Adm. Paul Zukunft, a 1977 graduate of the US Coast Guard Academy who is now the Coast Guard commandant, assumed command of the 88,000-strong force on May 30, 2014, overseeing a military branch that patrols from Guam in the Pacific to Puerto Rico in the Atlantic and from north of the Arctic Circle to south of the equator.

Business Insider sat down with Zukunft at the Coast Guard's Washington, DC, headquarters at the end of December to discuss his time as commandant, how his approach to leading the service changed during his tenure, and how the force had adapted to new threats. The partial transcript below has been edited for length and clarity.

Christopher Woody: The Coast Guard is a military branch but is also a member of the intelligence community. It has law-enforcement responsibilities, but it also does first-response and humanitarian efforts, and in its day-to-day activities it interacts with the public a lot. So that range of responsibilities, how does that align with the other military branches and how does it distinguish the Coast Guard?

Adm. Paul Zukunft: Certainly we're aligned with the other military services. When you look at just our fleet alone, 40% of our capital ships are serving in direct support of geographic combatant commanders — Pacific Command, Africa Command, Central Command, European Command, Southern Command, and Northern Command. So those are all led by four-star generals or admirals, and the Coast Guard works in direct support of those Department of Defense combatant commanders.

But at the same time we interact daily with the public we serve — probably the one most people relate to is search and rescue, but we have broad responsibilities in our ports. We have over 37 captains of the ports in all of our major ports who work with the maritime industry ... I represent the United States at the general assembly of the International Maritime Organization. Many countries look to the United States Coast Guard for setting maritime standards across the world as well, not just on safety but also on security and also on environmental issues, so very unique in that regard. You almost might look at [it] as a member of State Department, having impacts on foreign policy as well.

A Coast Guard crewman during Fleet Week in New York in 2016. US Coast Guard/Petty Officer 3rd Class Frank Iannazzo-Simmons

And then we're a member of the intelligence community — we're a member of the Department of Homeland Security, and so as the department looks at illegal migration being a big concern right now and can we stop every illegal migrant at the border, we look at the maritime border, which doesn't have a fence line, and in years past the United States often looked at itself as geographically isolated because we're surrounded by water. Well, in the 21st century we're no longer isolated, and certainly those bodies of water connect us to other countries for maritime trade, but also for illicit activity as well.

Woody: When it comes to addressing those broader responsibilities in terms of resources, how are you balancing and apportioning them? You have a big project like the icebreakers that you've been trying to get off the ground for a while, but this season hurricane activity has been particularly intense, so what's the give-and-take there with your long-term projects and those short-term requirements?

Zukunft: So as a member of the intelligence community ... first we looked at, so what are all the threats destined toward the United States? Why are people leaving Central America and trying to find, really, refuge here in the United States? They're leaving countries, particularly the tri-border region — El Salvador, Guatemala, Honduras — Mexico now has its worst murder rate in over a decade, and many people are just trying to get out of there. Why are they leaving? Well, you've got transnational criminal organizations trying to smuggle commodities into the United States, and so they use Central America as their initial destination to move commodities into the United States.

So we looked at where do we have resources around the world? Where do we have unique authorities? We have over 60 bilateral agreements that allow the Coast Guard to take enforcement action in the high seas or even in the territorial seas of other nations, to basically be their maritime police, if you will, and we have these agreements in many of the drug-source and transit zones here in the Western Hemisphere.

In 2014, we knew where about 80% to 85% of the activity was taking place, to include when a go-fast [boat] was leaving Colombia or Ecuador or somewhere in Central America with a shipment ultimately destined for the United States, but on the best of days we could probably put a ship over next to and a plane above maybe 10% of that 80% to 85%. We're basically giving all of this illegal activity a free pass.

Zukunft, then a rear admiral, reviewing oil-containment work in Louisiana from a Coast Guard helicopter after the Deepwater Horizon rig explosion and subsequent oil spill in 2010. (AP Photo/Kerry Maloney)

At the same time, we're doing enforcement activity in our remote [exclusive economic zones] to make sure that there's not illegal fishing activity taking place, and we were not seeing that activity, but it was peeling off a lot of our resources toward what I would consider a relatively benign threat, and then we're providing other resources to do exercises with the military in the remote parts of the world but with really no strategic outcome that I could discern where the Coast Guard was providing a unique capability. So we swept up all of those resources and then we doubled down to address the threats in the Western Hemisphere.

At the same time, the Perry-class frigates — which would routinely carry Coast Guard law-enforcement teams to contribute to the drug-interdiction mission — were taken out of service and decommissioned, so it left a huge vacuum in this part of the world, and so we filled that vacuum with Coast Guard resources, knowing that we had put other mission areas at risk but weighing what the priorities were in terms of what is the most considerable risk — those are the trade-off decisions that we're able to make.

