Photo: AP Photos

Buried deep in the heart of one of New York’s outer boroughs, in an area inhabited by junkyards and auto-body shops, is an unmarked redbrick building that stands as an extraordinary symbol of police commissioner Ray Kelly’s obsessive commitment to the fight against terrorism. Here, miles from Manhattan, is the headquarters of the NYPD’s one-year-old counterterrorism bureau.

When you step through the plain metal door at the side of the building, it is like falling down the rabbit hole—you’re transported from a mostly desolate, semi-industrial area in the shadow of an elevated highway into the new, high-tech, post-9/11 world of the New York City Police Department.

The place is so gleaming and futuristic—so unlike the average police precinct, with furniture and equipment circa 1950—that you half expect to see Q come charging out with his latest super-weapon for 007. Headlines race across LED news tickers. There are electronic maps and international-time walls with digital readouts for cities such as Moscow, London, Tel Aviv, Riyadh, Islamabad, Manila, Sydney, Baghdad, and Tokyo.

In what is called the Global Intelligence Room, twelve large flat-screen TVs that hang from ceiling mounts broadcast Al-Jazeera and a variety of other foreign programming received via satellite. The Police Department’s newly identified language specialists—who speak, among other tongues, Arabic, Pashto, Urdu, and Fujianese—sit with headphones on, monitoring the broadcasts.

There are racks of high-end audio equipment for listening, taping, and dubbing; computer access to a host of superdatabases; stacks of intelligence reports and briefing books on all the world’s known terrorist organizations; and a big bulletin board featuring a grid with the names and phone numbers of key people in other police departments in this country and around the world.

The security area just inside the door is encased not only in bulletproof glass but in ballistic Sheetrock as well. The building has its own backup generator (everyone learned the importance of redundancy on September 11); and the center is staffed 24 hours a day, seven days a week.

Even the 125 cops in the bureau (hand-picked from nearly 900 applicants) look a little sharper. Some are in dark-navy polo shirts that bear the counterterrorism-bureau logo, and others are in suits that seem to be a cut above the usual discount-warehouse version of cop fashion.

Though the counterterrorism bureau is still in its infancy, law-enforcement officials from around the U.S. and overseas regularly come to see it and learn. And it was all put together practically overnight—it opened in February of last year, little more than a month after Ray Kelly was sworn in as police commissioner.

The bureau, along with the NYPD’s totally revamped intelligence division, and the high-level hires from Washington—a lieutenant general from the Pentagon and a spymaster from the CIA—is part of Kelly’s vision to remake the NYPD into a force that can effectively respond to the world’s dangerous new realities.

There are now New York City police officers stationed in London working with New Scotland Yard; in Lyons at the headquarters of Interpol; and in Hamburg, Tel Aviv, and Toronto. There are also two cops on assignment at FBI headquarters in Washington, and New York detectives have traveled to Afghanistan, Egypt, Yemen, Pakistan, and the military’s prison at Guantánamo Bay in Cuba to conduct interrogations. Members of the department’s command staff have also attended sessions at the Naval War College in Newport, Rhode Island.

And there are the Hercules Teams, elite, heavily armed, Special Forces–type police units that pop up daily around the city. It can be at the Empire State Building, the Brooklyn Bridge, Times Square, or the stock exchange, wherever the day’s intelligence reports suggest they could be needed. These small teams arrive in black Suburbans, sheathed in armor-plated vests and carrying 9-mm. submachine guns—sometimes with air or sea support. Their purpose is to intimidate and to very publicly mount a show of force. Kelly knows that terrorists do a lot of reconnaissance, and the Hercules Teams were designed to disrupt their planning. Like an ADT warning sign in front of a house, they’re also intended to send a message that this is not an easy target.

The police commissioner now has what’s called an STU (Secured Telephone Unit) on his desk. It is a phone line that enables him to talk to someone in the White House or the Pentagon without fear of being monitored. When a key on the phone is turned, the conversation is electronically encrypted.

