgent need for broad reform" of FEMA, Homeland Security and Governmental Affairs Chairwoman Susan Collins, R-Maine, said Thursday.

Collins said the sweeping legislation, which was approved on a voice vote, was a direct response to the weaknesses found in FEMA as a result of the Katrina disaster, CongressDaily said.

Collins described the new legislation as "a careful and comprehensive program for improvement of our emergency management system. It is a concrete, nuts and bolts plan designed to rebuild and strengthen a broken system."

A key provision in the proposed legislation would restore the FEMA director's access to the president and the White House that he enjoyed until the agency was incorporated into the gigantic new DHS bureaucracy set up after the Sept. 11, 2001, attacks.

The bill gives FEMA's boss a "direct advisory role" with the president on emergency management issues. However, the new system may prove to be almost as cumbersome as the old one as FEMA's head will still routinely have to report through Chertoff.

The legislation also restores FEMA's distinct identity within the DHS and gives it a status comparable with that enjoyed by the U.S. Coast Guard, one of the most poorly funded, but also most lean and efficient, parts of the U.S. government or armed services.

Sensitive to the ridicule heaped on former FEMA head Michael Brown after New Orleans and Katrina, the new bill would legislate that future heads of the agency, unlike Brown, must have had serious experience in disaster response. It will require a minimum of five years of executive leadership and strong experience in crisis management. Brown had none. He had previously worked for the International Arabian Horse Association.

Senators on the Homeland Security committee gave Chertoff another slap last week that was less noted but in some respects more surprising. They rejected his department's request to shift $42 million from within already approved funds to tide the Federal Protective Service over an embarrassing budget bottleneck.

The FPS does important work. It provides security for federal buildings through contract guards. But it is paid by other agencies for providing these services. And according to a report Friday carried by GovExec.com, these agencies haven't been paying up and the financial squeeze at Federal Protection has escalated.

Chertoff and DHS acted to request emergency funding for the FPS but only at the last minute, and Sen. Judd Gregg, R-N.H., chairman of the Senate Appropriations Homeland Security Subcommittee, was not amused. In a July 20 letter to Chertoff, the senator said he was "deeply dismayed at the lack of responsibility shown by the department (of Homeland Security) in delaying until the last possible day the submission of this request to the subcommittee." Gregg expressed to Chertoff his suspicion that the DHS was trying push the extra funding through the Senate at the last moment in order to prevent senators having time to "weigh alternatives or engage in a wider discussion of possible solutions."

"The requested shift would have drawn money from areas including explosives detection and detention of illegal immigrants," GovExec.com reported.

However, the conclusion of Gregg's letter to Chertoff may indicate a growing willingness to allow FPS to explore the option of increasing the fees it charges to other government departments, GovExec.com noted.

Gregg made clear he was not going to let the Federal Protection Service hang out in the wind. He urged Chertoff to negotiate new payment schedule agreements with the U.S. Office of Management and Budget and the General Services Administration.

By itself, the row, and Gregg's letter, would amount only to a storm in a tea cup. But it comes just as the Senate, including key leading Republicans on the Homeland Security Committee, is moving to radically reform FEMA and give it far more autonomy within the DHS. That means Chertoff's poor management record is going to come under increasing scrutiny. And most of that scrutiny is unlikely to be friendly.

The brief is a response to a July 20 ruling by U.S. District Judge Vaughn Walker in San Francisco, who surprised lawsuit watchers by saying there are "sufficient" grounds to let the lawsuit continue.

"Because of the public disclosures by the government and AT&T, the court cannot conclude that merely maintaining this action creates a 'reasonable danger' of harming national security," Walker wrote.

In a 24-page brief filed on Monday, the Justice Department asked the 9th Circuit Court of Appeals to review the case because of the "serious risk" of disclosing sensitive information. "The district court has, in a highly unusual action, overruled the government's assertion of the state secrets privilege, and has thereby placed at risk particularly sensitive national security interests," the brief states.

In its class action lawsuit filed in January, the EFF alleged that AT&T violated federal wiretapping laws by cooperating with the NSA. AT&T has declined to comment, although its attorneys have hinted that legal authorization exists. (In general, federal wiretapping law prohibits electronic surveillance "except as authorized by statute" or by the attorney general.) The EFF is a nonprofit that advocates for privacy and free speech on the Internet.