The Arctic is a whole new ocean that's opened up. We've been working over the last five to six years with the United States Navy. We've worked with the past administration. We're working with this administration. We do have a strategy for the Arctic, and at the same time we're looking at Russia increasing its presence, and now we have China increasing its presence. Russia has gone as far as to claim most of the Arctic Ocean as theirs. That claim has not been reconciled, but it clearly demonstrates that Russia wants to own this domain, and they look at the United States, that we really don't have a dog in this fight because we really don't have any meaningful presence up in the Arctic as well, which is why it isn't just about building ships, but why you need to build those is to be able to exert sovereignty in an area that's opened and has, really, vast riches that have yet to be exploited but certainly will be at some point in time in the future.

Woody: You've been in this position for four years. In your time as commandant, what kind of changes have you seen in your own management style, your own approach to leadership of the force?

Zukunft: Well, the first is you think beyond the tyranny of the present, and you need to think at least five to six years out, and you can't just think of what's going to happen during your four-year tenure and then just truncate it and just say it's going to be somebody else's problem four, five years from now. What I look at right now is our growing national debt, what the impact of that's going to be to future budgets. When I came into this job, we thought: 'Well, hey, we can wait a while before we address icebreakers. Maybe we can wait another four or five years.' Well, if we wait another four or five years, as difficult as it is to find an appropriation today, it's not going to get easier any time in the future, at least when I look into my crystal ball. So really to think long-term about not just what we do but why we do it in the first place.

A crew from Coast Guard Station Port Canaveral in Florida enforces a safety and security zone during a rocket launch in 2016. US Coast Guard/Petty Officer 2nd Class Anthony L. Soto

When I came into this job, everyone of us could cite what our 11 statutory missions are, but no one could articulate why we need to exercise these 11 statutory missions. So we would say: 'Hey, we do maritime law enforcement. Why?' Well, we have this problem with transnational criminal organizations. They generate $780 billion of commerce. They corrupt other governments. They're causing regional instability in Central America, and we're already seeing the second-order effect of that in terms of illegal migrants now arriving at our border, unaccompanied minors. We're also seeing a loss of confidence in foreign investment in these economies, and so if the security environment is faltering, the economies are failing, you've now planted the seeds for long-term drivers for not only illegal migration but, if it undermines rule of law, do these become the future Venezuelas of the world as well, where they go from democratic to autocratic regimes right here in our backyard and perhaps sympathetic to a Russia, to a potential adversary, as well?

So really looking long term, not what we do but why we do it. We would explain we maintain our inland waterways — that's a mission. And we do it with ships whose average age is over 50 years old. We could never articulate an argument of why you need to recapitalize these 35 ships. Well, they move $4.6 trillion of commerce every year. To replace one is less than $20 million a copy. They can't accommodate a mixed-gender crew. They operate with lead and asbestos mitigation — the ships are that old. Yet we continue to slug on.

Zukunft with Adm. Yuri Alekseyev of the Russian Federation at a gathering of Arctic coast-guard leaders, in New London, Connecticut, in 2015. (AP Photo/Jessica Hill)

But it's part of our critical infrastructure. There's no good priority if you look at our nation's critical infrastructure, but $4.6 trillion is a big contribution toward GDP, and oftentimes we don't appreciate what we have until you no longer have it. So if you start losing that commerce for want of not making those investments — so that's the 'why' piece there as well.

So yes, we need to modernize, but you need to demonstrate why you need to, and you need to demonstrate what is that return on investment. We're asking for a greater appropriation — and that increase is a rounding error in the other military services — but I'm looking for a 5% annualized growth in our operating and maintenance account, a floor of $2 billion that will see some slight modulation, depending on what we're building at the time, particularly icebreakers.

But just to do that, that 5% growth and a $2 billion floor, buys me out of a $1.6 billion-short infrastructure backlog, allows us to bring 5,000 more active-duty people on board. It allows us to build out our program of record, move into unmanned aerial systems, and then recapitalize our icebreaker fleet, our inland fleet, as well as complete the buildout of our offshore patrol cutter fleet — the first one of those will come online in 2021.

But you can't look at these programs myopically, of, "I need a new ship." You really need to be able to articulate well with our authorizers, with our appropriators, and with our department, with [the Office of Management and Budget] why you need to make this investment. On that note, we've opened our books for five years running to a third-party auditor, and they checked our debits and credits, and we had five consecutive clean financial audit opinions. There's not another military service that has one — yet we as a military service have five consecutive clean financial audit opinions. Our acquisition program has matured. Our growth rate is under 2%, and so that's a good investment in what we're delivering will be in service at least 30, if not more, years from today. So it's a good investment, not just for today but for the future of the nation as well.