“We are doing all these things,” Kelly says over coffee in his fourteenth-floor office at police headquarters, “because New York is still the No. 1 target. We have been targeted four times, twice successfully, and the city remains the most symbolic, substantive target for the terrorists. These are cunning, patient, deliberate people who want to kill us and kill us in big numbers.”

On a bright October day several weeks after September 11, Kelly and his wife, Veronica, were finally allowed to return to their Battery Park City apartment—not to move back in, but to pick up a few personal items. Before they left the building, one block from the World Trade Center, they went up to the roof. There, Kelly consoled his weeping wife as they looked in stunned disbelief at the devastation of their neighborhood.

Eight years earlier, back in 1993 when the Trade Center was attacked the first time, Kelly was police commissioner. Mayor David Dinkins was in Japan when the buildings were bombed, so Kelly essentially took charge. It was Kelly who went on television to calm the city, to let everyone know in his powerful Marine kind of way that everything was under control.

Now Kelly is staking his reputation and his legacy on the fight against terrorism. “Four months after 9/11, when Kelly was about to be sworn in, you just didn’t get a sense of confidence at the federal, state, or local level that changes were being made,” says former NYPD first deputy commissioner John Timoney, who was recently named police chief of Miami. “Ray could easily have said, ‘What do I know about this stuff? It’s the Feds’ job.’ It takes a lot of courage to do what he’s doing. He’s leaving himself open to be second-guessed and criticized if things don’t go well. So he’s making decisions that may benefit the city but be detrimental to him personally.”

Kelly is familiar with being second-guessed and criticized. He served as NYPD commissioner during the final eighteen months of the Dinkins administration, in 1992 and ‘93. Though he was essentially finishing Commissioner Lee Brown’s term, he did manage several significant accomplishments. He cleaned up and restructured Internal Affairs, which was a serious mess. And it was Kelly, not Bratton or Giuliani, who took care of the squeegee guys.

Not that anyone knows it. “When Bratton came in with his arrogance and swagger, he showed Ray up nine ways from Sunday,” says a former high-level member of Bratton’s own team. “Giuliani and Bratton lumped him in with Dinkins as one big ineffective management disaster.”

So Kelly has plenty of reasons to want to make his mark this time. Even so, isn’t combating terrorism primarily a federal responsibility?

When I ask Kelly this question, he looks at me long and hard. He is a man who knows his way around Washington. In addition to his time in the mid-nineties as undersecretary of the Treasury, he was head of the Customs Service. He also worked for Interpol and was a special State Department envoy in Haiti where he was sent to establish and train a police force.

“I knew we couldn’t rely on the federal government,” Kelly says finally. “I know it from my own experience. We’re doing all the things we’re doing because the federal government isn’t doing them. It’s not enough to say it’s their job if the job isn’t being done. Since 9/11, the federal government hasn’t taken any additional resources and put them here.”

Has any kind of an increased federal presence been asked for? Soldiers? Fighter planes? More FBI agents? “Asked for?” he says, repeating my question incredulously. “Would you think it would have to be asked for? Look,” he says, shifting in his chair and crossing his legs so the .38 in his ankle holster is visible. “It’s a different world. We’ve redeployed. We’ve got 1,000 people on this. All seven subway tunnels under the river are covered, and it’s the same with all the other sensitive locations. It’s taken constant attention. It’s extremely difficult. But make no mistake: It’s something we have to do ourselves.”

Every morning at eight, in the commissioner’s conference room on the top floor of police headquarters (another NYPD venue where, by the way, you can watch Al-Jazeera), Kelly is briefed by his two key players in the counterterrorism battle: Lieutenant General Frank Libutti, who runs the department’s counterterrorism bureau, and David Cohen, formerly No. 4 at the CIA, who is now in charge of the NYPD’s intelligence division.

The two men couldn’t play more to type if they were actors hired to fill these roles. Libutti, a fit, silver-haired 35-year veteran who was in charge of all Marine forces in the Pacific and the Persian Gulf, is, in a word, crisp. His navy pinstripe suit looks perfectly tailored, his shirt is starched, and he has an open, forthright manner. He is friendly in a lieutenant-general-determined-to-stay-on-message sort of way. He calls terrorists “the bad guys.”