After EFF's lawsuit was filed, reports of a secret room in an AT&T building in San Francisco surfaced and have become central to the nonprofit group's litigation.

A former AT&T employee, Mark Klein, has released documents alleging the company spliced its fiber optic cables and ran a duplicate set of cables to Room 641A at its 611 Folsom St. building. Redacted documents seen by CNET News.com show that AT&T has tried to offer benign reasons for the existence of such a room.

"State secrets" claim

The Bush administration has tried to derail the EFF's lawsuit by invoking the "state secrets" privilege and has submitted statements from Keith Alexander, the NSA's director, and John Negroponte, the director of national intelligence. The state secrets privilege generally permits the executive branch to dismiss lawsuits that could endanger the nation if allowed to proceed.

Those arguments worked before a federal judge in Chicago. On July 25, U.S. District Court Judge Matthew Kennelly granted the Justice Department's request to throw out another suit related to the NSA program brought by the American Civil Liberties Union.

But Walker, the judge in San Francisco, saw things differently in the EFF suit and ruled that "even the state secrets privilege has its limits." Although the state secrets privilege might require that the case be halted at some point, he said, it should not be tossed out of courts before it could even properly begin.

In his opinion, Walker also said he was contemplating appointing an expert with security clearance to assist him in "determining whether disclosing particular evidence" would endanger national security.

The Justice Department opposes the idea but said that if an expert was necessary, Silberman is its choice.

For its part, the EFF nominated as an expert: Louis Fisher, who works at the Library of Congress; Michael Jacobs, a former NSA employee who is now a vice president at consulting firm SRA International; and Washington attorney Kenneth Bass, a court-appointed expert in a case dealing with classified documents.

The EFF's brief, which argued against the government's request to halt proceedings while the appeal continues, said the selection of a court-appointed expert was appropriate.

Proposals to rewrite federal surveillance laws could, however, imperil the case if they are eventually adopted. Last week, a U.S. Senate committee heard testimony from the heads of the CIA and NSA who urged the adoption of a bill to expand the 1978 wiretapping law called the Foreign Intelligence Surveillance Act. It would expand the president's ability to conduct broad telephone and Internet surveillance with limited judicial oversight.

Also on Monday, Walker approved a request from CNET Networks (publisher of News.com) and the California First Amendment Coalition to file a friend-of-the-court brief. In May, CNET and other groups had opposed a request by AT&T to hold part of a hearing behind closed doors. Walker rejected the request.

President Bush Monday in a speech in Miami Beach, Florida, reiterated his call for a cease-fire in the Mideast only if it brought a "long-lasting peace" that addressed Iran and Syria's support for Hezbollah, the Islamic militia that Israel is targeting.

Hagel said that refusal threatens to isolate the United States and Israel and harm chances of achieving a long-term peace in the region.

"How do we realistically believe that a continuation of the systematic destruction of an American friend -- the country and people of Lebanon -- is going to enhance America's image and give us the trust and credibility to lead a lasting and sustained peace effort in the Middle East?" asked Hagel, the No. 2 Republican on the Senate Foreign Relations Committee.

Calls for 'a statesman'

He called on Bush to name "a statesman of global stature" as his personal envoy to the region. And he urged the administration to open direct talks with Hezbollah's backers, Iran and Syria, both of which Washington also accuses of meddling in Iraq.

"Our relationship with Israel is special and historic," he said. "But it need not and cannot be at the expense of our Arab and Muslim relationships. That is an irresponsible and dangerous false choice."

Bush was headed back to Washington after a fund-raising trip to Florida, and the White House had no immediate reaction to Hagel's comments.

Like his frequent ally, Sen. John McCain of Arizona, Hagel is a possible GOP presidential candidate in 2008 and has been critical of the administration's handling of Iraq. But few members of Congress have broken ranks with the president over his handling of the Israel-Hezbollah conflict.

