When Immigration-Customs Enforcement officers arrested a Bronx man with about 1,000 flawlessly counterfeited law-enforcement badges on him, some of which represented federal agencies such as the FBI and the Drug Enforcement Agency, they headed off what could have been a security disaster.

But they also highlighted a difficult choice that confronts Michael Chertoff, the new secretary of the Department of Homeland Security.

In his first public speech at George Washington University, Chertoff promised a comprehensive review, by the end of May, that would "examine what we need to do and what we are doing without regard to component structures."

"Old turf," he said, "will not define our objectives or the measure of our achievements. Because bureaucratic structures and categories exist to serve our mission, not to drive it."

Chertoff at least has his priorities right. The department, created by the Homeland Security Act of 2002, was the product of political compromise and best guesses. Watching it in action has shown that many of the compromises were bad and the guesses wrong.

Among Chertoff's most daunting challenges will be figuring out what to do with Immigration and Customs Enforcement (ICE) and Customs-Border Protection (CBP), agencies formed from pieces of the pre-9/11 Customs, Border Patrol and Immigration and Naturalization Service (INS). The INS was abolished. Immigration border inspectors and Border Patrol agents merged with most of Customs to create CBP. Customs and Immigration investigators and detention and removal officers were combined into ICE, responsible for "internal enforcement." The two agencies were assigned to a Border and Transportation Security (BTS) directorate under an undersecretary.

This reorganization has proven to be a disaster, exchanging one seam in U.S. security for another. Before the creation of Homeland Security, "people" and "things" entering the country were handled under separate systems. Today, travelers and goods pass through an integrated system, but border operations and interior enforcement are divided into two organizations that, as yet, haven't learned to work well together.

The seizure of the badges in New York was an exceptional but unfortunately rare example of effective teamwork. CBP, in fact, has little incentive to cooperate with ICE on investigations, and its agents are as likely to call the FBI or Drug Enforcement Agency as their former co-workers. ICE, in fact, is so broke that agents often can't afford to leave their offices, lacking travel funds or even small change for automotive repairs.

It was a dumb decision. Separating responsibilities makes no sense. Every ICE investigation begins with a person or persons crossing or attempting to cross U.S. borders. Thus every ICE operation requires working with CBP. In fact, in researching the creation of the department, we couldn't find one compelling argument for creating separate agencies. Indeed, the only serious argument not to merge them now is that the disruption of further reorganization would make things worse.

The case for leaving well enough alone might make sense if terrorism wasn't a long-term threat. But it is, and America's homeland-security agencies will have to be effective for decades. Now is certainly the time for a short-term disruption that makes for better long-term security.

And cohesion is but one argument in favor of the merger. It also would permit Chertoff to eliminate the BTS undersecretary, "middle-management" that had to be created only to oversee the two agencies. This, in turn, would enable the secretary to establish an undersecretary to develop policies for the department.

However the secretary elects to deal with the issue, any effective reorganization and realignment of missions must do the following -- (1) establish common priorities, policies and doctrine between border security, internal enforcement and overseas operations (both ICE and CBP have agents abroad), (2) seamlessly integrate information and intelligence sharing, (3) ensure effective operational coordination and (4) gain economies of scale, particularly important for the cash-strapped ICE. If Chertoff can create an organization that can do those four things, then he really will have accomplished something.

Still, changing the status quo would be a difficult decision for Chertoff. It won't be easy to implement, and it will meet resistance. It is perhaps the first great test he faces in his new administration.

If he fails this challenge, ICE and CBP may limp through his tenure without another 9/11. But he will have saddled his successors with agencies that always will lack the mission, authorities and resources to do the job right.

James Jay Carafano, Ph.D., is a senior research fellow for defense and homeland security at The Heritage Foundation (heritage.org) and co-author of " Winning the Long War: Lessons from the Cold War for Defeating Terrorism and Preserving Liberty." Alane Kochems is a researcher in Heritage's homeland security project.