S. Hrg. 107-562 A REVIEW OF THE RELATIONSHIP BETWEEN A DEPARTMENT OF HOMELAND SECURITY AND THE INTELLIGENCE COMMUNITY ======================================================================= HEARINGS before the COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED SEVENTH CONGRESS SECOND SESSION __________ JUNE 26 and 27, 2002 __________ Printed for the use of the Committee on Governmental Affairs U.S. GOVERNMENT PRINTING OFFICE 80-609 WASHINGTON : 2002 _____________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800 Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON GOVERNMENTAL AFFAIRS JOSEPH I. LIEBERMAN, Connecticut, Chairman CARL LEVIN, Michigan FRED THOMPSON, Tennessee DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska RICHARD J. DURBIN, Illinois SUSAN M. COLLINS, Maine ROBERT G. TORRICELLI, New Jersey GEORGE V. VOINOVICH, Ohio MAX CLELAND, Georgia THAD COCHRAN, Mississippi THOMAS R. CARPER, Delaware ROBERT F. BENNETT, Utah JEAN CARNAHAN, Missouri JIM BUNNING, Kentucky MARK DAYTON, Minnesota PETER G. FITZGERALD, Illinois Joyce A. Rechtschaffen, Staff Director and Counsel Susan E. Popper, Counsel Michael L. Alexander, Professional Staff Member Richard A. Hertling, Minority Staff Director William M. Outhier, Minority Chief Counsel Jayson P. Roehl, Minority Professional Staff Member Darla D. Cassell, Chief Clerk C O N T E N T S ------ Opening statement: Page Senator Lieberman............................................ 1, 61 Senator Thompson............................................. 3, 63 Senator Akaka................................................ 5, 65 Senator Collins.............................................. 6, 81 Senator Cleland.............................................. 7, 97 Senator Voinovich............................................ 7, 85 Senator Dayton...............................................38, 88 Senator Durbin............................................... 41 Senator Carper............................................... 46 Senator Carnahan............................................. 65 WITNESSES Wednesday, June 26, 2002 Hon. Ashton B. Carter, Co-Director, Preventive Defense Project, John F. Kennedy School of Government, Harvard University and Assistant Secretary of Defense (1993-1996), International Security Policy................................................ 9 Lt. Gen. Patrick M. Hughes, U.S. Army (Ret.), former Director (1996-1999), Defense Intelligence Agency (DIA), U.S. Department of Defense..................................................... 13 Jeffrey H. Smith, former General Counsel (1995-1996), Central Intelligence Agency (CIA)...................................... 16 Lt. Gen. William E. Odom, U.S. Army (Ret.), former Director (1985-1988), National Security Agency (NSA).................... 19 William B. Berger, Chief of Police, North Miami Beach, Florida and President, International Association of Chiefs of Police... 23 Thursday, June 27, 2002 Hon. George J. Tenet, Director of Central Intelligence, Central Intelligence Agency (CIA)...................................... 67 Hon. Robert S. Mueller, III, Director, Federal Bureau of Investigation (FBI)............................................ 70 Hon. William H. Webster, former Director of Central Intelligence (1987-1991) and former Director (1978-1987), Federal Bureau of Investigation.................................................. 93 Hon. Bob Graham, a U.S. Senator from the State of Florida and Chairman, Select Committee on Intelligence, U.S. Senate........ 106 Hon. Richard C. Shelby, a U.S. Senator from the State of Alabama and Vice Chairman, Select Committee on Intelligence, U.S. Senate......................................................... 109 Alphabetical List of Witnesses Berger, Chief William B.: Testimony.................................................... 23 Prepared statement........................................... 166 Carter, Hon. Ashton B.: Testimony.................................................... 9 Prepared statement........................................... 125 Graham, Hon. Bob: Testimony.................................................... 106 Prepared statement with an attachment........................ 191 Hughes, Lt. Gen. Patrick M.: Testimony.................................................... 13 Prepared statement........................................... 135 Mueller, Hon. Robert S., III: Testimony.................................................... 70 Prepared statement........................................... 184 Odom, Lt. Gen. William E.: Testimony.................................................... 19 Prepared statement........................................... 156 Shelby, Hon. Richard C.: Testimony.................................................... 109 Prepared statement with an attachment........................ 209 Smith, Jeffrey H.: Testimony.................................................... 16 Prepared statement........................................... 140 Tenet, Hon. George J.: Testimony.................................................... 67 Prepared statement........................................... 175 Webster, Hon. William H.: Testimony.................................................... 93 Additional Material Submitted for the Record June 26, 2002 American Civil Liberties Union (ACLU), prepared statement........ 221 Richard J. Davis, prepared statement............................. 232 Questions for the Record and responses from: Hon. Ashton B. Carter........................................ 241 Lt. Gen. Patrick M. Hughes with an attachment................ 242 Jeffrey H. Smith............................................. 256 Lt. Gen. William E. Odom..................................... 259 Chief William B. Berger...................................... 266 June 27, 2002 FBI letter regarding search capabilities of the FBI's Automated Case Support (ACS) System...................................... 267 Questions for the Record and responses from: Hon. William H. Webster...................................... 270 Hon. George J. Tenet......................................... 273 Hon. Richard C. Shelby....................................... 278 A REVIEW OF THE RELATIONSHIP BETWEEN A DEPARTMENT OF HOMELAND SECURITY AND THE INTELLIGENCE COMMUNITY ---------- WEDNESDAY, JUNE 26, 2002 U.S. Senate, Committee on Governmental Affairs, Washington, DC. The Committee met, pursuant to notice, at 9:33 a.m., in room SD-342, Dirksen Senate Office Building, Hon. Joseph I. Lieberman, Chairman of the Committee, presiding. Present: Senators Lieberman, Akaka, Cleland, Dayton, Durbin, Carper, Thompson, Stevens, Collins, and Voinovich. OPENING STATEMENT OF CHAIRMAN LIEBERMAN Chairman Lieberman. Good morning. The hearing will come to order. I want to welcome our witnesses. Today, we are going to hold the second of four hearings designed to take an intense look at the Homeland Security reorganization plan proposed by President Bush and how best to merge it with legislation reported out of this Committee a little over a month ago. As we create this new Department of Homeland Security, one of our priorities clearly has to be to address what was the single biggest security shortcoming of our government before September 11, and that was the way in which our government coordinated, or failed to coordinate, intelligence. Suffice it to say that a few infamous memos and warnings, now notorious, and the picture they may have painted if they had been understood in relationship to one another are now a perplexing part of American history. And so our challenge is to build a more focused, more effective, more coordinated intelligence system that synchronizes information from the field, analyzes it, converts it, and then turns it into action that can prevent future attacks against the American people here at home. Last week, the Committee was privileged to hear from Governor Ridge on how the administration's plan and proposal would coordinate intelligence gathering, analysis, and implementation. Today, we are going to hear from what might be called a distinguished alumni group from the Intelligence Community and the national security community to get the benefit of their experience and good counsel on the best solution that we can adopt as part of our new Department of Homeland Security or related to it. Tomorrow, we will hear from the Director of the FBI, Robert Mueller, the Director of the CIA, George Tenet, and Judge William Webster, who was the former Director of both the CIA and the FBI, but not simultaneously. We will also hear from the Chairman and Vice Chairman of the Senate Intelligence Committee, Senators Graham and Shelby, because their expertise, including that gained from their current investigations, can certainly help us craft the most effective legislation. Our fourth hearing on Friday will explore the President's proposal to address the problem of weapons of mass destruction and the relevant science, technology, and public health issues associated with detecting, protecting against, and combating these weapons, and particularly the fourth directorate, if I can call it that, or division, that the President establishes in his proposal. With all that in mind, clearly, the part of this reorganization that has drawn most public attention and most attention and thoughtful concern, I am pleased to say, by Members of the Committee is the question of how to bring the intelligence establishment together with the law enforcement community to avoid the kind of information breakdown that appears to have occurred prior to September 11. The President's proposal to establish an intelligence analysis clearinghouse within the new Department is a step in the right direction, although I think we still want to understand better what is intended and to see if there is a way we can strengthen the proposal. Under the President's plan, as I understand it, the Department of Homeland Security would provide competing analysis, so to speak, but the FBI, CIA, and a handful of other intelligence agencies would still have primary responsibility to uncover and prevent specific threats or conspiracies against the American people. In other words, no one office would be designated to pull the threads together and the dimensions of that and how we can focus it most effectively is something I would be very eager to hear from our witnesses today. Our Committee bill proposed a different approach, which I do not argue on its face is adequate to the threat at this point, as we better understand it today, either. Primarily at Senator Graham's urging, we established an anti-terrorism coordinator in the White House with the statutory and budget authority to pull the various elements of the anti-terrorism effort together, and that would include not just the new Department of Homeland Security, but the Intelligence Community, law enforcement, and State and Defense Departments, as well. In short, the coordinator would be in a position to forge the kinds of relationships that would be necessary to get the information needed to connect the dots and have a chance of seeing a picture more clearly. Today, we welcome the witnesses that are before us to hear their response to these two ideas and hopefully separate ideas that they themselves have. Several people have suggested the creation of a domestic intelligence agency along the lines of Britain's MI5, which, as many of you know, works closely with both local police, Scotland Yard, etc., and the Foreign Intelligence Agency, MI6, and reports to the Home Secretary. The view of those who advocate this idea is that the FBI's law enforcement mission conflicts with the intelligence-related tasks we are going to increasingly give it, and that it is assuming now after September 11, and thus, the counter-terrorism functions of the FBI and CIA would be merged into this new Department. Others have been troubled by suggestions to break up the FBI, of course, but also troubled by the civil liberties implications that are associated with such an agency and we will want to hear from our witnesses about that. Our colleague from Pennsylvania, Senator Specter, has presented another proposal which, in some sense, builds on the President's proposal, that would create a National Terrorism Assessment Center within the new Department that would have authority to direct the CIA, FBI, and other intelligence agencies to provide it with all information relating to terrorist threats. That center would pull experienced intelligence analysts from across the Federal Government to analyze, coordinate, and disseminate information to law enforcement agencies and it has an interesting requirement in it somewhat like the Goldwater-Nichols proposal, that people in the different intelligence agencies of the government would have to serve a time in this National Terrorism Assessment Center as part of their promotional path up. We are going to hear other ideas today from a superb group of witnesses. What struck me last week at the first hearing we held with Governor Ridge and Senators Hart and Rudman is the really intense desire of Members of the Committee, certainly across party lines, to figure out the best way to get this job done, and this job meaning both the new Department of Homeland Security and particularly this question of coordinating intelligence and law enforcement. We feel that this is not only a moment of challenge, but a moment of opportunity, and I think most of us have not yet found a comfortable place to conclude our quest, particularly with regard to intelligence and law enforcement coordination. So I look forward to this hearing today with confidence that this distinguished panel of witnesses will help us in that effort and I thank them very much for being here. Senator Thompson. OPENING STATEMENT OF SENATOR THOMPSON Senator Thompson. Thank you, Mr. Chairman. I would ask that my statement be made a part of the record. Chairman Lieberman. Without objection. Senator Thompson. I think that if we were too comfortable right now in our quest to reach these solutions, we would be premature. That is the very reason, of course, why we have these hearings, and I want to compliment you on this array of witnesses that we have today. I think they are exactly the kind of people we ought to be talking to as we work our way through this. We are dealing primarily today with the intelligence piece. My own view is that, without a doubt, we will conclude after our Intelligence Committee hearings, which I am a part of, that there are deficiencies and inadequacies. I think we have known that for a long time before September 11. We simply have not kept up to the new world that we are now living in since the end of the Cold War. In terms of human intelligence, in terms of ability to penetrate, we are going to have to do much better. We have seen major deficiencies in terms of collection, analysis, and dissemination of intelligence information. I think the question for us here is to what extent will this legislation fix that, and to what extent is it designed to? I tend to think, at this stage of the game, "very little" is the answer to both questions. I think, though, that certainly stands on its own two feet in being beneficial to the overall problem. But the intelligence issue, is it really meshed into the homeland security problem or is it separate? Do we need to do the Homeland Security organization piece, treat Homeland Security as a customer of intelligence with the idea of reforming the Intelligence Communities later so as not to create confusion and gaps at a sensitive time, or exactly how do we handle this? Do we set up a separate entity, as you mentioned, recognizing the distinct nature of the FBI and the law enforcement mandate that it has, and the fact that overnight, its top priorities are now things that they spent relatively very little time on up until now? So should we keep them in the same Department or put them in the Homeland Security Department, or put part of them in the Homeland Security Department, or create a new MI5? If we create a new MI5, what should it be under, the Justice Department or the DCI or where? And what difference does it make anyway? We all have ideas that seem logical to us as to where the boxes ought to be and who ought to be under where, but we really need to get down to why. What empirical evidence is there that one way might work better than another? I think that is what people like these gentlemen can help us with. So thank you for being here with us today and I look forward to their testimony. Chairman Lieberman. Thanks, Senator Thompson. [The prepared statement of Senator Thompson follows:] OPENING PREPARED STATEMENT OF SENATOR THOMPSON Thank you Mr. Chairman for calling this hearing. I'm glad as we continue our work on the proposal for a new Homeland Security Department that we are going to spend a couple of days looking at intelligence information sharing. The President's proposal places a great deal of responsibility on the new Department to sift through information, conduct threat assessments and vulnerability assessments, to issue warnings, and to ensure that our critical infrastructure remains safe. This ambitious mission, together with reform of the Intelligence Community, cannot succeed, however, unless the Department receives cooperation and all the information it needs from collection sources such as the FBI and CIA. Shortcomings in intelligence collection and analysis must be solved if the nation's homeland security is genuinely to improve. Even if we do improve these aspects of intelligence operations, however, we still confront serious obstacles to getting agencies to share relevant information with each other. Indeed, some have questioned whether Congress should reorganize the Intelligence Community as a whole to improve the sharing of information. The failure to share intelligence is not a new problem. In fact, this Committee has seen some of those difficulties first hand. For example, during the campaign finance investigation, our efforts were hampered by the failure of the FBI to properly disseminate information to Congress, and for that matter to the Campaign Financing Task Force within the Justice Department. This Committee also conducted an investigation of the Wen Ho Lee matter and Senator Lieberman and I released a joint report regarding numerous failures within DOJ and the FBI including some regarding information sharing. A number of reasons have been given for the problem of information sharing. Some believe that it is simply not possible for law enforcement agents, whose training and promotions revolve around pursuing criminal cases for prosecution, to switch gears and operate as intelligence analysts. Others believe that because the FBI, CIA, and the military services all have a different focus that they're not inclined to talk to each other. Some also believe that our intelligence agencies are not coordinated very well and often display an inherent tendency to protect their information in order to protect their sources. Whatever the cause for the information-sharing problems that have existed for many years, we must address them. The good news is that we are doing so. Obviously, this committee is working on the issue this week in conjunction with its legislative jurisdiction. Other committees, most notably the House and Senate Intelligence Committees, are also examining this issue. I am looking forward to hearing some different ideas today about how the new Department could and should work within the Intelligence Community. I also want to hear the views of our distinguished witnesses about possibly reorganizing the boxes to put pieces of the FBI in the new Department, create a new independent intelligence center, or even an MI5 type model. I am also looking forward to hearing tomorrow about the ongoing effort at the FBI to reorganize from within to see if that reorganization will provide sufficient support to the new Department and obviate the need to shift portions of the FBI. While we may act on a Homeland Security Department in the short term, we will need to keep an eye on how information sharing works in practice to determine whether more steps need to be taken in the future. Whatever we do now to create a new Department will not be the last step, but only the first. Continuous and continuing oversight and reevaluation must be the new watchword for Congress, and especially this committee. We must keep in mind that the establishment of a new Cabinet Department with an intelligence component will not solve the defects we observed in connection with the attacks of September 11. Instead, wholesale reform of our Intelligence Community is desperately needed. We cannot afford to allow the failures in our collection, analysis, and dissemination to continue. Our intelligence agencies are the eyes and ears of this country. If they are malfunctioning, then we will be blind to potential attack. Clearly, September 11 proved to all of us that our Intelligence Community has not functioned properly for some time. Despite numerous warnings, we did not take sufficient action. The investigative efforts of this Committee and others are the first step toward fixing our intelligence agencies. We must follow these hearings with serious reform. This matter is too important to put off any longer. Mr. Chairman, you have brought together a number of very distinguished observers of the current system whose views will greatly assist Congress in evaluating the strengths and weaknesses of the current system. I look forward to hearing from them. Chairman Lieberman. Senator Akaka. OPENING STATEMENT OF SENATOR AKAKA Senator Akaka. Thank you very much, Mr. Chairman. Good morning to our witnesses and thank you for joining us today. I want to commend Chairman Lieberman for his leadership and guidance in what we are doing. Since September 11 exposed the strengths and weaknesses of our national security systems, we have been trying to correct mistakes, trying to strengthen our weaknesses, and Chairman Lieberman has stepped out on this issue. It was appropriate that after hearing from Governor Ridge and Senators Hart and Rudman last week that we discuss how the proposed Department of Homeland Security fits into our Nation's intelligence structure. In hindsight, we must strengthen existing analytical and information sharing structures and avoid duplication at the expense of other national security requirements. We are facing the most extensive government reorganization in over 50 years. Yet, the administration's proposal fails to articulate a long-term vision to guide this new Department. Moreover, I hope the proposal is not meant to replace the Homeland Security strategy that Governor Ridge is expected to release next month. The Hart-Rudman Commission found that the United States lacks systems to facilitate timely intelligence sharing. We must ensure full and active coordination between the Intelligence Community and this proposed Department. Currently, representatives from our Intelligence Community serve on the Central Intelligence Counter-Terrorism Center. We should ask whether strengthening the CTC and establishing liaisons between the new Department and the CTC would ensure access to timely information. The administration's proposed Department would analyze raw data and finished reports from many different agencies. However, the linkage of these previously separate functions could take years to develop and might create unintended vulnerabilities. State and local authorities in Hawaii and throughout the Nation depend on the Federal Government to collect, analyze, and disseminate information that is timely and accurate. I am concerned that the President's proposal does not include mechanisms for intelligence sharing between the Department and other Federal agencies, with State and local authorities. It is critical to establish and promote standards, intelligence sharing, and to guarantee that the information is reliable and credible. Regardless of how we organize the Federal Government, we cannot meet our intelligence obligations unless we maximize the talents of those charged with security, and provide sufficient resources to carry out new Homeland Security missions. As an example, we must provide training to improve the foreign language skills of our present Federal workers, and invest in the next generation of employees to ensure a dedicated and capable workforce that will contribute to our national security. We cannot allow the Federal Government to become the "employer of last resort." Learning from September 11, let us move forward to improve existing structures, coordinate information sharing, and ensure cooperation among agencies. I see these actions as opportunities, not challenges, in strengthening our Nation's security. Mr. Chairman, I join you in this effort and in thanking our witnesses for being with us this morning. Chairman Lieberman. Thank you, Senator Akaka. Senator Stevens. Senator Stevens. I yield to Senator Collins. Chairman Lieberman. Thanks. Senator Collins. OPENING STATEMENT OF SENATOR COLLINS Senator Collins. Thank you, Mr. Chairman, and thank you, Senator Stevens. Mr. Chairman, as our hearing last week demonstrated, this Committee, Congress, and the administration still have a lot of work to do to create workable legislation establishing a new Department of Homeland Security. Today, we are considering the relationship between the new Department and the Intelligence Community. This could well be one of the most important and difficult issues that our Committee wrestles with. If there is not efficient and adequate information sharing between the new Department and the existing intelligence agencies, and if there is not better interagency cooperation, then the reorganization and creation of a new Department will not be sufficient to remedy the problems that have been identified as vulnerabilities in our system. I look forward to hearing the testimony of our witnesses today. Thank you. Chairman Lieberman. Thanks, Senator Collins. Senator Cleland, good morning. OPENING STATEMENT OF SENATOR CLELAND Senator Cleland. Thank you very much, Mr. Chairman. Gentlemen, thank you very much for being here. I feel very strongly about several issues. First of all, the need for a Homeland Security agency to force coordination, cooperation, and communication among basic agencies that are in charge of our homeland defense, like Customs, like the Coast Guard, like the Border Patrol and other agencies. I am an original cosponsor of the Homeland Security Agency bill that came out of this Committee. I feel strongly about two other issues. First, that the Secretary of the Homeland Security Agency should be a Cabinet- level officer, sit in the Cabinet meetings, and be part of that inner circle. But the legislation that we reported out has within it a suggestion that I made, and that is that the head of the Homeland Security Agency should also sit on the National Security Council. Why? For access to intelligence, so that Secretary knows what everybody around the table knows. For me, that pretty much solves the problem. I think the Secretary of the Homeland Security agency ought to have access to information, and access to intelligence. I am not quite sure it is proper for that agency to be engaged in intelligence gathering. We are all worried about connecting the dots, but if you sit on the National Security Council and have access to the intelligence and know what everybody else around the table knows, it seems to me that ought to be sufficient. I would like to get your opinion as we get into the questions here, but that is the way I solve the access to intelligence problems and enable the Homeland Secretary to have the intelligence that he or she needs to do the job. Thank you, Mr. Chairman. Chairman Lieberman. Thanks, Senator Cleland. Senator Voinovich. OPENING STATEMENT OF SENATOR VOINOVICH Senator Voinovich. Thank you, Mr. Chairman. At the last hearing, I mentioned that we can rearrange the chairs in the new Homeland Security Department, but what really counts is who is sitting in the chairs, the quality of the individuals, their skill, their knowledge, and from the point of view of intelligence sharing, their interpersonal skills with each other. I am very pleased that Senator Akaka mentioned the human capital challenges that we have regardless of what we do in this proposed new Department. The subject of this hearing is intelligence sharing. But Mr. Chairman, at our last hearing, we spent most of our time talking about intelligence sharing and whether it was going to work or not. It seems to me that all of us should be concerned about the rash of reports that our Intelligence Community is deficient in its information sharing. Last week in the Washington Post, a senior U.S. official stated, "We do not share intelligence among agencies. No one seems to have the authority to make that cooperation happen. We are very much a Third World country in how we are doing this." This is a devastating assessment made by a senior government official and something, I think, that this Committee should take seriously. The inability of the government to share intelligence effectively seems to be rooted in longstanding and systemic problems, including a history in some agencies to protect turf rather than work together with other agencies toward a common goal. This simply cannot continue. I ask that the rest of my opening statement be inserted in the record. I am very anxious to hear from our witnesses because they have got the experience to tell us if these observations that I just made are correct, and if they are, what can we do to solve the situation. Chairman Lieberman. Thanks, Senator Voinovich. [The prepared statement of Senator Voinovich follows:] PREPARED STATEMENT OF SENATOR VOINOVICH Thank you, Mr. Chairman. I applaud your leadership in our Committee to move this issue forward. As you know, the proposed Department of Homeland Security represents the largest government restructuring in 50 years. Paul Light from The Brookings Institution noted that this effort "is by far the most sweeping merger of disparate cultures in American bureaucratic history." This is a massive challenge and the stakes are of the highest order. Today, however, we are not here to discuss merging the cultures and activities of 22 separate agencies, but rather how this new Department will interact with the agencies that handle the most classified and sensitive national security information and how those agencies can share information appropriately with the new Department of Homeland Security. I would observe, Mr. Chairman, that this is really the second, not the first, day of hearings on this specific aspect of the proposed reorganization. Last Thursday, most of the Members of this Committee focused almost exclusively on the relationship between the proposed Department and the Intelligence Community. We all seem to agree that this relationship may determine the success or failure of our efforts to secure the American homeland. According to a rash of recent news reports, our Intelligence Community is deficient in its information sharing. For instance, in last week's (Tuesday, June 18) Washington Post, a senior U.S. official stated that " . . . we don't share intelligence among agencies; no one seems to have the authority to make that cooperation happen. We are very much a Third World country in how we are doing this." This is a devastating assessment made by a senior government official, and something this Committee must take seriously. The Federal Government's inability to share intelligence effectively seems to be rooted in longstanding and systemic problems, including a history in some agencies to protect turf rather than work together with other agencies toward a common goal. This simply cannot continue. As a matter of national security, we cannot afford to continue policies or processes that disrupt the flow of information to the people who need to know and who can make a difference. Mr. Chairman, countless other Members of Congress have said similar things regarding intelligence sharing and cooperation in the past, yet the problem persists. We must make sure this time that we take all the necessary actions to ensure our security and we will not tolerate petty jurisdictional or turf considerations. This means that Congress must provide a solid legislative foundation for the Department that clearly sets out its roles, responsibilities, and relationships to the Intelligence Community and other departments and agencies. There must be strong accountability mechanisms. We also must provide adequate resources, including technology and, above all else, the people needed to get the job done. People who know how to obtain, organize, analyze and disseminate information collaboratively and effectively. Human capital, at all levels, will be key to the success of this Department. As we conduct this dialogue over the next 2 days, I look forward to hearing about ways in which we can better organize and manage the FBI, CIA and other intelligence agencies to ensure that life-saving information is made available in a timely manner to the Department of Homeland Security, and not, as we have regrettably seen, days or weeks after it is too late. Mr. Chairman, thank you again for your leadership on this issue. Chairman Lieberman. Gentlemen, thanks very much for being here. We end up speaking in technical terms sometimes about this, but as I see the question before all of us, it is to acknowledge that we are now spending an enormous amount of money annually to gather all sorts of intelligence, and the question post-September 11 is how can we most effectively bring that together to prevent further terrorist attacks before they occur? Are there other forms of intelligence that we should be more aggressively collecting now with what we know after September 11 and after, in fact, the anthrax attacks? So those are the big questions. I am very grateful that you are here. We are going to start with the Hon. Ashton Carter, who was Assistant Secretary of Defense for International Security Policy from 1993 to 1996, is now Co-Director of The Preventive Defense Project at the John F. Kennedy School of Government at Harvard. Thanks, Dr. Carter, very much for being here. TESTIMONY OF HON. ASHTON B. CARTER,\1\ CO-DIRECTOR, PREVENTIVE DEFENSE PROJECT, JOHN F. KENNEDY SCHOOL OF GOVERNMENT, HARVARD UNIVERSITY AND ASSISTANT SECRETARY OF DEFENSE (1993-1996), INTERNATIONAL SECURITY POLICY Mr. Carter. Thank you, Senator and Members, for having me today. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Carter appears in the Appendix on page 125. --------------------------------------------------------------------------- Chairman Lieberman. Excuse me a second. We have got the clock set for 5 minutes. Feel free to go a little longer if you have not--this is the only panel we are going to hear today--if you do not feel you have had a chance to say your peace. Mr. Carter. Thank you. I will try to be brief, though, Senator. You just mentioned new types of intelligence in connection with Homeland Security, and that is, in a sense, the theme of what I would like to say today. I have a written statement which I would like to enter into the record, if I may. Chairman Lieberman. It will, along with the other excellent statements all of you have prepared for us, be entered into the record. Mr. Carter. Thank you. The written statement addresses the overall architecture of the Federal Government for Homeland Security, including the respective roles of the White House, OHS, Office of Homeland Security, and the proposed new Department, DHS. In my oral comments, I want to focus on several new types of intelligence, intelligence with a small "i", which I mean very generally to denote information and analysis necessary to the successful accomplishment of the mission of Homeland Security over time, but which is not necessarily the perpetrator-focused, event-focused type of intelligence that we traditionally associate with the FBI and the CIA. These types of intelligence, which I would argue the Department of Homeland Security can usefully devise or invent or promote and then practice, these are modes of intelligence that the CIA and the FBI, I would judge, are unlikely to practice well by themselves, but for which they can provide useful inputs. If I may, I would like to take a few moments to recap the main points of the overall argument I made about the architecture and then turn to the intelligence question. Just a few points on the respective missions of the White House and the Department of Homeland Security. I am moved to do this because I think that the foundation of the new Department, if there is a foundation of the new Department, does not make the role of Tom Ridge or the Office of Homeland Security any less important. In fact, it probably makes it more important. Therefore, it is important that we not think of the DHS as somehow supplanting the Ridge mission. The reason for this is that while, in everybody's version of the Department of Homeland Security, it contains much of the Federal structure that bears upon Homeland Security, it also omits much. Therefore, the problem of interagency coordination does not go away. That is something that can only be done in the White House. The heart of the Ridge mission, from my point of view, is not what his charter says, which is to coordinate. Coordination implies that the Nation has the capabilities it needs to do Homeland Security. All we need to do is marshal them optimally. I do not think that is right. I do not think the Nation has the capabilities it needs. And so if all you have is a come-as- you-are party where everybody brings whatever history and tradition and their existing missions happen to have equipped them with, you are not going to have the capabilities the Nation needs. So to my way of thinking, Governor Ridge ought to see his job far less as one of coordinating what we have than building what we need, that is, an architect, not a coordinator--an architect who conceives the investment plan the Nation needs to make in its own protection over time. That is the heart of his job and the critical product we require of him is a multi-year, multi-agency program plan, precisely the kind of program plan that I think we all wish had informed the preparation of the fiscal year 2003 budget, which instead is essentially a bubble- up product rather than a top-down product. That investment plan, when he makes it, needs to include-- and this is also why this is quintessentially a White House function, not an agency function--attention to how the investments on Homeland Security are to be apportioned between the Federal Government, State and local governments, a question of fiscal federalism as it applies to Homeland Security. It is a critical issue. Someone needs to share out the responsibilities here. There are clearly things that the Federal Government ought to do in this domain, others that can be done by State and local government but might need support from the Federal Government, and others that they will need to do on their own. And part of the architecture is to establish a few ground rules for who does what. That is true also when it comes to the question of public investment versus private investment. Any of the needed investments that need to be made in the private sector, are they to be mandated by government, encouraged by government, supported by government, or are we going to count on the insurance industry or the self-interest of corporations to supply the needed incentives? Once again, that is a whole set of questions that only an architect can address. So for all these reasons, I think the White House and the Ridge office become more important, not less important, the more serious we get about Homeland Security, and his job is to be the investment architect, not the coordinator, not the czar. With respect to the Department of Homeland Security, I think that is an important ingredient of the architecture. I do have three concerns about it, though, and let me share them before turning to the intelligence question. The first, I have already noted, namely that it is a big mistake if we allow the Department of Homeland Security to divert us entirely from the mission of the Office of Homeland Security or imagine somehow that it is a substitute for a functioning Ridge office. It is not. Second, I have seen a lot of government reorganizations, participated in some in the Department of Defense, and they have a tendency to be half-done, to be poorly done. Unless this reorganization is aggressively pursued and whoever has the job of carrying it out is given the authority to manage it aggressively and creatively, we could end up worse off than we are now. Halfway-done reorganizations are the worst of all possible worlds. And the third proviso on the Department is I do not think it is enough for us to ask that the new Department just bring together things that we are already doing, focus them, and make them more efficient. I think unless the new Department does new things that are not done anywhere in the Federal system now, it is not adding enough value. I would identify two things, particular things, that are, I would say, to a first order of approximation not being done at all that need to be done. The first is these new types of intelligence, to which I will turn to in a moment. The second is the science and technology investments, or inventiveness, as it applies to Homeland Security. We have a lot of weaknesses as a Nation as we face the era of terrorism. We are open. We are a relatively soft target in many ways and we need to look to our strengths. If this Nation has one strength that has served it well in emergencies in the past, it has been our inventiveness, and particularly in science and technology. If we do not bring that to bear on this problem, we are not taking advantage of one of our key national traits. The other thing the Department of Homeland Security ought to do is intelligence with a small "i", and let me use a few minutes to say what I mean by that. There is a lot of debate going on about whether we should have connected the dots or not before September 11 and I think some useful insights have emerged from this debate already. One insight is the danger of continuing to separate foreign intelligence and domestic intelligence as rigorously as we have done in the past. Another is the insight that we need to encourage FBI law enforcement officials to prevent terrorism and not just to solve the crime after it has occurred. So these are useful insights. But most of the debate on intelligence is still what I would call intelligence with a capital "I", that is, intelligence which conceives of the information at issue as perpetrator-focused or event-focused. Who are these guys who might do this to us? What are their intentions? What kind of act might they be planning? This is obviously pertinent information, but I think there are some other concepts of intelligence that are of great potential importance to Homeland Security which, as I said earlier, at first approximation, are not currently accomplished anywhere in the Federal Government. A clear and valuable role for the Department of Homeland Security would be to develop and practice some of these intelligence techniques. Among them are red-teaming, what I call intelligence of means, counter-surveillance, and risk assessment, and I would like to just define each of those and give you an example. I will say parenthetically that these are important and effective aspects of the intelligence underlying Homeland Security and they raise very few civil liberties issues by themselves, and that is another advantage. Let me start with red-teaming. Most Americans were probably not shocked--I certainly was not--on September 12 to learn that we did not have advance information about the dozen or so individuals living in our midst who plotted and took part in the airline suicide bombings. I was deeply disturbed to learn, though, and I think most people I talked to were, that the government was as heedless of the tactic they used as it was of who they were. That is, we inspected the airline system for guns and bombs, not knives, and we thought about people seeking conveyance to Cuba, not seeking conveyance to the upper floors of the World Trade Towers. So a huge gap existed in our airline security system and they found it before we did. We cannot allow that to happen. We cannot allow that kind of tactical surprise to happen again, and to me, that recommends that the Homeland Security effort do something, red-teaming, which is a standard thing in military organizations, to have competing red and blue teams. An experience that I am familiar with was the example of the development of stealth. In a red team, you try to project yourself imaginatively into the shoes of the opponent. Think of what the opponent might do to you and then what counters. Then you have a blue team which devises counters. In the stealth program, when we developed the first stealth aircraft, for example, the Air Force created a red team which tried to figure out how to see, detect, and shoot down stealth aircraft, and I am sure some of the people here remember that well. The blue team was charged to fix the vulnerabilities, and then we could systematically balance the threat of detection against the cost and inconvenience of countermeasures. A comparable red and blue team effort is, to my way of thinking, a crucial aspect of Homeland Security, as I said, essentially not done anywhere in the government now except in bits and pieces--intelligence with a small "i". Another example, intelligence of means. If you think not about catching the people, but catching the wherewithal of terrorism, that is a pretty rich field, as well. Remember all the talk of crop dusters in October? That came from the Atlanta Olympics experience, within which I also participated, or with which I was associated, and that is an example where you surveilled the means of destruction. You do not know who has the intention of using a crop duster to spread biological weapons. You do not presume you have that information, but you are going to watch the crop duster. We watch fissile material around the world, not well enough, but we do. That is something, presumably, you will be discussing on Friday. It has been just a few years that we have surveilled pathogen cultures. And in the news in the last few weeks, we have learned that we are not surveilling well enough radiological sources, surveillance of means. Counter-surveillance, another concept---- Chairman Lieberman. Forgive me for doing this, but I am going to ask you to see if you can wind up. Mr. Carter. I am done. I have got one more example and I am done, sir. Chairman Lieberman. Good. Thank you. Mr. Carter. Counter-surveillance, the best example of that is what we do at embassies and bases, where, a simplistic version, you stand on the roof and look for people looking for you, people driving by more than once, people taking pictures of architecturally undistinguished aspects of a building. But counter-surveillance, the point of it is to estimate the information that a terrorist would need to attack you and then look for people looking for that information--a very lucrative form of intelligence with a small "i". And finally, there is risk assessment, which I will not go into but in the course of which one comes out balancing risks, figuring out which threats are most likely, most damaging, and least costly to countermeasure. It is risk assessment that is the crucial input to the architect's budget plan. So in summary, if you think about forms of intelligence with a small "i", it is easy to think of some. I have given some examples. These are things that need to be done. CIA and FBI information is input to them, but no substitute for them. Thank you. Chairman Lieberman. Thanks, Dr. Carter, for very fresh and helpful testimony. I look forward to asking you questions about it. Our next witness is General Patrick Hughes, U.S. Army, Retired, former Director of the Defense Intelligence Agency, and now, I believe, a consultant in the field of security, generally. General Hughes, thank you for being here. TESTIMONY OF LT. GEN. PATRICK M. HUGHES,\1\ U.S. ARMY (RET.), FORMER DIRECTOR (1996-1999), DEFENSE INTELLIGENCE AGENCY (DIA), U.S. DEPARTMENT OF DEFENSE General Hughes. Thank you, Mr. Chairman, Senator Thompson, and other distinguished Senators. I would like to read my statement because I want to make sure that I make the points clearly and directly to you. --------------------------------------------------------------------------- \1\ The prepared statement of General Hughes appears in the Appendix on page 135. --------------------------------------------------------------------------- What we do to secure our Nation must be done both internally and externally. We should go abroad in the global context as well as within our Nation's borders and vital territory to seek out those who would strike us and interdict them, stop them, dissuade them, provide alternatives to them, whatever will work short of appeasement, to forestall future attacks. We cannot afford to absorb the blows that are possible in the future. As bad as past attacks have been, those events were not as bad as future attacks may be. Thus, I am making my comments today with a great sense of urgency, because in my view, the conditions are, indeed, urgent. We have enlarged the battle space by putting forward the concept of conducting a defensive and sometimes offensive war on terrorism here in our homeland. To ensure an internally secure America, we must continue to attend to traditional threats from nation states and alliances and coalitions and from new groups that may form against us. We have not reduced the mission environment, nor have we reduced the possibility for external conflict merely by preparing for the threat to our homeland from terrorists and other antagonistic groups. Rather, we have expanded our requirements. As you know, the Department of Homeland Security will require appropriate legislation to give it a charter and authority and responsibility in the context of the U.S. Intelligence Community. In that same context, the Department will require Presidential authorities in writing and detailed written descriptions of its responsibilities and functions. Ideally, these documentary efforts should match and reinforce. Standing up the intelligence element of the Department of Homeland Security is not a zero-sum effort. Additional people and money must be allocated for this undertaking. The Department of Homeland Security should have a senior official appointed to do the work of intelligence included in its structure. The people who actually do the work of intelligence in the Department of Homeland Security should be the best and we should give them the best tools to work with. This will cost money and will strain limited human and technical resources. The key to the success of the people that do the work of intelligence is access to information. Intelligence sharing across the Intelligence Community, Federal, State, and local, is vital. Without open and expeditious sharing of intelligence, I believe this endeavor will fail. The Department of Homeland Security should not separately develop or field sensors, sources, methods, or collection capabilities apart from the existing U.S. Intelligence Community or relevant elements of law enforcement, counterintelligence, and security. However, it should have the power and authority to use existing or developed capabilities in partnership with those who have primary responsibility for the capability. The Department of Homeland Security should participate directly in Intelligence Community collection management. The Department of Homeland Security should have the requisite processing, analytic, and production capacity necessary to the task at hand. In our Intelligence Community, we currently have an inadequate capability to process, analyze, prepare in contextual and technical forms that make sense, and deliver cogent intelligence to users as soon as possible so that the time-dependent operational demands for the intelligence are met. In order to fix this inadequacy, this requires a very advanced set of automation and telecommunications capabilities, the best analytic tools we can acquire, and the best people we can coax to do this demanding work. Intelligence support for countering terrorism in the context of Homeland Security is akin to searching out criminals who are planning to act and interdicting them before they act, more than it is about the physical kinds of intelligence directed against established nation states or alliance opponents in conventional or even unconventional warfare. Understanding this construct seems critical to the work of intelligence support, since it is much different than the typical military context. This is, indeed, different and requires a different approach to achieve success. Warning times will be very short. Evidence of an impending act may be slim. The number of people involved can be comparatively small, and clarity is unlikely since extraordinary measures will be taken to conceal what is being planned or attempted. The threat may be so acute that we must act very rapidly. Invasive human and technical presence inside the planning, decision, action, and support loops of the compartmented opponents we are faced with seems vital. While this reinforces my view of the importance of human intelligence, it also reinforces the fact that technical intelligence of all kinds, appropriately targeted and focused, can provide important assistance and insight. We have, in my view, failed to do the right things in the past. These failures include an inadequate human intelligence gathering capability, an unwillingness to engage in risky operations, and a flawed set of recruiting, training, supporting, and training systems for intelligence professionals. For the security of our homeland, we have to fix this set of problems. Every possible type of intelligence endeavor must be applied concurrently and synergistically in an all-source collection and all-source analytic environment so that no stone goes unturned, no opportunity is missed, and no venomous snake is left alive unless it suits our purpose. The Department of Homeland Security must have, internal to its structure, an adequate all-source management and performance capability. One of the most demanding tasks for the Department of Homeland Security is to warn the citizens of the United States of an impending threat. Setting up an effective, efficient, and dependable Homeland Security warning system is quite different, since the nature of the threat, time, space and place, and tempo of activity are so different. Solving this problem is already challenging and will become more difficult as time passes. The indications and warning system needs our best effort. We should not allow the open publication and public compromise of vital details of intelligence activities which, when they are compromised, give some advantage to our opponents. On the other hand, appropriate authorities must have full access to the workings of the Homeland Security intelligence structure so that they can exercise the kind of oversight, policy control, and enforcement and accountability that we all know we need. We need to find some form of balance between these concepts. When one looks out at the future threat, notably the threat from rogue elements with weapons with mass effects, and adds to it the possibilities embodied in new science and new technology, then I believe we should generate an exceptional and urgent response to these threats. In speaking to you today, it is my fervent hope that some idea or thought will help to better secure our Nation. Thank you very much. Chairman Lieberman. Thank you, General. That was a very helpful statement. Next, we are going to hear from Jeffrey Smith, former General Counsel of the Central Intelligence Agency and now a partner at the law firm of Arnold and Porter. TESTIMONY OF JEFFREY H. SMITH,\1\ FORMER GENERAL COUNSEL (1995- 1996), CENTRAL INTELLIGENCE AGENCY (CIA) Mr. Smith. Mr. Chairman, thank you. It is a pleasure to be here and appear before this Committee to discuss generally the issue of Homeland Security and in particular one of the most important questions, how to improve the collection, analysis, and dissemination of intelligence. