Will Uncle Sam Have A Gift for Phoenix?

This article was written by CBS News chief invesigative correspondent Armen Keteyian and CBS News producer Phil Hirschkorn.

It's a complaint heard not only in New York, where Mayor Mike Bloomberg has remarked that it seems whenever terrorists are arrested they possess maps of his city, but all over the country, such as in booming Arizona, now the nation's fastest-growing state.

"I don't think that some of those decision-makers in Washington actually understand the scope of this city, the size of the city," Phoenix Mayor Phil Gordon told us when we visited him earlier this year.

His metropolis in the desert is now the nation's fifth most populous urban area, the sprawling home to four million people and still growing by 100-thousand new residents a year. Yet in 2006, the Phoenix's share of federal homeland security funds shrank by 60-percent from $10 million to $4 million, or to one dollar per person.

"I think a lot of people still think that we're a small western town, where, you know, maybe we're still in wagons," Gordon says ruefully.
Gordon sees plenty of reasons right outside his window why Phoenix needs more homeland security funds. It is the banking capital of the southwest and rich in critical infrastructure including the world's largest nuclear power plant, Palo Verde, and the nation's only training ground for F-16 pilots, Luke Air Force Base.

The city's water supply flows in from out of state through a vulnerable network of dams and open canals. Its oil and natural gas is piped in from Tuscon and stored in largely unguarded tanks. When the pipeline ruptured three years ago, the motor-driven city descended into chaos. Phoenix's stadiums and arenas are packed with fans of the Cardinals, Suns, and Diamondbacks, and the Superbowl is coming in 2008.

"You can't be stripping the defenses of the home front security and expect this country to be safe, and expect local governments to be first responders and be able to adequately protect the citizens of this country," Gordon says.

Gordon, a Democrat, has an ally in Republican State Representative Jonathan Paton, who believes Phoenix is underfunded because Arizona adheres to a DHS guideline to spread 80-percent of the grant money all over the state, leaving Phoenix and Tuscon, in his district to the south, begging for more.

"I think the majority of that money should be spent in the two large urban populations," Paton told us before he, a former military intelligence officer, shipped off for a stint in Iraq. "It's not an issue of fairness, it's an issue of priorities and danger."

Arizona has spent 20-percent of its $177 million in homeland security grants since Sept. 11 on central projects such as a state of the art, multi-agency counter-terrorism intelligence center and a task force that's cracking down on the fake ID trade facilitating illegal immigrant traffic across the state's porous border with Mexico.

Yet, like a lot of other states, Arizona has also sent its local fire and police departments on a shopping spree, for example, deploying eight $900,000 hazardous materials trucks equipped to respond to a terrorist attack or any disaster.

"When buildings fall, they do the same thing. It doesn't matter how they fall, we have to be able to rescue in that situation," says firefighter Jeff Clark, who got one of the trucks for his emergency response team in Chandler, a Phoenix suburb.

But DHS guidelines force the money to be dispersed far away from population centers. Look, for example, about 250 miles northeast of Phoenix, in the northeast corner of the state. An old ranching town called Holbrook, population: 5,000,is getting a slice of the pie worth $20 per person. to protect itself from terrorists.

"Imagine the havoc that could happen and scaring people, the fear, if they picked a few small communities, where it'd be real simple to put something in the drinking water, where all of a sudden you could wipe out a whole community at one time," explains Mayor Bryan Smithson. "That would cause fear throughout the whole country."

So the central water tower and two storage tanks up a hill will be guarded with video cameras 24 hours a day, beaming images back to monitors eye by the police station's 911 dispatcher.

Holbrook Police Chief Dwayne Hartup came up with the idea and applied for federal homeland security funds. The approved price-tag: $100,000.
"It's not so much that we worry about terrorism, but we always have to be vigilant. There is that potential wherever you are," Hartup says.
After installation in the next two months, cameras will also monitor the town's lone freight train crossing, a busy intersection with historic Route 66 that tourists traverse en route to the Petrified Forest National Park. But the priority is the water tower, a silver beacon on a barren landscape.

"If it were to be damaged or destroyed it could cause a significant impact here," Hartup says. "I don't believe there's a clandestine manual out there that says people who are upset with the United States may only target populations of 100,000-plus."

"The idea that we would have that system," Representative Paton counters, "for a fairly small community of individuals in a remote part of the state just does not seem logical to me."

Paton pushed for an audit of Arizona's homeland security spending this year, which found the state needed a "more formalized and better documented review process" for how federal grant monies are spent and it had "no written policies … or standard operating procedures that have guided project reviews." Governor Janet Napolitano, fresh off her reelection, replaced her homeland security director this month.

George Forseman, DHS Undersecretary for Preparedness, defends the formula that directs Arizona and other states to allocate 80 percent of the federal funds to localities all over a state.

"There's no empirical evidence to show it's not the right ratio," Foresman told us. "Responses are not simply local, are simply state, are not simply federal. They are national in scope, and we've got to make sure the right types of resources are available at the various level of government to be able to respond."

We pressed Foresman how a city like Phoenix, could be getting less money than smaller urban areas like Columbus, Fort Lauderdale, and Indianapolis?

"If it were a perfect world, we'd be able to give everything to everybody that they wanted to have, but we are limited in the resources that have been provided to us by Congress," Foresman says, referring to the overall $1.7 billion appropriated homeland grants this year.

Foresman concedes some communities "may not have made the best spending decisions," and he has gotten an earful from Mayor Gordon and others who believe the grant system needs to be more risk-based.

"The mayor raised several issues with us that had not been factored into the allocations of '06, and we're gonna look at those in '07, and they will be factored in," Foresman says.

Gordon says, "Just give us a fair share. That's all we're pleading for. Let us help protect this country."