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MEMORANDUM FOR THE RECORD

Event: Meeting with IBM Crisis Response Team


Type of event: Introduction
Date: Feb. 9, 2004
Special Access Issues: NA
Prepared by: Emily Walker
Team Number: 8
Location: 21241 Ventura Blvd, Suite 151, Woodlawn Hills, CA 92364
Participants - Non-Commission: Brent H. Woodworth, Worldwide Segment Manager, IBM
Crisis Response Team; Terri Lynn Pond, President, LT. Crisis Services, Inc.
Participants - Commission: Emily Walker in person; Mark Bittinger via phone

The origination of this meeting came from the participation of Brent Woodworth at the ANSI
meeting in NYC on Jan. 28, 2004. At that meeting, he offered to meet with 9-11 Commission
staff because he was involved in crisis management during 9-11 beginning on Sat. Sept. 15, 2001
for three weeks.

Brent Woodworth runs a division of IBM which has three components. The first component is
humanitarian aid on behalf of IBM in crises around the world. The second component is a for
profit business in the Government and Commercial Service sectors for preparedness, mitigation,
response, recovery and assessment. The final business is a for profit consulting service for Risk
and Service Management Support. IBM data suggested that for every dollar spent on
preparedness, 4-5$ are saved on the recovery side.

The first component involves continuity of life disruptions which can be social, political,
economic and environmental. IBM sends in teams of on the ground crisis managers and workers
(both from abroad and local IBM employees) when called in by a Government or company in
face of a disaster. The objectives of this work by IBM are to help the countries where IBM
works through a disaster event. Examples of the objectives of this work include the following:

1. To ensure continuous performance of essential government operations and constituent


support during times of crisis.
2. Protecting critical facilities, personnel, equipment, records, assets
3. Minimize losses and accelerate recovery and resume service levels
4. Manage protection, costs and benefits

In this capacity, IBM volunteered services after the Oklahoma bombing. In addition, they were
asked to assist NY City after 9-11. The areas IBM was involved in were the following:

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1. IBM has a center in Sterling Forest which was activated immediately to help their over
1000 customers which were impacted by 9-11 and needed to recover their businesses.
People who had subscriptions to the hot site and recovery facility were assisted during
this time. They had no problem meeting their commitment to these companies after 9-11.
Todd Gordon was responsible for the customer service here.

2. On ground zero, Brent was responsible for the crisis team from IBM that was sent to
work with the city. He surveyed the damage, looked at the skills IBM had available, and
looked at problem areas and what decision-makers needed. IBM spent time developing
the right information and format that could be easily understood with the correct amount
of information to give decision-makers at this time. They worked with Deputy Mayor
Lhota, who was in the information side.

3. Key operations support was given by IBM to Pier 92. IBM worked with OEM, the DOlT
division. The areas they worked on at Pier 92 were the following
• Supply chain management
• Communications
• Security
• Trauma
• Economic and social implications

4. The EOC had systems that needed a lot of attention. They did not speak to each other.
They needed rapid modification and IBM solved a great number of requests. There was a
certain amount of stove-piping, particularly in the Department of Buildings which a
bunch of sub-groups were all trying to collect the same data for the crisis and were not
sharing information. The goal was to try to re-open buildings as soon as feasible and the
information that was collected by inspectors and put into IBM database was helpful in
this regard.

5. Communications was the most overwhelming problem. The cell phones were
overwhelmed, the volumes were up and it was hard to talk in the EOC with all the noise.
IBM set up a wireless blackberry network with servers in North Carolina dedicated to the
system. This was up and running in 24 hours, not only with new IBM email, but also
connected to the previous email systems. 1500 devices were given to government
employees, the mayor, the Governor, and Red Cross. Instant messaging was also
provided. (The same system was used in DC during the anthrax scare).

6. IBM provided weather forecasting analysis which helped search and rescue and medics.
This was also used at the Olympics.

7. IBM provided emergency equipment monitoring so there was accountability of what was
where and what could be moved to where it was needed.

8. IBM also conducted fatality tracking through DMORT team which handles fatalities on
major disasters with FEMA (death certificates etc). IBM sent in 40 people to key in data
and carefully managed their volunteers.

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9. IBM worked at the family assistance center. They set up a system whereby families only
had to key in pertinent data once and it was used for a number of purposes.

10. IBM conducted the building tracking. They designed, developed, and implemented
building management system which tracked the status by floor. Inspectors worked and
updated the information on handheld computers as they inspected the site and the mayor
was provided with immediate status updates. (Now this is the main system used by
NYC).

11. IBM set up the account codes and system for tracking all expenditures by the city related
to the disaster so that they would be qualified for FEMA reimbursement through the
State.

IBM worked in the EOC in NYC for 3 weeks, 24/7 with volunteers. They believe they saved
NYC a significant sum of money through their efforts. Brent cited a number of other companies'
which were also helping and mentioned Staples setting up a store in the EOC. .

Brent felt Giuliani's strength was his regular communications with the people, telling the truth
and telling it often. He feels that in a crisis, this is a key element. He felt that Ground Zero was
very well organized. The Fire department was organized. He said that Pier 92 was reasonably
well organized. There was tremendous cooperation among the unions. And while there was
some chaos, and some duplication of efforts, and strong NY voices, there was a great deal of
mutual respect present. He felt it was helpful to bring in outside teams who were least impacted
by the trauma and separate enough to be a calming factor. He felt it was their role to make
suggestions, but not commandments on what to do.

Moving to a discussion on emergency preparedness today and the options for increasing this in
the U.S., Brent said that memories are short and unless there are disasters, companies tend to
delay mitigation. He said that since 9-11 security spending has not significantly increased. He
also felt that insurance companies would not give a company a break for better preparedness.
Since 9-11, D&O insurance has increased along with business interruption insurance, P&C and
deductibles have increased. If a company decides the limit it can pay on insurance, than it
automatically accepts the risks that are left and not covered. They do, according to Brent, have
an obligation to stock holders to mitigate the remaining risks. He feels that corporations balance
the risk/reward of cost of mitigating versus spending the additional money on investments for
expansion. Given the focus on quarterly, short-run' profits, many are opting for the expansion
over mitigation. He did not, however, that companies cannot insure "reputation or market share"
. and that this is a reason for preparedness.

He said that IBM has many clients where they are on call to examine the company for their
response, recovery, evacuation and continuity of business procedures. It gives the companies a
certain level of comfort and piece of mind to know their programs have been reviewed. IBM
also conducts vulnerability assessments which are very popular. They look at worse case
scenarios including the maximum foreseeable loss as well as the maximum probable loss. This
is considered business impact analysis and looks at the cost of functional losses.

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Brent felt that legal leverage was the best bet in terms of encouraging preparedness. He said that
the pressure of Sarbanes-Oxley has been significant. Forward thinking by CEOs will make the
difference. He cited Anheiser Busch brewery decision to retrofit for an earthquake in LA which
was completed only 2 days before the 1994 earthquake. The cost of retrofitting was $2-3
million; the savings was over $400 mm.

Attachment:
PowerPoint Presentation Managing Catastrophic Events, 9-11 IBM Global Crisis Mgt Support

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