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Smith appears in the Appendix on page 140. --------------------------------------------------------------------------- In my judgment, I agree with Senator Thompson. It is probably premature to reach final conclusions about what went wrong and how to fix it until the Intelligence Committees complete their review, but we can begin to ask some questions now. Let me talk just for a couple of minutes about intelligence broadly and then focus on some specific issues related to this. In my view, it is an oversimplification to say that the failure to predict to prevent the attack was caused solely by the lack of cooperation between the FBI and the CIA. Intelligence, whether it be domestic or foreign, is far more than just sharing information and connecting the dots. My colleagues have talked about this a bit, but good intelligence depends on many factors--understanding what the consumer of intelligence needs, and what we are able to collect, and what we are not able to collect. General Hughes mentioned the need to take risk, particularly in the clandestine service. One cannot say too strongly that clandestine officers of the CIA must know that we expect them to take risks and know that we will back them up when the going gets tough, and candidly, we have not done that perhaps as often as we ought to have. It is also imperative in my judgment that the analyst and the collector work together closely. The collector needs to understand what he is supposed to collect and the analyst needs to understand what the collector can and cannot collect. The analyst also needs to understand the texture in which it was collected to know what kind of weight that ought to be assigned to a particular scrap of information. Another fundamental question is whether it is possible to have a single agency responsible for both law enforcement and intelligence. Over time, we have discovered how hard that is, and frankly, I am almost of the view that we should separate the two. I think we need to look very hard at that, and I want to talk about that in a moment. The CIA and FBI have done a much better job of working together in the last few years, but there are still gaps. Finally on this broad issue, Mr. Chairman, I agree with the comments of General Hughes. I am sure General Odom will talk about this. The imperative to have the very best information technology available to our Intelligence Community. We have discovered that the FBI, particularly, is lagging. NSA has made a major investment. We have a lot of genius in this country in industry and academia, but we need to do a better job of reaching out to them and finding ways for the government to work with them to find the very best information technology. Let me turn then briefly to some issues particularly raised by the Department of Homeland Security. The administration's proposal would make Homeland Security a customer of the Intelligence Community. I think that is correct. The specifics are still vague and need to be worked out. There are some things that are not clear to me, obviously, but that is one the things this hearing will get at. In my view, the Homeland Security Department needs an intelligence function. It needs an element within the Department that can perform analysis and can disseminate that analysis to the rest of the government. There are a couple of pretty good examples, I think, of where other departments have an intelligence function embedded within them that carries out this role. INR in the Department of State, for example. Maybe even a better example is the Office of Net Assessment in the Secretary of Defense, whose job it is to take intelligence reports from various parts of the U.S. Government and then line that up with what we are facing, what the opposition has, and then try to reach some sort of net conclusion about how our forces would do in a particular battle or particular conflict with armed forces of that country. That is essentially what Homeland Security is going to be asked to do, to take intelligence information collected by the Intelligence Community and then produce an analysis that also incorporates what they understand to be the vulnerabilities about the United States. Having said that, I do not believe it would be a good idea to create within Homeland Security a competing intelligence center to the CIA. In my judgment, the Counter-Terrorist Center at CIA and the FBI should be combined into a single center. I would pull the analytical function out of the Bureau and create a single Counter-Terrorist Center under the DCI. Clearly, FBI officers, officers from other elements of the government need to be there, but I am not in favor of having a lot of competing centers around town. I also believe the time has come to consider the creation of a domestic security service. We most frequently think of MI5 as an example. They are, in my judgment, a first-rate service. They are able to work, as you said, Mr. Chairman, with MI6, the external service. They are also able to work with Scotland Yard and Special Branch, not only in London, but scattered around the country, the United Kingdom, and I think we have a great deal to learn from them. They do not have arrest authority. I do not believe that if we were to create a security service, I do not believe they should have arrest authority. As to where it is housed, Senator Thompson mentioned the two obvious choices, the DCI or the Attorney General. My inclination is to make them under the DCI, but a strong case can be made that they ought to be under the Attorney General. Regardless of where it is housed, the director of the new service ought to have direct access to the President, and I think that if we were to do this, the director of the security service ought to be a career government civil servant, perhaps with a fixed term like the Chairman of the Joint Chiefs, who also, of course, has direct access to the President. I am also intrigued with the suggestion that a couple of people have made, including recently Senator Feinstein and others, that we ought to separate the Director of Central Intelligence from his duties as the head of the CIA and to create a true Director of National Intelligence. This is highly controversial, but it does seem to me to have considerable appeal. One way of looking at it would be to think a little bit of the new Director of National Intelligence as analogous to the Secretary of Defense with greater powers and that the various pieces of the Intelligence Community would have a relationship to him in a way similar to that that the military departments have with the Secretary of Defense. As I say, that is controversial, but I think it is worth thinking about. Clearly, if we were to set up a domestic security service, a great deal of thought would necessarily be given to protecting civil liberties. In my judgment, that is certainly doable, and I have a few particular suggestions to how that might be done. I do have just one final thought, Mr. Chairman, about the proposal made by the administration and the issue of access by the Secretary of Homeland Security to information. The administration's proposal lays out a fairly complicated structure where there are three different categories of information and the Secretary gets all of this and some of that and a little bit of this, but only if the President agrees. I can envision some of my successors sitting around a table arguing, well, is this in Column A or Column B and does he get it or not get it? My suggestion is to simply have a statute that says the head of each Federal agency is required by law to keep the Secretary of Homeland Security, "fully and currently informed" on all intelligence or other data in the possession of that agency that is relevant to the Secretary's responsibilities, unless otherwise directed by the President. The "fully and currently informed" language is one that we are all familiar with. It is used in U.S. statutes a number of places. It is the operating principle under which the DCI is supposed to keep the Congress fully and currently informed. I would turn it around and just put the burden on individual agencies to keep the Secretary fully and currently informed unless the President says otherwise. Thank you, Mr. Chairman. I look forward to your questions. Chairman Lieberman. Thanks, Mr. Smith. That was very interesting. There was a lot of discussion with Governor Ridge about the provision in the President's proposal which seemed to require the President to give approval before so-called raw data, raw intelligence, could be given to the Department of Homeland Security. There was some suggestion that might have been to get around an existing legal prohibition. Do you have any understanding of what that might be? Mr. Smith. No. The only concern about that, Mr. Chairman, is to protect particularly sensitive, in my judgment, particularly sensitive sources and operations. But my judgment is that, in my experience, in most instances when a Cabinet secretary asks the Director of Central Intelligence those kind of detailed questions, they are answered. So I am not quite sure what the legal basis would be for the administration's proposal. Chairman Lieberman. OK. Thanks very much. Now we go to General William Odom, U.S. Army, Retired, former Director of the National Security Agency, now at the Hudson Institute, and I am proud to say, part of the year teaches at Yale University. General Odom. TESTIMONY OF LT. GEN. WILLIAM E. ODOM,\1\ U.S. ARMY (RET.), FORMER DIRECTOR (1985-1988), NATIONAL SECURITY AGENCY (NSA) General Odom. Thank you, Mr. Chairman. It is an honor to be here to testify before you. I have decided in the name of time to condense my remarks considerably, particularly in light of the comments that you and others have made on the Committee. I think an interaction directed towards specific questions may be more useful, now that I am better aware of where you are in this process. --------------------------------------------------------------------------- \1\ The prepared statement of General Odom appears in the Appendix on page 156. --------------------------------------------------------------------------- As general comments, I would just make the following points: The issue of whether or not we should have the agency, is an open-and-shut argument. If we do not make the changes, we cannot really improve anything. If we make a new Department, we at least create the possibility to make effective changes. Right now, we are organized in ways that prevent progress. I would also say there is another factor you should keep in mind. It is improper to focus only on terrorism. This Homeland Security agency is very much needed for the drug war, for immigration, for contraband trade and other kind of things. It has uses that have not gotten much attention, but which needs attention. So you should think broader than just dealing with terrorism. I would also say that terrorism cannot be defeated. It is not an enemy, it is a tactic. We often can be confused, if we do not keep that clear in mind and realize that we are after specific enemies. To explain why the present organizing arrangement cannot work, I will take an example from my own experience in the Intelligence Community--supporting the drug war. Assume, we receive intelligence that a big drug shipment is coming out of Country X somewhere across the ocean. The first problem I had in distributing the information was deciding to whom do I give it? Do I give it to DEA? Do I give it to Customs? Do I give it to the FBI? Do I give it to the Coast Guard? Do I give it to all of them? The second point, do they have the secure facilities and the trained and cleared people to receive it and not misuse it so that we either lose the sources because the information is disclosed in a way it should not be, or it is used in a way that prevents prosecution after they have taken action on it? Another problem you have then is the competition among agencies to use intelligence. The DEA will probably want to make the bust in the foreign country. The Coast Guard will want to make it at sea. Customs will want to make it at the port. The FBI will want to make it internally. I have seen that competition lead to no action with very good intelligence. So I do not care what you do to fix intelligence. Until you have somebody who can orchestrate the arrest and preventive operations under one head, rather than across Cabinet departments, I do not see how much progress can be made. The second example, if you have had experience with procuring modern IT systems within the U.S. Government, you will discover that Cabinet departments cannot even make their own sub-departments by the same IT systems and use the same security systems. But at least in principle, a Cabinet official ought to be able to make his department interoperable. If he is trying to create a common IT system in several small agencies in eight or nine different departments, the prospects of any success on this approach is zero. So I would just say to Senator Thompson, your questions are right about what we are going to get out of this. I do not have a perfect solution for this, but I do believe you cannot make any significant progress without some major regrouping agencies with responsibilities for border controls. Let me say in ending, that if you look at the history of these agencies, they go back to the 18th and 19th Centuries. We have not had a restructuring of them the whole of the 20th Century. And when they were established, you could not have expected the people who created them to have anticipated the needs of the 20th Century, much less the 21st Century. So it seems to me it is very compelling that we reorganize as soon as possible, and I do not think you will get it right the first time. They did not get the National Security Act for the Defense Department right the first time. The Congress has amended it several times. I think that will be the case with homeland security, that is the basis for my argument to go ahead, do the best you can, solve as many of these problems now as possible, and later with trial and error and experience you can improve it. My second point is intelligence. In dealing with that, I do believe that the issue of intelligence reform and the issue of intelligence for Homeland Security have to be separate issues. Intelligence is just not one thing. There are several functions in intelligence. There is the collection. There is the processing and analysis. And then there is the distribution to people who use it, act on it. The model that has developed to some degree in the Intelligence Community, a model which is very deeply rooted in the military organizations, separate collection from analysis. Every commander from a battalion on up has an analysis section on his staff to produce intelligence particularized for his uses. They all draw collected intelligence from any sources, some from higher echelons, some from organic collection capabilities. As we have developed more complicated and technical means for collection, we have learned that we can allow every one of those analytic elements to subscribe to the national collection systems, to receive distribution. That model is most advanced in NSA because it had the advantage of having a big communication system. We need a national system of the same kind for imagery and in human intelligence. There is no reason to not give raw intelligence to users at very low levels and let them put it together. I am weary of this talk about central organizations, groups that are going to be clearinghouses and the centers, the real analytic efforts for counterterrorism information. They will ensure that all useful intelligence gets blocked or delayed, that it does not go to people who need it fast enough, and that the particular analysis is not done in a way that is tailored for local use. You can have it both ways-- central analysis and local analysis of raw intelligence. It can have the central analysis, but all of these subunits within the Homeland Security Department will need to be able to subscribe to NSA, to the National Imaging Agency, to our HUMINT services and get particularized delivery instantly. Then, analytic centers can produce intelligence that is not so time sensitive. We have to be organized to do several of those things, so no one particular solution here fully addresses the question. Chairman Lieberman. I was just going to ask, you would include the new Department of Homeland Security as a recipient immediately of such information? General Odom. Absolutely. Let me explain something. There may be problems with classification here, but I think I can say this in the open without much concern. And you might want to get the National Security Agency to brief you on the distribution system. There are many agencies in this U.S. Government that are getting direct and instant service all the time. They have their own analytical systems within. Jeffrey Smith just mentioned the State Department with its I&R. State's regional bureaus get direct feed from INR, and beyond that, they receive raw intelligence from various agencies. Now, the Defense Department pays for most of this, and sometimes the military services get upset about whether these national level agencies using soldiers, sailors, airmen, and marines as part of the workforce, give their intelligence away to these non-military uses. But in practice that has not been a problem. It has been very successful. We know how to do that, but we must first be organized and wired properly for it. There are structural issues within the Intelligence Community that prevent it from providing such support as well as it could today. Now, let me move to another point about intelligence that I see Homeland Security facing. An ordinary infantry battalion, it sends out patrols, gets information about the enemy. These are not "intelligence collectors of intelligence." They are just ordinary combat units, but the information has intelligence value. Police on the street, are not known as "intelligence agents," but they pick up all sorts of information. The Homeland Security Department, with all its organizations deployed around the borders, will have access to massive amounts of this kind of intelligence. They have got to learn how to report it, analyze it, get it back, and use it. That is a problem the military deals with all the time. It is a problem the State Department should deal with in using its ordinary non-intelligence reporting from embassies properly. Such information may turn out in some cases to be as much or more important than anything the CIA or other agencies can provide. I think that is terribly difficult to achieve. The promise is always great. There is no perfect solution, organizational solution, to making that work well, but there is a big source of intelligence to be gotten there. The final point. I support what I think you mean by MI5 solution, but the MI5 model is somewhat misleading. MI5 cannot assert itself inside other intelligence agencies. It is by itself, and it ends up in competition with these others agencies. I made a proposal in an intelligence reform study, written in 1997, to create a National Counterintelligence Service and to take the counterintelligence/counterterrorism responsibility, that is intelligence against terrorists, away from the FBI, to put this new organization in the Intelligence Community as a separate agency, and to give it operational authority to look into the counterintelligence operations in Army, Navy, Air Force, also in CIA. At present there is no one in the U.S. Government who can give the President a comprehensive intelligence picture, a counterintelligence picture across the board. What is the overall view of every hostile intelligence service working against us or counterterrorism? The FBI has its view. The services have their view. The CIA has its view. The reason we have been penetrated many times in the past is that foreign intelligence services know how to go through these gaps between these agencies. They are not going to share information across agencies unless you have somebody with responsibility and authority to provide the comprehensive picture, but not necessarily to do the services' counterintelligence job or the CIA's counterintelligence job, or the FBI's criminal intelligence job. But it must put together the whole picture, and it must have a certain amount of operational responsibility for it. It must be the national manager of this particular intelligence discipline. It should have congressional oversight, and I also think it should have a special court overseeing it. I would have a court because I am very concerned about my rights and the violation of them by such an organization. Perhaps the FISA Court could serve this purpose, but Mr. Smith would know more about the FISA Court. But let me end my remarks there. Thank you. Chairman Lieberman. Very interesting testimony. We will come back and ask some questions. Final witness is Chief William Berger, Chief of Police of North Miami Beach, Florida, President of the International Association of Chiefs of Police. Obviously, as evidenced in our Committee bill, and there is some language similar in the President's bill, the relationship between the Federal Government's new Department of Homeland Security, and State, county and local officials is a very critical factor, certainly in terms of first responders, in the role of first responders. But the question we raise today is--and General Odom's comments lead right into it--is how can we better take advantage of the hundreds of thousands of police officers, for instance out there across America, who every day are observing or having contact with people or situations that might have significance in a National Homeland Security effort, to make sure it is fed in directly to them and that they receive information back from the Homeland Security Agency as well. So, Chief Berger, we welcome you and look forward to your testimony now. TESTIMONY OF WILLIAM B. BERGER,\1\ CHIEF OF POLICE, NORTH MIAMI BEACH, FLORIDA AND PRESIDENT, INTERNATIONAL ASSOCIATION OF CHIEFS OF POLICE Chief Berger. Thank you, sir. Chairman Lieberman, Senator Thompson, Members of the Committee and a special hello to Senator Max Cleland, who I had the honor of testifying for back in December. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Berger appears in the Appendix on page 166. --------------------------------------------------------------------------- I am honored to be here and represent the International Association of Chiefs of Police, a 20,000 member representing law enforcement executives worldwide, created in 1894. At the onset, I would like to express my thanks to the Committee for recognizing the needs for the views of not only IACP but law enforcement in general. The structure of the proposed Department of Homeland Security and its relationship with State and local law enforcement community is imperative. It is my belief that the ability of the Department of Homeland Security to work effectively with law enforcement agencies around the country is crucial to the ultimate success or failure in its mission in protecting the citizens of this country and its communities. There can be no doubt that cooperation and coordination and information sharing between Federal agencies and State and local counterparts is absolutely critical to the ability to prevent future terrorist attacks. For these reasons the IACP has gone on record in supporting the creation of the Department of Homeland Security. It is our belief that the proposed Department, by uniting numerous Federal agencies that are tasked with protecting the safety of our Nation into one organization will significantly improve the ability of these agencies to share information and coordinate activities within each other. However, a successful Homeland Security strategy cannot focus solely on the roles, capacities or needs of the Federal agencies. It must also ensure that State and local law enforcement agencies are an integral partner in this effort. In our society an enormous degree of responsibility and authority for public security is delegated to local government, particularly to police agencies. As the September 11 attacks demonstrated, the local police and other public safety personnel were often the first responders to this terrorist attack. However, the role of State and local law enforcement agencies is not limited to just responding to terrorist attacks. These agencies can play a vital role in the investigation and most importantly the prevention of future terrorist attacks. Across the United States there are more than 16,000 law enforcement agencies. These represent and employ 700,000 employees who daily patrol our State highways, the streets of our cities, its towns, and as a result have an intimate knowledge of the communities that they serve and have developed close relationships with the citizens that they protect. These relationships provide State and local law enforcement agencies with the ability to track down information related to possible terrorist information. Often State and local agencies can accomplish these tasks in a more effective and timely fashion than many times their Federal counterparts who may be unfamiliar with that particular community or its citizens. In addition police officers on every-day patrol making traffic stops, answering calls for service, performing community policing activities and interacting with citizens can, if properly trained, as mentioned, in what to look for and what questions to ask can be a tremendous source of information and intelligence for local, State and Federal Homeland Security personnel. However, in order to make use of this capacity, it is vital that the Federal, State and local law enforcement agencies develop an effective and comprehensive system for timely sharing, analysis and dissemination of important intelligence information. The IACP believes that failure to develop such a system in the absence of guidance to law enforcement agencies on how intelligence data can be gathered, analyzed, shared, and utilized is a threat to public safety which must be addressed. Therefore, as the legislation to create the Department of Homeland Security is considered and finalize, the IACP urges Congress to take steps necessary to promote intelligence-led policing and the information exchanged between law enforcement agencies. For example, the IACP has identified several barriers that currently hinder the effective exchange of information between Federal, State and local law enforcement agencies. It is our belief that these critical barriers must be addressed if we are to truly create an agency of intelligence gathering and intelligence sharing. They are: 1. The absence of a nationally coordinated process for intelligence generation and sharing. While substantial information sharing has somewhat occurred in some of the localities, there is no coordinated national process, and therefore much potential useful intelligence is never developed or is not shared. In addition, there is little focus on the local officer that recognizes their role as an intelligence- generating source in sharing, or which trains local officers to be part of this intelligence-sharing system. As a result, much of the Nation's capacity for improved intelligence generation and sharing system goes unused. 2. The structure of law enforcement and Intelligence Communities. Unfortunately, the structure and organization of law enforcement and intelligence agencies, either real or perceived, can lead to organizational incentives against intelligence sharing and even anti-sharing cultures. At best the lack of communications between the number of intelligence agencies means that individuals in one agency may not even imagine that others would find their intelligence data useful. At worst, this diffused intelligence gathering structure creates a "us versus them" mentality that stands in the way of productive collection. 3. Federal, State and local and tribal laws and policies that prevent intelligence gathering is a third area. By specifying who may have access to certain kinds of information, these policies and laws restrict the access to some of the very institutions and individuals who might be best able to use this intelligence for the promotion of public safety. The current laws and policies that guide the classification of intelligence information and an individual's clearance to view data are one example. Others include financial privacy acts, electronic communications policies and of course fraud laws. 4. The inaccessibility and/or incompatibility of technologies to support intelligence sharing. While a variety of systems support intelligence sharing or at least the information sharing, not all law enforcement agencies have access to these systems. Most operate on a membership basis, which means some agencies may find them too expensive to join while others may not see the value to joining the organization. In addition, the systems that do exist such as Regional Information Sharing Systems, the RISS System, the National Law Enforcement Telecommunications System, NLETS, and the Anti Drug Network, and Financial Crimes Enforcement Network, are not well-integrated and relatively archaic in terms of their capacities to provide information. In addition, addressing these barriers to effective information sharing, it is critically important that the Department of Homeland Security be designed in a manner that will ensure that State and local law enforcement agencies are fully incorporated as an integral partner in all aspects of the Department's operation. This means that the Department must go beyond simple notification and consultation with State and local law enforcement agencies, and instead, it should adopt an organizational culture that views State and local law enforcement officers and other public safety officials as critical and an integral part of this war against terrorism. The Department must ensure that State and local law enforcement agencies have representatives within the Department with the authority to guarantee that capabilities of local law enforcement agencies are accurately represented and their needs are addressed. In conclusion, as State and local law enforcement agencies modify their traditional crime fighting and crime prevention mission to encompass antiterrorism, they will need assistance from Federal Government to cover the increased burden placed on their agencies by this new training and the equipment needs as well as the cost of assuming these additional Homeland Security duties. In conclusion, I would just like to state my belief that over the past few months we have had some limited successes in overcoming many of the artificial walls that have sometimes divided us, but there is still a tremendous amount of work that has to be done. It is my belief that the proposed Department of Homeland Security, if designed properly and led in the fashion that emphasizes the critical role of State and local enforcement agencies will dramatically improve the communication and inter-agency and intergovernmental cooperation that is so crucial to the success of our mission of protecting our communities and the citizens that we serve I thank you and I await your questions. Chairman Lieberman. Thanks, Chief Berger, for a very constructive forthright statement. I support the tone entirely of what you said. Each of the Members will have a 7-minute round of questions. Thank you. It has been excellent testimony. Let me see if I can focus in on what our mission is on this Committee. I do not think it is our mission to, at this point, reorganize the entire intelligence apparatus of the government. In fact, the Intelligence Committees are working on their investigations and they may have some broader recommendations, but clearly it is our responsibility to, as we create this new Department of Homeland Security (and perhaps some office within the White House) to do the best we can to improve the collection, analysis, coordination, and dissemination of information. So let me see if I can draw from the testimony, am I correct in saying that each of you feels that there should be a division, a section or office within the new Department of Homeland Security that has the right to receive data throughout the intelligence and law enforcement communities and has the capacity to analyze and disseminate it. Is that a baseline that we all---- General Odom. Absolutely. Anything less is probably inadequate. Chairman Lieberman. OK. Then the next question is, and just to clarify for me--yes, sir. Go ahead, General. General Odom. Not just one point, many points within this agency. Chairman Lieberman. Why many? General Odom. Because you will find time sensitive requirements to have the ability to receive it out in various parts of the country. It will not just be at the Department headquarters. Chairman Lieberman. But do you not want it coming into one place eventually so that there is not a danger again, to use-- -- General Odom. You want it going into all those places simultaneously. Chairman Lieberman. Then the second question, which is, as I hear you, I do not believe any of you have recommended--you correct me--that the new Department of Homeland Security itself should have the capacity to collect information. I add a caveat to that. Some of the agencies that we are talking about putting into Homeland Security such as Customs, Border Patrol, and Critical Infrastructure Protection Agencies, they themselves will be sources of intelligence. And that is not the CIA, FBI, etc., so they will collect that. But beyond that, would any of you recommend that the agency itself have the capacity do collection of intelligence as we know it? General Hughes. General Hughes. My view is that your question has been answered in a way by your postulation. Some of the agencies that will be included in the Department of Homeland Security, at least in the initial concept, already collect intelligence, and they should continue those missions and activities that they have been given in the past. An example would be port security intelligence collection by the U.S. Coast Guard, which would continue and become part of the Homeland Security effort. Another example might be police intelligence collected at the very local level as the Chief has mentioned here, and then would be fed into the larger system. That kind of information collection should continue. I do believe, as I have cited and stated in my testimony, technical collection systems that are already in the hands of responsible authorities should be put to work for this agency. Duplication and redundancy is not appropriate. Chairman Lieberman. Give me an example what you are thinking about. General Hughes. Aerial surveillance done by the Department of Defense, using aircraft in the atmospheric environment, or national technical means being used to surveil a particular place on the earth. Here in the United States, along our contiguous borders, associated islands, and other lands, and the sea. Whatever the requirement is, we should not have a Homeland Security group that goes off to build a new satellite or buy a new airplane. They should use the preexisting capability. Chairman Lieberman. Absolutely. Dr. Carter. Mr. Carter. I agree with everything General Hughes just said about duplication, but I think it would be a mistake to limit the agency to the forms of intelligence information collected already by its constituent parts. One of the purposes of bringing those constituent parts together is to focus them on Homeland Security as opposed to the other missions that they now accomplish. Inevitably that will require refocusing their organic intelligence efforts. Second, as I tried to indicate, there is information we just do not collect now at all that is germane. Some of it can be pretty mundane, but for example, the culture types for dangerous pathogens for either animals or plants. So to support the intelligence with a small "i" that I was pointing to, we are going to have to develop new kinds of information to support this new mission. It is inevitable this Department will do it. It should not overlap the old stuff, but it will be new stuff. And so to try to limit it at the beginning and say it does not collect or assemble information, I think, is a terrible mistake. Chairman Lieberman. I guess my question is, maybe to clarify it and perhaps to state it in a caricature, none of you is recommending that the new Department ought to be able to hire agents similar to the CIA or the FBI to go out and infiltrate groups or collect information. Am I correct that no one is recommending that? Mr. Smith, you want to say something, then General Odom, and then I think my time will be up. Mr. Smith. Very briefly. I want to associate with what everybody has said, but add to it one of the keys is to try to find a way to ask people on the street, the Customs official, the local police officer, what is it that the Nation cares about? What is it that we want you to keep your lookout for? The British have a way of passing down the chain of command to the local bobby-on-the-beat what it is that they ought to be looking for in their neighborhoods, and that ultimately feeds back into MI5 and MI6. We need to find some system here where, as Mr. Carter says, the little "i" is identified so that people will know what it is that is in their domain that is important at the national level that they ought to report up the chain of command. Chairman Lieberman. General Odom. General Odom. I think your point is absolutely right, and I want to underscore that your assumption is right. Chairman Lieberman. Which is about not hiring---- General Odom. Acquiring new big collection agencies or systems. The issues that are being raised here, that Mr. Carter and Jeff Smith have raised, about what they need to collect, can be handled in the present system very effectively. Let me try to explain. The Intelligence Community is designed at the DCI level to respond to these kinds of changes. Take television. Intelligence is a little like the news business. It has customers; it collects information; it puts on programs and people watch them. If they do not watch, programs are dropped. You will see the changes, depending on markets, patterns, etc. The Intelligence Community has a mechanism, which it sometimes uses poorly in this regard, but which it can use effectively, and it uses effectively in some cases. There is a process of asking for requirements. All the departments of the government are asked what intelligence requirements they have. This Department would have its claim on the Intelligence Community like the State Department, Defense Department, the Energy Department, any other. Then the DCI has to prioritize requirements according to the users' demands, and issue them to the various collection agencies. I will give you an example of how this works. Back when we discovered a Soviet brigade in Cuba in the Carter Administration, we woke up to the fact that we did not have adequate collection in the Caribbean area. We had essentially neglected that area for the past 20 years. So all kinds of collection capabilities that had once been there, no longer operates. We had to go through a process of changing our capability to supply new intelligence markets. That is going to be the case with Homeland Security. We do not need a reorganization to do that. We need the DCI and the people who use intelligence asking for the right intelligence and issuing the right instructions to get the present system to respond effectively. Chairman Lieberman. I ask the indulgence of my colleagues. I want to ask a quick question and receive a quick answer, which is: Would you also give the Secretary of Homeland Security the power not just to receive raw data and then analyze material, but to give a task to the active intelligence agency, to say, in other words, "We need to know about Topic B." He has to be able to---- General Odom. He has to have that. He cannot just be passive. If he becomes a customer in the Intelligence Community, that goes with becoming a customer. He should be able to put his requirements in on a non-time sensitive annual basis. The DCI then justifies his budget based on how the Intelligence Community can collect for these changing requirements. Then there is another problem here, and that is time sensitive collection requirements. Homeland Security uses need to be looped in so that when they get timely intelligence in a fast-moving situation, so they can override to regular cycle to get rapid intelligence response. These will have problems there. Which department is at the head of the queue? There may be two or three agencies demanding to be at the head of the queue. The President will have to prioritize, and the DCI is the agent to do it. It happens in the Defense Department all the time. The European Command wants priority over the Central Command. Their officers get all upset, and you have to explain to them that it is not the Intelligence Community's choice. Their quarrel is with the Chairman of the Joint Chiefs and the Secretary of Defense. They say they want Central Command to have priority. There is a system for regulating priorities. It is not always done effectively. Chairman Lieberman. Thank you. You are a great panel, appreciate it. Senator Thompson. Senator Thompson. Thank you very much, Mr. Chairman. General Odom, to follow up on that a little bit, it looks like we are all talking in terms of Homeland Security being a new agency and being a customer and what that involves, but I get the impression that you are always saying basically what we need to do is use the existing system, do a better job of collecting