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[Senate Hearing 107-562]
[From the U.S. Government Publishing Office]

                                                        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

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_____________________________________________________________________________
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                   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.
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    \1\ The prepared statement of Mr. Berger appears in the Appendix on 
page 166.
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    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.
    [Whereupon, at 5:07 p.m., the Committee was adjourned.]
                            A P P E N D I X

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