U.S. representative Adam H. Putnam: as franchising strives to meet technology's challenges in the business sector, this Capitol Hill leader maintains a sharp focus on government information technology spending and the threats of cyber-crime.

A fifth generation Floridian, Congressman Adam Putnam represents the 12th District of Florida. His legislative committee assignments for the 108th Congress include the Agriculture, Budget, Government Reform, and Joint Economic Committees. Putnam is one of the few members of Congress to hold four committee assignments.

In January 2003, he was appointed to serve as chairman of the Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census. His ascension to the chairmanship makes Congressman Putnam the youngest subcommittee chairman in the 108th Congress and one of the youngest in the history of the United States Congress. He also serves on the House Republican Policy Committee and the Republican Steering Committee.

As chairman of the Technology Subcommittee, Putnam has focused on the federal government's $60 billion investment in information technology to ensure that taxpayer's dollars are being spent wisely. He has been the lead congressional voice addressing the threat of cyber crimes against the nation's crucial infrastructure, and has played a critical role in advancing the President's Management Agenda to coordinate and streamline communications among the various federal departments and agencies.

FW: As chairman of the U.S. House of Representatives Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census, what initiatives have you undertaken?

Rep. Putnam: The subcommittee has been extremely active in fulfilling its oversight responsibility throughout the 108th Congress, and I have endeavored to focus oversight attention in a number of specific topical areas. Those areas have included information security; the President's Management Agenda federal e-government initiatives; data mining and associated technologies utilized in the gathering, storage and sharing of information, corresponding privacy issues, such as identity management and protection; electronic records management; radio frequency communications interoperability; and a variety of census issues. The subcommittee has conducted more than 30 hearings on these topics and has plans to conduct several more hearings before the end of this Congress.

Of all the issues that the subcommittee has actively pursued, I think information security is one of the most critical. As a member of Congress, a home computer user, and a champion of small business, the problem of computer security hits particularly close to home for me, and I have undertaken an aggressive effort to improve cyber-security in every sector of our nation.

The Federal Information Security Management Act of 2002 defined parameters and guidance for federal agencies regarding their requirements for protection of the nation's information networks and the information assets that they contain. Accordingly, the subcommittee has conducted a number of oversight hearings that have examined the issues directly related to FISMA. This effort includes compliance evaluation through the issuance of an annual scorecard that measures progress and produces a grade based on those results.

Additionally, I have taken steps to work with the private sector to improve the nation's overall information security profile. Recognizing that roughly 85 percent of the nation's critical infrastructure is owned or controlled by the private sector, the matter of information security must be addressed at the highest level of management and ownership. Last year, I convened a group of 25 leaders from business organizations, as well as representatives from academic and institutional communities, to form the Corporate Information Security Working Group. The CISWG has produced a set of recommendations that could provide additional tools and strategies to improve the information security profile for enterprises in all sizes and sectors. I am reviewing these recommendations and am working with the participants of the CISWG to implement several of these recommendations in the near future.

FW: You have stressed that there is a need for the private sector to treat information security as a higher priority. What does this mean for franchisors and franchisees and what needs to be done?

Rep. Putnam: Information security affects businesses of all sizes and everyone must understand the nature of the threat, the extent of the vulnerabilities, and the need for each of us to take steps to improve our national information security profile.

The nation's health, wealth, and security rely on computers, but until recently, there has been relatively little focus on computer security. As a result, the systems on which we rely so heavily are vulnerable to attack from computer worms, viruses, fraudulent schemes, and even a terrorist cyber-attack. We must do a better job of finding ways to protect these systems.

There are existing and emerging protections against many of these threats. The federal government, including the Small Business Administration, the Federal Trade Commission, the Department of Homeland Security and other agencies, are working with business organizations to better inform the public about simple and affordable steps to improve their computer security.

As an example, businesses of all sizes--including those involved in franchising--can arm themselves with virus protection software to help mitigate any potential impact of worms and viruses. Use of firewalls can also help prevent some forms of spyware and attempts at unauthorized access to a user's machine. In addition, automated patches are a step in the right direction to help users stay up to date with protections against the most recently published vulnerabilities. These protections are just a sample of some of the steps that businesses can take, but in the end it takes people managing their risk appropriately.

FW: How can small businesses be made better aware of the cyber-security risks to their information systems and how they can best respond to those risks?

Rep. Putnam: Awareness is clearly a huge challenge. CISWG divided into subgroups, one of which was the Awareness, Education, and Training Subgroup. This subgroup's mission was to identify, partner with and build on the good work of organizations that are developing campaigns that raise awareness on the importance of cyber-security. The subgroup reported recommendations for three categories of users--small businesses, large enterprises, and home users. On the small-business front, the group recommended that a valuable resource would be a small-business guidebook on the subject of cyber-security. Such a guidebook would include recommended best practices and guiding principles that explain cyber-security risks in terms that are easily understood. I am aware that there is a collaborative public-private partnership underway that would address this recommendation in a tangible manner.