from all the different sources, and do a better job of disseminating it. I do think that what is envisioned with this new Department is that it is, as far as intelligence and acting on intelligence in order to protect the country, it is viewed as somewhat of a super agency, that it is not just another agency out there, another customer to get in line, whether it is-- wherever it is in that line. But the idea is to create something where it all comes together. And we get into the issue of the dot connecting that we all talk about, and we all know that that is rather simplistic because the dots are in a sea of dots before you can even try to connect them, and we realize we need better analysis. But from thinking in terms of what we need to do in this particular piece of legislation and what we need to leave for other endeavors, I am wondering whether--it seems like the issue comes down to who brings all this together? Some might think that this new Department is supposed to be that entity, it is supposed to have its own analytical capabilities. I do not know where they are going to get the analysts, but they are supposed to have their own analytical capabilities and pull all this information from all these different sources that we are talking about. We have heard some discussion here today by you and others of creating perhaps a new kind of entity, an MI5 type entity that would not be part of Homeland Security, but perhaps as a connector of the dots, perhaps as a repository. Perhaps that would be where all of the information would come together, and then that analysis would be handed over to the new Department. Can we dig in here a little bit deeper in terms of our analysis of how this Department ought to be structured? What should we try to do and not do in this particular piece of legislation? What should the Intelligence Component be with regard to Homeland Security and what should it not be? How does it fit in the overall framework, in the overall scheme of enhancing our intelligence capabilities in order to better protect ourselves? General Odom. I think you have raised two questions here and mixed them a bit, and I would like to separate them. Your initial remarks seem to me to be asking the question, if Homeland Security is not being asked to do too much. I think there is a danger in this regard. If you want a single agency in charge of everything about security in the United States, you will have to rewrite the Constitution. We are a Federal system. And the demand for a central authority to do everything all the time will run into limits caused by federalism. And I am happy they are there. Personally, I would prefer the Federal system the way it is. There is what I would call a minimum alternative reorganization, and that is not so much a Homeland Security Department as a "border control department." Responsibilities on the border are the most fragmented, and that is where the first problems start. If you look back in 1979 and 1980, there was a proposal sent to the Hill by the President's Reorganization Project to create a border management agency. This is not a new issue. There were many arguments made for consolidation at the time. It would be a more manageable reorganization if you could shrink it a bit in that regard. The more agencies you throw in, the harder it is going to be to integrate them, the longer it is going to take. But I can see some good arguments for most every function included in the present bill. I am impressed with the comprehension where the administration's analysis. Senator Thompson. Let me get some other views on it. Mr. Smith, is this a question of who connects the dots or how do you see this Department coming together? Mr. Smith. In my judgment, Senator, the bill that creates the Department of Homeland Security ought to assign an intelligence function to that Department along the lines that we have been discussing here. I would make it responsible for the production and analysis of intelligence that relates to Homeland Security, and they should be given the primacy for that function within the government. I think it is a separate question as to whether or not there ought to be an MI5, and as I said, I am inclined to do that, but nevertheless, the Department has to have that function. That would not supplant the Counterterrorist Center. The Counterterrorist Center, at least in my mind, would still continue to function in the Intelligence Community and provide analysis, threat analysis to the Department of Homeland Security, which would then take that analysis to do its own analysis on top of that would be focused very much on what does the Mayor of Miami need to worry about based on what we know about the situation in Miami. Senator Thompson. So the Department would be fully and currently informed, to use your words, and there are separate issues out there as to how we might best make sure that they are fully and currently reformed. So we need to make changes within the CIA or the FBI or perhaps consolidate the counterterrorism centers. Perhaps create an MI5 type entity. Those would all be things that would help this new Department become more fully and currently informed. Is that a good way of looking at it analytically? Mr. Smith. Yes. Senator Thompson. Let me ask, in the brief time I have here, one more question. Dr. Carter, you mentioned all of these things that you felt, the White House should do. You mentioned the plan that needs to come forth, and the first time I have ever seen anybody get into some of the analysis that you have done there, the things that are going to be needed is very impressive. But I was sitting here wondering, why cannot the new Secretary do practically all of these things, as opposed to that being done out of the White House? Mr. Carter. The new Secretary can do some of the things that Governor Ridge has been trying to do, which presumably is one of the reasons why Governor Ridge wanted to create the new Department. The new Department gathers up some of the pieces of the Federal structure, but there will still be pieces outside of it. We have been talking about some of them--the FBI, and the CIA. There is the Department of Defense, which we have not discussed yet today which is in the area of biological, nuclear, force protection, and so forth, a big player. So there will be big players that will not be underneath this new Cabinet Secretary, and the question remains, how do the departments of the Federal Government--they have been reshuffled, there has been some consolidation--the question remains, who is going to make them all work together? That is a quintessential White House function. We cannot wriggle off that hook. Senator Thompson. Well, I understand that, and that was one of the discussions we had here in the Committee as to whether or not it was a good idea even to have a Department in light of the fact that certain very important players could not be brought inside it, so you are going to need a coordinating function anyway. But you lay out your ideas for an investment plan and infrastructure evaluation of vulnerabilities, countermeasures, intelligence analysis, science and technology, and how new intelligence means and methods should come about. It sounds to me that those responsibilities should be in the domain of the Secretary, and the coordinating function could be left to the White House. Mr. Carter. Exactly. The border, the emergency response, the science and technology part, which we have not discussed yet today, but about which the National Academy of Sciences issued a report yesterday I was privileged to be part of the NAS Committee and I commend to your attention. And the intelligence piece, big "I", small "i" we have been discussing today. Those are appropriate parts of the Department. If we set up the Department right and we aggressively put it together, they will do those jobs well, but somebody has still got to sit atop all that and decide where the money goes, so that over 5 years, 10 years, the Nation makes the investments in its own protection that we all know we have got to make. Senator Thompson. Thank you very much. Chairman Lieberman. Thanks very much, Senator Thompson. Senator Cleland. Senator Cleland. Thank you very much, Mr. Chairman. Two Casey Stengel quotes come to mind. First, in his last year of coaching he coached the New York Mets, a brand new team, and the ball was being dropped in center field and errors were being made, and at one point he got frustrated and stepped out of the dugout and said, "Does anybody here know how to play this game?" I mean sitting here hearing after hearing, both on the Armed Services Committee and the Governmental Affairs Committee here, I sense a sense of frustration in my own view of this thing. I begin to wonder, does anybody here know how to play this game? The truth of the matter is I know that there are great people in this business, world class people, which leads to the second Casey Stengel quote, that: "It is easy to get the players, it is tough to get them to play together." And I think we have got great players. I think we are down to how to get them to play together. And the Homeland Security challenge, the challenge is how to get them to play together. When Sam Nunn headed a mock effort put on by Johns Hopkins with a mock attack of smallpox, he mentioned that he got very frustrated after a few days in this mock attack with, "bureaucracy," people playing together. And then the other thing he said was, "You never know what you do not know." That goes to the intelligence piece it seems to me. I would like to focus, General Odom, on a quote that you had which I thought was quite interesting in terms of getting people to play together. How at the national level of intelligence gathering do we get people to play together? You said: "There is no one in government who can give the President an overall view of counterintelligence"--I think that was your word--"no comprehensive picture to put it all together, no king of this particular discipline." Is that what we are searching for here? Are we looking for a king or a czar or a quarterback of national intelligence? Are we looking for a director of national intelligence to relate to all the intelligence, the vast elements of the intelligence team, and to get the team to play together so that data is collected and analyzed properly, and it then comes up to a central point and then properly disseminated to the lowest level that needs to know? What are we looking for here? We are obviously searching for something. In your opinion, what is it? General Odom. The quote you just read does not apply to all intelligence. It applies only to counterintelligence. Counterintelligence is information about other people's intelligence activities. That is not all intelligence. It is increasingly including terrorist penetrations and activities too. What I am saying is that part of the Intelligence Community dealing with the counterintelligence, which gives you the intelligence which you use to find spies and keep yourself secure, as opposed to finding enemies that you can attack, that is fragmented, and we do need somebody both to pull it together. My design for it is getting CIA, the services and that organization to play together under a director of counterintelligence. And I think with certain authorities he can be an effective coach. As far as getting the other parts of the Intelligence Community for many other kinds of intelligence support together, there are problems, but if you look at how fragmented it could be compared to the CIA, the rest of the Intelligence Community is in reasonably good shape. So that would be my answer on that. And if you are talking about intelligence support for this Homeland Security, the intelligence it needs, then you want to be able to have a comprehensive counterintelligence picture. You also want other kinds of intelligence coming there. They need to be able to subscribe to every intelligence news service available. Senator Cleland. There is actual legislation that creates a Homeland Security Agency. It is out of this Committee. We voted for it in a bipartisan way. It is on the floor of the Senate, and the connectivity or the interface between that Homeland Security Agency and the Intelligence Community, however organized, is that this Committee chose to put the head of the Homeland Security Agency on the National Security Council. Is that a good idea, bad idea, no fix, good fix, or bad fix? General Odom. That is a very good idea, and not just the intelligence purposes. Sure, it gives him some access to intelligence. He can get that without NSC membership, but it is important for him to be there for the coordination among all National Security agencies. If you put too many chiefs of coordination around the White House, pretty soon the President cannot manage them all. I think this Homeland Security ought to be a coordination problem for the National Security Council. It is part of security. The Defense Department is part of it. The State Department is part of it. So the coordinating function, to me, lies within the NSC. You have seen the struggle to try to get an NSC equivalent to handle economic policy. You have seen the problem with counter drugs. So I think there is a danger of putting too many big coordinators up there at the White House and not using the one institution that has a lot of experience in this kind of coordination. Senator Cleland. And that was another question, that in terms of the recommendation, shall we say, to leave the White House Office of Homeland Security in existence, are we moving in a direction to create the domestic counterpart to the National Security Affairs Advisor? I mean there is a National Security Affairs Advisor. Are we going to create another domestic Security Affairs Advisor that is interfacing with the Cabinet Secretary? You know I begin to wonder. It seems to me that it would be cleaner, since part of the challenge is coordination, cooperation and communication, it would be cleaner to have a Secretary of a Homeland Security Agency that gave us a chance to start doing some things right, getting the players to play together and putting that individual on the National Security Council with access to what everybody else knows. And I think that is basically the posture of this legislation that came out of this Committee. Yes, sir, Mr. Smith. Mr. Smith. Senator, I want to agree with that. In my judgment, there should not be another competing coordinating czar in the White House that is subject to the advice and consent of the Senate for that job. I would leave the President free to structure his arrangements the way he chooses. I think that putting the new Secretary on the National Security Council is a good idea. That machinery is excellent. It works well. I would try to use that machinery and I would not set up a competing Senate advise and consent person in the White House. I know that is Senator Graham's initiative, and I am reluctant to disagree with him, but I think your approach is better. Senator Cleland. Yes, sir, Mr. Carter. Mr. Carter. The National Security Council is a good model for doing something that is different from what we are looking for from Ridge, and therefore the National Security Council is not the answer. The National Security Council is a policy coordination body. It gets the agencies involved with national security together and they agree on the policy, essentially on a piece of paper. What we need in this phase of Homeland Security is an architect, somebody who puts an investment plan together. The NSC does not do programs, they do not do budgets. I can tell you from the Department of Defense's point of view that our program, $379 billion worth of it is not touched by the National Security Council. It has been that way since the Eisenhower Administration. The NSC is a policy coordination body. If you go up there, they have lots of gifted people, and I have the highest respect for them, but they are not program people, they are policy people. So to have given, which the President wisely did not do when September 11 occurred, say to the National Security Council, "You do it." He found someone else, and for some period of years we need that someone else. Now, I do not like to call him a czar because you know what they say about czars--the old joke about how the barons ignore them and eventually the peasants kill them. And I do not like to call him a coordinator because I said that is not what he is supposed to do, coordinate what we have. He is supposed to build what we do not have. But that is different from what the NSC does and one is mistaking an architect for a coordinator if one uses the NSC model. Senator Cleland. So who is in charge here? I mean what is going on? General Odom. I must say I think Dr. Carter is misleading us here a little. The NSC does have an effect on budgets in the Defense Department, at least they did when I was in that organization, and we did it through OMB. OMB is pulled into the NSC activities and OMB right now ends up being the organization that coordinates the budgets. And, Dr. Carter, I do not think you could say that OMB does not have any influence on the Defense Department's policy. Mr. Carter. Yes, but OMB is not the NSC. It is OMB, not the NSC. General Odom. If the President wants the OMB to take the guidance that is devised in NSC and implement it in budgets, he can do that. So the kind of coordination you are talking about that transcends this Department, there is machinery to do that in the White House if the President wants to do it. If you can put a czar there and if he does not want him to do it, it will not make any difference. Senator Cleland. Mr. Chairman, my time is up. Fascinating panel, and I wish we could just go all afternoon and into the morning. Chairman Lieberman. I agree. Senator Cleland. This is great testimony. Thank you. Chairman Lieberman. Thank you, Senator Cleland, and I thank the members of the panel. Our search for truth is aided by the gentlemanly cross fire that we have just heard occur. Mr. Smith. I have decided that it is better to be a baron than a czar. [Laughter.] Chairman Lieberman. Senator Voinovich. Senator Voinovich. I am still trying to get this straightened out. The Director of the Central Intelligence Agency is supposed to be coordinating the intelligence situation abroad and at home. Is that the individual that is supposed to keep track of all of the agencies that are collecting information, both domestically and abroad? General Odom. He is responsible for two things. He is responsible for program development. In other words, every activity that is known as part of a national foreign intelligence program has to have its program bill approved through the DCI. He can say, "You get less money or more money in your request to Congress." And then of course OMB has to sign off on it. And the other thing he has the power to do is to task them to collect and disseminate information. So those are his two major powers. And he also has the capability under him to generate nationally coordinated intelligence that is not a mere departmental view. Senator Voinovich. So that individual should know of all the agencies in the government that collect information and ascertain whether or not there is duplication and whether or not there are any holes in terms of gathering this information; is that correct? General Odom. The Director of Central Intelligence has that responsibility. The Director of CIA does not. The Director of CIA is a different man, I mean a different hat. Traditionally, we have only had one individual wear both of those hats. Senator Voinovich. Well, the issue is should that responsibility, in your opinion, be transferred to this new Department? General Odom. No, it would remain with the Director of Central intelligence. The Defense Department is the major user of intelligence. He does more for the Defense Department than anybody else, but he is not in the Defense Department. Senator Voinovich. Well, then what role would this new Department have in terms of--you all talk about collection management---- General Odom. It is going to be a user. Senator Voinovich. What is collection management? General Odom. Well, collection management means, in jargon inside the Intelligence Community, it means registering requests for collection, and somebody decides what collection agency is assigned to get the answer. So the Homeland Security Department, certainly would be hopeless if it does not have the right to make these demands for intelligence, which then the Director of Central Intelligence tasks the various collection capabilities to get the answers and deliver them back to this Homeland Security Department. General Hughes. If I could just comment here, I am very frustrated over this conversation since only part of it is right. The Director of Central Intelligence does have the kind of oversight authority that General Odom has just commented on. But he has difficulty exercising not only the program management but the operational oversight of intelligence gathering activities because there are competitors to him, the director of other intelligence agencies and indeed the heads of departments. For example, we are talking here about making a departmental level, Cabinet level officer, which would be on a par with the Director of Central Intelligence, if not slightly above that person. It depends on the administration and the way that the DCI is viewed. But this is not a line and block chart kind of issue. This is about relationships, presidential authorities, demands that are made and made in light of legal and procedural constructs. To illustrate this problem, collection management is a common issue across the Intelligence Community, and here it is in a nutshell. I tell appropriate authorities in the government, according to disciplines and responsibilities and functions, what I need in the way of information, and in collection management system that request goes, in a pervasive way, throughout the government and ostensibly information that is asked for is returned. Senator Voinovich. First of all, somebody has to decide what information we need right straight across the board. Somebody has to figure that one out. General Hughes. That is right. Senator Voinovich. Then the next issue is who gets it? General Hughes. That sort of is figured out. Who is it? There is not one person, nor can there be. Each agency, each function, each group has to decide what it needs for its own responsibilities and requirements, and these will vary from organization to organization, depending upon what it is they want to do. One simple example would be that the military and the civilian side of our government have different requirements. Senator Voinovich. But somebody said earlier, Mr. Carter, I think, you are talking about the issue of foreign intelligence, and domestic intelligence and how foreign intelligence has to have a larger impact today on domestic intelligence because we are dealing with terrorism. From a managerial point of view, somebody has to decide what information we need. Then the intelligence agencies need to collect the information. Once that information is gathered, we need to know what it is and whether or not there is duplication, for example, or a hole in our knowledge. The issue is: Where is that managed, in this new Department or in the White House? Mr. Carter. I think that is a crucial point and the answer is in the Department. The experts on what information is needed are not the Intelligence Community. The Intelligence Community is the expert on supplying the information needed. It is the Department of Defense that decides what we need from intelligence to support operations and acquisition. Likewise, it will be the Department of Homeland Security, which is the expert on what information we need for Homeland Security. Now, I would contend that at the moment there are no experts in the Federal Government on what we need for Homeland Security. That is why we are setting up a new Department and-- -- Senator Voinovich. But that person on the domestic side would be in the Department of Homeland Security. That would be the person that would look out and say---- Mr. Carter. And he would say to the Intelligence Community, "This is what I need." Senator Voinovich. And then get that. The next issue is the analytical aspect. You are saying you need to have that in the Homeland Security Department, some really smart people that can take the information that is coming in and analyze it; is that right, that should be there? Mr. Carter. I would say if I may, much of it will be analyzed in the Department of Homeland Security because they will be the ones who know what the template is that they are trying to fit the dots into, just like it is the military that needs to take information from the Intelligence Community and then interpret it for operational purposes or procurement purposes. But the Intelligence Community will need to do some of its own analysis within its own confines, and so some information will be sent as finished intelligence, and some of it will be sent as inputs to finished intelligence that is produced in the Department rather than in the Intelligence Community. Senator Voinovich. Now, the third issue, information comes in, we analyze it, and then we disseminate it. And you think that is another function that---- Mr. Carter. Absolutely. Senator Voinovich. How do you get this information out to the right people as quickly as possible? General Hughes. If I could just comment, sir, first of all, Mr. Carter had adequately and correctly described these functions. But, it is an important point for me to make. I think it may have been made already. That is why you need the very best people, and you need to start out with very experienced people in the collection management system, in the analytic system and the production system and in the dissemination system for Homeland Security. You cannot begin this process with neophytes or completely new people who do not have an experience level to know where to go to get the right information, how to couch it, how to put it in right context and how to put it out. We are talking, by the way, about an entirely new dissemination construct because some of this information is going to have to go, if we are to do our job right, to recipients who do not have a historical record of receiving such information. That is especially true at the State and local police level, and I would argue, at the governance level in the towns, municipalities and States around the country. This is different. It is new, but the origins or the grounding of it probably should be set in experience and history, to some degree. So we have kind of got to play off the best of both worlds. Once, again, my last point to you, sir, the quality of the people here is vital. Senator Voinovich. Am I finished with my time? Chairman Lieberman. You are, but---- Senator Voinovich. We have the president of the chiefs of police association, and we are all talking about the future, but most people are concerned about what is happening now. I have been told by several people in the FBI that these task forces that the FBI has set up on the local level to work with local police departments and sheriffs offices and so forth have been significantly better than anything that anyone has ever seen before. Chief Berger, would you comment on whether or not you have seen any marked difference between before and after September 11, in terms of information sharing and cooperation? Chief Berger. Those are mixed reviews. Some communities have had some outstanding efforts, but I would say that the majority have not yet, that it has not filtered down to every community within this country. Senator Voinovich. Who should be in charge of making sure that happens? Would you say that is a function of the new Homeland Security Department? Chief Berger. As far as the Bureau, I think that is the Director of the FBI. I think that is his sole responsibility to make sure that these joint task forces dealing with the FBI are, in fact, working cooperatively with every local law enforcement agency in this country, and that includes everyone--sheriffs, State people and local police. Chairman Lieberman. Thanks, Senator Voinovich. Senator Dayton. OPENING STATEMENT OF SENATOR DAYTON Senator Dayton. Thank you, Mr. Chairman. Mr. Smith, your comment about preferring to be a baron than a czar reminded me of when I worked in the seventies for then- Senator Walter Mondale of Minnesota. There was the saying then that Northern Senators run for President. Southern Senators are smarter. They become committee chairmen. Take that admonition to heart, Mr. Chairman. Chairman Lieberman. Very kind of you. Thank you. [Laughter.] Senator Thompson. But sometimes they do not last very long. [Laughter.] Senator Dayton. As I said at the previous hearing, my experience with government reorganization was in the Executive Branch of the State of Minnesota, so much smaller entities and numbers of people, but my experience there has been that reorganization of departments involves a short-term greater dysfunction, and then hopefully out of that a better function for the future, a better organization for the future alignment and better equipped. So, if that is the case, and given that none of you are sort of overwhelming in your--and I share your view--confidence in government's ability to manage these huge systems efficiently, to be undertaking this task of reorganization at a time of national urgency and another shoe dropping from another national emergency, I think we are moving into necessary, but unchartered, and maybe even some turbulent, conditions. So I think it is essential we do it right. And you used the word "architect," Mr. Carter, and I think that is a very interesting concept, both from the standpoint of somebody in that role and carrying this out, but also I think in terms of this Committee and Congress because we will not carry this out, but we can, by our design of this, I think facilitate the architect carrying it out or we can I think get in the way. I am leading to my question. I want us to do it right. I want to see us create the opportunity for a genuine reorganization and not just a reshuffling of the deck and having people who are going to be performing the same tasks, the same functions. I know that all of the institutional forces that will weigh in day after day, once this entity falls out of the front page of the paper, are going to be preserving the status quo and preserving domains, and fiefdoms, and the like. So how do we do our part to make this, give it the best chance to be true reorganization, rather than reshuffling? I will ask that of each of you. Mr. Carter. There is, as I understand it, being prepared by the administration as part of its submission, a management package that goes with its particular concept of the Department, but which could accompany any concept of the Department, including the one that this Committee has considered. It is a management package which ensures that the Cabinet Secretary in the new Department really has the authority to get the job done. That is a very important package, from my point of view. Senator Dayton. What does that authority consist of, in your view? Mr. Carter. The ability to move people, to sort sheep from goats in the Federal service, to break ground and build buildings, and sell Federal land and buy Federal land. All of these things sound very mundane, but it is a big deal. You have a very cogent concern, which is that every department head who 2 months ago was mainly concerned with doing the job of homeland security is now spending half of his or her day figuring out where they fit in the new Department of Homeland Security. The Office of Homeland Security in the White House is mainly spending its time trying to set up the Department of Homeland Security, rather than being the architect. So we are all getting diverted, and there is a risk there, and we certainly hope the reward is big at the end. Senator Dayton. There is a hierarchy of human behavior, Darwinian, that applies in these situations organizationally. The first is you are concerned about your individual survival. So you have got 170,000 people wondering, "Do I, individually, have a job and the like?" Second, then, as you say, basic needs, organization, "Do I have a desk? Where am I in the hierarchy?" And then you get to the realm of possibly interacting effectively with your fellow humans. So it is a big shift. Mr. Carter. I commend to your attention this management package, and I hope it is supported and maybe strengthened by this Committee. Senator Dayton. Does anybody else want to comment on this? Mr. Smith. Mr. Smith. One of the things that struck me, Senator, when I read the administration's proposal was the words they used to describe the functions assigned to the various officers. For one thing, it struck me as odd that the language just says the Secretary is the head of the Department. The specific responsibilities are then assigned to the various under secretaries, and the words that are used are not, as a former government lawyer, not very clear, and they do not give a lot of authority. The under secretary--who is responsible for what we have been talking about here, intelligence--receives and analyzes, he assesses, he integrates, he develops. You do not get down to any real action verbs until the very last one, which is take or seeking to effect necessary measures. Now I do not know what that means, but when you contrast that to the language that the DCI has, he approves things, he promotes things, he protects things, he eliminates things, he is the head of the Intelligence Community. Just the tone of language struck me as quite different. So one thing that one might think about is doing some of the things that we did in the Goldwater-Nichols Act, when I was working up here, was Congress gave very specific authority to individuals and held them accountable. To use a Marine term, they were "designated necks"; that is to say, a neck you get your hands around. I think that this draft submitted by the White House does not do that. Senator Dayton. Yes, sir? General Hughes. I would just like to add I think it is a very important observation. In my testimony I made the point that the two--the legislative bodies chartering and authorizing of this Department and the executive departments giving it authorities and responsibilities--should be matched and should be, hopefully, synergistic and reinforcing. That has not, in my experience, always been the case in the past when we have tried these reorganizations. If you can do anything to assist that, I know that the people who do the work, after the documentary effort has been completed, would greatly appreciate it if they do not have built-in frictions and competitions to work with. My last point is that the intelligence officer in charge of the intelligence function in the Department of Homeland Security is probably going to have to have within the context of the Intelligence Community, because it is different, some separate and distinct authorities and responsibilities. That also requires the same kind of focused attention. Senator Dayton. Mr. Odom. General Odom. I want to emphasize what Dr. Carter said about having control over personnel, resources, etc., and even organizational structure within. Look at what happened in the National Security Act in 1947. It was supposed to be a unification act, it was a proliferation act. We ended up with four departments instead of one. This could turn out to be a multiplication of departments if you leave each one of these with authorities that the Secretary cannot really override, force personnel changes, budget changes, and those sorts of things. Senator Dayton. That leads me to the next question. What I hear from local law enforcement and local government people in Minnesota is very much not even mixed; it is that they do not feel they are being communicated with, and they are given these added burdens. They are certainly having added costs imposed on them without being part of this front-line team. We talk about consolidation with this Department. I am concerned that we are looking at something that is going to be increasing fragmentation, at least at that highest level. I saw today in the Washington Times the headline or the story that the Department of Defense now wants an intelligence czar, and that request has been sent to Congress. I still delude myself every day that I am a member of Congress. I have a lot of experience with the Executive Branch telling me otherwise, but even being on the Armed Services Committee I sort of thought that maybe that would be something that I might be apprised of other than--I could subscribe to the Washington Times in the State of Minnesota and get my information. It seems to me everybody is going to try to grab a bigger role, and they are going to grab theirs, and you have got the CIA and the FBI, these two major players, and others as well, who are not part of this at all. I will start with you, Chief Berger, from the vantage point of a local government, front-line person. I see an increasingly bewildering array of who is in charge, who do I go to, who do I look to for information, and also who do we look to for accountability. Chief Berger. Certainly, from an outsider's standpoint, I do not see a team. I do not see a combination of, as we mentioned before, we have got tremendous people in high places and individual efforts, but I do not see a team effort. One of the things that used to bother me greatly in my 28 years of experience in law enforcement, when I was a commander of a Robbery Unit in the Miami Police Department, we used to always hear the Federal people say we will get back to you, and that never happened. That needs to happen. Again, I think that, certainly, at the local level and those sheriffs and police chiefs that are talking to you, I have been in the field. I have been to Tennessee, I have been to Mississippi, I have been to the heartland, and this same type of response is coming, also. Give me a plan, any plan. So far, we are all anticipating--we are team players--we realize how important this is, but I guess there is just a frustration of when is it going to happen and let us see it happen. And every day goes by, and when I hear statements like we are going to have a terrorist attack, it is not if we are going to, it is when, and it drives us crazy because a lot of the emphasis is in response, and certainly we will be there, God forbid if it ever happens, but we have to be proactive too. Proactive means trying to prevent it from ever happening. Senator Dayton. Mr. Chairman, I see my time is up. Does anybody else want to respond briefly on this issue of consolidation versus fragmentation? Any advice? [No response.] Senator Dayton. Thank you, Mr. Chairman. Chairman Lieberman. Thanks very much, Senator Dayton. Senator Durbin. OPENING STATEMENT OF SENATOR DURBIN Senator Durbin. Thank you, Mr. Chairman, and I thank the panel. I am a Member of this Committee, as well as the Judiciary Committee, and the Intelligence Committee, so I am getting a steady diet of conversation about this topic and trying to learn. I am humbled by the fact that I am an attorney by education, with a liberal arts background, who scrupulously avoided every course that had the word "management" in its title. So here I am talking about management of the Federal Government, reorganization of the Federal Government and trying to learn as we go along. But I did take a few history courses, and some of them have helped me to try to put what we are doing in some historic perspective. In 1939, our scientists discovered nuclear fission. President Franklin Roosevelt created something called a Uranium Committee to look into the possibility of using this new scientific discovery for military purposes. According to historic reports, it did not get very far until December 7, 1941. Once attacked, a different mentality descended on Washington, DC. In August 1942, the President made an historic decision. He placed a project under the U.S. Army control, totally reorganized the Uranium Committee. It was called the Manhattan Engineer District, the official name. It came to be known as the Manhattan Project. Here is the point that I find most interesting. The Manhattan Engineer District project's commanding officer, General Leslie R. Groves, was given almost unlimited power to call upon the military, industrial, and scientific resources of the Nation. He organized and spent about $2 billion in those dollars--$20 billion today--to build four bombs that ultimately brought the war to an end, over a period of time working in Tennessee and other States. The reason I bring this up is that I want to step away from the box charts for a minute and address one particular aspect of intelligence, successful intelligence gathering, processing and sharing. This is a long intro, but there will be a question at the end, I guarantee you. Six years ago, Congress said to the Immigration and Naturalization Service, we require you, we mandate that you set up a system to record the exit of any visa holder in the United States so that we can try to, at any given time, know the inventory of people with visas in the United States--6 years ago. The Inspector General for the Department of Justice reported to us 2 weeks ago in the Judiciary Committee they are literally years away, years away from being able to do that. Congress, 3 years ago, said to the INS and the FBI, we notice that you are both collecting fingerprints. Is it possible to merge your databases of fingerprints so there is one common source--3 years ago. Still not done. Still years away. Three weeks ago, the Department of Justice said, we think there are about 30 million visa holders in this country. We are going to start collecting photographs and fingerprints selectively from these people coming into the United States on visa for the purpose of intelligence gathering. What do you think the likelihood is that we are going to do that any time soon? I sit here and look at what we have been through and believe that we are deluding ourselves into believing that we have the information technology capability to deal with the war on terrorism, and I see it every day, as the Director of the FBI tells us, that they still have not quite reached the level where they have something called "word search." Do you know any computer that does not have word search anywhere in America? Well, they have got them at the FBI. That is what they have. So here is what I am getting to. If we are going to combine the intelligence resources and gathering of the Department of Defense, the Department of State, the Department of Justice, and a new Department of Homeland Security, would it not be just common sense for us to establish a Manhattan Project when it comes to information technology, so that they can all converse with one another, share information and try to make the job more effective so that Chief Berger and his operations at the State and local level can deal with it as well? I listen to all of this conversation about reorganization, and I still come back to those basic things. If we do not have computers that work at the FBI, and if they cannot communicate with the INS, how is this going to be done? I know some of you have alluded to this information technology in your testimony, and I appreciate any comments or response that you might have. General Hughes. I will be happy to start. First, your characterization of this problem is, in my view, right, but it is not about the technology. The technology to do the things that you are talking about wanting to do is present and available. It is about parochial interests, managing and constructing the technology for their own purposes, as opposed to the synergistic larger effect of mission support across the government. I, personally, have observed this over many years. I have not only argued--I have made the same argument you are making, but I have written about it and published it inside the government and outside the government. May I just close by saying that I agree with you that a Manhattan Project for future technologies, especially information technologies, would be a good idea. I support it. Senator Durbin. Who would you put in charge of that? General Hughes. I, personally, would probably form an organization out of the scientific and technical structures of the National Reconnaissance Agency Office and perhaps a couple of other organizations in academia, the national laboratories and others. I would try to achieve out of this phenomenal expertise that we do have around the country a focused effort, Manhattan Project-style, for a few years to achieve concrete goals applying technology to real problems, one of which is the distribution and interaction of information. But may I just say, sir, it is not about technology. It is about the management of that technology and the policy in which that technology is applied. We have hamstrung some technological capabilities because we protect turf, we have parochial interests, we do not have a broader vision. Senator Durbin. Thank you. Mr. Chairman, I might say that I am working on legislation with our staff here on the Committee to try to pursue this and to try to determine who should be on top of this Manhattan-type Project. Sadly, as I reflect on it, it could be called the Lower Manhattan Project from the World Trade Center and what we went through. But it just strikes me that we ought to be making this part of our conversation about reorganization. I do not know if any other members of the panel would like to comment. Mr. Carter. Mr. Carter. I just want to second what you said. The state of government information systems is a metaphor for the state of government management, in my opinion. It is not a technical question. It is related to how poorly we manage in Federal public function compared to private functions. Without burdening the new head of this agency too much, it would be nice if this new founding--our first new founding of an executive department of substantial scale for 40 years or whatever the right number is--was a poster child of how to do it right and not a poster child of how to do it wrong, and that is not going to happen automatically. This management angle, management package that goes with the who is in what boxes and what are they supposed to do package is absolutely crucial. Senator Thompson. Mr. Chairman, could I comment on that? Chairman Lieberman. Please. Senator Thompson. I think that is so important what Senator Durbin was getting into, and it is something this Committee over the years has dealt with, and it is something that is important for us all to really understand. It is that we are trying to set up perhaps one of the most important departments in government and to be a well-oiled, efficient, smooth-running machine that gives us information vital to our protection. In the midst of a management mess, the most crucial things to the success of this legislation are things in which we are abysmal in as a government. They are all on the GAO high-risk list--information technology, financial management, human capital management, overlap, and duplication. All of the things that are so vital to this are things that we are awful at. Unsuccessfully, we have spent billions of dollars in the IRS alone trying to get a workable information technology system. But we think that we are going to pass this bill and solve that problem, which we are not. The stakes are much higher here than they are with the IRS. Chairman Lieberman. I agree with you, Senator Thompson. I appreciate, Senator Durbin, the work that you have been doing with the staff. In our Committee bill, we had an Office of Science and Technology, and it may be a very good step forward to broaden that, to strengthen it. It could be on a parallel with DARPA in the Defense Department, which has played such a constructive part in stimulating technological development, incidently, with extraordinary nondefense commercial overlaps or expressions, but also really led to the generation of weapons that won not only the Cold War, but the Gulf War, and most recently the war in Afghanistan. This is one of our great strengths. And you are absolutely right, we have not organized it and focused it to produce the kind of homeland security in this case that we need. Thank you. Senator Durbin. Thank you very much. I would just say, Mr. Chairman--and I thank Senator Thompson as well--thank God there were no subsequent attacks of that scale since September 11. Had there been attacks on December 11 and March 11, I think the substance and pace of this conversation would be a lot different. There was a wartime mentality after Pearl Harbor that said stop talking, stop delegating, let's get it done. We are going to give responsibility and extraordinary powers to the people to achieve that. I hope that we will reach that level soon in this conversation. Chairman Lieberman. That really is our purpose. It is a very good point, and of course