Cohen is a much grayer, more recessive presence. He has been described as “bookish,” but that’s not quite right. His look is much closer to that of, say, a software designer, someone who appears both geeky and cunning.

Cohen rarely gives interviews, and in the days following his appointment, he seemed to be amusing himself and perhaps trying to create a mysterious aura by playing with the reporters who questioned him. He was very sketchy on the details of his background. When asked his age, he’d respond only that he was “somewhere between 28 and 70.” (For the record, he’s 61.)

“I knew we had to do business differently,” Kelly says of his marquee hires. “I thought we had to get some people with a fresh outlook and with federal experience to help us.”

With Libutti, Kelly gets someone who has command presence, a man who has known pressure and conflict—he was injured three times in Vietnam. Libutti also has a record of accomplishment as someone who can, as they like to say in the military, organize and marshal forces and execute an objective. And in fact, he was able to “stand up” the counterterrorism bureau (Marine-speak for get it up and running) within weeks.

Job one for the new bureau is threat assessment on landmarks, public and private properties, and the city’s infrastructure. The bureau has nine five-man teams, whose members were schooled at the federal law-enforcement training center in Georgia.

These teams could, for example, look at the Brooklyn Bridge, a Con Ed plant, or the offices of New York Magazine. Once an inspection is complete, the team produces a written report that includes detailed security suggestions. Though most of the sites are chosen by the bureau based on risk level, some are done by request. This process has helped the department establish closer ties to the business community.

I knew we couldn’t rely on the federal government. We’re doing all the things we’re doing because the federal government isn’t doing them. It’s not enough to say it’s their job if the job isn’t being done.

The counterterrorism bureau also does independent intelligence analysis. The focus is on techniques. If two suicide bombers in a row in Israel are wearing Columbia ski jackets, for example, they’ll identify the marker and issue an alert so cops here are aware of this.

Cohen’s challenge, on the other hand, was to re-create and give new relevance to a division in the Police Department that already existed. “Our intelligence division was in essence an escort service,” says Kelly. “They handled dignitaries and bigwigs when they came into town. It was an intelligence service in name only. We simply had to get better information. We didn’t know what was going on in our own city, let alone the rest of the world.”

On paper, Cohen is exactly what Kelly needed to execute his vision: a high-level guy from inside the intelligence community who has knowledge and access. Someone who can get the right people on the phone and find out what they know. Libutti is plugged in as well. Just before joining the NYPD, he was a special assistant to Homeland Security secretary Tom Ridge. He served as a liaison between Ridge and the Pentagon.

One morning in Libutti’s ninth-floor office at police headquarters, he and Cohen talked about their roles. They are kind of like the Rumsfeld and Tenet of the Police Department. Cohen, who is fairly expansive considering his reputation, admits that when they signed on, their roles were not all that well defined.

“When we got here, there was no counterterrorism doctrine for a city like New York,” he says in a faint Boston accent. “There was no playbook, no manual you could turn to and say, ‘We should do two of these and a couple of the things in that chapter, and we have now built our counterterrorism program.’ The process for us has been to write and implement the playbook simultaneously. And it’s like trying to change the tires on a speeding car.”

What comes through most clearly from the two men is that the lifeblood of their efforts is information. Cohen makes this point when he discusses the recent incident in London when authorities arrested three men suspected in a plot to unleash cyanide in the Underground: “When something like that happens, we need to know in real time everything we can find out about it. Obviously, the subway is a real hot spot for us given that three and a half million people a day use it. So we need to understand what kind of operation they tried to roll up, was it pre-surveillance-stage, planning-stage, was it really cyanide, was the subway the real target? The more times things get rolled up overseas, the smarter we get. And the smarter we get, the stronger we get.”

The flow of quality information is also critical in helping Kelly decide how to respond to threats. Most threats that come in, according to Cohen, don’t name a place, so it is often difficult even to be sure New York is the target. “You have to understand the nuances of the threat,” Cohen says. “Where it’s coming from, how to define it, what it really means. Frank and I help interpret the information, and that enables the commissioner to make an informed decision about responding. This war is going to go on a long time, and you’ve got to calibrate your response. You don’t want to burn everyone out.”