Additionally, in mid-June, my subcommittee held a hearing on the many cyber-threats facing small businesses and the tools and strategies they can use to respond.

At the hearing, Cheryl Mills, the associate deputy administrator for entrepreneurial development of the Small Business Administration, testified about SBA's actions to assist small businesses, including partnerships with the Department of Commerce, the Federal Bureau of Investigation and the private sector to help increase awareness about the importance of cyber-security.

FW: IFA participated in the Corporate Information Security Working Group that you convened. What is the CISWG and what were its recommendations?

Rep. Putnam: The subcommittee has conducted a number of oversight hearings during the 108th Congress directly related to the efforts of federal agencies to improve their information security, and specifically their progress and compliance with the requirements of the Federal Information Security Management Act. I have described my efforts at bringing this message to Corporate America, but I also recognize the need to provide additional information to home users to better protect them from the damage that can be caused by worms and viruses, or even more denial-of-service attacks perpetrated through the Internet.

Following hearings, interviews and meetings with private-sector leaders, I determined that information security was not a high priority matter for much of Corporate America, being viewed by many as primarily a technology issue, as opposed to a management and governance issue. I do not believe that the matter is being sufficiently reviewed or considered at the '%" level of management, board of directors, or ownership level in the case of small- and medium-sized businesses. Given the magnitude and reality of the threat, I am seeking to elevate the profile of the matter and identify a means of establishing attention and accountability throughout Corporate America for the security of our nation's computers and computer systems.

Last fall, I drafted the Corporate Information Security Accountability Act of 2003, legislation requiring that publicly-traded companies include as part of their annual filing with the Securities and Exchange Commission a status report on their corporate information security plans, in the form of a checklist that would have to be certified by an independent third-party auditor. The checklist would include elements of a basic information security plan, such as: an up-to-date inventory of critical IT assets, a risk assessment and corresponding risk management/mitigation plan, an incident response plan, and a tested business continuity plan. This methodology was selected after a review of the strategies employed to motivate private sector attention to the challenges and vulnerabilities associated with the Y2K issue, as well as a review of existing legislation, such as Gramm-Leach-Bliley, Sarbanes-Oxley and the Health Insurance Portability and Accountability Act.

Prior to filing the draft legislation, I solicited feedback from a number of private sector individuals, companies and trade associations. Following a review of their responses, I decided to postpone the introduction of my proposed draft legislation, while challenging the private sector to identify an alternative approach to dramatically improve information security throughout Corporate America. A private-sector driven, market-based initiative has always been my preference, and I made it clear that the timeline would be short, and that the draft legislation would remain a viable option. The result was the working group that I described above.

It is important to note that a number of the recommendations require continued work. Virtually every member of CISWG has indicated a strong interest in continuing this important and critical work. While it was the effort of CISWG to achieve consensus on this set of recommendations, there was not unanimity on all of the recommendations, and some members expressed concern that there were a number of recommendations that were not fully mature and required further discussion and debate.

I am presently evaluating the CISWG work product, along with the work of the various working groups attached to the National Cyber Security Summit to identify similar or complimentary recommendations. I am also considering other elements that may be contained in a corporate information security action plan in lieu of legislation. The CISWG recommendations include several potential legislative initiatives, such as an amendment to the Clinger-Cohen Act that would explicitly identify information security as a component that must be evaluated in the IT investment decision-making and strategic planning for federal agencies.

I have introduced a bill, H.R. 4570, which will fulfill this recommendation. As for the CISWG's other recommendations, I will continue my support for these initiatives and plan to reconvene the CISWG to further develop them through the next phase of this important and collaborative activity.

FW: As you know, litigation reform is a very high priority for the IFA. Has Congress done enough to protect small businesses against unfair lawsuits?

Rep. Putnam: Lawsuits, even junk lawsuits that have no basis, are expensive. There is a need to protect small businesses from the costs of unfair litigation. The House of Representatives has renewed its efforts to curb all frivolous lawsuits; unfortunately, the Senate has not taken action. The cost of a small business owner's defense against an average lawsuit is now an astronomical $100,000. I am working with other members of Congress and the Bush Administration to enact legislation that will cap non-economic and punitive damages at fair and reasonable levels, as well as help small businesses recover attorneys' fees when they successfully defend themselves against wrongful government accusations.

Last year, Congress passed and President Bush signed into law the Small Business Liability Relief and Brownfields Revitalization Act, which should effectively rescue Main Street from a quagmire that could have affected nearly any business owner who legally disposed of trash. As a member of Congress, I was proud to help bring this process to a close and cast my vote to end what was termed the "Nightmare on Main Street."

FW: What are some of your other priorities in Congress this year?

Rep. Putnam: One of my top priorities is getting a budget based on sound fiscal principles and limiting the growth on non-defense/non-homeland security related spending.