part of that is an expression of the fact that this is a different kind of war. The troops are not out there visibly on the field contending, confronting one another, although we know, in most unconventional ways, for instance, by the arrest of somebody trying to come into the country or the occasional release of a tape from al Qaeda, that they are very much still out there, and we have to have that same sense of urgency. Senator Dayton. I think, again, this is this reconceptualizing of our mission. Mr. Odom, you made the comment or he made the comment of the fact that terrorism is a tactic, it is not an entity per se, and certainly it is not a country as an enemy. Your point, Senator Durbin, about INS not being able to tell us when people are leaving, I am told that there are a backlog of 4 million applications in that agency. I understand we have 5 million or maybe more, maybe less, undocumented people in this country, people that are here illegally every day, and we do not do anything about it. So I think September 11 was the worst catastrophe, but reflecting this massive dysfunction. As you said so very well, pointing back to previous years where this Congress has mandated things, that things are not happening and not even in the realm of happening. No matter how you want to recast INS as a subdivision of this Department or whatever, how is any of this going to change the fact that they are nonperforming this huge task? We are not going to know anything until they straighten that out or we figure out how to do that differently. Senator Voinovich. Mr. Chairman. Chairman Lieberman. Senator Voinovich. Senator Voinovich. I would like to follow up on what Senator Dayton has had to say because we are talking about this new agency, but it gets back to the incapacities of various agencies in terms of technology and in terms of human capital. I began advocating legislation the first year I was here that would give the civilian side of the Defense Department the authority to offer early separation and early retirement to senior employees, and not lose the slots so they could reshape their workforce to reflect the needs that they have. The legislation eventually passed and something is happening. Congressman Davis has introduced the Digital Tech Corps bill, which would allow private sector information technology professionals, the dot-com folks, to come work in the Federal Government for a couple of years. If we do not really address ourselves to the technology and human capital problems in these agencies, we are doing our country a great disservice and lulling ourselves into believing that somehow this reorganization we are talking about now is going to solve the problem. It alone is not going to get the job done. We must understand that we are going to have to spend more money on people than we ever have before, and people have not been given the priority that should have been given to them. For somebody to say, for example, that the Coast Guard is going to be able to get the job done without new people, we have to face things as they really are and not just gloss over them and think they are going to be taken care. Senator Lieberman. Senator Carper, you are next. OPENING STATEMENT OF SENATOR CARPER Senator Carper. Thanks, Mr. Chairman. To each of our witnesses, thank you for joining us today. I have just one question, I think a pretty simple one. Senator Voinovich and I are old governors, and we always focus on what is working, and I was never---- Chairman Lieberman. Did you say old governors? Senator Carper. Old governors, yes. Chairman Lieberman. I just wanted to clarify that. No dissent. [Laughter.] Senator Carper. Was not so much interested in whether ideas were liberal or conservative, Democrat or Republican, I was just interested in what was working, and I know the same was true with him. I think we will have a pretty good understanding of what is not working out of what we do here with respect to these issues because we will have a repetition of the kind of disaster we experienced in September 11. My question is, how will we know what we are going to do in this area is working, not whether it is not working? How will we know if it is working? General Hughes. I will start. One way we know is by success. We do have successes in the Intelligence Community; some very small ranging from interagency agreements and cooperative mechanisms to very important successes like stopping or interdicting hostile activity directed against us. Without going into the details of that, of course, you as Senators should know about some of that already in some forums. You should know about it in great detail. This is an inappropriate forum to get into some of the specifics but I think success, apparent, obvious success on the face of it is a measure of success itself. It sounds like it is saying the same thing here but you have to look at the event. There are two other issues, I think, and one is that our country in broad terms, given unfortunate events, is secure, has been secure. One can argue there are many gaps, many shortcomings, many problems. I do not dispute that. But I do think that there are a large group of people and quite a broad array of organizations and functions being applied in the Federal, State and local environment to take care of the people of this country. You can see successful activities each and every day and you could observe those and make your own judgment about them. The last issue I would make is that I know, and I hope that you know, and I think most citizens do know that there are many attempts, many more attempts to attack us, to strike us, to undermine us, to undercut us, to defeat us, and there have been over many years, that have been unsuccessful. Some of this may be chalked up to good luck, but most of it, in my view, is chalked up to very hard disciplined work by very good people who are dedicated and devoted to their country. I am not talking just about the uniformed military. I am talking about policemen, intelligence officers, and politicians. I am talking about all of us who in my view, by the way, do form something of a team, albeit it loosely organized without jerseys and perhaps no coach. But we generally kind of know what we are about here, and it seems to work on a very broad scale. I would just rest my case that as bad as things are and as serious as the problems have been, and may indeed be in the future, we have to look on the margins at the fact that we are not being defeated broadly across the world. Indeed we are making a difference. Senator Carper. Thank you. Yes, sir, General? General Odom. I do not think there is a general answer to your question. I think there are some specific answers and I have heard an idea or two expressed by both you and Senator Dayton. Take the exit visas, the entry and exit business. If you finally get that answer you know you have made some progress. In the issue we were just discussing about IT, there are practical tests you could go out and do to show whether or not these agencies can communicate. So you can pick out particular things to test that will indicate some kind of major progress, but I do not see an overall measure. Senator Carper. Thanks. Anyone else? Mr. Carter. Mr. Carter. It is a very profound question, that is why I am bobbling here. A way of operationalizing it is, how will we measure the success of this Department? We cannot measure it according to whether it eradicates terrorist attempts because I am afraid they are part of our future because technology is putting destructive power into smaller and smaller numbers of hands, and we are all getting more interconnected and complicated and vulnerable. So this is part of the human story as far into the future as you can see. Al Qaeda will be defeated and pass from the historical scene, but as we sit here today we have another unsolved terrorist attack from the fall, which as far as we know may not have been a foreigner at all but one of our own, maybe even a "cleared" one of our own. So this is sort of a syndrome of life and I think it is too much to expect that any reorganization is going to eradicate it. I think there are two measures though that one can use. One is the one that General Hughes referred to, which is we ought to be able to break up developing plots and be able to exhibit a pattern of having done that. I think that can be done both domestically and foreign, but not perfectly. But second, I think that the government needs to be able to explain to the public and exhibit through this Department that it is competent at this job of homeland security in some sort of general way. Remember, the terrorists in Germany of the 1970's, their objective was to discredit government, to show that it could not protect the people. We are kind of on the edge in all these visa fiascoes and so forth of the ability of the function of protecting the public to be discredited. I think that if we get our act together and the new Secretary can exhibit a program of effort that looks competent, looks robust, looks well-rounded, then if we have another incident you say, OK, it is going to still happen, but we are doing a competent job here. Right now I do not think we can exhibit that competent effort. Senator Carper. Mr. Chairman, my time has expired. I again want to thank the witnesses for their responses and for helping us and our country on a real tough challenge. Thank you. Chairman Lieberman. Thanks, Senator Carper, for your profound questions which undoubtedly are a function of your age. [Laughter.] If the members of the panel have the patience, I have a couple more questions that I would like to ask and take advantage of your presence. First, Chief, I wanted to ask you, you gave us some real straight talk here earlier this morning in your opening statement about what you identify as barriers that exist to effective intelligence sharing between local law enforcement and the Federal Government. I want to give you an opportunity to just speak a little bit more about, particularly as we consider this legislation creating a new Homeland Security Department, what your best thoughts are about how to break down those barriers and to provide for a much more constructive and effective role for local law enforcement. Chief Berger. As I mentioned before and has been mentioned here, being proactive instead of reactive. Giving us the tools to go ahead and do the job, to go ahead and effectively measure threats, and hopefully eliminate those threats before they ever get to a situation where it is a threat to the actual citizens. Intelligence gathering is extremely important. I think we do individually--and that is right down to the smallest department--do a good job, but we do not talk to each other. The intelligence that is gathered in Miami is different than is gathered in Minnesota or it is different in Los Angeles, it is different in New York. I think that is extremely important. Even so far as the forms that we collect this data need to be standardized. I think that is extremely important. I think that, as I mentioned, the ability for notification. Again, within our groups we kind of smile and laugh, but we listen to CNN just as you do to get our notifications. It is still not taking place on a timely basis. Security clearances--I know the director of the FBI is very adamant about trying to provide that. So far I think we have had about 400 over a couple thousand that were requested. It takes anywhere from 6 to 8 months supposedly to do these. I have suggested to him that we have many of the men and women who serve in law enforcement that are National Academy graduates, that went through this background check, sometimes years ago, but could easily be refreshed, in my opinion, and get these up so that at least if there was some sensitive information then---- And the local police chief or sheriff does not need to know what the military movements of al Qaeda or any group. We just need to know in our community if there is a potential threat, or if there are individuals in our community that need to be surveilled. We need to know that and not be, as I said before, we will get back with you. I think if we could accomplish those two main---- Chairman Lieberman. How about the other end of it, which is obviously hundreds--I think you said 700,000 State and local police officers out there. How do we train them to detect information, activity by people that may in some sense relate to homeland security, in a broader sense we are talking of it here, counter-terrorism, and then feed it into the department in Washington? Chief Berger. Again, not showing favoritism, but I know my State, Florida, Director Tim Moore of the Florida Department of Law Enforcement came together at the ground level, got together with the police chiefs, got together with the sheriffs. We have set together seven geographic areas. So we have reduced the amount of responsibility from the standpoint that we are all doing the same thing but it is done in a manageable amount, that we can get down to the smaller counties and communities and pass that information on. We need to find out who in fact are the experts that can talk plain talk, and not talk about potentials but actually say, this is what we should be doing. This is how we should be reacting. We, too, recently had a symposium on smallpox, and unfortunately due to scheduling, whatever, the benefit of that was very minimal because we only had maybe a quarter of the room filled down in the local community. So we need to invigorate that, to say that on a time basis, this is critical, these types of things are critical, and try and get it down as close as we can. The one area that is extremely--that was touched on here towards the end by, I think, Senator Dayton, the ability to analyze information on a technological basis: Extremely important. I will give you an example. I take great pride, a couple years ago my department was distinguished by Computing magazine as 1 of the 10 very best in the entire country. That is private and public sector. The average age of my IT persons is 28 years old. When we went to this meeting up at the NBC building to receive this award there were several large corporations there and we were talking and he said, how many people do you have dedicated to IT, and my IT manager said three. He goes, 300 people, that is amazing. My director says, no, three. What I am saying is, the people are there, the ability is there. We have just got to think outside the box--I know it is an old cliche--and say, who best can analyze these things? It may be the private sector to come in and help us to put this together. But it is extremely important that the tools are knowledge and training. I have said this publicly, that those responders, many of them--and I know the chief in Boca Raton-- he used to be my assistant chief--Andy Scott told me that when they went to the first site, which was the American Media publication house, that the men and women that entered that building, of course they had no idea initially what they---- Chairman Lieberman. That was the anthrax case? Chief Berger. Yes. They had no idea what they were encountering. Unfortunately, those men and women need to have the inoculations and the basic training to identify those types of threats to hopefully save their lives or their potential lives down the road. Chairman Lieberman. We really want to work with the association. If you have any thoughts about how to include at least statements of goals, policy goals, or to help facilitate the interaction, Federal and local, we would welcome them. Chief Berger. Thank you, sir. Chairman Lieberman. Mr. Smith. Mr. Smith. Senator, I wanted to add just one thought on the issue of how you get the local policeman on the beat to know what is important to look for. I have given that a little thought. It seems to me that there needs to be--one of the reasons that I am attracted to the idea of creating a domestic security service is that they ought to have a relationship with the State and local police in such a way that there are people at the local level who have security clearances, who have secure communications, who see a certain amount of intelligence that is disseminated to them so that they will have a sense of what is important. Then there has to be a dialogue in which the Federal Government says to the State and local people, here are the issues that we are worried about. We are worried about certain kinds of pathogens. We are worried about certain kinds of groups. We are worried about certain nations and certain kinds of issues. So that the cop on the beat knows what to look for. Now it is not suggesting that we want the Miami Police to infiltrate some group that the Federal Government cannot, so there are some safeguards that have to be included in this. But there is really--as the chief said we at the Federal level have done a terrible job of finding a way to work with the State and local police to have this dialogue that goes up and down which would make us all more secure. Chairman Lieberman. That was very helpful. Thank you. My time is up. That means I am going to have to come back one more time. Senator Thompson. Senator Thompson. Dr. Carter, I think you are the individual who mentioned the management portion of this bill and how important it is. I agree. I think it is very important. Part of what it does is gives the Secretary substantial flexibility to do certain things, including flexibility with regard to Title V involving personnel type issues. There has already been expressions of concern by employees' groups. They want to make sure that their rights are not tampered with, and nobody loses their job. I take it none of you at the table really have a dog in that fight. I would appreciate your objective analysis of just how important that is because General Hughes mentioned, more than anything else really having the right people there is important? Does that not make this management portion, the one that gives the Secretary flexibility, even flexibility that is going to step on toes, or maybe especially because it gives flexibility to step on toes, is that not important? No one is suggesting, that I know of, that the civil service system be abrogated, but the way that the bill is drafted now there is some uncertainty because it just simply gives the Secretary substantial discretion. What do you think about that bill in that regard? How important is what this bill is trying to accomplish? Dr. Carter, we will start with you. Mr. Carter. I think it is a terribly important, and I have a dog in the fight in the sense that I am a citizen and I would like to see this mission get accomplished right. If it is accomplished like many other Federal reorganizations that I have been closer to and witnessed, it is not going to make me feel safer. There are going to be people who are going to have to either get on board or get out of the way, as the saying goes. And for some a place will not be found. So I personally am for a very aggressive form of carrying this out and for giving the person carrying it out, the new Cabinet Secretary, as much authority as one can possibly give, and make this an example of how to manage right in the Federal Government, not an example of how to manage wrong. Senator Thompson. General Hughes. General Hughes. I guess I am in general agreement with that, but I am mindful of the problem I have some experience with, commanding an organization made up of civilian and military people from all over the government. There are many variations in the civil service in the government, and indeed in the uniformed services. Not everybody gets paid the same. Not every personnel structure is graded the same. Not everybody has the same benefits, even though they do the same work. I think that a careful approach needs to be taken to assure that people in the Homeland Security Department are appropriately rewarded and managed for their service there, but that's a we-they competitive environment, especially a negative one, is not somehow the result. So I know that this sounds like I am supporting you and have a different idea from you, and perhaps I do. I would just say, please keep that in your mind; there are differences. It is not all the same between organizations, and even sub-entities in the government. Senator Thompson. We have given some organizations in government greater flexibility. There are flexibilities within Title V itself, and we have given some departments--the IRS, for example, greater flexibilities. When an agency gets in enough trouble, we give them additional flexibility. So it occurred to somebody somewhere along the line, if that is a good idea, maybe we ought to do it before agencies get in trouble. So what this might turn out to be, I do not know. The question I guess is, in the legislation how much should we try to micromanage that, or say what the Secretary can do or cannot do. I think that balancing you are talking about is what he will have to do. General Hughes. Right. I hope you can apply great wisdom to this because I do believe there is a chance to build in reasons for friction. Senator Thompson. Anyone else care to comment on that? Mr. Smith. Mr. Smith. Very briefly. To go back to something I said earlier. I was disappointed in the administration's draft, that the language was not more clear in terms of power that is given to the Secretary. I would give the Secretary much more authority to direct and execute than the current language does. I think that would go a long way. I would encourage the Committee also look at other pieces of government where it has been successful: Goldwater-Nichols, which built in a variety of incentives to try to accomplish the objectives. The authority of the Director of Central Intelligence, some of his extraordinary authorities he has used well in the procurement realm and in the personnel area, maybe those could be incorporated. I think you have to give the Secretary--you really have to hand him the field marshal's baton and the support to carry it out. Senator Thompson. Thank you. General Odom. General Odom. He has made most of my points. I agree with everything that has been said here and I would just endorse his ability to step on some toes in the personnel area. Also, to step on some toes in procurement areas. He is going to inherit a group of agencies, each with their own internal procurement systems, and their approaches, and their own favorite vendors, and that will be a huge problem to overcome in the IT area, which we discussed earlier. If he does not have the authority to over rule them, then I do not think he will succeed. Senator Thompson. Chief Berger. Chief Berger. Senator Thompson, unfortunately I have to leave after this comment because of a plane I have to catch, but I think the emphasis has got to be domestic. Those men that were involved on September 11 lived, played, and communicated within our individual small communities. I think that is so important to remember. Senator Thompson. Thank you very much. Thank you, Mr. Chairman. Chairman Lieberman. Thank you, Senator Thompson. Chief Berger, thanks for coming up here. Your testimony was very helpful and we look forward to---- Senator Thompson. Excuse me, Mr. Chairman. Senator Stevens asked that we submit these five questions for the record addressed to some of these witnesses. If we could get these questions to the witnesses, would they be kind enough to respond to Senator Stevens? Chairman Lieberman. We definitely will, and we will leave the record of the hearing open for 2 weeks to allow for time for the answers to come in. Chief, thanks for coming up here and we will look forward to continuing to work with you and the association. Chief Berger. Thank you very much. Chairman Lieberman. Senator Dayton. Senator Dayton. Thank you, Mr. Chairman. I would join with others in thanking the panel. This has been a very, very valuable session. I thank you, Mr. Chairman, and the Ranking Member, and your staffs for putting together in 2 weeks, two excellent hearings. Before you all had the experience of being high-ranking officials in various intelligence agencies of the Federal Government--and I will never be an old governor. I will never be a former member of one of those entities, so my question is going to be, help me as an outsider understand what the mentality or the attitude is that I believe is part of this unwillingness to share information. I have been appalled, in my limited experience here for a year-and-a-half as a member of the Senate, as a member of the Armed Services Committee, going to so-called classified and top secret and all this stuff, briefings, of what people think their--I really think sincerely, almost as you said, General Hughes, it is their patriotic duty to withhold the most innocuous of information. The information that literally if you read the paper that morning or watched the news you would know walking into a meeting. There is also a view of some I believe, it is almost like they believe in democracy philosophically, they just think that they should be the exception. There is really this, as I say, kind of a hardened attitude that anyone else who is involved in this tangentially is almost--like trying to get the Dallas Cowboys to share their playbook with the Minnesota Vikings. It is abhorrent, the thought. So can you help me, if we are going to be structuring a system, I agree we should have an integrated, state-of-the-art communications system, information sharing, whatever else involved. But if we do not somehow crack the culture I am afraid we are going to be--we have seen the FBI, the Phoenix office does not communicate with the Minneapolis office. So to expect they are going to communicate with other agencies or communicate across these broad departmental fields, I think, is totally unrealistic, given what we know is current behavior. So if any of you can help give insight, and apply it to how we can, again, reorganize? General Hughes. I will start with a brief explanation of the construct. I hope I did not say that someone thought it was their patriotic---- Senator Dayton. No, you said they were very patriotic individuals, and I agree with you. General Hughes. Yes, they are. I think this falls into the category of protecting the information from perceived risk by providing it to others. The more people you give information to, the greater the risk of it expiring or being no longer useful. There is a pretty good reason to believe that is an accurate perception. The more people that get it, the greater the chance of it being compromised. That is especially true in the sensitive intelligence realm where the sources and methods that are used to collect the information are at risk merely because the information has been compromised. That, to a professional intelligence person, is anathema. We do not want to create that situation. That is part of it. Another part of it has to do with policy and roles and missions. The Director of Central Intelligence produces intelligence for the President of the United States. The Director of CIA, who has that mantle too, is the same person, as was pointed out by General Odom. The Director of the Defense Intelligence Agency is responsive to the Secretary of Defense. He is a partner with the Director of Central Intelligence in doing the all-around mission of providing intelligence to the uniformed military, and so on. It kind of goes downhill. At each one of those levels information, and the providing of information, the mechanism to provide it is akin to a power structure. Information indeed is power, and the structure to provide it represents a certain power base. So the black book that goes into the President is not seen by very many people, and it may indeed contain some unique intelligence that very few people get to see, for very good reasons. Now on the end of an event, when it is discovered that that information was not provided to everybody and their brother or sister, there is a lot of criticism over that. But the truth is that if you provided to everyone in general form you would not have--the information would not be any good, and the sensors and sources and methods used to acquire it might be forever lost. So you have a Hobbs' choice here. We seem to have chosen to play the information conservation game, for very good reasons, as opposed to just providing it willy-nilly to everybody. I think it makes a certain amount of sense. Senator Dayton. Mr. Smith and Mr. Carter---- General Hughes. I need to make one last point, if you do not mind. Senator Dayton. OK. General Hughes. That is that policy sets broad guidelines for providing information. The aegis of the information, and the context of it are not always fully accounted for in this broad policy. Without managerial intervention and exceptional activity to make sure the right information gets to the right people, the broad policy guidance that controls the information flow is often inadequate. So I am laying the blame for mistakes, problems, and inadequacies in the information flow in part at the doorstep of the leaders who should manage the system, change the policy, intervene, and directly apply the information where it is needed, when it is needed. That is a leadership function and it must be done by leaders. Senator Dayton. Thank you. Mr. Smith and then---- Mr. Smith. Very briefly, a comment and a suggestion. A comment: The FBI has particularly difficult problems in this area because it is currently structured as both a law enforcement and an intelligence agency, and for purposes of law enforcement, they must collect and maintain information in a way that ultimately can be used in court. That has roots in the Constitution and protection of the rights of defendants, and we all understand why that information has to be tightly controlled. I think we can work a little harder at getting access to that for reasons of intelligence, but that it is a very real problem that the Bureau has to face and we need to recognize that. With respect to a suggestion, it has been my experience that when the system works well when red-blooded American men and women are thrown together with a common cause and from different parts and told, go achieve a mission. We saw that in Grenade where things did not work but we figured out a way to make it work. When I was at the CIA, John Deutch and Louis Freeh set up a series of task forces, and it was the first time the FBI and the CIA had ever done it. We set up a very small group of, I think, maybe five or six task forces, and we literally put CIA and FBI people in the same room and said, go after that target, go after this target. Suddenly the bureau would say, we have a source in that group. And we would say, tell us the name, but they would not tell us the name. They finally would say, OK, it is so-and-so. My God, we know so-and-so from over here. But it was the simple step of getting committed officers of the Federal Government focused on a very real task. Not a theoretical task but a real task. People find a way to break through these barriers that have grown up over the years for whatever reason, and get the job done. That is one of the great features of the American Government and of the American character, we do get the job done. My suggestion is that as you structure this bill, try to build in some of those incentives, build in cross-assignments. Goldwater-Nichols, for example, as you know, said that nobody can become a general flag officer unless they have served in a joint assignment. As joint assignment, by the way, is a real joint assignment. So there are things like that that can be done statutorily, and I encourage the Committee to try to find some of those and crank them into the bill. Senator Dayton. Thank you. Mr. Carter. There is a third reason why intelligence is not shared, other than the two that I think have correctly been pointed out here, which are the need to protect the information for law enforcement or sensitivity purposes and just bureaucratics, and that is that the provider did not know that the other guy needed the information. That is an important point, to my way of thinking. It gets back to what this Department ought to be. If this Department does not provide a strong customer pull, then it will not be serviced with information. Said differently, if you as a customer of intelligence do not articulate what it is you need to the Intelligence Community, it does not give it to you. That is certainly my personal experience. It is a two-way street. And you need to say this is what I need, and in that way little "i," good little "i" makes good big "I" possible. In other words, if you can paint a template, say this is the template I am looking for, then they can begin to provide the information. I am from Philadelphia, and we never saw the night sky in Philadelphia. Every once in a while somebody will take me out in the night sky and say, "Do you see that? There is a horse with wings." And I go, "Jeez, I do not see a horse with wings." If you know you are looking for a horse with wings, eventually you will see it, but I never would have looked up and seen a horse with wings in the first place. So somebody needs to say we are looking for a horse with wings. Then the dots just might appear. So we need to know enough about homeland security and the intelligence requirements of homeland security to articulate that to the Intelligence Community. Then maybe we will get something, and that is another job of this Department. Senator Dayton. Thank you. Mr. Odom. General Odom. Taking the paradigm that Dr. Carter just articulated very clearly, if you look at the user side, there is one thing he can do to make things flow better for him, and that is to flatter the intelligence suppliers. They do not get many kudos. When they get them, they become responsive. So it is not something you can write into legislation, but, a matter of operational practices. That is what will cause intelligence to flow. Senator Dayton. That is a good point. Thank you, all. Thank you, Mr. Chairman. Chairman Lieberman. Thanks, Senator Dayton, for some excellent questions and for your commitment to the work that the Committee is doing. A final question/topic, which is the question of the White House office, and to go back a bit to the debate that you had before, the Committee's bill included a White House office, which we called the White House for Combating Terrorism, because we were concerned that, even after the Department of Homeland Security was created, nationally, and you had all of that effort going on together, there were still going to be parts of the counterterrorism effort, both in terms of homeland security and foreign security from terrorism that would be outside of the Department. So we created the office in the White House which would include, and frankly in our bill we did not have an effective intelligence section, coordination section within the Department, so part of our vision was that might well occur in the White House office, but it would also bring in the State Department, the Defense Department, obviously, and perhaps have impact on other agencies such as the FAA, which was clearly directly involved in the September 11 matters. We gave it some power so that, to use your terms, Dr. Carter, it was both a policy and a program office, which is that it was charged with working with the Secretaries who were on it to form a national counterterrorism strategy, but then the Director of this White House office had budget certification authority to try to coordinate budgets across the government related to counterterrorism and to sign-off or reject them. The White House proposal, post the President's endorsement of a new Department, is not clear to us yet. Clearly, they want to maintain a White House Office of Homeland Security, but at least insofar as I have seen, they have not told us exactly what it would do yet if we create the Department. So I wanted to invite some reactions, first from you. I know you have testified to this, and your written testimony gets to it, about having heard some of the cross-fire about the proposal and having allowed me to give you this brief history, whether you think, if we do create a strong Department of Homeland Security with an Intelligence Division in it, as we have described, whether we still do need the White House office. Mr. Carter. I, as I said earlier, Senator, do believe that we need both. I think your bill had it right. You do not solve the overall problem of architecture by creating a Department of Homeland Security. You do find a home for certain functions. You mentioned the intelligence function, which would not be appropriately done in the White House anyway, and now you give it an appropriate home and a focal point for it, but you cannot get away from the question of the inherently interagency nature of this mission, the inherently intergovernmental nature of this mission. Those are things that can only be resolved in the White House. I, too, have not been able to get a fix on what the White House intends about its own White House office. Chairman Lieberman. Right. Mr. Carter. I will offer only one more thought. I have described what it is I think that office needs to do and the ineradicable need for it. The other comment I will offer is that you cannot do what I think it needs to do with a handful of White House staffers, however gifted they are. The program planning job is a substantial, intellectual, and technical, and practical sort of task, so that you cannot do it with a few people out of the hip pocket. Therefore, I think that, at least for a period of years, the White House Office of Homeland Security needs an attached capability, which I think of as like an FFRDC, the National Academy of Sciences call it a Homeland Security Institute, but something that gives a little analytical heft to this office. Chairman Lieberman. Yes. General Odom. Mr. Smith, General Hughes, have we convinced you at all of the necessity of such a White House office? I am happy to hear your arguments against it. General Odom. When you sit over in the NSC and you need analytic capability, what you generally do is get it from the departments, and you have to be skilled at pulling that analysis out of them. They do not necessarily want to give you what you want all of the time, but it can be often. I would just say I do not think if you create something like this, that you will do a lot of damage, so I would not worry a great deal about trying to stop it, but I have difficulty seeing how the National Security Council and this thing are going to keep from stepping on each other. If it becomes that kind of a contest, which it will, this terrorism office will not be very effective, and the National Security Council will win the struggle. Chairman Lieberman. Yes. General Odom. And this is a national security issue. It is sort of hard to draw the line there. Now a National Academy of Sciences model, if you need an analytic capability, I had not really thought of that. That is entirely different. Chairman Lieberman. Right. Perhaps the question I want to ask you is whether the National Security Council can play the coordinating role that we have had in mind for the White House office for combating terrorism, which is to say to bring in not just the Department of Homeland Security, but the other departments that, in fact, do sit on the National Security Council that are not---- General Odom. They do that all of the time. I mean, foreign policy, military policy abroad, intelligence policy abroad, these are as complex as homeland security, and the NSC does that all of the time between State, Defense. By the way, the National Security Council seldom meets without having several other Cabinet agencies present. The Council can invite any official it wants to attend. Many of these meetings involve the Attorney General, and the FBI Director. As I mentioned earlier, when the issue of the money is in dispute, and the NSC can, but usually does not have much of an effect on the resource flows. But if they want to pull the Director of OMB in, and the NSC can get the President to give new guidance to the Director, then you will start moving resources around. Chairman Lieberman. Sure. Dr. Carter, you would be skeptical about whether the NSC would have the kind of implementation capacity to do the things that you have in mind for the White House office and that we did when we put the bill together. Mr. Carter. Exactly, and the toes that would be stepped on by OHS, in my conception, would be OMB. Now that has not happened so far. OMB has worked with OHS, but to the extent it is about resources and capability building and not the policy du jour, which is what the NSC does, it is more like an OMB function. Chairman Lieberman. Right. Mr. Smith and General Hughes, I will give you the last words. Mr. Smith. Senator, I wish to associate with General Odom on this. My concern is that if the Congress directs the President to create an office, that one President might like it and use it, the next President may not. My strong view is to let each President determine how he or she wishes to organize their Executive Office and line it up in the way that makes the most sense to them, given the personnel that they have, given their own leadership style and so on. My experience is that Congress, over the years, has helped the President by directing him to create an office, and then it gets set up, and nobody pays any attention to it. So I counsel, in a sense, they are both right. Mr. Carter is right that you have got to have that function, but I would leave it up to the President. Second, Mr. Carter mentions the idea of an FFRDC or a national lab providing some analytical support. I happen to know that two or three of the national labs--I visited one of them recently--has focused on this very issue; that is to say, what can they do to provide the kind of analytical support to help the Nation prioritize things, understand what is going on and assign priorities. There is a lot of exciting work out there, and I think maybe your staff or maybe even the Members might want to talk to some of the national labs about some of the things they are doing. Chairman Lieberman. Thanks. General Hughes. General Hughes. I would just take a slightly different approach in terms of functions. I would call the National Security Council a staff element, and I would say that they should exercise policy, development and oversight; they should exercise general oversight, perhaps; they should exercise National Security Council coordination and interaction; and they should exercise budgetary review. Chairman Lieberman. Over the various agencies having to do with counterterrorism. General Hughes. Yes. Indeed, they do that now, I think, over quite a few different agencies, but fed into the National Security construct selectively. It depends on the circumstances. Chairman Lieberman. So you would suggest that we might add those statutory responsibilities to the NSC? General Hughes. I do say that the NSC might--well, I think they already have several of these, in broad, general terms, in their statute, and I believe that they will apply them to a new Department unless someone stops them. But the reverse of this is the operational leadership construct, which the new Department would automatically assume when it becomes active. That means that it would be in charge of operational activities, and it would be in charge of budgetary development and carrying out the work of the Department. So I would probably divide the line between leadership and operational activities, which are normal to all departments of the government, as far as I know, and a staff oversight function, a monitoring kind of function, for what would arguably be a very complex and difficult set of roles and missions. That is just my view. My last point on this would be the National Security Council, interesting term, I am not sure that there is a National Security Council that does all of the things we ascribe to it. There are many other committees and groups, and I would point to something called the Principals Committee and the Deputies Committees working in the National Security construct, kind of a larger thought process here, where various heads of departments or deputy heads of departments come together to coordinate and interact on a specific issue for a specific purpose. That function, with regard to homeland security, should be described and provided for in legislation, in my view. That is a very important issue. Chairman Lieberman. Very interesting. General Hughes. This is not covered by the umbrella term, the National Security Council. Chairman Lieberman. I thank each and every one of you. You remember the old saying, "there is no substitute for experience." You four have had it, and you brought it to bear in a most helpful and constructive way today for this Committee as we move to create a new Department of Homeland Security and perhaps a White House office. I thank you very, very much for your time and your input. The reward for your good behavior is that we will probably be bothering you for the next month or so as we construct legislation to send to the floor. The hearing is adjourned. [Whereupon, at 12:50 p.m., the Committee was adjourned.] A REVIEW OF THE RELATIONSHIP BETWEEN A DEPARTMENT OF HOMELAND SECURITY AND THE INTELLIGENCE COMMUNITY ---------- THURSDAY, JUNE 27, 2002 U.S. Senate, Committee on Governmental Affairs, Washington, DC. The Committee met, pursuant to notice, at 1:03 p.m., in room SD-342, Dirksen Senate Office Building, Hon. Joseph I. Lieberman, Chairman of the Committee, presiding. Present: Senators Lieberman, Akaka, Cleland, Carper, Carnahan, Dayton, Thompson, Collins, and Voinovich. OPENING STATEMENT OF CHAIRMAN LIEBERMAN Chairman Lieberman. The hearing will come to order. Good afternoon and welcome to the third of four hearings this Governmental Affairs Committee has held on the creation of a new Department of Homeland Security since the President endorsed that idea. Today is the second day of hearings focused specifically on the relationship between the Intelligence Community and the new Department, and I am very grateful that the Director of Central Intelligence and the FBI Director are able to join us to share their knowledge and their insights, which will assist us enormously as we pull this legislation together. We will also hear, after the first panel, from Judge William Webster, who has had the unique honor of serving as Director of both the FBI and the CIA. Then, finally, we will hear from Senators Bob Graham and Richard Shelby, the Chairman and Vice Chairman of the Senate Intelligence Committee, whose unique perspectives and experience will similarly improve our work. Plainly put, it does appear that the failure of our intelligence and law enforcement agencies to collect and share and bring together in one place information prior to September 11 was one of our government's more egregious lapses. We are not in this chapter of our Committee's work, I want to say again, going to reorganize the American intelligence and law enforcement communities and fix all of their problems. That will happen in other places, and obviously under the leadership of these two gentlemen within the agencies that they serve. But on this Committee, we do have a responsibility in designing a new Department of Homeland Security to guarantee as best we can that it has the best intelligence on threats to the American people here at home so that the new Department can prevent attacks against our people and our homeland. I am encouraged by Director Mueller's decision to reevaluate and overhaul the FBI's domestic intelligence gathering operations. I know that Director Tenet is also at work in various ways to improve the CIA, and I know that they are both working more closely together and the agencies are working more closely together in an organized way since before September 11. I commend both of you for those efforts. I want to say that I am increasingly convinced, and the outstanding group of former intelligence and national security officials who appeared before the Committee yesterday confirmed this for me, that a new intelligence structure is needed for this new Department within the Department. The witnesses agreed that the new Department must have the authority not only to receive all terrorism-related information and data, including, on request, unfettered access to raw intelligence data, but also the new Secretary of Homeland Security must have the authority to task the intelligence and law enforcement agencies to collect information to conduct analyses in areas that the new Department and the new Secretary believe are critical to their work of protecting our homeland. In President Bush's proposal, he does recommend the creation of an Information Analysis Division, or office within one of the divisions. It would be different from the picture that emerged in my mind from the testimony that this Committee has heard. The President's proposal, I think, envisions a more passive intelligence role for the Homeland Secretary through this new Information Analysis