[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
THE PRESIDENT'S PROPOSED FISCAL YEAR 2008 BUDGET FOR THE DEPARTMENT OF 
                                HOMELAND
                  SECURITY: THE OFFICE OF INTELLIGENCE

=======================================================================

                                HEARING

                               before the

                     SUBCOMMITTEE ON INTELLIGENCE,
                        INFORMATION SHARING, AND
                       TERRORISM RISK ASSESSMENT

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 14, 2007

                               __________

                            Serial No. 110-7

                               __________

       Printed for the use of the Committee on Homeland Security
                                     
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                     COMMITTEE ON HOMELAND SECURITY

               BENNIE G. THOMPSON, Mississippi, Chairman

LORETTA SANCHEZ, California,         PETER T. KING, New York
EDWARD J. MARKEY, Massachusetts      LAMAR SMITH, Texas
NORMAN D. DICKS, Washington          CHRISTOPHER SHAYS, Connecticut
JANE HARMAN, California              MARK E. SOUDER, Indiana
PETER A. DeFAZIO, Oregon             TOM DAVIS, Virginia
NITA M. LOWEY, New York              DANIEL E. LUNGREN, California
ELEANOR HOLMES NORTON, District of   MIKE ROGERS, Alabama
Columbia                             BOBBY JINDAL, Louisiana
ZOE LOFGREN, California              DAVID G. REICHERT, Washington
SHEILA JACKSON-LEE, Texas            MICHAEL T. McCAUL, Texas
DONNA M. CHRISTENSEN, U.S. Virgin    CHARLES W. DENT, Pennsylvania
Islands                              GINNY BROWN-WAITE, Florida
BOB ETHERIDGE, North Carolina         MARSHA BLACKBURN, Tennessee
JAMES R. LANGEVIN, Rhode Island      GUS M. BILIRAKIS, Florida
HENRY CUELLAR, Texas                 DAVID DAVIS, Tennessee
CHRISTOPHER P. CARNEY, Pennsylvania
YVETTE D. CLARKE, New York
AL GREEN, Texas
ED PERLMUTTER, Colorado
VACANCY

       Jessica Herrera-Flanigan, Staff Director & General Counsel

                      Roline Cohen, Chief Counsel

                     Michael Twinchek, Chief Clerk

                Robert O'Connor, Minority Staff Director

                                 ______

 SUBCOMMITTEE ON INTELLIGENCE, INFORMATION SHARING, AND TERRORISM RISK 
                               ASSESSMENT

                     JANE HARMAN, California, Chair

NORMAN D. DICKS, Washington          DAVID G. REICHERT, Washington
JAMES R. LANGEVIN, Rhode Island      CHRISTOPHER SHAYS, Connecticut
CHRISTOPHER P. CARNEY, Pennsylvania  CHARLES W. DENT, Pennsylvania
ED PERLMUTTER, Colorado              PETER T. KING, New York (Ex 
BENNIE G. THOMPSON, Mississippi (Ex  Officio)
Officio)

                 Thomas M. Finan, Director and Counsel

                        Brandon Declet, Counsel

                   Natalie Nixon, Deputy Chief Clerk

        Deron McElroy, Minority Senior Professional Staff Member

                                  (ii)


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable Jane Harman, a Representative in Congress From the 
  State of California, and Chair, Subcommittee on Intelligence, 
  Information Sharing, and Terrorism Risk Assessment.............     1
The Honorable David G. Reichert, a Representative in Congress 
  From the State of Washington, and Ranking Member, Subcommittee 
  on Intelligence, Information Sharing, and Terrorism Risk 
  Assessment.....................................................     3
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Chairman, Committee on 
  Homeland Security:
  Oral Statement.................................................     4
  Prepared Statement.............................................     5
The Honorable Christopher P. Carney, a Representative in Congress 
  From the State of Pennsylvania.................................    18
The Honorable Charles W. Dent, a Representative in Congress From 
  the State of Pennsylvania......................................    23
The Honorable Ed Perlmutter, a Representative in Congress From 
  the State of Colorado..........................................    21
The Honorable Christopher Shays, a Representative in Congress 
  From the State of Connecticut..................................    19