What Kelly has done with Libutti and Cohen, essentially, is to create his own FBI and CIA within the New York City Police Department. “This is all about Ray Kelly’s contempt for the Feds and how they blew it, over and over again,” says a former member of the NYPD who knows the commissioner well.

“The Feds kept getting information they didn’t act on,” he continues. “So what Kelly’s trying to do is say, ‘Hey, just in case they don’t fix all that stuff at the FBI and the CIA, we gotta find out the things they’re finding out. And we gotta act on them.’ Let’s face it: A lot of this isn’t rocket science. It’s cultivating sources, talking to informants, running down leads, getting search warrants, and following up on every piece of information you get. In other words, it’s good, solid investigative police work. The kind of thing New York cops do every day.”

It’s not every day, however, that a major figure in law enforcement like Kelly does something so contemptuous of the system. Yet there has been no outrage, no intramural rock-throwing over what he’s done. Even the FBI, which has traditionally looked down on local cops, has barely raised an eyebrow over Kelly’s moves.

“Our intelligence service was in essence an escort service,” says Commissioner Kelly. “They handled dignitaries and bigwigs when they came into town. We simply had to get better information.”

One possible explanation for the FBI’s passivity is that the agency has been under such relentless critical fire from Congress and the media that it is in no position to take on new battles. Another possibility is assistant FBI director Kevin Donovan, who was recently put in charge of the FBI’s New York office. Donovan gets high marks for competence and as a team player. By all accounts, he is someone who looks to eliminate problems rather than create them.

But the most significant factor may be the most obvious. Given everything that has happened, the FBI may simply be happy to have the help. When I interviewed both Donovan and Joseph Billy, the agent in charge of counterterrorism in New York, they praised Kelly and his cops with alacrity.

“This is a very big city,” says Donovan, “and we just don’t have the resources to collect all the information. We don’t have 40,000 eyes and ears on patrol like the NYPD. We have 1,100 agents in this office. And no one knows the streets here like the local officers. They know what to look for at two in the morning. They know what’s out of place, what doesn’t seem right. What Ray Kelly is doing makes perfect sense and is complementary to what we do. No city is better prepared right now than New York.”

Tom Reppetto, who heads the Citizens Crime Commission and has written a history of the department called NYPD: A City and Its Police, more or less agrees with Donovan. In addition, he says, the FBI is not an immediate-response agency in any event. You wouldn’t call the FBI, for example, if you found a bomb in Union Square Park.

“Remember, too, that the police can do a lot of the counterterrorism work as part of their regular duties,” Reppetto says. “You’ll notice there’s been a surge in arrests of homeless people recently, and they seem to be getting arrested under bridges and in tunnels. Know why? Because police are spending a lot of time under bridges and in tunnels.”

The relationship between the FBI and the NYPD has probably never been more critical than it is right now. The FBI-NYPD Joint Terrorism Task Force is one of the key instruments in the effort to protect the city. The task force was a relatively sleepy backwater run by the FBI but made up of both agents and detectives. One of Kelly’s earliest moves was to pump up the number of detectives from 17 to 125, a huge commitment that the FBI matched. Kelly’s intensity and his willingness to push the envelope were demonstrated early on when he tried to muscle control of the JTTF away from the FBI. According to sources, Kelly and Libutti sent a two-star police chief named Phil Pulaski over to the JTTF, which is housed at the FBI’s New York headquarters.

Pulaski is generally viewed within the NYPD as brilliant—he designed and set up the police lab. However, as one cop put it to me, he also has a “Ph.D. in pissing people off.” So he trooped over to the JTTF and told them, after the FBI had been in charge for over twenty years, that he was now the boss. Though you can imagine the reaction by the Feds, Donovan managed to maintain his cool and prevent a truly damaging explosion.

He simply told Libutti it was not going to work. “You can’t send a guy to my house,” the director reportedly said, “and have him say he’s in charge. Especially without even calling me.” Libutti said he was sorry and reeled Pulaski back in.

