ChicagoFirst, the first local public-private collaborative meant to prepare financial companies for disasters, has become a model for communities around the country.
Similar groups in San Francisco and Los Angeles should begin operation in the next few months, said D. Scott Parsons, the deputy assistant Treasury secretary in charge of critical infrastructure protection and compliance policy. Other candidate cities include Houston, Dallas, and Tampa, he said Tuesday.
FloridaFirst, the first group patterned on the Chicago program, was organized in Miami in October.
Executives from a cross section of the Chicago’s financial services community organized ChicagoFirst in early 2003 to coordinate corporate efforts with those of government agencies.
Louis Rosenthal, an executive vice president at LaSalle Bank Corp. and one of the organizers, said the effort was a response to the 9/11 attacks.
“What we’re not trying to do with ChicagoFirst is tell each of my members what is appropriate for them to do as an individual bank,” Mr. Rosenthal said. The idea is for companies to work on a serious problem together and then get back to business as usual, he said. “ChicagoFirst gives us assurance we can get back out in the marketplace the next day and beat each other up.”
Mr. Parsons said establishing the program in Miami was a priority because the city is a gateway to the Latin American banking industry.
Though ChicagoFirst is the model, “each of these cities has a bit of a different risk profile,” Mr. Parsons said. The Florida effort grew out of the 2004 hurricane season, when the state was battered by four major storms in the span of a few weeks. That need was underscored when a series of hurricanes struck the Gulf Coast this season, devastating New Orleans and causing widespread damage elsewhere.
“There will be a number of organizations like this,” Mr. Parsons said. “We don’t necessarily need them in every town, but we do want to have them in areas where we have concentrations of the financial industry.”
Mr. Rosenthal said ChicagoFirst came about after 9/11 and a conversation between executives of LaSalle, the U.S. subsidiary of ABN Amro Holding NV of Amsterdam, and the Options Clearing Corp., an issuer of exchange-traded options.
He said he had been concerned by some of the things he observed in New York. For example, Amro staff members were allowed into their New York facilities by police on the day after the attacks in September of 2001, but were denied access on Sept. 13 because they lacked the proper credentials.
He did not want to have such a problem if a disaster ever struck Chicago, and the financial executives recognized they needed “a seat at the table” with local government officials who would be managing a crisis.
“When we started, we didn’t know how we were going to dance with each other,” Mr. Rosenthal said. “The city didn’t know who we were. We didn’t know who the city was.” The program is an extension of a corporate disaster plan, not a substitute for one, he said. “Ultimately it has to be tethered to the enterprise, but the enterprise has to see the value of being tied to the system.”
In February 2004, ChicagoFirst hired Brian Tishuk, a former Treasury Department official, as its executive director and its first full-time professional. He said that the group could “get to the next level only if they had somebody working on it full time,” and that his main function is to build relationships with local and state governments.
“There is a greater ability to work with government at all levels if you work together,” Mr. Tishuk said. Some of the efforts seem simple but require advance coordination with government officials, such as establishing credentials for financial workers “to get beyond the yellow tape” at an emergency scene.
The organization can also coordinate the evacuation of employees from a disaster area, and to ensure, for example, that armored trucks can deliver cash to automated teller machines, he said. “Whenever there’s a crisis, people run to the ATMs. Trust can erode quickly” if they are not working.
Perhaps the closest thing to a full-scale disaster in the city since ChicagoFirst’s founding was a five-alarm fire that shut down LaSalle’s 45-story headquarters for several days in December 2004.
“It was the first time that the mutual-aid pact was invoked,” Mr. Rosenthal said. “I had phone calls from competitors up and down LaSalle Street asking, ‘Do you need facilities? Can I do anything to help you?’ “
Key employees were able to access the damaged building because the company had established relationships with the various city departments, he said. “It was a crime scene for four or five days while they were investigating the cause of the fire,” but they “were sensitized how important the financial sector was to the city.”
New York has no comparable organization encompassing the entire financial community, but Mr. Parsons said that organizations such as the Securities Industry Association, the Bond Market Association, and The Clearing House Payments Co. LLC have done some collaborative planning on behalf of the banking and trading industries and that the city’s emergency planners are aware of the importance of the financial industry.
In Minneapolis, businesses led by Wells Fargo & Co. are taking a different approach. They are organizing a group called the Minnesota Information Sharing and Analysis Center in conjunction with the state’s Homeland Security and Emergency Management Department. Nonfinancial companies helping to organize the group include Target Corp., 3M, and Best Buy.
Charles Wallen of the industry-backed Financial Services Technology Consortium in New York said such collaboration will probably become more important as companies continue to refine their approaches to all kinds of operational risks. “You can’t do it as an independent entity,” said Mr. Wallen, the managing executive of the research organization’s standing committee on business continuity. “ChicagoFirst is a great model for public-private cooperation.”