                                Witness

Mr. Charles E. Allen, Chief Intelligence Officer, Office of 
  Intelligance and Analysis, U.S. Department of Homeland Security     6

                             For the Record

Prepared Statements:
  Mr. Charles E. Allen...........................................     8
  The Honorable Jane Harman......................................     2
  The Honorable Bennie G. Thompson...............................     5


THE PRESIDENT'S PROPOSED FISCAL YEAR 2008 BUDGET FOR THE DEPARTMENT OF 
       HOMELAND SECURITY: THE OFFICE OF INTELLIGENCE AND ANALYSIS

                              ----------                              


                      Wednesday, February 14, 2007

             U.S. House of Representatives,
                    Committee on Homeland Security,
                  Subcommittee on Intelligence, Information
                    Sharing, and Terrorism Risk Assessment,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 3:36 p.m., in 
Room 311, Cannon House Office Building, Hon. Jane Harman 
[chairwoman of the subcommittee] presiding.
    Present: Representatives Harman, Carney, Perlmutter, 
Thompson (Ex Officio), Reichert, Shays, and Dent.
    Ms. Harman. Good afternoon. I would like to welcome all of 
you to this first hearing of the Subcommittee on Intelligence, 
Information Sharing and Terrorist Risk Assessment of the 110th 
Congress. I extend a warm welcome to our friend, Charlie Allen, 
the Department's chief intelligence officer, who will be 
talking with us not only about the President's fiscal year 2008 
budget, but also, I think, I hope, he is bringing some good 
news about information sharing with State and locals. Let me 
set the context for these hearings. In public remarks last fall 
by the head of Britain's MI5, Dame Eliza Manningham-Buller 
revealed that police and others within her organization were 
working to contend with some 200 groupings or networks totaling 
over 1,600 individuals who were actively engaged in plotting or 
facilitating terrorist acts in Britain and overseas. And those 
were just the ones she knew about.
    These extremists, she said, are motivated by a sense of 
grievance and injustice driven by their interpretation of the 
history between the west and the Muslim world. This view is 
shared in some degree by a wider constituency. She continued, 
we are faced by acute and very difficult choices of 
prioritization. We cannot focus on everything. So we have to 
decide on a daily basis with the police and others where to 
focus our energies, whom to follow, whose telephone lines need 
listening to, which seized media needs to go to the top of the 
analytic file. The task is daunting. We won't always make the 
right choices and we recognize we shall have scarce sympathy if 
we are unable to prevent one of our targets from committing an 
atrocity.
    Dame Eliza was here several weeks ago, and she reminded me, 
not that I didn't know this, that the United States is only an 
eight-hour--or even less--plane trip from London. And it was in 
London last summer where British nationals planned to blow up 
airplanes over the Atlantic Ocean and those airplanes, had they 
succeeded with this plot, could have killed thousands and 
thousands of tourists, many of them Americans.
    While our British friends have been in the homeland 
security business for decades, we are, in many respects, just 
getting started. Unless and until we have a robust intelligence 
and information sharing system in place in this country, we 
will be unable to prevent a terrorist attack on the scale of 9/
11 or greater.
    And that is why this subcommittee will focus its efforts in 
the 110th Congress on improving information sharing with our 
first preventers, the women and men of State, local and tribal 
law enforcement who are the eyes and ears on our front lines. 
And it is why we pay particular attention to the issues of 
radicalization and overclassification of intelligence and what 
we can do about both of these. Of course, let me add and let me 
stress that we will do this work in the right way, partnering 
with our friends in the privacy and civil liberties community 
who want to protect America while preserving our cherished 
rights.
    It is fitting that Charlie Allen is with us today as we 
kick off this agenda. He has put the intel function at the 
Department of Homeland Security on the map, and we have already 
started with him to review the classified portions of the 
President's budget request and its implications for his office. 
To our colleagues on this subcommittee, please remember that 
the I&A funding for the Department of Homeland Security and the 
staffing numbers are classified. It cannot be discussed during 
this public hearing, but the activities of the Department can 
be discussed. They are fair game. And this hearing will be to 
consider the priorities for this office through the next fiscal 
year and how we can jointly work to make America safer.
    Welcome, Charlie. We are delighted that you are on the job 
and we are delighted that you are appearing before us. The 
Chair now recognizes the ranking member of the subcommittee, 
with whom I spent the last weekend at a very important 
international security conference, the gentleman from 
Washington, for an opening statement.