Division, focusing predominately, by some descriptions, on critical infrastructure. It does contain language that requires the President's approval before the Secretary of Homeland Security could obtain the raw data from the intelligence and law enforcement communities, which troubled many Members of the Committee at our hearing last week with Governor Ridge. The President's proposal, leaves the FBI, CIA, and a handful of other intelligence agencies primarily responsible for uncovering and preventing terrorist threats on American soil pretty much as they are, to cooperate with this new agency, I think, is an important and helpful start, and frankly, added to this Committee's bill and its work in this particular area of intelligence gathering. But I think from what we have learned from the ongoing investigations of the Joint Intelligence Committees, from other Committees of the Congress, even from media disclosures, we now have to move forward to strengthen the administration's proposal with regard to an intelligence section in the new Department of Homeland Security. That includes some very interesting questions about how best to staff the Homeland Department's intelligence unit with the most skilled analysts that would be needed for this kind of work. So in all of these questions, I know that Director Tenet, Director Mueller, Judge Webster, Senator Graham, and Senator Shelby will be able to help us as we formulate an Intelligence Division within the new Department, particularly one that can work with the CIA and FBI. I am confident as we go forward, and yesterday's hearing deepened my own belief in this regard, that we can find common legislative ground here. This has not been, at least not yet, a confrontation with the kind of turf protection that many feared when the idea of a new department was first brought out, nor has it been a partisan debate. Thus far, I am very grateful to the Members of the Committee and proud that our pursuit is to try to agree on the best possible Department we can with the strongest powers we can give it to protect the security of the American people at home. We will find common legislative ground. In fact, I think we must. That is perhaps why the divisions and turf protection that some feared have not happened. I think we must fulfill our constitutional responsibility to provide for the common defense as it has been redefined by the events of September 11. My optimism for the future course of our Committee's work I base, in no small measure, on the strong cooperative working relationship I have had with the Committee's Ranking Member, Senator Fred Thompson, who I would call upon now. OPENING STATEMENT OF SENATOR THOMPSON Senator Thompson. Thank you, Mr. Chairman. I must say, as one who will soon be out of here, I think those Congressional turf battles are totally unnecessary and you ought to really resolve those things, next year at the earliest. [Laughter.] Mr. Chairman, thank you very, very much for those comments and for this hearing today and inviting our distinguished panel here. I would ask that my statement be made a part of the record. Chairman Lieberman. Without objection. Senator Thompson. I would just observe that you have laid out the issues here. We clearly are about a monumental task here in dealing with this homeland security issue and the new entity, new Department that we will be forming. We have, right off the bat, gotten into the realization that a very important part of what they will be doing is being one of the government's most important customers for intelligence. How they get that, the quality of what they get, and how they use that in order to protect this country is kind of focal to what we are doing. We do recognize that many of us think we must do better with regard to our intelligence gathering, analysis, dissemination activities and our law enforcement capabilities, and I think we all recognize some shortcomings in that regard. You rightfully point out that dealing with all of that is not part of what we are trying to do, but we must recognize that as we move forward. So we are dealing with a massive reorganization involving possibly 170,000 employees and 22 different agencies on the one hand. We are recognizing that as we go forward in the future, we need to address our intelligence and law enforcement capabilities on the other hand. In the middle, we are trying to decide how do we bring those two considerations together. So we are sort of skateboarding while trying to juggle, I guess you might say, in this massive endeavor. I am sure that is not beyond the Chairman's capabilities, but I find the prospect a little daunting. I think we are off on the right footing. I think we will get this done, and although America may be working on it for many years to come and some of its details, I think we are on the verge of making a really good first step toward making our Nation a more secure one and I thank you for your efforts in that regard. Chairman Lieberman. Thanks, Senator Thompson. [The prepared statement of Senator Thompson follows:] OPENING STATEMENT OF SENATOR THOMPSON I want to welcome our witnesses today. Thank you, Mr. Chairman for inviting them. The issue of enhanced intelligence to support homeland security needs is a central one before this Committee. The bill to propose the President's Department of Homeland Security has as its first substantive provision the creation of a new intelligence analysis component. We discussed the issue of intelligence- information sharing and the FBI and the CIA extensively, not just in the first part of this hearing yesterday, but also while Gov. Ridge was here last week. This discussion obviously could not be complete without hearing from the Directors of the two agencies represented here. There is no shortage of opinions regarding the future role of the new Homeland Security Department in the Intelligence Community. Complicating this debate is the on-going discussion on how intelligence information should be collected, analyzed, and disseminated in the future. While these are two separate issues, we need to address them both in the near future. Yesterday, the Committee heard from a number of experts, who discussed various ideas for reorganizing the Intelligence Community by combining part of the FBI and CIA into a joint counterterrorism center or perhaps creating an MI5 type of security service. There has also been some discussion of moving part or all of the FBI into the new Homeland Security Department, although I found it interesting that none of the experts yesterday recommended that course of action, at least at this time. As I understand the construct of the Administration's proposal, the new Department will be a "customer" of collection services such as the FBI and CIA. That naturally raises some concern given the past dissemination problems in the Federal Government. We are told that the new initiatives in both the CIA and FBI now underway will result in an adequate sharing of information with the new Department, and that some of these other avenues may not be necessary. Even if we solve the issue of information sharing between agencies, there are many other issues that confront our intelligence services and will confront the new Department as well. From the decay of our human intelligence to the upcoming retirement crisis facing all federal agencies, the difficulties we confront in reshaping our government to address the new threat environment are significant. At the heart of any reform must be changes to the way the government does business. The President's proposal provides enhanced flexibility in the personnel, procurement, and property management areas. It may seem beside the point to touch on these issues today, but they are as central to what is wrong as intelligence issues. The inadequacy of information technology systems and the inability of them to talk within and across agencies will continue to hamper intelligence operations until we put an end to "stove piping." So I see management challenges and the need for reform as going hand-in-hand with intelligence reform. Mr. Chairman, I look forward to the testimony of our witnesses today. It would be helpful to the Committee if the witnesses could discuss their efforts to correct the past problems on information- sharing and explain how the new Department of Homeland Security will receive the information that it requires. I also look forward to the input of Judge Webster from his unique perspective as a past Director of both of these organizations. Thank you, again, Mr. Chairman for holding this important hearing. Chairman Lieberman. What was that, skateboarding and juggling at the same time? I think we can do it with your help. The record should note that part of my optimism about our capacity to bring all this together is that in his previous life, Senator Thompson in various movies played both the Director of the CIA and the Director of the FBI, and he played them with great distinction. Senator Thompson. And with much greater pay, I must say, than here. [Laughter.] Senator Thompson. Than either they or I am receiving at the present moment. Chairman Lieberman. Right. So he has been able to coordinate the work of those two agencies within his own person, which should give the two of you optimism that you can do it together. Mr. Tenet. Is that a straight line for us, Senator? [Laughter.] Chairman Lieberman. Senator Carnahan. OPENING STATEMENT OF SENATOR CARNAHAN Senator Carnahan. Thank you, Mr. Chairman, and thank you, Director Mueller and Director Tenet, for being here with us today. You both have very demanding jobs. When things go well in your agencies, they usually go unnoticed. And when things sometimes go wrong, it is front-page news. So we thank you for your dedicated service day after day, regardless of the circumstances. This Committee has an important task before it, to create an agency with the mission of protecting our homeland. The task is more difficult in a world now where borders no longer bind our enemies. With new technology has come new threats and new challenges, as well. Trans-national threats require increased levels of intelligence coordination between those who collect information and those who use it, between Federal and local governments, and between the military and law enforcement. With better coordination, we will prevent our enemies from exploiting our vulnerabilities. Our future also depends on a government with the human capacity and technical systems to identify and analyze terrorist threats and to act swiftly and with precision to eradicate them. To do that, our Intelligence Community must be staffed with the brightest people, equipped with the best technology. It must have the resources to act upon its mission and to think as our enemies do, beyond physical and diplomatic borders. So with those thoughts in mind, I will later, when the questioning time comes, be addressing some questions to each of you. Thank you. Chairman Lieberman. Thank you very much, Senator Carnahan. Senator Akaka, good afternoon. OPENING STATEMENT OF SENATOR AKAKA Senator Akaka. Thank you very much, Mr. Chairman. I thank both of our witnesses in advance for your insights and for being with us here today. Your being with us give me greater confidence that we are moving in the right direction. To me, there are lessons to be learned from mistakes in the past, and we must apply these lessons to the future. I know that your agencies will provide the proposed Homeland Security Department with the access, the participation and the intelligence it will need to carry out its responsibilities. Your service to your country is appreciated. I believe you are doing a great job in refocusing your agencies' efforts and lending your expertise throughout the government. I want to ask the Chairman to place my full statement in the record. Chairman Lieberman. Thanks, Senator Akaka. Senator Akaka. Thank you very much, Mr. Chairman. [The prepared statement of Senator Akaka follows:] PREPARED OPENING STATEMENT OF SENATOR AKAKA Timely and accurate intelligence is key to the success of the proposed Department of Homeland Security. A major problem is how to ensure that accurate intelligence is received by decisionmakers in time to do something about it. As we have seen with the investigation of what was known leading up to the attacks of September 11, a great deal of information was known about the attackers and their intent, if not their target. Yet, it was difficult to ensure that intelligence was provided quickly to the appropriate decisionmakers. There is a worthwhile distinction here between information and intelligence. Information is what is received from various sources, for example human agents or electronic intercepts. Intelligence is what is derived from evaluating the different information bits. What we want to do with this new Department is to ensure that all the relevant information is collated quickly enough that an accurate intelligence assessment can be sent to the people who need to act on it. What we do not want to do with this new Department is to create an additional layer of clearance or interpretation which slows the process of assessing the information. Several questions have already been raised over the intelligence sharing protocols proposed in the Administration's legislation. One question is the extent of the new Department's access to raw intelligence. Will the Department be a passive recipient of finished intelligence reports or will it have access to the raw information contained in the reports? Certainly sources and methods must be protected and creating a new Department may exacerbate this by expanding the number of intelligence users in the Federal Government. At the same time, the source of information can be useful in its analysis. According to the Administration's bill, the President will determine access to the raw information reports. There are legitimate concerns about whether or not this will ensure timely and adequate receipt of essential information. According to a General Accounting Office report, there is no standard protocol for the sharing of intelligence information between state, local, and Federal officials. This will be the critical component in guaranteeing the effectiveness of this new Department. Much of the information about threats to our nation will come from local officials who become alert to questionable activities in their area. This new Department will have to ensure adequate training for these officials and provide for a prompt communications link. It is important to note that the new Department will be a substantial producer of its own intelligence reports. Some of the agencies envisioned in the new Department, for example the Coast Guard, the Immigration and Naturalization Service, and Customs, produce potentially valuable information about potential threats. This information will need to be evaluated and provided to agencies which will be outside the purview of the new Department, especially the FBI and the CIA. This cannot be a one-way street. The Department will generate information helpful to other departments and we must ensure a swift process for evaluation and transmission. Rather than duplicating existing analytical capabilities in the Department of Homeland Security, we should strengthen the analytical and information-sharing capabilities we now have. We need to identify ways to strengthen the structure and capabilities of the CIA's Counter- Terrorism Center. This includes ensuring that the analytical capabilities of the Intelligence Community can properly address the broad range of current and future national security threats. We need to assess our foreign language and technical skills. Do we have the appropriate expertise for addressing asymmetric threats? Legislation that I and other Senators have introduced, S. 1799, the Homeland Security Education Act, and S. 1800, the Homeland Security Federal Workforce Education Act, seeks to encourage that we have adequately trained Federal employees in national security fields. Governor Ridge has mentioned that we may need to bring intelligence analysts out of retirement or academia. This is a short-term solution to a long-term problem and does not ensure that these workers have backgrounds adequate to meet the challenges posed by new threats. We need to ensure we have the long-term, in-house analytical capabilities to evaluate and interpret current and future national security threats. I want to thank both CIA Director Tenent and FBI Director Mueller for their service to our country. I am encouraged that we have two such talented individuals who are willing to serve our nation so ably. Their experience and dedication will ensure that the problems which we face will be overcome. Chairman Lieberman. Again, I thank both of you for being here. Have you tossed a coin to decide who goes first? The senior member of the team? Mr. Mueller. The younger member of the team. Chairman Lieberman. All right. Director Tenet, you go first. TESTIMONY OF HON. GEORGE J. TENET,\1\ DIRECTOR OF CENTRAL INTELLIGENCE, CENTRAL INTELLIGENCE AGENCY (CIA) Mr. Tenet. Senator, I want to touch on two main areas, how the new Department fits into the Nation's approach to terrorism and what the Intelligence Community plans to do to support the new Department. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Tenet appears in the Appendix on page 175. --------------------------------------------------------------------------- I strongly support the President's proposal. The Nation very much needs the single focus that this Department will bring to homeland security. We have a foreign Intelligence Community and law enforcement agencies, but we have not had a cohesive body responsible for homeland security. The President's proposal closes that gap while building bridges across all three communities. It is clear that the new Department will not duplicate the roles of either foreign intelligence or law enforcement. The new Department will merge under one roof the capability to assess threats to the homeland, map those threats against our vulnerabilities, and take action to protect America's key assets and critical infrastructure. In addition to ensuring that all domestic agencies respond in an integrated manner to tactical situations, ensuring a coherent response to specific threats, the Department will also have a much more strategic mission that will require a different kind of analysis, one that has access to both public and private sector data to ensure that the Nation's infrastructure is protected. There may well be some overlap and even some redundancy in evaluating what the Nation's foreign intelligence and law enforcement communities provide, and this is welcome. But in the end, the Department's most important role will be to translate assessments about evolving terrorist targeting strategies, training, and doctrine overseas into a system of protection for the infrastructure of the United States. In other words, they will review the intelligence we provide and what Mr. Mueller and the FBI provides and develop an action plan to counter the threat. It is more than just countering each threat as it comes up. It is building a coherent, protective system that provides long-term deterrents. We often have strategic warning about the imminence of a threat. We work hard but do not always have the tactical warning that identifies the actual date, method, and site of an attack. The new Department will build a protective system based on our strategic warning that serves to deter or defeat attacks when we lack tactical warning. As a result, the Nation will become more systematic, agile, and subtle, matching resources and strategies smartly to vulnerabilities. We have learned, Mr. Chairman, one very important historic lesson. We can no longer race from threat to threat, resolve it, disrupt it, and then move on. We must also evaluate whether we have put in place security procedures that prevent terrorists from returning to the same target years later. Just because a specific attack does not occur does not mean that category of targets is no longer of interest to terrorists. Will this be easy? No. Is it necessary? Absolutely. The lesson in fighting terrorism is clear. The strategy must be based on three pillars: First, a continued and relentless effort to penetrate terrorist groups to steal secrets that can result in the tactical warning that is often so difficult to attain, the date, time, place of an attack; second, offensive action around the world--both unilateral and with our allies, to disrupt and destroy the terrorists' operational chain of command and deny them sanctuary anywhere; and third, systematic security improvements to our country's infrastructure directed by the Department of Homeland Security that create a more difficult operating environment for terrorists. The objective is to increase the costs and risks for terrorists to operate in the United States, and over time, make those costs and risks unacceptable to them. If there is no strategic security safety net at the back end, in the homeland, then we will be left in a situation where we and the FBI will have to be operationally flawless, in sports parlance, bat one-thousand every day. We need to play offense and defense simultaneously. A strategic security plan that is based on integrated data sharing and analysis must close the gap between what we and our law enforcement partners are able to achieve. Equally important, Mr. Chairman, the Department of Homeland Security, working with the FBI and the Intelligence Community, will provide State and local governments and their law enforcement entities the education and tools to use the resources at their disposal wisely. This means training and education that help them understand terrorist practices and what to look for. This means making priority judgments on what is most important to protect and how. Let me turn to how the Intelligence Community will support this new Department. I see this support in three principal areas: Information sharing, connectivity, trade-craft development, education, and training. Information sharing covers a broad spectrum of activity, from people to intelligence. Intelligence community experts in many disciplines already have close working relationships with many of the offices being brought together in this new Department. These will continue and will both expand and deepen. We are committed to assuring that the new Department receives all of the relevant terrorist-related data that is available. This intelligence falls into two very broad and important categories. Reporting derived from either human or technical sources--these reports provide the basis for analytical assessments and are disseminated today directly to our customers. All-source assessment or finished analyses-- these assessments prepared by intelligence analysts at CIA or elsewhere in the community include current reporting of breaking developments as well as longer-range strategic assessments. In addition to receiving these analyses, the new Department may, like other customers, commission individual assessments or even participate in drafting the assessments themselves. Information sharing also means locating key people from any agencies in each other's offices. For example, CIA's Counterterrorism Center already has 52 detailees from 15 organizations. Since 1996, the Deputy Chief of CTC has been a senior FBI agent and the FBI's presence in CTC has increased from 6 to 14 officers since September 11. CIA has sent key officers to FBI to establish a Counterterrorism Analytic Center. In each agency, these officers help steer exactly the right kind of information to their parent agencies. The Department of Homeland Security will have similar access. In addition to this crucially important sharing of information, here are some other steps that we will take to give our fullest support to the new Department. In every possible case, we will provide intelligence at the lowest permissible level of classification, including sensitive but unclassified. Support to the extended homeland security audience, especially State, local, and private sector entities, will benefit from the release of information in this manner, something we believe should occur. Databases can also identify and help stop terrorists bent on entering the United States or causing harm once they get here. We are examining how best to create and share multi- agency government-wide database that captures all information relevant to any of the many watch lists that are currently managed by a variety of agencies. We need to make sure that the Department of Homeland Security and other members of the Intelligence Community are connected electronically. The Intelligence Community already has in place the architecture and multiple channels necessary for sharing intelligence reporting and analysis at all levels of classification. We will provide the new Department with our technology and work with them as they develop compatible systems at their end. This will make it possible for all levels of the broader homeland security community, Federal, State, and local, to share the intelligence they need and to collaborate with one another, as well. We will help the Department develop the analytical methodologies, the trade craft, and the techniques they need based on our own vast experience in assessing foreign infrastructures. We will help the Department develop training programs for new analysts and users of intelligence through an expansion of our own analytical training programs. This broad-based and dedicated program of support is founded in large part on work that has been long underway in the Intelligence Community and our greatly increased efforts since September 11. In closing, let me repeat my pledge, Mr. Chairman, on behalf of the entire community to give our fullest support to the Department of Homeland Security. We see this support not as a change of mission but as an expansion of our mission. Fortunately, we already have underway many of the programs and processes needed to ensure the highest level of intelligence support. Our counterterrorism mission for years has been to understand, reduce, and disrupt this threat. The new Department's mission will be to understand and reduce the Nation's domestic vulnerability. This calls for an intimate and dynamic partnership between us, as vital a partnership as any in the U.S. Government. It will not be enough for the Intelligence Community to treat this new Department as an important customer. We are committed to bringing the Intelligence Community into a genuine partnership with the Department of Homeland Security. Thank you, Mr. Chairman. Chairman Lieberman. Thank you, Mr. Tenet. Mr. Mueller, thanks for being here. TESTIMONY OF HON. ROBERT S. MUELLER, III,\1\ DIRECTOR, FEDERAL BUREAU OF INVESTIGATION (FBI) Mr. Mueller. Thank you, Chairman Lieberman and Senator Thompson and other Members of the Committee. Thank you for having us here today. The urgency with which this Committee is addressing the critically important issue of homeland security is appreciated by all of us who are engaged in this war against terrorism. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Mueller appears in the Appendix on page 184. --------------------------------------------------------------------------- September 11 has transformed the Executive Branch, but most particularly, the FBI. Understanding this basic fact is essential in evaluating how the FBI fits into the President's proposal to establish a Department of Homeland Security and what we will provide to ensure that this new Department gets from the FBI what it needs to succeed. That is our obligation. Or to put it more bluntly, the FBI will provide Homeland Security the access, the participation, and the intelligence necessary for this new Department to achieve its mission. Let me back up a little bit and go to the immediate aftermath of September 11. We began taking a hard look at ourselves in the FBI to see how we in the FBI could become more collaborative, more flexible, and more agile. Even before September 11, we knew we had to fix our antiquated information infrastructure and also unbridle our agents from overly burdensome bureaucracy. Much has changed since then and much more is in the offing. While I would be glad to discuss the details of what we are about, our most basic changes complement the homeland security proposal in very fundamental ways. Simply put, our focus is now one of prevention, and this simple notion reflects itself in new priorities, different resource deployments, a different structure, different hiring and training, different business practices, and a substantially different information architecture. More importantly, it is reflected in how we collect, analyze, and share information. For example, in the aftermath of the attacks of September 11, more than half our agents were working on identifying the individual attackers, their international sponsors, and along with other agencies, taking steps to prevent the next attack. Today, we are at double the amount of our pre-September 11 commitment. But regardless of what that permanent number ultimately may be, what is important is that we will apply to prevention whatever level of resources--indeed, the entire agency, if necessary--to address the threats at hand, and we will do so in the context of the current multi-agency effort. In addition to committing manpower, September 11 has triggered a wide range of organizational and operational changes within the Bureau. There are three I would like to note, the first of which is the expansion of our Joint Terrorism Task Forces throughout the country. Second is the creation of a National Joint Terrorism Task Force in Washington, DC. The third area that I would like to discuss is the substantial increases in our analytical capacity. All three are designed to promote better information sharing and will directly complement and support the new Department. The Joint Terrorism Task Forces are chaired in 56 regions of the country by the FBI, and those task forces include members of other Federal agencies, such as INS, Customs, ATF, and CIA, as well as State and local law enforcement. Homeland Security would be included, as well. The importance of these task forces is that they have transformed a Federal counterterrorism effort into a national effort creating a force multiplier effect and, indeed, providing effective real-time information sharing among the participants. The national complement to these local or regional task forces is to be the National Joint Terrorism Task Force. The National Joint Terrorism Task Force will bring a needed national perspective and focus to the local task forces. It will consist of both the FBI as well as eight other agency detailees and, of course, will include the new Homeland Security Department. The task force will complement both the FBI's and the new Department's analytical efforts and the inclusion of other agencies allows for the real-time sharing of information at the national level with all of those participating agencies. On the analytical side, to be blunt, pre-September 11, our analyst numbers were woefully inadequate. The effect not only was inadequate operational support, but also an inability to finish and timely disseminate intelligence. Thanks to considerable help from Mr. Tenet and the substantial resources that Congress is providing, our ability to identify, analyze, and finish and share intelligence is becoming much improved. This will very directly help Homeland Security and the CIA, but equally important, it will give us the actionable intelligence we need to support our own investigations. Of equal importance to the FBI putting its own operational house in order is our relationship with the CIA. Even before September 11, it was much better than it had been 5 years ago, but since September 11, it is much better still, although our challenge is to continually improve, particularly in regard to information sharing. As you may know, Mr. Tenent and I jointly brief the President each morning on pending terrorist threats, and the positive consequences of a more robust relationship between us are found in FBI agents working at Langley and CIA officers at FBI headquarters, as Mr. Tenet has already explained. We produce a daily threat matrix 7 days a week, jointly. We exchange briefing material each day, all to ensure that we are working off a common knowledge base. I would also say that CIA officers have joined us in several of our Joint Terrorism Task Forces around the country, and that is going to increase. I would also expect them to participate, quite obviously, in the National Joint Terrorism Task Force. Finally, our legal attaches overseas are working ever more closely with their CIA counterparts in ways that was unimaginable before September 11. I spent a few moments on the FBI's post-September 11 operational characteristics and our relationship with the CIA for a purpose. My experience since September 11 has only served to cement in my mind the need for a new Department of Homeland Security. And although the FBI and the CIA are operating at higher levels of operational efficiency and connectivity, there still remains a need for an agency that is committed to improving, and in some cases building from scratch, a defensive infrastructure for America and its borders. Given the daunting challenge that will face Homeland Security, the question naturally arises as to what intelligence capability the new Department requires. The FBI's view on this matter is quite simple: Whatever it needs to properly do its job. It seems the President's formulation in his proposal strikes us as the proper formulation. The new Department as a matter of course will receive all FBI finished intelligence analysis and such raw intelligence as the President deems that it needs. Experience also tells me that the participation of Homeland Security on Joint Terrorism Task Forces, the National Joint Terrorism Task Force, and with us at FBI headquarters will prove to be as valuable as anything else we do to ensuring a common knowledge base. Further, the proposal complements the reorganization we are well along in implementing at the FBI and vice-versa. So, for example, as part of a changing culture, a senior CIA official participates in my daily case and threat briefings and CIA officials and analysts are included throughout the FBI's counterterrorism structure. The reverse is, likewise, true. We have, as Mr. Tenet pointed out, a number of agents, some in top positions, over at the CIA. This is to ensure that the CIA sees what we see and to ensure all information gets acted upon swiftly. I would expect Homeland Security to be equally integrated and equally participatory. Discussions of the FBI's relationship with Homeland Security have also raised the issue of whether the Counterterrorism Division of the FBI should be transferred to the new Department. For the reasons laid out more extensively in my statement, my view is, no, that that would not be a wise idea. At the very least, such a move at this critical moment would disrupt our ongoing battle against terrorism, and as we all know, al Qaeda is active both abroad and at home. The FBI's counterterrorism team, intertwined with and supported by the rest of the FBI and in concert with our colleagues in the CIA, has a substantial number of open, ongoing counterterrorism cases that we are working on on a daily basis. I do believe it would be a mistake to assume that our counterterrorism efforts are in some way discrete from all other criminal and counterintelligence work that we do. Often, plots are disrupted by employing every available Federal criminal statute, such as credit card fraud, smuggling, health care fraud, and the like. It will be even harder to separate that function from our criminal and counterintelligence informant base should there be a shift of responsibility. Further, even with our focus on prevention, much within our counterterrorism effort will always be somewhat criminal in nature and it is supported by FBI functions, such as its forensics laboratory, surveillance capabilities, technical capabilities, 56 major field offices, 400 regional offices, and 44 offices overseas, and all the information collection and information exploitation that these represent. We should not forget the FBI's working relationships with over 16,000 police departments and law enforcement agencies not only in the United States but also around the world. And lastly on this point, I think it perhaps prudent to remember our history and the fact that our domestic intelligence collection must be grounded in an agency that is steeped in the constitutional protections afforded our citizens, and perhaps also it is important to note that it is under the watchful umbrella of the Department of Justice. In sum, while the fear is that this new Department will not get the information it needs, I believe we are doing that which will ensure that it does and in ways that reflect the practical realities of information collection and law enforcement. Old rivalries and outdated equities went by the wayside on September 11. I believe what we are doing will work, reflects the most practical arrangement, and I have every expectation that the President and Congress will monitor this closely to ensure that it accomplishes that which it is set out to do. Thank you very much, Mr. Chairman, for the opportunity to make this statement. Chairman Lieberman. Thank you, Mr. Mueller. Thank you both for thoughtful, helpful opening statements. We will now have questions by the Committee and have 7- minute rounds of questions. I want to thank you, Mr. Mueller, for what you said at the end. It complements, of course, what Director Tenet has said about the extent to which the agencies are cooperating post- September 11. Pre-September 11, whatever lack of communication that existed was unacceptable. It becomes intolerably unacceptable after September 11. The American taxpayers invest billions of dollars, literally, in the agencies that you represent. We have a right to expect that you are sharing information, that you are pooling resources to get the maximum benefit out of the investment we are making to protect our security. So I appreciate the steps that the two of you have taken in that regard since September 11. I have some other questions that I will come back to, perhaps, in a second round, if we have one, or later in this round, but I want to focus in on the Department of Homeland Security, or whatever we call it, the Intelligence Division of that Department, and talk about what your responsibilities and authorities to it should ideally be. It is clear that it should at least have analytical capacity with regard to intelligence, and of course, all of this is to provide the Secretary with the intelligence to allow him to take steps with others in our government to prevent terrorist attacks, or other attacks, on our security from occurring, so that the Intelligence Division would have analytical capacity to consider both what you are sending it, the two of you and other agencies, and, in fact, what it gets from within its own agency. It will, if it goes along the lines that we are contemplating now, have within it the Border Patrol, Customs, and all agencies which generate what might be called, and is, intelligence information. The second question, then, is: Beyond what you choose to send it, what else does it have a right to ask of you? And let me ask you to focus first on this question that perplexed us at the hearing with Governor Ridge last week, which is that it appears in the President's bill, he gives the Secretary the authority to request raw data on certain subjects, but only with the President's permission. So this struck us as odd, that you would go from the Secretary up to the White House over to CIA, FBI, instead of horizontally. Give me your sense of why that is so and whether it should be so? Mr. Tenet. First, Senator, let me start with one of the things you said. It is not a question of what you choose to send, because the way the system works from the intelligence side today is you automatically disseminate, push the button, over 9,000 products every month to this universe of customers who care about terrorism, from reporting to analyses. Now, to your question---- Chairman Lieberman. OK, that is an important point. Mr. Tenet. There is an automatic---- Chairman Lieberman. General Odom talked about that yesterday from his time at the National Security Agency. Mr. Tenet. There is an automatic flow of information across the government in all of these categories of information today, and indeed, the Office of Homeland Security today is a recipient of this same kind of information. Chairman Lieberman. And, naturally, a new Department would be on the list. Mr. Tenet. The same---- Chairman Lieberman. Just give us a sense--obviously, I am not asking for details of particular reports, but what kind of information flows in that automatically? Mr. Tenet. Sir, there are, first of all, all your finished reporting, all your reporting regarding what have human sources told you, what technical sources have told you, and then the finished analysis that we basically take all those first two categories and write finished product. That goes to you, in addition to the reporting produced by the Defense Intelligence Agency, the State Department, the regional security offices. So there is a very rich body of information that flows automatically to that. Chairman Lieberman. Distinguish that, for our benefit, from what we have come to call raw data. Mr. Tenet. In our business, let me help you think about that. The raw piece of this data is who is the source and how did you collect the information. That is the thing you hold on to in the most rigorous and disciplined of terms. Now, there may be an instance where you walk in and tell the Director of Homeland Security that I can tell you unassailably this is our best reporting source. You can take his information to the bank. We should immediately launch the following set of actions. And the Director may say, or the Secretary will say, "I would really like to know who the source is." In this instance, this is an issue I would want to talk to the President about because the system, the way it works today, we give you so much texture about the source and their reliability and their access in the context of reporting that going that extra mile and protecting that holy piece of information is something we have to do relentlessly. Chairman Lieberman. So you would say that the necessity to get Presidential permission only goes to disclosure of the source, not to the content of the report? Mr. Tenet. No, sir, because the content is already in the finished product that the Secretary has received, or in a specific collection method that you want to protect and sometimes you disguise. Chairman Lieberman. Forgive me for interrupting. This is a point that has come up before at the Committee. There is an assumption, I think, or an interpretation here that what goes to the customers of your two agencies is analysis, in other words, analyzed information rather than the raw information from which the analysis is drawn. And, therefore, the Secretary of Homeland Security might in some case want to see the raw data that was behind the analytical report you sent to him. Mr. Tenet. In fact, what he sees is two categories of information. You see the product from the raw--from the meeting with the asset. You see the product from the transcript of something that is technically collected and it is all in a report. It is the facts and nothing but the facts. And then what you also provide the customer or the Secretary may be a finished analytical assessment that takes that report and a number of other reports and puts them together to give him texture and story about what that single report may mean. Chairman Lieberman. OK. Mr. Tenet. He will get both categories. Chairman Lieberman. Let me allow Mr. Mueller to get in here now. Mr. Mueller. Let me talk about a different type of raw material. If we are investigating an individual, or a group of individuals, we will get telephone toll records. There will be bank records we will pull in for financial analysis. There may be grand jury transcripts. There may be wire transcripts. All of that, I would consider to be the raw data. I will tell you that the provisions of the PATRIOT Act that now allow us to provide to others in the Intelligence Community grand jury information has opened up a vast category of information that we now can provide to the Intelligence Community that we could not before. But what we have not had in the FBI previously is that capability of taking this information, extracting the information, and producing reports for the rest of the community. And what our new analytical capability will do is extract from a grand jury transcript, from a wiretap, from what we call a 302 report of an interview, that information so that we can do what the Intelligence Community does---- Chairman Lieberman. What they have been doing all along. Mr. Mueller [continuing]. Which NSA or CIA has been doing and provide that material to not only the CIA, NSA, but also Department of Homeland Security in the form of the report. Chairman Lieberman. Right. With regard to the necessity for Presidential permission, do you have the same understanding that Director Tenet does, that the permission would only be required if you were asked by the Department of Homeland Security for the source of the information? Mr. Mueller. I think we can provide to the Director of Homeland Security 99.9 percent of what they want in terms of reporting. I can extract from a wiretap transcript that which is necessary for Homeland Security to look at. If there is an ongoing operation, for instance, ongoing investigation that is time sensitive and to disclose individuals' names might hinder that, and somebody wanted the name and the specifics of it in a different agency, that is something that I would look at and might have some concern about and that is where it would go over, I believe, to the White House, not necessarily directly up to the President, but to the Homeland Security Advisory. Chairman Lieberman. Can I ask the indulgence of my fellow Committee Members? One of the points raised yesterday, and I think it is particularly with regard to the Office of Intelligence that you have established, Director Mueller, is to give the Secretary of Homeland Security the authority to task you to do something. What are we thinking about? He has reason to be concerned about X port of entry into the United States, or ABC University, and, therefore, Mr. Director of the FBI, the Secretary of Homeland Security, and I, request that you send your agents out to collect information there. I presume you have no problem with that? Mr. Mueller. I would not give a blanket "yes" to everything. There may be areas in which it is contrary to our guidelines, contrary to what we think is constitutional, but generally, cooperatively, if there is a tasking, of course, we would try to provide the information that is necessary. Chairman Lieberman. We may want to give that authority to this office in the statute, just to make it clear. Do you want to have a final word? Mr. Tenet. On tasking, in the normal course of our exchanges every morning with the senior policy makers, they will always ask for, "Can I have more data or more analysis on the following subject?" It is a natural occurrence, Senator. It is just the way we do our business. Now, you raise an important question about, operationally, the direction of assets and people overseas. That direction comes from the President for the national Intelligence Community and the priorities he sets and the guidance he provides us. So on operational matters, there are today, in the way Mr. Mueller and I work this, there are operational matters that get surfaced when people are looking at how we are deploying people, but nine out of ten times, they will leave the operational judgment to us about how to take care of a specific case or instance. They may have a view, and we inform them on a series of things that are sensitive and they should know about, but that operational judgment is usually left to us because it is operational and requires a professional judgment. Chairman Lieberman. Thanks very much. My time is definitely up. Senator Thompson. Senator Thompson. Thank you, Mr. Chairman. Gentlemen, we, of course, are not the oversight Committee for either one of your organizations, but as we indicated earlier, what you do is relevant to the new organization, so I would like to discuss with each of you very briefly in the broadest terms a couple of issues that are very broad-based, but I think important. Director Mueller, one of the issues here that you addressed has to do with whether or not something different should be done with the counterintelligence part of your operation. Some people suggest it ought to be brought within the Department of Homeland Security. Others suggest