But the response from the two sides when this episode is brought up is perhaps more revealing than the incident itself. “Pulaski had a job to do,” says the FBI’s Joseph Billy. “He had to integrate a large number of detectives into the task force, and he’s a very results-oriented individual. There was some tension, but it all worked out. The FBI is still the lead agency for the JTTF.”

Libutti is not quite as conciliatory: “Without criticizing their efforts, part of our responsibility is to reach out to the federal side and demand excellence in support of what we’re doing. I got a guy over there—Pulaski—who’s hard-charging. His job is to keep me posted, and he’s going to press, press, press, to turn over every rock to find out everything that’s happening on the federal side. I think I know what’s going on. What worries me is what I don’t know.”

Part of what Kelly learned during his first term as commissioner—and its aftermath—is the importance of perception. It may not be fair and it may not be right, but sometimes it is not enough just to do a good job.

Self-promotion is not Kelly’s natural mode, but it seems he has learned a few things from watching eight years of Giuliani. Kelly has become the face of the NYPD in the same way that Giuliani was always the face of New York. If there’s a bodega robbed in the Bronx on a Sunday afternoon, it is most likely Ray Kelly who will be on the six- and eleven-o’clock news.

He also must have recognized, coming back to the NYPD, that no matter what he did on the crime front, he would not get any credit. When the FBI crime stats were released last month, New York’s numbers were terrific. That week, in an editorial celebrating the continuing crime decline, the New York Post congratulated Kelly this way: “The local crime rate continues to drop—even as crime nationwide is on the rise—because Kelly and Mayor Bloomberg continue to employ the previous administration’s anti-crime tactics.”

Terrorism, by contrast, is Kelly’s fight. But for all of the risk and the additional headaches, Kelly may, ironically, end up getting very little credit on this front even if he succeeds. When you’re battling street crime, success and failure are easy to measure. Murder goes up or goes down. Rapes increase or they decrease. But how do you measure the terrorist acts that didn’t happen? The ones all the painstaking work may have prevented? In fact, some of the successes may never even be made public when they do occur.

In November, the Times ran a full-page story with the headline deepening shadows that stated in its lead, “Once again, it’s not uncommon to feel a vague sense of dread when walking down a shadowy street.” And “New Yorkers are more fearful these days.”

“You don’t want this kind of perception to fester,” Kelly says with a hint of frustration in his voice. “I’m aware it’s out there. But it is a little difficult to deal with when it’s not based on some reality.”

With the crime numbers way down from four years ago, why do average people say they feel less safe? What has changed for them? “The elephant in the corner of the room,” Kelly says, “is 9/11. That’s why people feel less safe.”

So Kelly’s job is to end the fear. Not the fear of conventional street crime, which continues to be under control, but fear of a menace that can be very hard to see. “Kelly’s a very methodical guy who does things step-by-step, by the numbers,” says Reppetto. “And he is clearly determined that if something does happen, nobody is going to be able to say they didn’t do everything possible to stop it. There won’t be some report issued afterward saying the NYPD fell short.”

The most obvious tests of Kelly’s new counterterrorism strategy are large public events. And two months ago, with several hundred thousand people gathered in Times Square for New Year’s Eve, the pressure was really on the commissioner and the NYPD. They had executed what Kelly calls their “counterterrorism overlay package.” Undercovers were everywhere. Intelligence officers mingled in the crowd. Sharpshooters were on the rooftops. Police boats were on the water, choppers were overhead, and Hercules Teams were ready to move.

Kelly also had the department’s Archangel package in place, which includes ESU teams equipped to detect a chemical or biological attack and to respond if one does in fact occur.

Is New York less safe than it was? “You don’t want this kind of perception to fester. I’m aware that it’s out there. The elephant in the corner of the room is 9/11. That’s why people feel less safe.”

The five days leading up to the celebration had been especially difficult. There were intelligence reports detailing serious harbor threats, including information about a possible plan to stage eight separate diversionary acts culminating with a major terrorist attack. All the locations were covered. The water had an eerie, blacker-than-usual look to it because it was mostly empty. No pleasure boats were allowed out.