                             For the Record

Prepared Statement of the Honorable Jane Harman, Chair, Subcommittee on 
    Intelligence, Information Sharing, and Terrorism Risk Assessment

     Good afternoon. I'd like to welcome you all to this first 
hearing of the Subcommittee on Intelligence, Information Sharing & 
Terrorism Risk Assessment in the 110th Congress.
     And I extend a warm welcome to my friend, Charles Allen, 
the Department's Chief Intelligence Officer, who will be talking with 
us not only about the President's Fiscal Year 2008 budget but also some 
good news about information sharing with State and locals.
     Before we turn to those subjects, I'd like to share some 
chilling information I recently learned from another major player in 
the war on terror.
     In public remarks she made last fall, she revealed that 
police and others within her organization ``are working to contend with 
some 200 groupings or networks, totalling over 1600 identified 
individuals. . .who are actively engaged in plotting, or facilitating, 
terrorist acts here and overseas.''
     And those are just the ones she knows about.
    ``The[se] extremists,'' she added, ``are motivated by a sense of 
grievance and injustice driven by their interpretation of the history 
between the West and the Muslim world. This view is shared, in some 
degree, by a far wider constituency.''
     ``We are faced by acute and very difficult choices of 
prioritisation,'' she concluded. ``We cannot focus on everything so we 
have to decide on a daily basis with the police and others where to 
focus our energies, whom to follow, whose telephone lines need 
listening to, which seized media needs to go to the top of the analytic 
pile.''
     ``The task is daunting,?''she added. ``We won't always 
make the right choices. And we recognise we shall have scarce sympathy 
if we are unable to prevent one of our targets [from] committing an 
atrocity.''
     This wise observer is none other than Dame Eliza 
Manningham-Buller, the Director of MI5 and a 32-year veteran of the 
British intelligence community.
     Dame Eliza recently reminded me that the United States is 
only a short 8-hour plane trip from London, where the British nationals 
who planned to blow up airplanes over the Atlantic Ocean last summer 
lived and worked.
     While our British friends have been in the homeland 
security business for decades, we in this country are in many respects 
just getting started.
     Unless and until we have a robust intelligence and 
information sharing system in place in this country, we will be unable 
to prevent a terrorist attack on the scale of 9/11 or greater.
     That is why this Subcommittee will focus its efforts in 
the 110th Congress on improving information sharing with our first 
preventers--the men and women of State, local, and tribal law 
enforcement who are the ``eyes and ears'' on our front lines.
     And it's why we will pay particular attention to the 
issues of radicalization and over-classification of intelligence--and 
what we can do about them.
     And we'll do this work in the right way--partnering with 
our friends in the privacy and civil liberties community who want to 
protect America while preserving our cherished rights.
     It is fitting that Charlie Allen is with us today as we 
kick off this agenda.
     Charlie has done a remarkable job during his tenure at the 
Department, and he and his staff were kind enough to brief us last week 
about the classified portions of the President's budget request and its 
implications for his office.
     I remind my colleagues that any information about Mr. 
Allen's specific funding and staffing numbers is classified, and that 
it cannot be discussed during this public hearing.
     I look forward to hearing about your priorities for your 
office through the next fiscal year, Charlie, and how we can help you 
make America safer.
    Welcome to you again.