we need a new MI5-type organization. I understand your feelings and position on that. But if we leave it where it is now, I am wondering how you address those who point out the obvious difficulties that you have. You are making a major transformation within the FBI. Your three top priorities that you have now were nowhere near the top just a few months ago. You are making massive shifts of personnel from traditional FBI work, such as violent crime, drugs, and things of that nature, into counterterrorism. We all understand that. We had several witnesses at our hearing yesterday, but one in particular talked about the issue of whether or not the FBI can perform both its old missions of after-the-fact crime solving and its new prioritized mission of before-the-fact activities and whether or not the FBI can perform both missions effectively. The FBI apparently will have to revamp completely its investigative approach and require the retraining of many agents. Here is what this gentleman said yesterday. Compartmentalization is required in order to do effective law enforcement but is anathema to effective intelligence. The rules that the Bureau must follow for law enforcement investigations are simply inconsistent with good intelligence. Law enforcement looks backward to solve a crime that has been committed. Evidence must be painstakingly gathered and analyzed and protected from disclosure in order to find and arrest criminals. The fewest number of people must be given access to the information, not only to prevent leaks, but also to assure a fair trial for the defendant. The prosecutors must be able to comply with the rules of criminal procedure on issues like discovery and disclosure of information to the defense counsel. Intelligence, on the other hand, tries to look forward. Its job is to collect as much information as possible, analyze it, try to predict what will happen, and disseminate that analysis to the widest group with a need to know. So again, you are taking on that burden at a time of massive transformation and you very candidly acknowledge the deficiencies and gaps and difficulties that were present before September 11 within your Department. You are making major efforts to do something about that. Do you acknowledge this difficulty, and if so, what is your answer to those who make those points? Mr. Mueller. I think those points are somewhat overstated. I think what we have out there is 11,500 agents who are very good collectors of information. In the past, 70 percent, not the counterintelligence side or the counterterrorism side, but 70 percent on the criminal side have looked towards taking the information that they gather and putting it into a courtroom. But they are superb collectors of information that can now go into the intelligence side of the house. We have had in excess of 6,000 agents immediately after September 11 pulling together every piece of information in this country relative to September 11, but most particularly relevant also to assuring that there would not be a second wave of attacks and working on prevention. We now have 2,000 agents who are doing that. I do not believe there is an agent in the FBI that does not understand today that part of his or her responsibility is taking up every piece of information and provide it to the centralized intelligence database so that it can be used for a much more predictive approach to prevent the next attack. Senator Thompson. Let us move, then, from the agent in the field, the capabilities of the agent and the training that might be necessary to the organization or the line reporting part of it, and let me give you a hypothetical situation. I will ask you how this is going to work and how it might be different than it would have worked before September 11. Let us say you have an agent in Phoenix, Arizona, who reports up the fact that there are some suspicious activities with regard to an individual with potential al Qaeda connections. The information is solid, but it is a suspicion. There is no evidence of a crime. You have got that scenario. How would that be handled today, and just so it is not turned into a trick question, I will ask you simultaneously the second part of that hypothetical situation. Suppose, in addition to that, you have got information that this individual was also a suspect in a bank robbery in Phoenix in order to get money to finance their (al Queda's) operations. You could pick any kind of Federal crime, but let us just say it is a serious one, a bank robbery. You have a before-the-fact scenario that you are all too familiar with now. Now you have an after-the-fact traditional FBI scenario. How would that be handled? Where and by whom would that be reported? To whom? Where would the lines cross within the agency? How would that be handled? Mr. Mueller. I will tell you, before September 11, in Phoenix, what we call electronic communication from Phoenix would come to headquarters and perhaps, depending on the circumstances, go elsewhere. Before September 11, we operated as 56 separate offices. What we had to do and we are doing, and actually what we have done is put into place enhanced management collection at headquarters so that something like the Phoenix memorandum now would come up through the ranks at headquarters, would go to our new analytical unit as well as being in the operational unit, and that portion of the memorandum that relates to the possibility of terrorists going to flight schools would be extracted, put into a report, and sent around to the community. Additionally, the analytical capacity that we did not have before would look at that and see if there are any other reports out there relating to flight schools. And as it tasked, depending on the quality of the technology and how soon we put in the bank robbery report, it would have picked up the fact that this individual is also a suspect in the bank robbery. Senator Thompson. Say the bank robbery memo came in a week later. The only commonality, as I understand, would be the name. Would the name do it? Mr. Mueller. Our current technology, not unless you went back and made another search for that name 2 weeks later. In the future, when we have the technology where you could put in there, OK, you hit on this name on thus-and-so date. If that name enters the database down the road, that particular agent or somebody has to be notified, then the technology would kick it out. Senator Thompson. My time is up. Thank you, Mr. Chairman. Chairman Lieberman. Thanks, Senator Thompson. Senator Carnahan. Senator Carnahan. Thank you, Mr. Chairman. I believe Director Tenet mentioned this earlier, that we need to develop better interoperability between the networks of foreign intelligence agencies like the CIA and law enforcement agencies like the FBI. Since the revelations of the breakdown in communications between the FBI and the CIA, what efforts have been made to improve the compatibility of your computer systems between your agencies? Mr. Tenet. On our end, Senator, we have in place, as I mentioned in my statement, we do have a communications architecture with multiple levels of transition--of transmission, the most classified information and then lower levels, and we are hooked up to the FBI and 46 other agencies and a total of 80 subcomponents of those 46 agencies. So at the most highly classified level, we disseminate all of the product I talked to you about to a broad array of individuals and it will get bigger. This also is based on the principle of obviously creating communities of interest using technology, so rather than get inundated by data, you can carve out of this data stream the things you, as an analyst at FAA or another agency, are most interested. So we have pushed that information out and we are connected. I think what Bob is building is the connection from his field to his center so that he will be able to transmit in the same way and potentially use the exact same network for all of us to do it in with the same modern technology that connects everybody. We have worked a long time on this and have made great strides and this all started way before September 11 and it has come to fruition in a very good way for us. Mr. Mueller. I think from my perspective, I have spent time over at the CIA. I would say that the CIA is ahead of us in terms of upgrading its information technology. We are in the process of upgrading that information technology to allow us to transmit digitally reports that we would be developing on our intelligence. But we are not where I want to be. In the meantime, we are doing it with personnel. Having CIA individuals in the FBI seeing our information gives us that connectivity today that I hope to have technologically tomorrow. So we are doing what I believe is necessary to have the interchange of information until such time as we can put into place the technological improvements that are necessary in the Bureau. Senator Carnahan. To what extent does your centralized intelligence database have the capacity to analyze data and to make links and connections and see patterns? Mr. Mueller. It does not have any capability for artificial intelligence. You can query it with basic queries. One of the deficiencies is if I put my name in, Mueller, M-u-e-l-l-e-r, you have to put it in explicitly. It will not pull up any variations, M-u-l-l-e-r, that type of search capability. We have a basic search capability in our major database, but it is not what I would want, and we are migrating that database to a much more modern database that not only will give us the search capabilities, but also will enable us to exchange digitally information between ourselves and the Department of Defense or CIA or the like and we are working on that second stage of connectivity digitally. But the fact of the matter is that I have to build up our own capability before I can reach that second stage. Senator Carnahan. One final question. Certainly, Americans are very concerned about their physical safety now, but I do not think we can ignore some other vulnerabilities we have, as well. We certainly did a good job with Y2K, but cyber security is certainly an ongoing concern. In your estimation, does the Department of Homeland Security need a special unit that is focused on cyber security, and what other resources does the Department need in order to protect the country from cyber attacks? Mr. Mueller. We have what is called National Infrastructure Protection Center, NIPC, which has three components. One of the components is an investigative component. We have agents around the country who are part of that investigative component and that, it is anticipated, will stay with the FBI. And in NIPC are detailees from Department of Defense, Secret Service, the CIA, all of the community. There are two other components that are proposed to go over to Homeland Security, and they are the warning and alert section as well as the outreach section to private industry. But in my view, the investigative part of NIPC, that is, that which requires not only the technical investigation, those individuals who are computer specialists and know how to use sniffers to go up the line to determine who has launched a denial of service attack, that technical capability has to be coupled with the agent in the field who can go out and interview the individuals who may have those computers who have been used for the launch of denial of service attack. And, consequently, that integration, that investigative integration, I believe should stay with the FBI. However, the other components should go with Homeland Security. Senator Carnahan. Thank you very much. Chairman Lieberman. Thanks, Senator Carnahan. And that, in fact, is the proposal, both in the Committee's bill and the President's bill, I believe, on infrastructure protection, that the so-called outreach parts of NIPC go to the new Department. Mr. Mueller. I believe it is, and the legislation proposed by the President, I am not certain in the Committee's bill because originally it was kept together, and I know when the legislation came up, it did carve out the investigative part of it. So I am not certain whether it is in the Committee's bill that way. Chairman Lieberman. Thanks. Senator Collins. OPENING STATEMENT OF SENATOR COLLINS Senator Collins. Thank you, Mr. Chairman. Gentlemen, I am pleased that both of you have recognized that we need not only reorganization, but also reform, and that if we have reorganization without reform, we are not going to get the job done. I am interested in how the new Department would deal with your two agencies on the issue of cyber terrorism. There was a report in the Washington Post today that suggests that al Qaeda may be targeting our computer systems, and it goes into some detail about a flaw in a data transmission standard that the FBI concluded could have been exploited to halt "all control information exchange between the ground and aircraft flight control systems." In the area of a possible cyber attack, how do you see your two agencies interacting with the new Department? One of my concerns is, who is on first? Who has the lead? How are we going to avoid confusion over lines of authority and prime responsibility in areas that are large, complicated vulnerabilities? Director Mueller. Mr. Mueller. There is an investigative piece of any cyber attack in which you have to determine the originator of the attack, whether it is an individual or a country or a terrorist or what have you, and it is an investigative piece that requires a variety of investigative capabilities. You need the computer expertise. You also need the investigative expertise because behind every computer is an individual. And I would expect us, the FBI through its NIPC center, to provide that expertise in conjunction with Homeland Security, which would be looking at and have the expertise in looking at the particular networks, whether it be the electrical backbone or power plants or ports or what have you and we would be merged. One of the items that we contemplate is that when we move portions of NIPC over to Homeland Security, we would move a number of FBI agents. We would have FBI agents detailed over to Homeland Security so that there would be connectivity, as we have agents back and forth with the CIA. And whenever you have something like that in this day and age, because the globe is so small, because it is not just within a State, it is not just within a region, it is not just within the United States, it can be global, you have to work with other partners to accomplish the goal. I think we would take the investigative lead, but we would do it jointly, understanding what the vulnerabilities are as established by the Office of Homeland Security. Senator Collins. Director Tenet. Mr. Tenet. I think for the foreign Intelligence Community, the range of questions that the Director or the Secretary of Homeland Security would have is what do you understand about the capabilities of this particular group? Is there State sponsorship involved? Can you map back to the point of origin of the attack? What can you tell us about their capabilities, all of which gets fed in. And the critical piece of analysis that gets done by Homeland Security is in concert with working with service providers and companies, what is the specific vulnerability to the infrastructure of the United States and how do you fix it? We can inform you about the tools that are being used, the intent of the attack, whether there is someone that is bigger than a terrorist group involved, what the technical capabilities are, and that gives you the road map for somebody doing the analysis here out of Homeland Security about this infrastructure to say, this is how we have to plug the hole. So, actually, the system works for us quite naturally today and we will pass all that information over to the new Secretary. Senator Collins. Director Mueller, you testified that you thought that the Counterterrorism Division of the FBI should not be transferred to the new Department. One of our witnesses yesterday proposed the consolidation of existing counterterorrism divisions of both the FBI and the CIA into a single National Counterintelligence Center that would not go to the new Department but rather would be under the control of the Director of Central Intelligence. I would like your opinion of that proposal. Mr. Tenet. I think it is a mistake. I think that what we need, that operational and intelligence and law enforcement fusion will have to occur between our organizations. As you operationally work cases and chase people around the world, somebody has to be responsible for aggregating the domestic private sector and public sector data to fix the vulnerabilities that we enunciate or find, and I do not think you want to reside all of that domestic information in an intelligence organization. I just think it is a mistake. Senator Collins. Director Mueller. Mr. Mueller. Terrorism is something new in this way. Prior to terrorism, we had intelligence, and the intelligence part of the FBI would look at Russia or other countries and their intelligence officers and try to determine where they are and then the sanction there would be kicking somebody out of the country, persona non gratis, or opening an espionage case. On the other hand, you had the criminal side, which was locking up people who commit crimes. Terrorism is a hybrid. On the one hand, there are threats against the national security which require the use of the intelligence tools, but for terrorism, you also need a sanction. In other words, what are you going to do with a person that you have in the country who you believe, and you have sufficient evidence to believe, is conspiring to commit a terrorist act? Do you lock them up? You have got to have some sanction. In my mind, it is a combination of intelligence and law enforcement. The sanction may well be, if the person is out of status, that the person be deported. But then what we have to do and that which we have not done altogether that well in the past is when we have somebody who may be deported who is a potential terrorist, we have to work very closely with the CIA so we have the pass-off, which is what we have since September 11. If somebody leaves the country and we think they are important, whether it be worldwide or in the United States or some particular country, there is a pass-off to the CIA. Getting back to the original question, I do not believe that separating our collection ability in the United States from the law enforcement option makes a great deal of sense. Senator Collins. Director Mueller, my time has almost expired, but I want to very quickly ask you one final question. I understand that the FBI has established what I refer to as the terrorist watch list. I believe the formal name is the Project Lookout Watch List, which is intended to make sure that agencies have access to the same kinds of information on people who may be seeking access to our country. In conversations that my staff has had with the State Department, I have been told that the FBI and the State Department are still having trouble sharing information because of database incompatibility. Is that accurate? Mr. Mueller. I am not certain which particular watch list we are talking about. I know there is the project for doing record checks before someone is granted their visa and there had been some bumps in the road there. We have a separate watch list that are individuals whom we wish to be notified if they are picked up, if they are stopped by a police officer or something, which is separate and apart from what is done with the State Department. I believe as of now that the sharing of information between the FBI and the State Department in terms of doing the record checks has been evened out and should not be a problem, but I will check on that. Senator Collins. Thank you, Mr. Chairman. Chairman Lieberman. Thanks, Senator Collins. Senator Akaka. Senator Akaka. Thank you very much, Mr. Chairman. Director Mueller, the gaps and duplications, that exist within our Intelligence Community are being addressed in part through the creation of a single Homeland Security Department. And as you have testified, the FBI is undergoing a major shift in mission and priorities. Given your agency's new focus, do you believe the FBI should have a seat on the National Security Council along with the Secretaries of State, Treasury, and Defense? Mr. Mueller. What in practice happens is to the extent that the National Security Council is addressing a law enforcement issue, particularly one that relates to something overseas, we sit. So I am not certain whether it is necessary to change the Presidential directive. I am not even certain whether it is statutory or the Presidential directive establishing the National Security Council, to assure a seat at the table. The practicalities of it are to the extent that there is something that we can be helpful on, we have a seat at the table. Senator Akaka. Then let me ask you, would you change the makeup of NSC to include the Director of the Homeland Security Department? Mr. Mueller. I can speak as Director of the FBI. On the National Security Council, I do not think it ought to be changed. There has never been an occasion where I believe that law enforcement, whether it be the Attorney General, the Deputy Attorney General, or myself, has been left out of a meeting in which law enforcement was a substantial topic. Senator Akaka. Thank you. Director Tenet, yesterday, the GAO issued a report on efforts to control the smuggling of nuclear and radioactive material in foreign countries. The report noted, "the current multiple agency approach is not the most effective way" for the United States to monitor and control the movement of materials that could be used in "dirty bombs." There appears to be agreement since September 11 that the government's reliance on a multiple agency approach for security poses significant weaknesses, which is why I support Senator Lieberman's bill. You note that we need a "coherent protective system," and I agree. Given your broad range of experience, are there traps that Congress should avoid in drafting legislation to create this new Department? Mr. Tenet. It is an interesting question. I think I would like to think about that, Senator. I do not have an answer off the top of my head for that. Senator Akaka. Director Mueller, how will the reallocation of the field agents impact State and local law enforcement, especially since the FBI announced last week that the crime index rose for the first time in 12 years? I am curious, because the statistics show that crime in Honolulu rose 4 percent over the past year. Although you have addressed the importance of the Joint Terrorism Task Forces, I remain concerned as to how the FBI will balance its traditional law enforcement functions and its new responsibilities for home security. Would you comment on that? Mr. Mueller. Surely. What I proposed is the shifting of 480 agents from other programs to doing counterterrorism after determining that we needed the permanent shift of 480 agents. Of those 480, 400 will come from the drug programs, and where we have 10 or 15 individuals on an OCDETF, Organized Crime Drug Enforcement Task Force, we will be drawing back to fewer agents. Where we overlap with the DEA in investigations of Colombian or Mexican cartels, we will try to eliminate that overlap. For State and locals, to the extent that we in the past have been willing to pick up stand-alone methamphetamine cases, Ecstasy cases, and the like, we probably will not be as willing to do that in the future. In terms of violent crime, I am suggesting that we move, I think, a total of 59 agents, and again, we participate in violent crime task forces around the country. I believe it is critically important that to the extent that the FBI can bring to the table special skills, capabilities to address violent crime in our communities, we should do so. The 59 agents that are being reassigned will come off of task forces. Where we had five or ten agents on a violent crime task force, we will draw back to maybe five or four, with a lesser number. My expectation is that, hopefully, that will not cause a substantial deterioration in our ability to work with State and locals to address violent crime. There is one other aspect of it that in my mind is critically important and that is that when we sit and work with State and local law enforcement on violent crime task forces or other task forces, we are developing the relationships that are critically important, not only in addressing violent crime, but also addressing terrorism and other threats to our communities. Senator Akaka. Mr. Chairman, my time is almost up. I have one more question. Director Mueller, I agree with your assessment that there needs to be a new level of intelligence awareness among Federal employees and a willingness on their part to come forward with information that may assist in the war against terrorism. However, as Chairman of the Federal Services Subcommittee and sponsor of legislation to strengthen the Federal whistleblowers statute, I also know that employees fear retaliation when disclosing information they have uncovered. I would appreciate your insights into how we can ensure that employees are protected from retaliation when reporting intelligence concerns to superiors or to Congress. Do you believe employees in national security positions should be covered under the Federal Whistleblower Protection Act? Mr. Mueller. I believe there ought to be strong protection for whistleblowers. On, I think it was November 6, I sent out a memorandum to every FBI, whether it be support or agent, expressing the strong view that whistleblowers will be protected, that there cannot be any retaliation. One of the things that I do, to the extent that a person believes that he or she is a whistleblower, I alert the Inspector General from the Department of Justice so that is a separate track in terms of monitoring the fact that the whistleblower will not be retaliated against, and I think I have made it clear that in the FBI, we need to embrace criticism, as hurtful as it may be, and to learn from it. I believe the message should be a strong one that goes out from the top to everybody in the organization and that in the Department of Justice, that the Inspector General gives an additional assurance that whistleblowers will be protected. Senator Akaka. Thank you very much. My time is expired. Chairman Lieberman. Thanks, Senator Akaka. Senator Voinovich. OPENING STATEMENT OF SENATOR VOINOVICH Senator Voinovich. Thank you, Mr. Chairman. I apologize for not being here for the early part of the testimony. Director Mueller, former General Electric CEO Jack Welch insisted that if GE businesses were not No. 1 or 2 in global markets, they would not be part of GE. His point was that you have to pick just a few priorities and do them extremely well. Director, I am concerned that the new FBI has too many top priorities, nine in all, ten if you include the goal of upgrading the FBI's information technology. Simply stated, I do not see how the Bureau can do all of them and do them well, given your workforce and your budget. As you know from a letter that I sent to you, I have met with the group that represents your employees and they have indicated that for almost a dozen years, they have been looking for a new compensation system that gives them the competitive wherewithal to keep and attract people at the Bureau, deal with the problem of retirement in the near future, with one-third of your people leaving, and then the problem of locational pay, where some of your agents around the country have to go 60 miles outside of metropolitan areas in order to find someplace to rent property and so forth. So in addition to the top three priorities, which are focused on preventing terrorism and other foreign action against the United States, while the remainder are more traditional law enforcement functions, it seems to me that these functions require different cultures and mindsets. Do you think it makes sense to place such different missions in the same agency? Mr. Mueller. I look at our agents as collectors of information. Now, that information can be transformed into evidence that is produced in a trial. That information can be gathered, put in reports, whether it is interviews or wiretap tape and surveillances. It does not make any difference whether it is intelligence or criminal. They are information gatherers, and I think they do a superb job at it. What we have to do in the Bureau is to give incentives to those individuals who are doing counterintelligence and counterterrorism in new ways. In the past, the measure of success in the Bureau often is how many arrests have you made? How many successful prosecutions have you had a hand in? In the future, that which we have to do to assure that our No. 1 and 2 priorities, counterterorrism and counterintelligence, and the third one, defending against cyber attacks, become the leading priorities is to change our reward system to make certain that those agents who go into those fields understand that it is appreciated and that those individuals are rewarded. I think, though, at the bottom line, we are collectors of information and I think we do it exceptionally well and I do not believe that, given the priorities, and I think it is a fairly simple list of priorities, that I think we can handle it. I will tell you that every 3 to 6 months, I will be looking at either shifting resources or coming back to Congress and asking for more resources if I thought we could not handle one of the priorities. Senator Voinovich. It has been discussed around here for years: Do you need a compensation system that is tailored to the specific needs of the Federal Bureau of Investigation? Mr. Mueller. I think we could benefit by a compensation system that would assist us to obtain some of those individuals that have the skills that are very much appreciated not only in private industry but in government but are paid substantially better on the private side of the house. I will tell you that one of our problems is, as was pointed out before, is that having people come back to headquarters-- and what you want is the best and the brightest, the leaders to come back to headquarters to lead the organization, whether it be in counterterrorism, in counterintelligence, and there is a disincentive to come back to headquarters because of the price of housing here and because of---- Senator Voinovich. May I just interrupt you--one of your best people came from Cleveland. Mr. Mueller. A number of our best people came from Cleveland. [Laughter.] Senator Voinovich. The Committee Members ought to know that he gets, each month, $26 more in his paycheck since he has moved to Washington. From Cleveland, Ohio, to Washington, that is it. Mr. Mueller. He just came back, Mark, yes. Senator Voinovich. It is a big job, and $26 more a month, moving from where he was to Washington, DC, is inadequate. Mr. Tenet and Mr. Mueller, this government of ours is not facing up to the reality that to get the best and brightest people and hold them in government, it is going to require a whole new look at the way we manage our personnel system. We cannot continue as we have anymore if we expect to get the talent that we need to get the job done. Mr. Mueller, we had the President of the International Association of Police from North Miami here yesterday. I asked him about the task forces that you have set up. Now, I have met with some of your agents and they are talking about their task forces and how there is great communication back and forth, and I asked him to give me his appraisal of what was going on. He said that it was not that good, that maybe there were a couple of them around the country that were really working well, but from his perspective, and from his colleagues' perspective, the kind of information sharing and teamwork that is needed is not as good as it should be. I just wondered, have you tried to evaluate whether or not those task forces that you have set up for the exchange of information are making a difference and whether they are working? Mr. Mueller. Yes. I have talked extensively with State and local law enforcement around the country. I think there are some areas when it is not working as well as it should. But I believe that, generally across the country, I have had substantial positive responses on the task forces. The issue of information sharing is frustrating, and there are two separate issues. The task forces, the joining together to run down leads, to sit at the same table, to exchange information on the task forces, I think is going pretty well. There are spots in the country where it could go better. There are always, when you have 56 offices around the country, you will have one or two or maybe more offices where the relationships are not what they would want to be for a variety of reasons. But generally, I think it is going fairly well. The information sharing is frustrating because there is so much information, some of which is classified, some of which cannot be shared, and there is always the belief out there that we have more information than I think we, in fact, do. And I think if I have heard it once, I have heard it a number of times, that once we give clearances to a police chief or a captain in a police department and they see what they have, they come back and say, gee, I did not need this clearance. You do not have what I anticipated you had. But there is a great deal of frustration out there at the State and local level in terms of the information sharing. I would agree with that. Senator Voinovich. The only suggestion I would make is I would certainly do an evaluation around the country and find out which ones are really working and then share that information with the other ones that people feel are not working. Mr. Mueller. Good. Will do. Senator Voinovich. Thank you. [The prepared statement of Senator Voinovich follows:] PREPARED STATEMENT OF SENATOR VOINOVICH Thank you, Mr. Chairman. I commend you and Senator Thompson for your cooperation during these important hearings. We are truly fortunate to have two outstanding Members leading our Committee's examination of the Federal Government's largest restructuring initiative since the Truman Administration. Today we continue to examine how the relationship should be structured between the new Department of Homeland Security and the Intelligence Community. Yesterday, our Committee received testimony from witnesses whose professional expertise and background gave us much to consider as we work on the President's Homeland Security proposal. I would like to extend a warm greeting to today's distinguished witnesses, which includes FBI Director Robert Mueller, III, CIA Director George Tenet, Judge William Webster, Senator Bob Graham and Senator Richard Shelby. I am certain this all-star line-up will provide the Committee with additional insights on what is needed to ensure that the proposed Department of Homeland Security can interact effectively with our Intelligence Community to handle national security information with the utmost care while making sure information is shared with those who need it to provide for our defense. Thank you, Mr. Chairman. Chairman Lieberman. Thanks, Senator Voinovich. Senator Dayton, you are next. OPENING STATEMENT OF SENATOR DAYTON Senator Dayton. Thank you, Mr. Chairman. First, gentlemen, I would like to express my appreciation to both of you for shouldering a magnitude of responsibilities on behalf of our country. I think only a handful of other people have to bear these responsibilities, so thank you. Director Tenet, you said at one point, talking about this agency and others, that they need to do their jobs effectively or you have to bat a thousand. You almost have to bat a thousand anyway. One of the areas that is of primary concern, and would be a primary responsibility of this new Department, is immigration and the fact that we have five million, more or less, undocumented individuals in the country. Obviously, it makes both of your jobs enormously more difficult, to assess who is here and who should not be here. Therefore, do we need this new Department to be doing something different from what it is doing now, something new that no one else in government is doing now, or do we need it to do its existing functions more effectively, or some combination? Mr. Mueller. I think we have to do both. In terms of keeping track of individuals that are within the United States, the Attorney General announced an initiative several weeks ago in which we will be keeping better track of certain persons coming into the United States, but also persons that leave. One of our big problems is we are so open, so broad, such a wide open country that we, unlike other countries, lose track of people once they come within our borders and we are taking steps to try to assure that does not happen in the future, but it is going to take a period of time to do a better job of tracking individuals once they come into the country--these are visitors to the country--as well as identifying when they leave the country. Senator Dayton. Director Tenet. Mr. Tenet. The only thing I would say--I am not an immigration expert, but I think this new Department has to look at visa policies, how they are applied, how people come here, the number of countries that you can travel from, to the United States, without a visa. All of these things have to be looked at coherently because you will never get enough manpower to track people around the country. So it is not an issue that I am an expert in, but you need to think about this in layers from the overseas to the border to who gets in and you need to think through all of those systems in place and you need redundancy in understanding who is here and that is a very difficult question in terms of the number of people who are out of status at any moment in time, the rights that they have under the law, the ability you have to deport people. It is a very complicated picture. We have always been a country that has accommodated a great many people and it has been very successful for us and generations of immigrants have come here. I think we just have to look at this differently than we ever have to protect ourselves and I think this new Department will undertake that. Senator Dayton. I meant the question both specifically and generally. Let me go back to another part of my question. In terms of what, if anything, this agency needs to do that is new or different from before, Director Mueller, you referred to the mission of the Department as the defensive backbone of the country. You talked about its function of being preventative and anticipatory. Is there something outside of what you and others are doing now that needs to be done. Mr. Tenet. Sir, the most important new thing that needs to be done is the systematic assessment of the country's vulnerabilities without regard to the daily tactical "chase the threat." There are all kinds of infrastructure targets in the country, from your air system to your rail system to your water system. This group of people who populate this office have to have a unique ability to work with the private sector and the public sector to understand what the real vulnerabilities of that infrastructure are and to design smart, agile ways to protect it so that you basically increase the odds that you have been able to deter somebody from conducting a terrorist attack because the protection is smart. That is what has not been done and what needs to be done and that really is the strength of what this Department will do, in addition to integrating the data and the stream of information that many domestic agencies collect within the Department and disseminate it in a way that we can all make sense out of it. But the vulnerability assessment and a systemic program of protection is what the country does not have and that is unique and different from what the rest of us do for a living every day. Senator Dayton. Thank you. You said it more cogently. We have had excellent hearings, but I do not think I have heard from anyone so far exactly what the distinction is, so I thank you. Going back to the communication or the flow of information, I am confused. I remember reading or learning in a hearing months ago about the incompatibility of your respective information systems and computer systems. Director Tenet, today you said you push a button and 9,000 customers get disseminated information, 46 at the top level. One of my questions about this new Department is whether they need a state-of-the-art communications system that integrates their own divisions and can hook into yours or do you already have that with each other? Mr. Tenet. We already can communicate with ease and electronically with all of our national security customers and with the FBI from us to them, and a large amount of product in the specific information link I talked to you about was the most highly classified counterterrorism information that is now on a secure link with communities of interest so we can push it all out. So the Intelligence Community has done this historically and a Chief Information Officer in the Department of Homeland Security who aggregates this data and meets us and connects us is a very important, fundamental building block of making all of this work. Senator Dayton. My own view is that we obviously want to do this right and do it in a way that lays the foundation for a seamless integration of all these functions and sharing of data. Do they need what you already have or do you need something new that is compatible with one another and with them? Mr. Tenet. They will need what we have to be certain, and then we will both need the connections and the data mining tools to rationalize and make all the relationships out of all of this data so that it becomes actionable in one way, shape, or form, and we can be helpful here. We are not Microsoft, but we are moving in the right direction and have a lot of tools at our disposal that could be very helpful to this community. Senator Dayton. I hope you will tell us what you need, at least in financial terms, or even in functional terms. Mr. Chairman, I hope that is a key component of what we are going to be providing. Thank you, Mr. Chairman. My time is up. Chairman Lieberman. Thank you, Senator Dayton. You are absolutely right. There is a vote on. Senator Cleland went off to vote. He wants very much to question the two of you. I think we have 20 minutes until I promised Director Mueller we would let you go, so this means I am going to get to ask a few more questions while we wait for Senator Cleland to come back. One I have is about cooperation with local county and State law enforcement. It seems to me, and to us, that as we have gone along here that not only have we post-September 11 focused new, justifiable, deserved attention on the first responders locally, but I think we have now got to start thinking of them--we had the chief of police yesterday, 700,000 State and local law enforcers around. So affirmatively, what thoughts do either of you have, and I suppose this comes particularly to you, Director Mueller, about how we can train and use them for intelligence to be provided to the Department of Homeland Security, to you, to prevent terrorism? Obviously, they are seeing a lot every day. Mr. Mueller. The principal component in my mind are these Joint Terrorism Task Forces in each of our communities, and to the extent that they are not working well, we have to make them work well because you need a focal point for the leads to come in and you need a focal point for the intelligence to come in and you have to have it come in in some way that is consistent, and if there is word that comes in about a suspicious character, you then have to have somebody go out. It could be a local policeman or a local deputy sheriff to find the person, interview him, do a report, and get it back to a central location so that you have that intelligence where you need it in case that name comes up again in the future. So you have to have some network that includes State and locals, and the Joint Terrorism Task Forces are the beginnings of that integration of the Federal Government with the State and locals in a way that will enable us to capture that information. We also have to set up, and have been setting up at headquarters, liaisons with State and locals. At the Joint Terrorism Task Force at headquarters, we will have State and locals involved. We have currently in the investigation two New York City Police Department detectives who are participatory in it. We also have established an office to support local law enforcement and I have Louis Quijas, who was the police chief of High Point, North Carolina, as an Assistant Director in charge of that office. His responsibility is not only just to be the point of contact for State and local individuals, including the head of the IACP, Bill Berger, if there are problems, but also when we have an investigation to sit at the table and say, this is how you can enlist State and local law enforcement in your investigation. So both at headquarters and out in the field---- Chairman Lieberman. So you are thinking about it and you are working on it. Mr. Tenet, did you want to add anything? Mr. Tenet. Yes. It is out of my lane, but one of the things, and I talked to Mr. Mueller a bit about this, one of the things I think you have to do at the National Law Enforcement Center or your training academies is you really have to build training and education for the State and locals. What are you looking for? What are the methodologies? How have they changed their practices? There is an enormous amount of talent out there and they are basically wanting to know, how do we use our scarce resources to help you? So you have to have an education module someplace, and it will change over time because as your security gets better, their practices will change and you need to constantly update that knowledge. Chairman Lieberman. Director Mueller, let me ask you a different kind of question. We talked about the change in focus of the FBI, which we are all demanding of you to focus on counterterrorism, and intelligence. Particularly, you have set up the new FBI office and redirected personnel. So I have two kinds of questions: One is, should we worry, absent additional funding, about the FBI's capacity to carry out its traditional law enforcement functions? And two, are there any other responsibilities that you have now that really should be done by somebody else? Forgive me, I think one that comes to mind is the extraordinary work you do in interviewing nominees for Federal office. I do not know that that is the most challenging work to give the people you have there or whether that could be done by somebody else. Mr. Mueller. We are looking at each of our responsibilities to see whether they could be scrubbed, and actually, if you look at the number of personnel we have doing that, it is very small. Chairman Lieberman. That is reassuring. Mr. Mueller. It is basically Presidential nominees and the rest is done by contractors. So we have contracted a great deal of that out and it really would be minimal impact. There are a number of the areas where Congress has given the FBI additional jurisdiction. When you look at it, it is very small numbers that we have and would not make that tremendous a difference. As you will see, most of the individuals we are asking to reassign are from the narcotics area into the counterterrorism area and I have had lengthy--not lengthy--I would say discussions with Asa Hutchinson in terms of picking up the slack there and we believe that there will not be a drop in attention. He is making moves to assure that there is not. And also, I think State and local law enforcement will be picking up some of those cases that we in the past had been responsible for. Chairman Lieberman. Another question about personnel for both of you. Our colleague from Pennsylvania, Arlen Specter, has put in a proposal to create a--I believe he calls it a National Terrorism Intelligence Center, somewhat like the division within DHS we are talking about. But one of the proposals he makes in that, and I will state it generally, is to build on the Goldwater-Nickles model for the military where you have to have served in a joint command to work your way up within the military ranks and stars. So part of this is that the new Department of Homeland Security would draw its analysts from existing agencies, including your two, and that we would state in statute that service in the new Department would be a condition for promotion within the agencies from which they come. Do you have a reaction to either or both parts of that? Mr. Tenet. I do not think you can uniquely build this institution from our two respective agencies. I think that at the beginning, we are going to have to help build this, but they are going to have to hire and train a new analyst and a different kind of person because of the glaring needs we have