Calls for an end to the 20-day conflict have increased since Israel's bombing Sunday of the Lebanese town of Qana, which left at least 54 civilians dead. Hagel said the Israeli campaign was "tearing Lebanon apart," and the resulting civilian casualties and economic damage were weakening the country and bolstering support for Hezbollah, which the U.S. State Department considers a terrorist organization.

Hagel urged the administration to revive the Beirut Declaration of 2002, authored by Saudi Arabia's King Abdullah, under which Arab countries would have recognized Israel's right to exist. Hagel said that declaration was "a starting point" toward a regional settlement, but the United States "squandered" it.

'Bogged down' in Iraq?

Meanwhile, the decorated Vietnam veteran said the United States "is bogged down in Iraq," limiting U.S. diplomatic and military options. Last week's announcement that more than 3,000 more American troops were needed to reinforce Baghdad amid rising sectarian violence was "a dramatic setback," he said.

He said the 3-year-old war is wearing badly on the U.S. military, and that Iraq's fledgling democracy needs to take over more of its security responsibilities from American troops.

"This is not about setting a timeline," Hagel said. "This is about understanding the implications of the forces of reality."

The possibility that shoulder-fired missiles could take down commercial airliners in the United States is considered real. They're portable, common and relatively inexpensive.

Though no terrorists are known to have smuggled shoulder-fired missiles into the U.S., the
FBI arrested two men in Albany as they were trying to buy some nearly two years ago.

Terrorists linked with al-Qaida are believed to have fired two SA-7 missiles that narrowly missed an Israeli passenger jet after it took off from Mombasa, Kenya, in November 2002.

According to intelligence estimates, at least 24 terrorist organizations possess rocket launchers, the report said.

They are also known as "man-portable air defense weapons," or Manpads.

Congress agreed to pay for the development of the systems to protect the planes from such weapons, but balked at proposals to spend the billions needed to protect all 6,800 commercial U.S. airliners.

"Ultimately, Congress is going to determine whether it wants to support a wide-scale deployment of Manpads countermeasures to the aviation industry," said William Knocke, Homeland Security spokesman.

Under pressure from Congress in 2004, the Homeland Security Department gave Northrop Grumman Corp. and BAE Systems Plc $45 million each to adapt military missile defense systems so they can be used by airlines. Military systems require too much maintenance - and fire by mistake too often - to be used on a passenger airliner.

Both BAE and Northrop systems use lasers to jam the guidance systems of incoming missiles, which lock onto the heat of an aircraft's engine.

According to the report, tests showed:

_They can be installed on commercial aircraft without impairing safety;

_At least one company can supply 1,000 systems at a cost of $1 million each;

_It will cost $365 per flight to operate and maintain the systems, more than the $300-per-flight goal;

_The systems aren't reliable enough yet for commercial use.

John Meenan, executive vice president for the Air Transport Association, questioned whether the cost of such systems matches the security risk.

"The counter-Manpads proposals we have seen reflect more vendor say so than security prioritization," said Meenan.

Rep. Steve
Israel, D-N.Y., who supports widespread deployment of the systems, said it's always been known that they're expensive. "But it will be much cheaper than the cost of a $5,000 shoulder-fired missile hitting a $130 million 767," Israel said.

In the next phase, the systems will be tested on cargo aircraft in real operational environments for advancements in reliability, performance, cost and ability to be manufactured, the report said.

Results will be reported to Congress in 2008.

In fairness, exploiting this shortcoming would require physically opening up the machine and a certain amount of hardware and programming skills, but that's hardly an insurmountable barrier to a sufficiently motivated hacker.

Open Voting Foundation reckons the problem is compounded by a failure to create a voter-audited paper trail during elections tallied by the machine.

"Diebold has made the testing and certification process practically irrelevant," said Open Voting Foundation president, Alan Dechert. "If you have access to these machines and you want to rig an election, anything is possible with the Diebold TS - and it could be done without leaving a trace. All you need is a screwdriver."

Newer TSx series voting machines can only contain one boot profile at a time, but it's far easier to circumvent controls and overwrite files stored in older TS machines, according to Open Voting.

"These findings underscore the need for open testing and certification. There is no way such a security vulnerability should be allowed. These systems should be recalled," he added. ®