Additionally, our families never take the oath to support and defend the Constitution like the active-duty folks do. But they certainly do with the number of times we require people to uproot and move. This is my 21st move in the Coast Guard. To challenge the rationale, is it necessary to move people all over the world as often as we do? Because it comes in three expense buckets, if you will. The first is to the family. The ability to have dual careers, stability, and support structures are all impacted. Second, it comes with a readiness expense for the units that those people serve at. We typically move most of our people in the summer, which is during our highest operational tempo. Third, it also comes at a very real cost. So this last year we extended folks in their current assignments or we reassigned them at no cost in the same geographic area. And that alone saved almost enough money to buy a new fast response cutter, which goes for about $60 million dollars. So it was a win-win-win.

My other commitment is to demonstrate that I am a good steward of public funds.

The other part in duty to people – and this really spills into the next area of commitment to excellence – our missions today are a lot more complex than they were back in 1790, but our human resource management system is still operating much like we did in 1790. By that I mean a jack-of-all-trades and masters of none. We really need to work at subspecializing within the Coast Guard. We do a pretty good job of that within the aviation community. We need to do the same in cyber. Cyber is not a program that you can jump into for three years, leave for five years, and then think you can come back at the end of that five-year period and pick up where you left off. This is the same with intelligence and acquisition systems. A number of our programs are at a point now where we need to be more specialized to be proficient.

My other commitment is to demonstrate that I am a good steward of public funds. And what that means is each year in this capacity I will invite an audit team to check my books and determine whether I am a good steward through a chief financial officer audit. We’ve come to the realization that our core accounting system, which manages about three different ledgers, a fourth if you count military pay, is woefully out of date. We really need to consolidate all of that so I know in real time what’s in the checking account and what I am spending each and every dollar on as I assess return on investments. So our commitment – one is a clean audit opinion, but the second is I need to recapitalize my core accounting system so I can be better accountable for the funds that we’re entrusted with – especially if I’m going to Capitol Hill to campaign for more resources. That’s a little bit about the three strands.

You have been quoted as saying that “we need to make sure we don’t compartmentalize cyber.” Can you elaborate on that?

A lot of people look at cyber as: That’s what information specialists do, you know, the IT world. I’m sure all of us have phones, and we don’t have a subject-matter expert at our side showing us how to use apps. Cyber really cuts across every element of our organization. It begins with cyber hygiene. Are we exposing systems that may make them vulnerable due to poor cyber hygiene? A lot of our systems and platforms use the Cloud to update software, including software that runs our main control systems. So if you’re a legacy machinery technician or an electrician’s mate and you’re not cognizant of what a cyber intrusion can do to that main console and lock it up and now your ship is literally unable to get out of shoal water, you need to make that part of your skill set. It really is crosscutting in everything we do. Anyone that comes to work, if they can’t get on the net on a given day, then what’s the point of coming to work? But if that person exposes the net to vulnerability, then it brings the entire system down. That’s where I really see this; everyone needs to be conversant in cyber. In that regard, we’ll actually roll out a cyber strategy.

What’s the significance of the “Western Hemisphere Strategy?”

I’ve been involved in counter-drug operations since I was an ensign 37 years ago. We have a national drug-control strategy and have had one for some period of time. But quite honestly when we look at the work we do, all that strategy does is set a bar of the volume of drugs that you’re going to remove. It doesn’t speak to all the second- or third-order effects. And so if you’re trying to rationalize the resources that we use to go against this particular threat but the only document you have is the “National Drug Control Strategy,” it doesn’t quite answer the mail for me.

When I look at the Western Hemisphere, currently we’re looking at unaccompanied minors. The countries they are fleeing from – particularly Honduras, Guatemala, El Salvador – represent three of the most crime-ridden and violent countries on the face of the Earth. In fact, in the Western Hemisphere, eight out of 10 of the most violent crime nations are in the Western Hemisphere. It’s not a coincidence that the drug flow from transnational organized crime operating in those nations are the root cause of much of that violence.