in so many different areas. Simply believing you can take a couple of hundred CIA or a couple of hundred FBI analysts and throw them into this, I do not think is the right way to proceed. I do think Senator Specter's idea of jointness and terms of serving in certain positions before promotions is generally a concept we in the Intelligence Community work on today in terms of advancement to senior rank, but I would do it a little bit differently, sir. I think the kind of analysis that is going to be done at this place is going to be fundamentally different, require a different kind of person, and at the front end, we will have to help, but we are going to have to grow that and migrate people who really are going to develop long-term expertise there. So I would build it a little bit differently. Chairman Lieberman. Director Mueller. Mr. Mueller. I think I would agree pretty much with Mr. Tenet. I think the advanced military has--you always go in a staff position before you take over a regiment. You will be regimental staff, and that works very well in the military. I do believe, and I am not certain you can transfer that to the FBI, where we have any number of supervisory positions but a relatively limited number of liaison positions to, whether it be CIA or Homeland Security. So you would not get many people through the ranks if you had to have spent a point in time at one of those places. What I do think we have to do, though, is give credit and explain to persons through our promotion process that this is a benefit. Spending time in another agency is beneficial to your career, as opposed to being detrimental, and that is critically important to do and that is what we are doing. Chairman Lieberman. Time is running out. I think I had better go and vote, with apologies to Senator Cleland, who I do not see back yet. I thank both of you. You have been very helpful. We are on a schedule in the Committee to go to a markup sometime in the middle of July and we will have drafts early in July. I want to share them with the two of you and your Departments, get your feedback, because we want this to work well. You have helped us a lot today. Thank you very much. Mr. Tenet. Thank you. Mr. Mueller. Thank you. Chairman Lieberman. I am going to recess the hearing. Judge Webster, I will be back in a few moments and we shall proceed. [Recess.] Chairman Lieberman. The hearing will come back to order. We have got a smaller but highly select gathering now. The interest of the Committee in learning and doing right by the national security needs will be benefited in these next two panels. First, Judge William Webster--I am just looking at the dates--former Director of the FBI from 1978 to 1987, and then Director of Central Intelligence from 1987 to 1991, an extraordinary career in public service and a very distinguished career in private service, as well. Judge Webster, thanks so much for being here. We welcome your testimony now and then we look forward to engaging in dialogue with you. TESTIMONY OF HON. WILLIAM H. WEBSTER, FORMER DIRECTOR OF CENTRAL INTELLIGENCE (1987-1991), CENTRAL INTELLIGENCE AGENCY (CIA) AND FORMER DIRECTOR (1978-1987), FEDERAL BUREAU OF INVESTIGATION (FBI) Judge Webster. Thank you very much, Mr. Chairman. I am honored to be here. I think you just heard from the experts and I do not know how much I can add to the insights of the two directors, but I shall certainly try. I have been out of town and just got in last night and consequently did not file either a summary or a statement. I can in a few sentences, I think, put myself in perspective and then be responsive to any of the questions that you may wish to ask. Chairman Lieberman. Good. Judge Webster. As you mentioned, I have had the privilege of serving both as Director of Central Intelligence and as Director of the FBI and I am currently Vice Chairman of the President's Advisory Council on Homeland Security, and I am not sure in which capacity I am supposed to speak, but I do know that in the case of the latter, I am speaking only for myself and not for the Council. I am very supportive of the approach to homeland security and the creation of a Department for Homeland Security, and I am also supportive of the President's view that the CIA should continue to report to him and that the FBI should continue to serve by reporting through the Department of Justice, for reasons I would be glad to expand on. The key, it seems to me, is to look at what the Homeland Security Department could achieve, and, of course, I know the Chairman has been active in thinking about those issues. For too long, I have felt that the various smaller agencies have been stepchildren in their departments. Many of them are there by accident, have no real claim to core missions in those departments. Some have been moved from one Department to the other, all performing good service, but with no real relationship to the issue of security and homeland security. And bringing them together, particularly in the area of border control and transportation security, seems to me to make a great deal of sense, where they can be better supported by resources, better able to coordinate, and better, I think, at receiving intelligence that should come to them in finished form and with an analytical capability. So that seems to me to make a lot of sense. I have heard various suggestions about carving off various pieces of the FBI or CIA or having a major intelligence operational component in Homeland Security. I think those are neither necessary nor wise. What is needed is to build the capacity of the FBI and the CIA to work in areas where they had not previously been required to work because of the globalization of these threats and the need for intelligence both from abroad and at home. That brings me to the last thing that I hope we will have a chance to talk about and that is, I think, the FBI's technology served it well as it grew. I recall days when we did fingerprints by manual inspection and now we can do latent fingerprints in a matter of minutes. That kind of thing has been extraordinarily useful to the FBI and they have put it to good use. But today the FBI's electronic equipment is not capable, in my view, of dealing with the monumental amount of intelligence that is coming in, not only of its own creation, but from other agencies. Until that issue has been fully addressed and supported, the FBI's ability to mine or retrieve data coming into its system in ways that would be specifically useful on a real-time basis to agencies, particularly Homeland Security, that have need to know specific things but certainly not others, will be impeded, and I hope that along with making sure that the agency and the Bureau are adequately staffed and the Homeland Security agency is adopted, you will make sure they have the equipment to keep up with the rapidly changing world. Chairman Lieberman. Thanks very much for that opening statement. Somebody recommended to me a book written about Pearl Harbor by a woman named Roberta Wohlstetter, who I have met. I cannot say I have read it, but I understand that one of the conclusions is that in that time, with commissions and Congressional investigations looking back at how could this have happened, one of the answers was the inability of our government to separate out the relevant information from the static. Of course, we now generate multiples, probably millions of times, of what was available at that point. How should this new Department (assuming that it does not have operational capacity, but the capacity in its Intelligence Division to receive all the information that Mr. Mueller and Mr. Tenet indicated they would get automatically and the power to task and ask for new information) how does it organize itself to appropriately analyze and filter out new information? Judge Webster. The bill, as I understand it, mandates certain types of information to be provided to the Department, and that is good. It also makes clear those areas that for reasons of security should not be passed in raw form unless specifically authorized by a higher authority. I make the analogy, and I am not so sure it is a totally good one, but I think it is worth looking at the INR Division of the Department of State. They do not collect information. They get information from their various field offices that are useful for their purposes that may or may not fall in the specific definition of intelligence, just as I think the Homeland Department would receive, in their relationships with State and local authorities and State and local governments, a substantial amount of information that could be factored into their judgments on vulnerabilities, threats, and remedies. But they have in the State Department an analytical capacity to go over the material that is supplied to them to see how it relates to the State Department's responsibilities, and they do that. I think it is worth looking at as a vehicle. My understanding is that the Homeland Security Department would received finished intelligence. By that, it would be intelligence that reads out on the basis of preliminary analysis and excluding sources and methods and other things that should not and need not go out. It would exclude all raw material that had not been evaluated or confirmed. One of the problems of the FBI is they have so much information they keep and retrieve that has not been validated, and because we are dealing with U.S. citizens and because it only adds to the burden of finding the needle in the haystack, it should not be transmitted in that form, in my opinion. So they get material they could work with. They could massage it, add to it, form judgments about it, and more importantly, I think, the legislation would and ought to provide for them to go back for more, maybe even raw material on a specific issue if it was important enough to get a true fix on it. In that sense, the CIA and the FBI would both be responsible and accountable for providing that information, as well as the follow-up information or any that were needed without a major dump on any particular subject on homeland security. Chairman Lieberman. That is a helpful answer. Let me ask you a very different kind of question, which we did not get into with our two previous witnesses. In the Committee bill on this subject, we not only created a Department of Homeland Security, but as you may know, we created a White House Office for Combating Terrorism. The thought there was that homeland security, obviously very critical new function for the government to carry out, but it was not all of the counterterrorism effort. Somewhere there ought to be a place where this all comes together, so we created this office, accountable to the President, of course, which would include a representative of the Defense Department, State Department, and intelligence and law enforcement and perhaps others. What do you think of that idea? Judge Webster. I do not have a solid judgment on it. I do know that the present intention of the President with respect to the bill that he has offered to you was to retain the advisor to the President on Homeland Security, similar to the National Security Advisor, and that he would have the same kind of access to the other departments of government and the military and could address these issues much as the National Security Council addresses them with outside help. Beyond that, I am not sure how much more detail you have provided or how much the permanent staff has been provided. I would hope it would be lean and mean. Chairman Lieberman. I am going to come back to a different kind of question here, and I think uniquely from your experience, having headed both agencies, you may have a perspective on it. Obviously, we have heard concerns about the failure of the CIA and the FBI to cooperate with one another. What are the critiques of setting up a new intelligence analysis division of the new Department of Homeland Security? One of the arguments that is made for it is that it creates competitive analyses, that it may actually contribute to the lack of cooperation, that it may be just one more center and that when you have competitive analyses, perhaps there is an incentive for the component intelligence and law enforcement communities not to share information because they each want to do the best analysis. I spoke to a friend from the United Kingdom who said that their MI5 really cooperated, and I might say it cooperates because they seem not to have a history of competition between the different component agencies. So I wonder if you might give us a little guidance on that and particularly on whether you think the new Intelligence Division would create more competition and less sharing. Judge Webster. There are a couple of questions in there. I do not see creating an Intelligence Office in Homeland Security that collects intelligence as adding to the resolution of possible competitive analysis and different points of view. I headed an organization in the Intelligence Community that produced assessments and we had everyone at the table, all the military, all the intelligence components, and we often arrived at different points of view, conclusions, from some of the same evidence itself and those were reported in the assessments in ways that it was clear to the consumer of that intelligence where the differences were and what they might be. I did not detect in competitive analysis a problem of not telling somebody something that they needed to know. Moreover, I really come back to my view that the CIA has its position with a much broader responsibility than mere homeland security. The FBI has a much broader responsibility than homeland security. But both of them over many, many years--FBI even before there was a CIA--have been working in counterintelligence and in counterintelligence areas. They need to work better together. I must say that in all the years I have watched it, in the 14 years I was involved and the 10 years afterwards, it has gotten increasingly better. I have heard so much talk about culture, and I think culture is a state of mind. It may reflect an attitude or it may reflect the training or the discipline. There is real commonality here. These are, in my experience, patriotic Americans who love their country, are not interested in fame or fortune, and they want, very simply, a safer and a better world. That is the kind of commonality that ought to produce cooperation in the supplying of information. Sometimes they simply have not known what is of interest. There is a difference between proactive intelligence gathering and counterintelligence and we work to try to develop that understanding. What would be of interest to CIA, not just spreading everything that came in, but what would be of interest? Tasking devices have been put in place that are very helpful today. The technology for finding it and the technology for getting it back to CIA could be improved radically. Chairman Lieberman. Judge, excuse me, and I thank you. A vote has gone off. I am going to run over. I am going to yield to Senator Cleland to carry on and I will come right back. Judge Webster. Thank you, Mr. Chairman. OPENING STATEMENT OF SENATOR CLELAND Senator Cleland [presiding]. Thank you, Mr. Chairman. I missed the questions of our two previous panelists because we ran out of time here and I had to go vote and when I came back, they were gone. I did not want to get caught this time leaving to vote and missing you. Thank you very much for your time here and for your public service. May I just say, in terms of the Intelligence Community, I have a powerful sense that no one is in charge, but I do not think I am the only one that has that sense. Yesterday, this Committee received testimony from the former Director of the National Security Agency, NSA, Lieutenant General William Odom, who said there is no one in government who can give the President an overall view of counterintelligence. There is no comprehensive picture, no one to put it all together, no king of this particular discipline. I think what he was trying to say was that the Intelligence Community is made up of a number of agencies, many of which compete with one another budgetarily. Many have different assignments. They are all called the Intelligence Community, but nobody at the top is pulling together and connecting the dots for a decision. The Chairman mentioned a book in regard to Pearl Harbor. I think that is the book I read a review of about 8 or 9 months ago, around December of last year, which talked about the intelligence failure that led to Pearl Harbor. My father was stationed at Pearl Harbor after the attack, so I grew up with that whole legacy of Pearl Harbor and the response of this country to the attack. The book basically alleges that what we have, it seems to me now, is stovepiping of information where one agency has some information, another agency has a piece of information, another agency has a piece of information. It was not that we did not have a sense that there was an impending attack upon Pearl Harbor, we just did not pull it all together. There was nobody at the top pulling it together for a decision. You get the same sense here about September 11, that there was an FBI office in Phoenix, there was another FBI office in Minneapolis, and then over here in the NSA there were a couple of things, and then over in the FBI, and in the CIA there was something, but nobody was pulling it together. As someone who has headed up both of these agencies, the FBI and the CIA, what do you think of Senator Feinstein's proposal that basically creates a Director of National Intelligence who, in effect, pulls all of this information together, has a staff, and is advised also by a National Intelligence Council of senior analysts from the Intelligence Community and that, in effect, that individual answers directly to the President? I just wondered if you felt any need to reorganize somewhat the Intelligence Community in order to not only connect the dots at the bottom of the pile, bottom of the pyramid, but at the top for decisionmakers like the President. Judge Webster. Senator, I have heard that suggestion before. It is not a new one. It has been considered from time to time, and on paper, it seems to have merit. As Director of Central Intelligence, when that would be proposed, I would say, what troops will this person have? How will he be able to make things happen? The Director of Central Intelligence currently has troops, but he has no control over the various components of his business outside the CIA. The report cards are written in the Defense Department, and that, as you know from your own experience, makes a big difference on how responsive people are to information. There is a concerted effort to make sure that information is properly sent in the right direction. NSA has more than it can translate every week. They simply lack the total capacity. The FBI gets a lot of information that it cannot retrieve in an active, meaningful way because of the equipment that they have. We are in an age where we are not lacking information, we are inundated with information. I am not sure that having a Director of National Intelligence will achieve that objective. It is possible that it might improve it, but I am more and more convinced that the Intelligence Community can, with proper ability to communicate what they know, do a better job of communicating. I do not at all believe that we are any longer the victims of cultural disattachment, rivalry, or distaste. The two agencies, the FBI and the CIA, like it or not, are becoming more and more alike. The CIA used to be thought of as a place that attracted Ivy Leaguers, especially from Yale, and the FBI was the long gray line at Fordham. Now, both agencies recruit from over 100 colleges and universities. More and more cross-fertilization is taking place. You heard this afternoon the testimony of Director Mueller of the number of CIA analysts that are in place and the efforts that they are making to have people put in all places. I am not sure that one more layer would assure that it would all come in some neat package that the President would be able to use, but I certainly agree with you that your nightmare is that something is going to fall between chairs. We had this problem as recently as the Gulf War, in terms of getting the information. Our satellites were downloading into Riyadh and the military services were unable to promptly and immediately communicate the intelligence because they were on different systems. I think that maybe as we get to a more uniform system that protects the "need to know" principle, that may help. But I have to tell you that the Director of Central Intelligence is supposed to be the President's principal advisor on national intelligence and he ought to be able to perform that function in the job that he has. Senator Cleland. In 1947, Harry Truman restructured the Intelligence Community to create the Director of Central Intelligence. Is that a misnomer? Judge Webster. No, it is not. It is arguably a misnomer, and I know what you are driving at now. His purpose was he did not want to get his intelligence out of a department of government that had an agenda. He wanted a place that looked at intelligence in as neutral a form as it could be and gave the most objective, considered intelligence that could be accomplished, utilizing intelligence from all quarters, all- source intelligence. His purpose was to try to find one place that was neutral, and I think it was a good purpose. It was a wise move. But there is still difficulty in consolidating the intelligence that comes from the various components, including NSA, and that needs improvement. In terrorism, you have several sources. You have the SIGINT, the Signals Intelligence with the National Security Agency, which has responsibility for collecting information, plus any cryptology and translations that come from that Signals Intelligence, and that is important. You have the CIA's collecting capabilities from all sources, signals and imagery and human intelligence, coming from around the world, and you have the FBI with its agents in place in various parts of the country attempting to pick up information about threats to our infrastructure and threats to our national security. I do not know that having one more person is going to make it happen any better--one more layer of government is going to make it any happier. It depends on the President's confidence in the judgment of his Director of Central Intelligence and---- Senator Cleland. Let us talk about that for a second, though. Before September 11, the President met apparently frequently with the head of the CIA, very understandable. Then when we found that the ball was being dropped big-time between the FBI and the CIA, even within the FBI, and certainly within the government, various agencies of the government that had a piece of the puzzle but nobody at the top was putting it together. Now the President, I understand, meets frequently with the CIA, the head of the CIA and the head of the FBI. Should the President have a class? I mean, should he have the head of the DIA there? Who else should be in the room? If nobody is connecting the dots at the top, I guess I still wonder if we have overcome the stovepiping of information, the lack of sharing between agencies when there are a lot of people within the Intelligence Community. It just seems to me that we are not aggregating it, pulling it together, collating it, and making sense of it. Somebody up there at the top is not there. Again, General Odom, that was a pretty powerful statement by the head of the NSA saying there is no one in the government who can give the President an overall view of counterintelligence. I would like to move on to another question and that is about the FBI, your familiarity with it. Before September 11, counterintelligence dealing with terrorism and so forth was buried pretty much in an agency that was highly law enforcement oriented. Now, I think Senator Thompson was right on the case. It does seem to me that the exigencies, the needs of law enforcement are one thing and the needs of the Intelligence Community gathering people are, quite frankly, another. I wonder if you like the idea or do not like the idea of taking the counterintelligence, or basically the intelligence functions of the FBI, and separating them out from the FBI, out from under the law enforcement folks, and making that part of the Intelligence Community if you have somebody ultimately at the top that connects the dots and makes that part of the intelligence input. Judge Webster. My view is that that is not the way to go. I would like to explain. That is a very important question and I think I have had substantial experience in the area and would like to address it. In 1980, I made terrorism one of the four top priorities of the FBI. Before that, it had been foreign counterintelligence, organized crime, and white collar crime. So it is not a new thing. We were experiencing 100 terrorist incidents a year, not of the size or proportion of what we are now experiencing as of September 11, but serious terrorist incidents, 100 a year. When we made it our priority and addressed it by gathering intelligence and applying that to effective law enforcement methods, we reduced the number of annual terrorist incidents to about five when I left in 1987, and the next year there were none, as I recall. Senator Cleland. May I just interrupt? Unfortunately, our schedule terrorizes us and I have about 60 seconds to go vote, and it is the last vote of the day. Judge Webster. Please, do not let me hold you back. Senator Cleland. But thank you very much for your service to our country. Thank you very much for your testimony. Judge Webster. Thank you. Senator Cleland. The Committee will stand in recess pending the call of the Chair. Thank you. [Recess.] Chairman Lieberman [presiding]. The hearing will come back to order. Judge Webster, thanks so much. Of course, you are a veteran or previous victim of this Senate schedule, but I thank you for your patience. Judge Webster. I understand. Chairman Lieberman. Let me ask you for a moment to put on your former hat as the head of the FBI and give us a reaction, if you would, to the priorities that Director Mueller stated, the new priorities, and if there is any reason to be concerned, as I suggested at the end, that they may result in less capacity to carry out the traditional law enforcement functions of the FBI. Judge Webster. Well, I have them before me and there are some ten of them. I would not be too concerned about the fact that there were ten. There were three when I came to the FBI in 1978, and as I mentioned while you were out of the room, I made terrorism one of the four top priorities in 1980. We were very successful in bringing a focus on that area, reduced the number of terrorist incidents from 100 a year to five by the time I left, not of the size and scale of today's capacity for horror, but very important and serious events that we averted, we prevented. So I felt that three or four top priorities made sense. Here, the director has his priorities in boldface, so he probably really only has a few more than I did. But No. 10 is "upgrade technology to successfully perform the FBI's mission." If these are ranked in order, I would put it up to No. 4, I think, because I do not think the FBI can manage its responsibilities in the intelligence arena and the law enforcement arena where national security is involved without being sure that its technology is successfully upgraded to perform its mission. The other ones are all significant. I know less about combating significant violent crime. That was not a top priority when I was there, and if we had to find some areas to draw down on for resources, I would look closely at that one to see what is in that category that could be just as well managed by State and local authorities. This is always a challenge. Abraham Lincoln said that that is the true function of the Federal Government, to do what State and local cannot do as well for themselves or cannot do at all. So I would look at that one. I think the word "significant" probably is a limiting factor, but violent crime, to me, has been something that belongs to the whole law enforcement community. It is not unique to the FBI's capacities or abilities. Supporting it in terms of the laboratories, the Identification Division, the NCIC indexing system and other matters, behavioral science for serial crimes and so on, are all very important contributions to State and local law enforcement. But I am not sure that we ought to be competing with them at this point. Beyond that, I do not know that I am really qualified to comment on the other priorities. I think there is a big difference between the amount of resources that are required for individual subjects that are listed in there. Chairman Lieberman. It is true, is it not, from your experience at the FBI that some of the kinds of work that we are asking the Bureau to do now with regard to terrorism has been done for quite a long time, not only with regard to terrorism, but with regard to other groups, both criminal and politically confrontational or threatening groups, that the Bureau has for quite some time watched or infiltrated, is that not correct? Judge Webster. That is correct, Mr. Chairman. The Bureau has developed, I think, a remarkable capability to conduct longer-term investigations to get to the top of organizations who are engaging in one form or another acts hostile to our country in violation of our laws or our national security. I think that is all there. They need to keep working at it, but it is not a new thing. What may be raising the suggestion of newness is that in a time of emergency, there may be more interest in disrupting or preventing a terrorist activity even if it means that the criminal prosecution is somehow disadvantaged by the techniques that are used. That is a little different. On the other hand, I think it is important that No. 5, protecting civil rights, not be neglected and that this not ever become an excuse for engaging in activities that have been condemned in the past and which we are well beyond. Chairman Lieberman. Thanks for that answer. As you probably heard on the first panel, yesterday, we heard from Chief Berger from the International Association of Police Chiefs and we talked with him about how to engage local law enforcement and several hundred thousand additional eyes and ears around the country in the carrying out of this new responsibility, as I mentioned. What advice would you give us about how best to do that? Judge Webster. I think a Homeland Security Department is a good place to enhance not only the relationships that the Federal authorities have, the Federal law enforcement authorities have, but also in terms of acquainting State and local officials with vulnerabilities that they may or may not be aware of in their areas, infrastructure weaknesses, for example. I am acutely aware of the fact that State and local authorities are usually the first on the scene. They are the first to respond. Senator Nunn, with whom I was talking recently, of course, introduced the Nunn-Lugar-Domenici bill to help with training for people who have that kind of responsibility. Should we have a weapons of mass destruction incident, if we have another type of airplane missile bombing or other types of major--they are the first ones that are going to be there and there has to be a collaboration, both in providing them with any known threats or risks in their area or their geography and also supporting their efforts as quickly as possible when something of major proportion takes place that may be outside their capacity. Chairman Lieberman. I know that one of the reasons you have spoken against breaking up the FBI and taking its domestic intelligence function and putting it in this new Department or a separate agency is that the Justice Department oversight does provide a kind of protection against civil liberties violations. Obviously, there are some instances in which the Bureau has been criticized for that, and I am going back now over half a century. My question is, as the Bureau now moves into this new area with greater devotion of personnel and, in fact, sometimes when you mention the MI5 comparison, incidentally, one of the great concerns expressed is civil liberties. Is there anything additional that we should do to make sure that we are not only protecting our security, which obviously is primary, but that we are also not compromising our liberties? Judge Webster. As you know, MI5 has had problems in the past on issues of civil liberties. Chairman Lieberman. Yes. Judge Webster. I take a certain comfort in the fact that the FBI has always been in the Department of Justice. It was created a long time ago with a single sentence in a statute that said the Attorney General may have a Bureau of Investigation. I think that it has served as a shield from oppressive use, assignments that are not sanctioned in the law or the Constitution. It has also been, I think, a healthy relationship because it prevents the possibility of some White House tasking that goes beyond what would be acceptable treatment of American citizens. We have had experiences, as you know, with telephone calls from the White House saying the White House--I am not talking about the President--from people in the White House saying that they would like this done or that done. It is very difficult for an agency not to be affected by that. I had to deal with the Iran-Contra issue when I got to CIA. But at the FBI, the FBI would not accept that kind of tasking because it was screened through the Department of Justice and the Attorney General would be the person who would have to take the heat for saying we cannot do it that way. That is one of the reasons I like it where it is. But from an operational sense, terrorism is a continuum. One objective is to get there before the bomb goes off and to take the necessary steps to stop it. I mentioned our success in those years with other different types of a more domestic nature, although we had Serbians, Croatians, Algerians, a whole range of people fighting others, carrying on their European wars in the United States. But we start with trying to stop it, and that is through intelligence. That intelligence has to go to the operatives. It also comes from the field agents in the field who are picking up on planning operations of that kind. And once it passed the stage of preventing, we have to deal with it through effective law enforcement of it. MI5 makes no arrests. It relies on the local constabulary to do it. We have a vast resource out in the field of people who have had counterterrorist training, who have had counterintelligence training, who are there to help when the emergency arises. I cannot conceive that the Congress would enact legislation creating another group of that size to be there when they are needed, to be there to detect terrorism and to be there to follow up and minimize the damage and to make the arrests. So I am more comfortable feeling that is not the way to improve intelligence sharing. If that is the problem, it should be addressed in a different way. While you were away, I spoke too long, perhaps, on my sense of how cultural differences that may have existed 30 years ago have really largely evaporated as the agencies become more like each other, draw from the same pool of colleges and universities, work more closely together, share in joint centers, provide, as you heard this afternoon, analysts from CIA to the FBI, the FBI, I think the present head of the Counterintelligence Center at the CIA is now headed by an FBI Special Agent. These things are all to the good. We cannot tell when something will fall between the cracks in hindsight that if we had known and if we had known what it was about, we might have done something about it. I just think that is not a reason for breaking up the FBI's current structure and relationship to CIA. Chairman Lieberman. Let me ask a final question, which has two parts. The first is personal in sense, which is having had the extraordinary experience you have had to head both the FBI and CIA, having been involved in these matters, what was your reaction when you first heard of them on September 11 when those events occurred? And the second part is, putting together all that experience, is there anything that we are not doing post- September 11 to raise our guard that you would suggest we should be doing? Judge Webster. Well, of course, I was like any other citizen, going to work when it happened. When the first plane crashed, I thought, "Oh, it is another Empire State Building accident." When the second one came as I got to my office, it was pretty clear that something terrible in the way of a terrorist purposeful activity was occurring, and then the Pentagon was hit. The fact is, as I understand it, there had been some concern for some time that something was in the wind with the al Qaeda organization, but no one had a specific clue, a time or a place or a way, and that is historically the way terrorist succeed, get a victory on the cheap, because they could choose it all, how they are going to do it, where they are going to do it. They operate in cellular form and it is very difficult to get on the inside unless someone who for various reasons decides to go over and sell what he knows or does not agree with the conclusion and wants to head it off, can be found to get a piece of specific information. But I suppose we all wonder what we could have done to prevent it. I am very proud of the way America responded. I am very proud of the way the President led us, first in compassion and then with determination to know who was responsible and to take appropriate action. I am proud of what went on in New York City, when volunteers and the fire fighters and the police came and did what they did. And I have just finished my 65th airplane ride since September 11 and I am proud of the way Americans are accepting the burdens of additional security without complaining about it, and trying to be helpful about it, and so those are the good feelings. I have to say, and I think I should say, that the two pieces of information that are most talked about are the Phoenix report and the efforts of the Minneapolis Special Agents in Minnesota to get an appropriate warrant to pursue their suspicions about an individual. I think close analysis will show that in all probability, neither of those would have pointed to the specific activity and the time and the place in order to be able to prevent it. Within just a few hours of the explosions, however, the authorities were able to identify all 19 of the people who were on those airplanes and knew a good deal about their background. I am sure that everyone said, why did we not know enough to put this together? Many of those people themselves did not know where their objectives or destinations were. It is a typical, but extraordinarily successful, terrorist undertaking of a dimension we had never known before. Tom Friedman said it was a failure of imagination. I think we now are a good deal less innocent in our feeling that the homeland is safe and free. We know that will never be the same again and that we all have to take appropriate steps to protect ourselves against threats, not only to our citizens but to our infrastructure. We depend a great deal on electronics, on computers. The things we live by can be penetrated and destroyed. It can create enormous problems for us in the future unless we devote the resources to get a handle on it ahead of time. I am a great believer in intelligence, but intelligence also requires that we know what the problems are and we focus on where those problems might come from and where they might go. That is why I think a Homeland Security concept is particularly good because that is their job, to go out and look and see. What about the water supplies in various places? How well are they protected? What could be done to affect other things? What do we know about the capacity of those who hate us to come up with weapons of mass destruction and to create another event? That may be a long way away, but it is certainly not out of the question. I think it is very likely that, in time, that will be the kind of attack to make. We have to be resolute, but I was thinking all along, let us keep our cool here and let us not either engage in activities that would make us like the terrorists. We use our investigative forces and intelligence forces effectively, but we will not engage in torture. We will not invade Americans without a proper, supervised basis for it. We will keep the courts involved. And we will be the kind of people we have always been that make us what we are. Our value system is what we are, and that means that we have to support it with our major skills. We know a lot about technology. We know how to apply that to the challenges of the future. We know how to improve and we need to improve those Federal agencies that depend on their data systems, their mining systems. The problem with the FBI right now is that it gets more information than it can retrieve and use and supply to other people. So we must not hesitate to be sure that is done. Maybe they need to bring in people who really are experts in this field. But we have to do those things, and at the same time be a government under law that protects democracy and respects human life. Chairman Lieberman. Thanks very much, Judge. You continue to represent the best of our values and a proud tradition of service to your country and I thank you for the service that you have given this Committee as we try to chart a course for the next phase of our homeland security. Thank you very much. Judge Webster. Thank you. I am honored to be here. Chairman Lieberman. We appreciate it a lot. Senator Shelby and Senator Graham are here. I apologize to my colleagues that perhaps the last vote having occurred has taken a number of other Members of the Committee. Thanks very much. I would give you the option of not going forward, but I am very anxious to hear your testimony. Senator Shelby. Mr. Chairman, we want to go forward. Chairman Lieberman. Good. That sounds like the two of you. I will circulate your testimony to the Members of the Committee. I want to suggest that I consider it to be significant enough that we may want to, sometime after we get back, just hold a meeting of the Committee at which you come in and share your considerable experience with us. But anyway, I thank you for preparing as you have to be here. Senator Graham, Chairman of the Intelligence Committee, I call on you now. TESTIMONY OF HON. BOB GRAHAM,\1\ A U.S. SENATOR FROM THE STATE OF FLORIDA AND CHAIRMAN, SELECT COMMITTEE ON INTELLIGENCE, U.S. SENATE Senator Graham. Thank you very much, Mr. Chairman. I would propose to deliver a somewhat abbreviated version of my remarks and submit the full statement for the record, if that is acceptable. --------------------------------------------------------------------------- \1\ The prepared statement of Senator Graham appears in the Appendix on page 191. --------------------------------------------------------------------------- Chairman Lieberman. Thank you. It will be done. Senator Graham. We both appreciate the opportunity to come at this late hour before the Governmental Affairs Committee to discuss what we believe to be a critically important subject in our Nation's future domestic security, and that is the relationship between the agencies which make up our Nation's Intelligence Community and the new proposed Department of Homeland Security. I want to applaud the leadership which you and other Members of this Committee, particularly the Ranking Member, Senator Thompson, for taking up the challenge offered by the President in his proposal, but not just waiting but really anticipating and spending much of last year working on legislation which closely tracks what the President is now proposing. I would like to confine my remarks to those relating to intelligence and homeland security because I am convinced that sound security policy decisions require timely, relevant intelligence. I am also certain that nowhere will this prove to be more true than in the newly named but historically fundamental area of homeland security. But whatever shape the new Department takes, its success or failure will in large measure depend on the quality of intelligence upon which it can rely. For now, I would like to focus on three areas where the intersection of intelligence and the functioning of the new Department will be particularly important. First, creating an intelligence analytical capability within the new Department. It is important to recognize in the beginning that the creation of a new Department of the size and power contemplated here will alter the relationship between the Intelligence Community and its totality of consumers. The new Department will rival the Department of Defense as the Intelligence Community's largest and likely most demanding consumer. It is important that the new Department structure enhances its ability to function as a smart consumer. To that end, I am pleased with my initial review of the second section of the President's proposal, wherein he establishes an Under Secretary in charge of what will be, in essence, the Intelligence Processing Center for the new Department of Homeland Security. It will be this Processing Center that will assure that the Department decisions are made with the benefit of all-source intelligence. Being a good intelligence consumer, it is important to note, is not limited to knowing how to read finished and, where appropriate, raw intelligence information. To be a smart consumer requires an ability to know what more is needed, what additional intelligence should be collected, how to articulate the needs of the new Department to those who will be collecting the information for the new Department in the Intelligence Community. The new Department will need to have a seat at the table when scarce intelligence collection assets are being tasked. One of the most important decisions that an Intelligence Community makes, given the fact that whether it is human intelligence, a particular form of technical collection capability, or a nascent capacity, all of those are at some point finite and decisions have to be made as to how and most effectively to allocate them. This new Department will play an important role in those decisions. Mr. Chairman, although Senator Shelby and the members of the Intelligence Committees of the House and Senate are in the early stages of our joint inquiry into September 11, after 3 months-plus of staff inquiry and our preliminary closed hearings, there are some factors which have contributed to the failures to anticipate and prevent September 11 which are emerging. Let me mention two of those. One is inadequate and untimely sharing of information within the Intelligence Community. A notable example of that is the example that Judge Webster just referenced, the Phoenix document, a potentially critical piece of domestically collected foreign intelligence. Second is the absence of a single set of eyes to have analyzed all the bits and pieces of relevant intelligence information, including open-source material, that which is available to all the public through the newspapers, periodicals, television. Examples of this failure to place before a single set of eyes all of these pieces would again be the Phoenix document and the Moussouai investigation, that is the investigation that was originated by the FBI field office in Minneapolis, and available foreign intelligence in the weeks and months prior to September 11. These factors support the idea that an all-source analytical unit which will fall under the heading of a smart intelligence consumer is a critical element of this legislation. This smart consumer must be equipped to function like an intelligent recipient, with the ability to sort through large volumes of intelligence information and draw specific conclusions to inform policy decisions, to be able to ask and receive intelligence needed to support their functioning, to be capable of tasking the Intelligence Community to collect specific information needed for this new agency. The second area of intelligence and the new Department relates to the creation of a White House Office for Combating Terrorism. The creation of the new Department with a scope of responsibility transcending terrorism and encompassing other homeland security threats does not obviate the need for a White House office which is solely focused on terrorism. Such an office, a National Office for Combating Terrorism, was proposed in legislation, S. 1449, which I cosponsored with Senator Feinstein last year and is largely incorporated as Title II of the Chairman's pending legislation establishing a Department of Homeland Security. Our efforts drew on a belief that the fundamental problem was structural. Nobody was in charge and there was no coherent strategy to combat terrorism. The