H.R. 4570 to amend the Clinger-Cohen Act

This legislation updates the Clinger-Cohen Act, which requires the heads of federal agencies to link IT investments to agency accomplishments. The act also requires that agency heads establish a process to select, manage, and control their IT investments. The Putnam bill would update the act to explicitly identify information security as a critical element that must be evaluated as a component of all information technology investment decision-making and strategic planning by federal agencies. This will insure that information security is considered as part of the decision making process as opposed to a consideration after the fact.

Clinger-Cohen was written before the federal government had a large web presence. It is essential that the act be modernized to keep pace with these changing and evolving threats. Cyber attackers specifically target the federal government because of the high value of penetrating or taking over government systems. A myriad of automated attack tools are operating around the clock scanning the Internet for systems that can be taken over. I am very concerned that we may not be giving adequate consideration to security.

I think we all recognize that we need to bring our federal IT investment in line with the realities of the 21st Century. I am confident that once H.R. 4570 is signed into law, it will help to strengthen the federal government's overall efforts to improve the information security profile of its systems.

Economic Security

I have been proud to vote for three important bills that would make permanent the president's historic tax relief of 2001: H.R. 4181, legislation making the marriage tax relief provisions permanent; H.R. 4275, legislation permanently extending the 10 percent tax bracket; and H.R 4359, legislation that would permanently extend the increase, to $1,000, in the child tax credit. I am hopeful that the Senate will take action on these important bills.

The tax relief extended to every taxpaying American through the jobs and growth packages of 2001 and 2003 fueled the U.S. economic engine that continues to gain speed. Allowing these tax relief measures to "sunset" would be to increase taxes on hardworking Americans--putting their jobs and livelihood at risk.

National Security/Iraq

My priorities include homeland security oversight, funding the war on terrorism, including the war with Iraq, and ensuring that we win the ongoing war on terrorism. I will also remain vigilant in exercising my subcommittee's oversight authority of the new Department of Homeland Security and its efforts to continue to make us more secure.

National Energy Policy

The House passed a comprehensive energy plan last year based on the president's proposal. We will try again this year to enact a balanced approach that meets U.S. energy needs, decreases our dependence on foreign oil and OPEC, promotes conservation measures and creates jobs.

FW: As you may know, the International Franchise Association recently released a study conducted by PricewaterhouseCoopers that showed that the approximately 5,300 franchise establishments in the counties comprising the 12th Congressional District of Florida employed over 71,000 workers. Were you aware of the impact of franchising in your District?

Rep. Putnam: Small business is the engine driving our economy, and franchising is an important part of this. America's 25 million small businesses employ more than 50 percent of the private work force, generate more than half of the nation's gross domestic product and create two-thirds of the new jobs in the U.S.

I recognize that franchising is extremely important to the economic health of my district. I hear from people all the time about the job opportunities that franchises have created, and I will continue my support for franchising in the future.

From the "Economic Impact of Franchised Businesses"
A study conducted for the IFA Educational Foundation by
PricewaterhouseCoopers

FRANCHISING IN THE COUNTIES OF THE 12TH CONGRESSIONAL DISTRICT OF
FLORIDA

                           All Franchises
                      In Franchised Businesses

Jobs                            71,183
Payroll (in $ millions)        $ 1,710
Output (in $ millions)         $ 4,008
Establishments                   5,328

                           All Franchises
                  Because of Franchised Businesses

Jobs                           108,013
Payroll (in $ millions)        $ 2,768
Output (in $ millions)         $ 6,923
Establishments

                               Business Format Franchises
                            In Franchised         Because of
                             Businesses           Franchised
                                                  Businesses

Jobs                            56,426              84,290
Payroll (in $ millions)        $ 1,198             $ 1,977
Output (in $ millions)         $ 2,788             $ 4,909
Establishments                   4,207

                           Product Distribution Franchises
                            In Franchised         Because of
                              Businesses          Franchised
                                                  Businesses

Jobs                            14,757              23,723
Payroll (in $ millions)          $ 512               $ 791
Output (in $ millions)         $ 1,220             $ 2,014
Establishments                   1,121

                               In Business Format Franchises
                           Franchisor Owned    Franchisee Owned

Jobs                            16,065              40,361
Payroll (in $ millions)          $ 263               $ 935
Output (in $ millions)           $ 695             $ 2,093
Establishments                     992               3,216

Data pertain to 2001
In some cases, numbers may not add up due to the rounding of fractions.

RELATED ARTICLE: IFA launches voter information Web site.

As the political battles for November election intensify, it will become increasingly difficult to obtain accurate information about the candidates' positions on key issues. IFA and the U.S. Chamber of Commerce have embarked on a groundbreaking, Internet-based bi-partisan political program--Franchising Votes (www.FranchisingVotes.com)--that is designed to empower the franchising community to make a difference by helping to elect legislators who will respond to franchising's needs.

"This program will enable us to respond strongly to the political efforts of our adversaries and could prove to be the difference in many key federal and state races," said IFA Chairman Sidney Feltenstein. "There is a lot at stake for American businesses and their employees."

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Visit www.FranchisingVotes.com for complete election details.