Police had also been looking for the five men who might have come across the border from Canada using illegal documents. Michael John Hamdani, the Pakistani document forger under arrest in Toronto, told the NYPD detective who interrogated him about the men. This prompted the FBI to instigate and then call off a nationwide manhunt. Hamdani, however, didn’t say they were terrorists, just that they were trying to sneak into the U.S. For Kelly, this highlighted what he believes is an ongoing alien-smuggling problem. Cops hit various locations around the city during the day, and several arrests were made.

Kelly also had credible intelligence that something might happen between Christmas and New Year’s Day at the stock exchange. All week, Hercules Teams had been flooding the financial district. And then, of course, there was the gathering in Times Square itself.

“We were covering a lot of bases,” says Kelly. “But we were addressing all these things appropriately. We all felt we’d done everything we could’ve reasonably done to make the night a safe one. You can really see the force and the power of the Police Department manifestly displayed on a night like New Year’s Eve.”

Finally, at around 1:30 in the morning, when most of the crowd had drifted away, Kelly had a momentary flash of relief, and satisfaction. The night had been so well handled that there were only three arrests—for disorderly conduct—in a crowd of hundreds of thousands of people. But Kelly’s pleasure was short-lived. “When you get past a particular event now, there’s the next event you have to address. And we were concerned about New Year’s Day.”

Kelly has taken on this burden at an extraordinarily difficult moment for the Police Department. With the city facing its most serious deficits in 30 years, budget cuts have hit the department hard. By July, Kelly will be down 3,000 officers from the roughly 40,000-man force he took over last January. In addition, he has 1,000 cops assigned full-time to his fight against the terrorists.

In an attempt to fill in the gaps, Kelly has energetically tried to convince the federal government that the cost of protecting New York is no longer just a municipal responsibility. Though a half-billion dollars of need has been identified, Kelly and his staff have whittled it down to a $261 million list that includes money for training and equipment. Despite several trips to Washington, Kelly has so far made no progress.

He has also been a good soldier and not publicly fought with the mayor over budget issues. When the mayor was booed last week at the graduation ceremony for 2,108 new cops—largely because his budget-cutting included talk of police layoffs—Kelly enthusiastically came to his defense. However, the police commissioner was not always so sanguine about the cuts. When Bloomberg made his first statement last July calling for 7.5 percent cuts across all city departments, sources say, Kelly balked.

According to one source, Kelly initially told the mayor he couldn’t play ball on the budget cuts. He was not going to be the police commissioner on whose watch crime began to go up because the department was underfunded and undermanned. Though everything was worked out amicably, Bloomberg’s people actually contacted several former commissioners—including Bratton and Timoney—to see what they were up to. “The conversations were to put out friendly feelers that were one stop short of ‘Are you still available?,’ says the source.

The potential downside for Kelly of this focus on counterterrorism is enormous. “I know there’s a universe out there just waiting to say, ‘Aha, I told you so,’ ” he says. “But let me tell you something. We’re taking care of business. There is this notion that this administration cannot do it all, something’s gotta give. Well, the city is safer than it’s ever been in modern history.”

Before september 11, the nightmare that haunted New York’s police commissioners—and commissioners in other big cities as well—tended to revolve around police brutality and race—Amadou Diallo, say, or Rodney King. One commissioner who left his job not all that long ago while riding a wave of popularity in his city reportedly told a confidant that he believed he was “one 3 a.m. phone call away from having it all fall apart.” Since 9/11, of course, “having it all fall apart” means something entirely different—and much scarier. “We don’t know the time and we don’t know the place,” says Libutti, “but we do know the bad guys are coming back.”

Sitting in his office one recent evening as a cold wind whipped across the plaza in front of police headquarters, Kelly showed no signs of the pressure he is under.

“I enjoy this job and I’m living in the moment,” he said while eating a cookie. “The world has changed, but I believe I’m doing the right thing. We’re the biggest, most important city in the world, and this is the biggest, most talented police force. And we have done everything we can reasonably do to prevent another attack.”