result: Disorientation and fragmentation. Last year within the Intelligence Community, we established a working group to review all of the reports that had been conducted on the Intelligence Community, particularly with a focus on terrorism. An informal memorandum was prepared, dated June 22, 2001, which offered a prescriptive review of the current terrorism structure, and Mr. Chairman, I would like to submit that memo as part of my remarks. Chairman Lieberman. Without objection. [The information of Senator Graham follows:] Senator Graham. It was our feeling that it was important that there be such a White House Office of Counterterrorism. It would be small, but with a narrow mission, confined to terrorism, which would be necessary to complement the larger missions of the Homeland Security Department. Now, some may argue that such an office already exists, created by Executive Order and occupied by Governor Tom Ridge. I personally do not believe this is adequate and I believe the action of this Committee in reporting out its previous legislation with Title II contained therein supported my belief. It is important that this office within the White House bring to bear the power and legitimacy that only the Legislative Branch can provide and do so by creating such an office by statute. It is equally important that such an office be subject to the oversight of Congress and invested with real budget authority. Although much smaller in size and scope than the contemplated Department of Homeland Security, a National Office for Combating Terrorism is an essential component of a workable plan to reorganize our homeland security efforts and should be created in the same legislation. Finally, I believe that the events of September 11 compel a reexamination of the scope, methodology, and limitations governing domestic collection of terrorism-related intelligence. When, where, and under what circumstances should the government collect intelligence about the activities of U.S. citizens or lawful visitors to our Nation? What techniques should they use? What techniques should be prohibited? Is the present government structure in which the FBI is primarily responsible for collection of intelligence, foreign and domestic, within the United States, adequate to our needs? Should we enhance our domestic collection capabilities, and if so, how? Mr. Chairman, I would suggest that we make no mistake about this third issue. It is a very tough subject. It will require serious consideration of the balance of deeply held principles of civil liberty and privacy in relation to the need to protect our Nation. Thus, I was pleased that the President's plan and the Chairman's pending bill do not attempt to resolve these issues. Rather, they create new institutions which are designed to effectively lead our Nation as we debate and resolve these fundamental issues of civil rights, privacy, and domestic intelligence collection. By deferring what is likely to be a contentious and challenging debate, we can avoid mixing two apparently similar but quite different issues, how to organize to fight terrorism, and once organized, under what rules should we conduct that fight. Further, by proceeding first to organizational legislation, the Congress will be in a position to wait, and I hope find informed judgment from the results of the Joint Inquiry into the events of September 11. Our purpose is to answer the questions of what happened, why it happened, and what could we do to reduce the prospects of it occurring in the future? I would hope that our suggestions on those three questions would help inform this Committee and our colleagues as to the appropriate method and means by which to balance these interests of national security and personal privacy and rights. Armed with this analysis and aided by what will then be a new Department's ability to focus and drive the debate, I believe we can address such questions consistent with our Nation's traditions and beliefs. Thank you, Mr. Chairman. Chairman Lieberman. Thanks very much, Senator Graham, for a very thoughtful, very helpful statement. Senator Shelby, Vice Chair, colleague, welcome. TESTIMONY OF HON. RICHARD C. SHELBY,\1\ A U.S. SENATOR FROM THE STATE OF ALABAMA AND VICE CHAIRMAN, SELECT COMMITTEE ON INTELLIGENCE, U.S. SENATE Senator Shelby. Thank you, Mr. Chairman. I hope you will indulge me for a few minutes. I know it is a long day here. --------------------------------------------------------------------------- \1\ The prepared statement of Senator Shelby appears in the Appendix on page 209. --------------------------------------------------------------------------- Chairman Lieberman. No, this is very---- Senator Shelby. I believe, as Senator Graham does--and we have talked with you privately about this--that the intelligence component of homeland security is the key to homeland security. Chairman Lieberman. Absolutely. Senator Shelby. I want to thank you for allowing us to address this Committee today. I believe Senator Graham and I would love to meet with other Members that are not here as we crystallize, or as you crystallize, this legislation. Chairman Lieberman. Good. We will do that. Senator Shelby. As I have pointed out many times, Mr. Chairman, as all of us have pointed out, more Americans were killed by terrorists on September 11, 2001, than died in Japan's infamous sneak attack upon Pearl Harbor on December 7, 1941. I think it is both necessary and fitting that we do everything in our power to ensure that the United States never again suffers such a catastrophe, a third Pearl Harbor. For this reason, I support, Mr. Chairman, the creation of a Department of Homeland Security, as you do. As in so many important endeavors involving legislation, the devil is always in the details. We also know all too well that legislation alone cannot meet all the challenges that we will face. One of the biggest risks we face in the world of intelligence collection, I believe, is risk aversion. Our intelligence bureaucracies have, over time, become averse for the most part to risk taking, partly because of internal institutional pressures and partly because of external criticisms. No bill, Mr. Chairman, rule, or regulation can reverse that. What we can do is address an immediate need. To do so, we need to create a new Department, but it is important that we create it right--as you said, Mr. Chairman, many times--and that in creating it, that we do not simply replicate the mistakes of the past. Accordingly, Mr. Chairman, I am grateful for the opportunity to discuss the intelligence aspects of homeland security, a topic with which I have been greatly concerned and closely involved for the past 8 years on the Senate Intelligence Committee, serving as Chairman and currently as Vice Chairman. In introducing his legislative proposal for a Department of Homeland Security--after yours had been introduced, Mr. Chairman--President Bush declared that the top priority of the Department will be preventing future attacks. This emphasis is picked up in the text of his legislative proposal itself, which stresses in Section 101(b) that the primary mission of the Department of Homeland Security will be to prevent terrorist attacks within the United States. As the President's proposal recognizes, this fundamental mission highlights the importance of intelligence. First among the list of the new Department's primary responsibilities, according to the proposed legislation, the President's proposal lists the crucial function of conducting information analysis related to terrorist threats. The intelligence function is absolutely central, Mr. Chairman, to the President's proposal and to yours, as it should be. It is, therefore, Mr. Chairman, doubly important that we get, the intelligence aspects of the Department right. The President in his proposal assigns appropriate emphasis to ensuring that this intelligence function is carried out properly by making the Information Analysis and Infrastructure Protection Office the first of the new Department's key components. If done right, Mr. Chairman, the creation of such a national-level center for true all-source intelligence fusion of terrorist-related threat information would be of huge value. Most Americans would probably be surprised, Mr. Chairman, to know that even 9 months--yes, 9 months--after the terrorist attacks of September 11, there is today no Federal official, not a single one, Mr. Chairman, to whom the President can turn to ask the simple question, "What do we know about current terrorist threats against our homeland?" No one person or entity has meaningful access to all such information the government possesses. No one really knows what we know, and no one is even in a position to go to find out. This state of affairs is deplorable and must end. In the wake of a well-publicized series of significant intelligence failures, Mr. Chairman, including the failure to prevent the bombing of the World Trade Center in 1993, the failure to prevent the bombing of Khobar Towers in Saudi Arabia in 1996, the failure to anticipate the Indian nuclear tests in 1998, the failure to prevent the bombing of our embassies in Africa that same year, the accidental bombing of the Chinese embassy in 1999, the failure to prevent the attack on the U.S.S. Cole, and, of course, the failure to prevent the attacks of September 11, there has been no shortage, as you know, of proposals to reform the U.S. Intelligence Community. Most of them have involved, as you know, Mr. Chairman, variations on the theme of empowering the Director of Central Intelligence, the DCI, to exercise more real power within the mostly Defense Department-owned Intelligence Community. Other proposals, such as one floated this week, would empower the Pentagon by creating an Under Secretary of Defense for Intelligence. All of them, Mr. Chairman, so far have gone nowhere. When such ideas do not flounder upon the rocks of interdepartmental rivalry and what the military calls rice bowl politics, they simply fail to elicit much interest from an Intelligence Community that even to this day insists that nothing is fundamentally wrong. Too often, Mr. Chairman, serious reform proposals have been dismissed as a bridge too far by administration after administration and Congress after Congress and have simply fallen by the wayside. While very modest attempts at reform have been enacted, they have been ignored by succeeding administrations and openly defied by our current Director of Central Intelligence. With this in mind, last year, Senator Graham and I asked our Committee's Technical Advisory Group, or TAG, to undertake its own look at these issues. The TAG Group, the Technical Advisory Group, is a group of prominent scientists and technologists that volunteer their services to advise the Intelligence Committee on very difficult technical and program management issues. We worked with them over several months on these matters and we came to some interesting conclusions. I beg your indulgence for a few minutes more. Chairman Lieberman. Please. Senator Shelby. Rather than rest our hopes for reform upon plans destined to run headlong, Mr. Chairman, into vested interests wedded to the current interdepartmental division of intelligence resources, or to be smothered by pained indifference from holdover bureaucrats satisfied by the status quo, the TAG Group proposed instead that the President create something entirely new: A small, agile, elite organization with the President's personal support dedicated wholly and single- minded to conducting fusion analysis. This organization would draw upon all the information available to the Federal Government and use the resulting knowledge to achieve a single clear goal: Dismantling and destroying terrorist groups that threaten the United States. This, we hoped, might allow meaningful reform to take place without initially, Mr. Chairman, having to upset entrenched bureaucratic apple carts. We proposed, in effect, an intelligence-related version of the Manhattan Project that would take place, to some extent, outside the traditional chains of command and networks of vested interests. We suggested an approach modeled on the movie catch phrase, "If you build it, they will come." If this new venture were successful, its progress would breed further successes, we thought, by gradually attracting resources and support from elsewhere, and perhaps, Mr. Chairman, by stimulating the intelligence bureaucracies to do more to reform themselves even when faced with the success of an alternative model. The private sector refers to this process as creative destruction. After the terrorist attacks on September 11, we felt that it was time to present this proposal to the White House. If the mass murder of 3,000 Americans could not drive meaningful reform in our Intelligence Community, we reasoned, what could? Accordingly, Senator Graham, the Chairman, and I brought our TAG team to meet with Governor Ridge at the White House on November 29 of last year. We met with the Governor with these distinguished scientists for about 90 minutes and talked in detail about our plan for the creation for the first time, Mr. Chairman, of a truly all-source national-level intelligence analytical agency dedicated to knowing and assessing everything that our government knows about terrorist threats. I think I can speak for Senator Graham as well as for my staff and the distinguished members of our technical advisory group in saying we are pleased that President Bush has seen fit to propose the creation of just such an organization within the Department of Security, a little different from the bill that you initially introduced, which is a working model, but which neglects the intelligence function, and nowhere provides the new Department with a centralized threat assessment entity capable of making up for the Intelligence Community's longstanding failure to provide government-wide one-stop shopping for terrorist threat information and analysis. The President's proposal puts terrorism-related intelligence front and center, making it the foundation of all other protective measures. I applaud the President's wisdom, Mr. Chairman, in making information analysis such a central focus of the plan. It is central. It is the linchpin. It is in that vein that I would now like to offer a few constructive criticisms of the President's proposal. Precisely, Mr. Chairman, because the intelligence function is vital to every aspect of interagency coordination and planning for homeland security, we must ensure that these aspects of the President's plan are structured properly and that they do not, as I said earlier, simply replicate past mistakes. In this regard, I would like to point out that under Section 203 of the President's bill, the Secretary of Homeland Security would have only limited access to information collected by the Intelligence Community and law enforcement agencies. Section 203 provides that the Secretary would be entitled only, "to all finished reports, assessments, and analytical information related to threats of terrorism in the United States." Unlike information relating to infrastructure or other vulnerabilities to terrorist attack, to all of which the Secretary would be given access whether or not such information has been analyzed, information on terrorist threats themselves would be available, Mr. Chairman, only to the Department of Homeland Security in the form of what is known as finished intelligence. That is a very important point here. Under Section 203, the Secretary may obtain the underlying "raw information" only with other agencies' permission or when the President specifically provides for its transmission to the new Department. This is troubling. To my eyes, these limitations are unacceptable and seem designed to keep the new Office of Information Analysis and Infrastructure Protection dependent, Mr. Chairman, upon the good will of the Intelligence Community and law enforcement agencies and hostage to their perhaps incompletely informed or self-interested judgment about what the Homeland Security analysts really need to know. Already, we understand that the Director of Central Intelligence, Mr. Tenet, has no intention of providing raw intelligence data to Homeland Security intelligence analysts. As he sees it, they should be content to receive only finished reports, that is, to get no deeper access to Intelligence Community databases than we do in Congress as we receive the community's periodic intelligence products. To agree to such limitations, Mr. Chairman, would be, in my view, a grave mistake. In the information technology world, we are on the verge of dramatic new breakthroughs in data mining capabilities that are giving ordinary analysts an extraordinary ability not just to search, but to analyze and to understand enormous quantities of data from a vast array of different data sources. The cutting edge of intelligence analysis, Mr. Chairman, in other words, is likely to be in crunching massive amounts of data on a genuinely all-source basis, drawing upon multiple data streams in ways never before possible, and certainly in ways that are not being done today. However, as long as we have no one in a position to see all the many data streams that exist within the Federal Government today, must less those that may also exist in the State and local arena and in the thriving information economy of the private sector, all of these rapidly advancing analytical tools will be of little use. Already, it has been one of our frustrations at the Senate Select Committee on Intelligence to see the degree to which even agencies that acknowledge the importance of interagency electronic information sharing are each independently pursuing separate answers to this problem. Even their responses to the problem of agency-specific stovepipes are often themselves stovepipe of responses. The DCI's own initiative to create an Intelligence Community-wide "Intelligence Community System for Information Sharing" depends wholly upon the agencies deciding, Mr. Chairman, what information they think other agencies' analysts need to know. Every agency will be charged with populating its own "shared space" that will be searchable by cleared and accredited online users. No outsider, it seems, would ever have access on an agency's real databases. Without some modification, Mr. Chairman, to the President's Homeland Security proposal and to the DCI's refusal to consider providing raw information to the new Department, this initiative runs the risk of replicating and institutionalizing these limitations. The exciting part about the new Department is precisely, Mr. Chairman, that it offers the prospect of getting beyond or above bureaucratic stovepipes in the ways we imagined for the anti-terrorist project we discussed with Governor Ridge last November. Rather than having every agency decide for itself what every other agency needs to know about its own information holdings, we need, I believe, to create an institution that finally has real visibility into all government information on terrorist threats. The President's proposal for a Homeland Security Information Analysis Office has the potential to be that organization and to rise above bureaucratic business as usual, but its access cannot be limited, Mr. Chairman, just to what the agency heads decide it should have. In my view, Mr. Chairman, the President's proposal can and should be improved by giving the Secretary of Homeland Security access to essentially all information related to terrorist threats, and including raw data that is in the possession of any government agency. Homeland Security intelligence analysts should be free to data-mine agency holdings in order to undertake true all- source intelligence fusion. Senator Specter has offered an amendment that would help fill this hole in the President's otherwise very promising proposal by creating a National Terrorism Assessment Center with the authority to direct the CIA, FBI, and other Federal agencies to provide it with all intelligence and information relating to threats of terrorism. As I see it, Mr. Chairman, Senator Specter is clearly thinking the right thoughts, although I believe it would be a mistake to duplicate analytical functions by creating a new center within or parallel to the Homeland Security Information Analysis office. Personally, I think the soundest step would be to apply the concept of unfettered information access to the Department of Homeland Security. Section 203 of the President's proposal should be modified, I believe, to allow for the creation of an information architecture that will enable Department analysts to seek and obtain whatever information they deem necessary to understand and thwart terrorist threats against the United States. The only qualifier on this authority, I believe, would be to provide that such transmittals must occur pursuant to some kind of agreement or memorandum of understanding with the DCI regarding security procedures for handling classified information, and with the Attorney General with respect to handling "U.S. person" information and protected law enforcement information pursuant to applicable law. Provided, Mr. Chairman--and I know I am going on, but this, I think, is important--provided that the new Department's intelligence functions---- Chairman Lieberman. You are doing well. Senator Shelby. Thank you--were also subjected to appropriate intelligence by Congress, the United States would then be well on the way to creating, Mr. Chairman, for the first time, a genuinely all-source national analysis organization devoted to combating the threat of terrorism in the United States. Naturally, the Department of Homeland Security, including its intelligence function, will require close Congressional scrutiny and oversight as it is created. Whatever the final information access rules end up providing, it will be necessary, I believe, Mr. Chairman, to ensure that appropriate agreements are worked out between the agencies involved and that personnel are properly trained and equipped to implement them. In the bureaucracy such as our Intelligence Community, this can be no small task. As you may recall, we put mandatory sharing provisions in Title IX of the USA PATRIOT Act, but today, 8 months after the President signed the Act into law, procedures for implementing such sharing are still being negotiated between the Attorney General and the Director of Central Intelligence. The detailed procedures for information sharing with the new Department of Homeland Security will likely require very close Congressional attention. Another of my concerns relates to the important of ensuring that the Department's Information Analysis and Infrastructure Protection Office maintains an appropriate balance within its own ranks. Under the President's proposal, that office will require an infrastructure protection constellation from a number of existing Federal agencies whose entities are being transferred en masse to the new Department. The information analysis side of the office, however, will apparently have to be built up largely from scratch. It will not require specific analytical offices from other agencies within the Federal system but will rather have to be grown within the Department. Mr. Chairman, if this is done right, this could be a great strength, allowing the Department of Homeland Security to build its own elite analytical cadre, largely independent of the institutional biases and bureaucratic mindsets of the existing Intelligence Community. Careful attention over time, not to mention Congressional oversight, will be needed. This process may involve growing pains, and the fledgling organization may also need to be nurtured and protected against its bureaucratic rivals and others who may not wish it to succeed. For the most part, I have no other serious concerns about the President's proposal. I would only note that under 710 of the President's bill, the Secretary would have the power to terminate any Inspector General investigation that he felt to be inappropriate, providing only that he provides notice of this termination to the Speaker of the House and the President of the Senate. Given the important role, Mr. Chairman, that Inspectors General play in our system of legal and policy oversight and the important domestic security role of the new Department, I would think this provision to be too limiting and I hope you will take a good look at it. Even if the Secretary could derail investigations, I would think it imperative that notice of such a decision, also be given to the appropriate Congressional committees of jurisdiction. I would like to emphasize that while I believe, Mr. Chairman, that the President's proposal for a terrorism-focused information analysis function within the Department of Homeland Security is a vital step forward, its creation alone will not solve--will not solve--the intelligence problems affecting our country and which we and our House counterparts are working on today as part of our inquiry. We must not forget, Mr. Chairman, that we will have a large intelligence bureaucracy that will not be part of the new Department and that the Department's important analytical functions will have no chance of succeeding if the information collection system that feeds it remains broken. Furthermore, the new Department's system will focus upon domestic terrorist threats, leaving the whole universe of foreign intelligence unreformed. The President has noted that his proposal for the Department will "complement the reforms on intelligence gathering and information sharing already underway at the FBI and CIA." While I believe the FBI is doing a commendable job at this point trying to reform itself, the CIA, I believe, has not yet even considered significant changes. Indeed, as its leadership has repeatedly indicated in testimony before our Committee, the CIA's response to September 11 has mostly been to insist that it is on the right track and that Congress should simply give it more money and personnel with which to continue doing more of the same. As I have said elsewhere, I think that response is inadequate and that we can do much better. Finally, I would like to make a brief comment about the analysis of information that already exists in the private sector. This is another area that our TAG group has emphasized in our internal discussions of intelligence reform. The private sector collects and maintains vast amounts of information that would be of enormous use to intelligence analysts seeking to track terrorists. Mr. Chairman, I appreciate your indulgence here this afternoon and I believe some of these proposals would help improve this legislation. Chairman Lieberman. Thanks very much, Senator Shelby. That was very helpful, very interesting, both of you. If you have got a few moments, I would like to ask a few questions---- Senator Shelby. Absolutely. Chairman Lieberman [continuing]. Then I would really want to follow up and bring you back to the full Committee because you have clarified some history for me. You have given some texture and focus to some of the parts of the bills that we are considering, and you have raised some questions in my mind. I am fascinated by that TAG experience. You know, it did strike me as I looked at the proposal in the President's bill for this information analysis section--we will probably give it a bigger title, separate it--and as I have listened to the testimony over the last week--this is the third of four hearings, today--that if we do this right, and I think you said it at the end---- Senator Shelby. We have got to do it right. Chairman Lieberman. We will do it right--it will be the one place in the Federal Government where all the information comes together so that, as you said, Senator Shelby, the President can ask the Secretary of Homeland Security what is the threat, what is going on. Now, it leaves open, obviously, the question of whether there should be another such fusion center or some other kind of reorganization for the rest of the world for the counterterorrism threat, and I presume as I listen to both of you that is a question that your joint investigation may be considering and may be recommending on at the conclusion. Senator Graham. Senator Graham. Yes. There have been a half-dozen or more reports on the state of the Intelligence Community, several of them specifically, and in some cases almost prophetically, focusing on the threat of terrorism. Almost every one of those reports has recommended some greater centralization of capability over our foreign intelligence collection, analysis, and dissemination function. What we are talking about here is a different issue, and that is intelligence which is collected to understand activities and threats inside the homeland of the United States. I believe the basic principle of the President's plan, which is not to create a new collection agency but rather to rely on those that already exist with one caveat, but do create a new analytical capability where all of the information that is currently being collected plus, I hope, law enforcement information being collected at the State and local level will flow into this single set of human eyes. As I indicate, it was the failure to get collected information before a single set or at least a coordinated group of eyes which in a preliminary way appears to be one of the major flaws that contributed to September 11. The caveat that I had is the issue of the domestic collection of domestic intelligence. Right now, that is, to the degree we carry it out, a function of the FBI. I personally would recommend, and I believe this is consistent with the President's proposal and with your earlier legislation, that issue does not have to be resolved in this Department of Homeland Security legislation and would be better held, not forever, but maybe for 6 to 12 months when we could look at that knowing what the structure of the Department of Homeland Security will be, maybe informed by some of the information that our inquiry is going to develop, because it raises the thorniest of issues of civil rights, privacy, where it should be located. There seems to be an initial feeling that the FBI is the proper place and it may well be, but a number of other countries whose intelligence systems we tend to admire, such as the British, most Europeans, the Israelis, place domestic intelligence collection in a different agency than either their domestic law enforcement or their foreign intelligence collection, and there are some good reasons why so many other nations have separated that particularly sensitive function of domestic intelligence collection. Chairman Lieberman. I agree with you. Let me just say before I yield to Senator Shelby, that question goes beyond what we should tackle in this chapter. I think we want to set up a Department of Homeland Security. I want to come back and talk to you a little bit about the White House office, and we want to create in it this intelligence analytical capacity. I like the idea of a fusion center. I take it that at this point, both of you would say that the Intelligence Division of the new Department should not have collection capability or be given operational intelligence capability, right? It is possible that somebody would come back after your work is done and decide that there ought to be a new domestic intelligence center and one of the places one might place it is in the Department of Homeland Security. But that goes beyond what I intend to have our Committee consider at this point. Senator Shelby. Mr. Chairman. Chairman Lieberman. Yes, sir. Senator Shelby. If I could just comment on the TAG Group, the Technical Advisory Group that Senator Graham and I know has helped our Committee so much. If you and some of your people on the Committee of jurisdiction here on creating this legislation would like to talk with them about this, I think you would find it very helpful. They were the same group that predicted NSA was going to go down--it was way behind--if we did not really do a lot of things to modernize the NSA. Nobody believed that; everybody was in denial. Sure enough, about a year and a half later, this happened. They are into what is best for America. They have the processing power, you might say, to understand these issues. I think you would be impressed with the group, as Senator Graham and I have. They know this issue. What do you think, Senator Graham? Chairman Lieberman. Yes. It sounds like we could benefit from such a gathering and we will pursue that. Senator Shelby. Thank you. Chairman Lieberman. I appreciated, Senator Shelby, what you said about Section 203. It has troubled us, too. We have been asking questions about it. In some ways, it seems to give more authority in gathering information related to the vulnerability of critical infrastructure than to terrorism generally, which seems to suggest a limited focus, and so certainly my hope and intention is to try to strengthen the language that we put into the bill about the Intelligence Division---- Senator Shelby. Absolutely. Chairman Lieberman [continuing]. And as soon as we get some drafts, we would like to share it with you. Have you looked at it? Senator Shelby. We would like that. Chairman Lieberman. Senator Graham, your work clearly inspired and, in fact, expressed the sections of our Committee bill that created the White House Office for Combating Terrorism, and as I understood it, and you have stated it again today, homeland security is one important function but it is not all of combating terrorism. We have got State, Defense, etc. The White House now, although it has not clearly stated what it wants to do with the office Governor Ridge now occupies, wants to continue it, but with the focus still on homeland security, as I understand it, instead of a broader focus on combating terrorism. The other criticism that we heard yesterday from some of the witnesses we had, veterans of the national security/ Intelligence Community was that, Lord knows, the last thing the White House needs is another office. Perhaps, if anything, well, the National Security Council does this. Maybe you should just put the Secretary of Homeland Security on the NSC, which, in fact, our bill does, and that will do it. I am still quite interested in this office and still think it has a unique function. I wanted to give you a chance for the record here today to respond to some of those comments or criticisms on our proposal. Senator Graham. I think it is interesting that you have raised the National Security Council. As you know, the National Security Council is a statutory body created in the National Security Act of 1947, which was the same act or was part of a companion group of acts which collectively created the Department of Defense, created the modern intelligence agency, the CIA and its counterparts. All were results of that legislation. What the National Security Council and its chief advisor represent is two things. One, an awareness of the fact that in a complex government such as ours, you are unlikely to be able to place in one Department, the singular responsibility for major national issues, such as national security and now such as homeland security. Ms. Rice told me, Dr. Rice, that she deals primarily with the Department of Defense, the Department of State, the Intelligence Community, and often, but not as frequently, with the Treasury Department. Those are her main clients. So her first job is to coordinate those clients so that they are all operating in a focused way in America's national security interest. The section function that she performs is as the principal advisor to the President on national security. If the President wants to know what is the current state of Indian-Pakistani relations, we have had a quiet 30 days, does it look as if this period of tension is over, she is the person that he turns to. She tasks all of these clients that she has to develop her recommendation to the President. I think those two functions basically describe what this new Office of Counterterrorism would be. Even with the creation of the Department of Homeland Security, there are still important parts of the National Government that will be involved in countering terrorism. The Defense Department, and particularly with the creation of the new Northern Command, which for the first time will put a command of the Defense Department inside the homeland of the United States, the State Department will have important functions. The Department of Justice, certainly FBI, Immigration and Naturalization Service, to mention two, will have a lot to do with Homeland Security, and again, the Treasury Department through its economic and financial controls mechanism will be an important part of a comprehensive counterterrorism program. So I think we need to have someone on the domestic level who does what Dr. Rice is doing on the foreign policy national security level is still there, and again, a person whom the President has confidence who can be his closest advisor on the panoply of issues and relationships that will be involved in an effective counterterrorism strategy. Chairman Lieberman. In some ways, your answer fits some pieces of testimony that we had yesterday from Dr. Ash Carter, who very strongly supports an office in the White House but sees it not just as a planning office but as a programming office. As he kept saying: "Not just the architect but the builder to continue to build a national anti-terrorism program, including homeland security." So it is hard to know exactly how the administration will respond at this point because I think they are particularly--let me ask you this specific question. I know that in the early iteration of the Committee bill, they were particularly troubled about the accountability of the office to the Congress and the need for advice and consent confirmation. I know in the opening statement you said you still thought that was an important part of it. Your feeling about that has not diminished in the context of creating a Department of Homeland Security, I take it. Senator Graham. If anything, the Department of Homeland Security both as a symbol of the elevated importance of this issue, I think it will be helpful. I mentioned that the person who would head this agency would have a client base of maybe five or six Federal agencies. But for the creation of the Department of Homeland Security, they would have a client base of about 15 to 20 Federal agencies. So the creation of the Department does not obviate, in my judgment, the need for a White House office focused specifically on counterterrorism. It does corral into one big place that is a new corral and several older corrals the capability of actually conducting an effective counterterrorism activity. I, just as Dr. Rice does not command any troops or assign ambassadors or conduct economic policy but rather works through the agencies that have that as their responsibility, I would see that as the manner in which the head of the Office of Counterterrorism would operate. I did indicate in my remarks that I believe that the Director should have some budgetary control, maybe in this point drawing from some of the experience of the Counter-Drug Office, where the Director of that office has the ability to, the word "veto" may be a little too strong, but almost that strong, if he feels that one of those operational agencies is not allocating resources either sufficient or properly directed to carry out the function of counternarcotics. I think this office ought to have some similar budget capability vis-a-vis the various Departments that will be involved in counterterrorism to be certain that the strategic plan is being implemented in terms of resource flows. Chairman Lieberman. Well said. In fact, we have given the White House Office Director exactly that responsibility, that same budget certification authority. Senator Shelby, please, and then I have a specific question I want to ask. Senator Shelby. I just wanted to comment that I subscribe to everything Senator Graham has been saying here. But I believe, Mr. Chairman, that you and Senator Thompson, the Ranking Republican and former Chairman of the Committee, have an historic opportunity to fashion a piece of legislation that will really help bring security to this country in our fight against terrorism. But the key, I want to point out again--the linchpin, the brain of this whole Homeland Security operation for security--is going to center around the intelligence component, make no mistake about it. Chairman Lieberman. I agree. Senator Shelby. I know you are very involved in it, you understand it, and you will work towards doing that and doing it right. Chairman Lieberman. I appreciate your saying it. I feel like this is one of the most important things that Senator Thompson---- Senator Shelby. That you might do while you are here in the Senate. Chairman Lieberman. Absolutely. Let me ask you a question that came up today in our discussion with Director Tenet and it goes to some of the concerns you expressed about the authority of the Secretary of Homeland Security as proposed to request information, to get raw data, and this, for us, very puzzling requirement that there be approval of the President at different points for the Department to receive that data. It is very unusual, as I said earlier, that the Secretary of Homeland Security should have to go up to the White House to get information over there. Now, Mr. Tenet said at one point, that he interpreted raw data to mean the disclosure of sources and methods, not content. In other words, in my mind, and I think a lot of the Members of the Committee, both parties, we were seeing raw data as raw data as compared to in an analysis. Senator Shelby. Right. I agree with your interpretation of that, but I want to say again, and I have a lot of respect for a lot of the people that toil in the law enforcement agencies and in the Intelligence Community. They have served this country, well overall. But there are just too many obstacles, as Senator Graham talks about, in the way of sharing of information. If this Homeland Security bill is going to work and is going to be meaningful, they are going to have to have all the intelligence they need, and not just what people want to give them. And if they have a piece of interesting intelligence and say, "Oh, let us look behind that, let us see what is really there," they ought to have the ability to go find out. They ought to have people well trained to do this. And I think that is what our TAG Group had in mind. Otherwise, we are wasting our time, we are going to waste our money, we are going to waste our effort, and America is not going to be safe. Chairman Lieberman. Thank you. I agree. Incidentally, I agree with you on the Inspector General--and I appreciate your making the point. Senator Graham, maybe I will ask you a last question and let both of you go. Help me to understand a little more your third point of the three points. Senator Graham. Well, the third point is that the question, will we need a different domestic intelligence collection capability than the one we have today through the FBI? Chairman Lieberman. This is that question, OK. Senator Graham. That raises the issue of for what purposes will it be different than it is today? Who will be the targets? What will be the methods that will be legally available to this agency? And where should it be housed in the family of Federal agencies? I personally feel those may end up being some of the most contentious issues that will have to be faced in the full establishment of the Department and its intelligence component, and I do not believe that that is so integral. This is not, to use an analogy to architecture, this is not like installing the heating and air conditioning system in a house, which has to be put in at the time the house is under construction or you are going to have to tear it down to put it in later. This is more like putting the interior decoration into the house. You can do that after all the construction is over. I would suggest, let us get the building completed and then we will come back and have the national debate over domestic intelligence gathering. Chairman Lieberman. I agree with you. I think that is well said. We do not need to do that now and I also think that it is so controversial that it might delay and obstruct the passage and creation of the new Department. For now, as I hear both of you, and I think it is very reassuring to hear you. Not only have you sort of filled in some blanks, but encouraged me in the direction that I personally, and I think other Members of the Committee are going, that what we are trying to create here, to use a term that you used somewhere where I was with you, Senator Graham, and I reused it, I must admit, without giving you credit for it---- Senator Graham. Hmm---- [Laughter.] Chairman Lieberman [continuing]. We want this Intelligence Division or office in the new Department to be an aggressive customer. Senator Shelby. Agile, too. Chairman Lieberman. And agile, right. Senator Graham. And demanding, too. Chairman Lieberman. There you go. No, I agree. So for now, we have all agreed it does not require operational or collection capability, and that is for another day, determined by your work and others, and---- Senator Shelby. Mr. Chairman. I do not mean to interrupt you, and especially not the Chairman of this Committee. It has occurred to me--the Phoenix memo just comes to mind and the Minnesota Moussouai case, which we all know probably too much about--that if you had had an all-source analysis center, it might have picked up that memo from the FBI in Phoenix and then, 4 or 5 weeks later, become aware of the FBI situation at the flying school in Minnesota with the FISA. If they put that together, bells may start to ring---- Chairman Lieberman. Sure. Senator Shelby [continuing]. If the information is in the right place. Chairman Lieberman. Right. Senator Shelby. If you were to tie that together with the information regarding a couple of the September 11 terrorists who, I believe, were in Malaysia---- Chairman Lieberman. Yes. Senator Shelby. You put all of that together, and you have got more than a little piece of intelligence. This is what has not happened in the past and this is what we are hoping--if we can create, or you can create, the right piece of legislation and it is not choked off by the other agencies--we might be able to do differently in the future. Chairman Lieberman. Well said. Incidentally, a few times in our hearings, people have analogized what we are trying to do to the INR office at the State Department. I am seeing this as much more independent, much more aggressive, agile, and demanding as a consumer of intelligence information. Senator Graham. If I could just extend what Senator Shelby just said, we talk about stovepipes. I think of these stovepipes as being three yards long in a vertical sense. The top 36 inches is labeled "collection." The middle 36 inches is labeled "analysis." And the bottom 36 inches is labeled "dissemination." Right now, we have three-yard-long stovepipes. It does not get disseminated until it goes through all three parts of it and then it goes out. What we essentially are doing is bringing an acetylene torch to this stovepipe and we are cutting it at the 36-inch level. We are keeping the stovepipe for purposes of collection, and there are some, I think, good reasons for doing that. But then once it comes through collection, it then goes to a totally different entity, this newly created analytical capacity in the Department of Homeland Security. I think that will avoid some of the problems of the three- yard-long stovepipe, which include, first, an attitude that if I collected the information, it is better information than anybody else collected. Second, there is a certain tendency to degrade open source information as compared to secretly collected information. And then third is the tendency to not want to share the information that I have collected and analyzed with other people. I think if you can separate collection from the analytical and dissemination function, which this legislation does, you will essentially have dealt with all three of those constraints on the current system. Senator Shelby. Well said. Chairman Lieberman. Well said is right. I thank you both. I sometimes surprise people outside of the Senate when I say that I often learn more from my colleagues in the Senate than from anyone else, and I appreciate your testimony. Senator Shelby. We also learn from you. Senator Graham. Yes. Thanks, Mr. Chairman. Chairman Lieberman. Hear, hear. I am going to ask you--you see, the reward for such a performance is that we are going to ask you back for an encore. We will work with our staffs to arrange an appropriate date to bring the whole Committee together for a meeting the week we come back. In the meantime, I thank you very much. I wish you a good recess. Senator Graham. Thank you, Mr. Chairman. Chairman Lieberman. The hearing is adjourned. 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