So there’s a cause and effect to what we do. But we’re at a point now where it really affects regional stability. There’s clearly a focus on ISIS [Islamic State in Iraq and Syria] and on the Mideast and that part we get. But we’re also looking at the diversion of money. It costs roughly $1,000 to produce a kilogram of cocaine, which sells for $25,000 here, $80,000 in Australia, maybe $60,000 in Europe. When you look at those kinds of returns on investment, then where does that money go? Well, one of my concerns is Iran has a presence in South America, as does Hezbollah. We’re starting to see some of that money flow into those hands, which go right back to some of the challenges we face in the Mideast. So it’s time to make this area a priority. When we talk about the “war on drugs,”which, quite honestly, it isn’t with the resources that we put forth to it, it’s time to make this region a priority and to do so with a strategic approach. So we put this strategy together. We worked it across the Department of Homeland Security, all of the interagency, Department of State, Department of Justice, Department of Defense, the Office of Management and Budget [OMB], and we got a head nod from everybody. In fact, from OMB, they said, “Good on you, Coast Guard, that you’re finally putting strategy in front of your resource requirements rather than trying to put resource requirements into a strategic void.” I really think that’s the way forward in what’s going to be a very resource-challenged era in the years ahead.

You just spoke about money. How will the decrease in the budget for FY 15 affect the service? What is the give and take there?

You can take from three different areas: The first area that you take from might be a major acquisition. If you slow down an acquisition, or say you pause an acquisition such as a national security cutter, that can cause the whole program to shut down. So that’s one area that you can take from. Another area you can take from is frontline operations. And even though your budget goes down, there’s always external pressure that you need to do at least as much if not more. So we always call it doing more with less. And then the third area you can take from is you can draw down your force size. And as I speak to you today, we’re a Coast Guard that [is] roughly 3,000 people smaller, almost all of them active duty, than we were four or five years ago. That’s been one of the areas that we’ve taken from. So I came into this job and said, “How big of a Coast Guard do we need to be when a number of our programs are in a growth cycle?”

When you look at the energy growth in our country, it has explicit Coast Guard equities tied to it. The certification of new tank barges being built; the waterways that those barges will flow through; the response in case one of those barges collides or runs aground; uninspected towing vessels; and the list goes on. As I look at fiscal years 2015 and beyond, the last place I can take from is a continual drawdown on our force structure. And the hardest thing to do is to build your workforce back up. So holding on to my workforce is going to be priority one for me, which means I’ve got to strike a delicate balance between major acquisitions and then frontline operations. That will be in each budget-year cycle while I have the honor to serve in this position.

What is the state of the Coast Guard’s offshore acquisition program and what are your top recapitalization priorities?

We’re in a really good place with our national security cutter program. As I speak today, we are on target and tracking to build out that program of record, which is eight national security cutters. The fast response cutters are more of a near-shore platform – they have some endurance, but I wouldn’t necessarily call it an offshore platform. Those are being delivered on time and on budget, but unfortunately not at the pace at which I would like to see those being produced – ideally at a rate of six per year. As we enter fiscal year 2015, we’ll only be able to afford to build two per year, and that wasn’t because I pulled anything out of the acquisition budget. I started out fiscal year 2015 with a 40 percent reduction in my acquisition budget, so there wasn’t any new money that came into that program. It does tie my hands in [FY] 2015. I need to get that program back on pace in [FY] 2016 and beyond so I can build it up. The biggest decision will be the down select for the offshore patrol cutters and to ensure that it meets all of our requirements, but it does so with an emphasis on affordability. That will be a big part of that down select as we look at that new program coming online. To support this offshore presence is overhead surveillance. So the other major acquisition that we have is the missionization of the 14 C-27J [Spartan] aircraft that we acquired at no cost from the Air Force. And that in and of itself allowed us to avoid roughly a half-a-billion-dollar line item in our acquisition budget. It was a huge windfall for us.