    Mr. Reichert. Thank you, Chairwoman Harman. I am glad to be 
here today as ranking member of the subcommittee and would also 
like to welcome the members of the subcommittee, and especially 
the new members. As I am sure you know we have important work 
to do. The subcommittee's mandate is very broad, and I believe 
Chairwoman Harman and I share an interest in several topics, 
including information sharing, overclassification and the role 
of State and local fusion centers. We are here to examine the 
plans and programs of the Department of Homeland Security 
Office of Intelligence and Analysis, because it is budget 
season but this is not simply about the numbers. This hearing 
is a part of a series that will help lay a foundation for a DHS 
authorization bill--try to say that fast three or four times. 
Although the House has passed an authorization bill in the 
past, the Senate has never joined us in this effort, and I am 
hopeful that will change this year. Part of the subcommittee's 
title is information sharing.
    As a former cop of 33 years I know what it is like to have 
information sharing bottlenecks and breakdowns. Before 
September 11, information sharing was a challenge, but in the 
age of global terrorism, information sharing can no longer be 
just a challenge. It is an imperative. It has to happen. 
Information sharing has improved tremendously since September 
11, but it must get better. The program manager for the 
information sharing environment has issued his information 
sharing implementation plan, and the FBI has set up an 
additional joint terrorism task force and field intelligence 
groups. Information sharing fusion centers were developed from 
the grassroots efforts of State and local law enforcement. 
Congress and the Department and the program manager for the 
information sharing environment must work together to 
strengthen the coordination between these efforts.
    Mr. Allen, we welcome you today, look forward to your 
testimony on how the Office of Intelligence and Analysis is 
working to strengthen our Nation's intelligence community and 
secure our homeland. Welcome. I yield.
    Ms. Harman. Thank you. It is now my real personal pleasure 
to welcome the chairman of the full committee, the gentleman 
from Mississippi, Mr. Thompson. You should all know that it was 
he who first staked out the ground that we will explore today. 
He has been extremely interested in how information is shared 
between the INA function at DHS and State, local and tribal 
authorities. He has been pushing to integrate local officials 
into the NCTC function and recently sent a letter to Mr. Allen, 
and I am very honored to invite him to make some opening 
remarks. Please welcome the chairman of our full committee.
    Mr. Thompson. Thank you very much, Madam Chairman, and I am 
very happy to be a part of your committee, and Mr. Allen, I 
welcome you here also. You have been on the job 18 months. I 
know it seems like an eternity, but it has only been 18 months, 
but I can assure you that from my vantage point, you have been 
getting the Department on sound footing, and I appreciate it. 
On a personal note, I appreciate the outreach you have given me 
as a member of this committee as well as a Member of Congress. 
You have been straightforward.
    Where you had problems you said it, and I can appreciate 
that. Too many times, we run up on individuals at your level 
who try to defend the indefensible, and you have been a real 
shining light in that respect. But I do want to hear your 
analysis of this present budget that has been put forth by the 
President to make sure that you can do your job.
    The information sharing that the Chairman alluded to is a 
real concern of this committee as well as, you know, most 
Members of Congress. We can't really get the bad guys until we 
have access to the information, and you have to help us take 
that lead.
    So I look forward to your testimony. I look forward to 
continuing our relationship. On a personal note, I have shared 
with you the lack of diversity in your shop. I want to 
reiterate that from my position as chairman of the overall 
committee, you absolutely have to do better. I am told that you 
are working on it. If you have some information on what you are 
moving in that area, it is not just a minorities in that sense, 
but it is women and others that we desperately lack in that 
arena, and we are all in this together. So I look forward to 
your testimony, and I yield back, Madam Chair.

                             For the Record

   Prepared Statement of the Honorable Bennie G. Thompson, Chairman, 
                     Committee on Homeland security

    Thank you, Madame Chair, I join you in welcoming Mr. Allen to this 
first hearing of the Intelligence Subcommittee in the 110th Congress.
    It has been eighteen months since your appointment as Chief 
Intelligence Officer, Mr. Allen.
    During that time you have taken the Office of Intelligence and 
Analysis to a place where it is finally finding its footing.
    I know it's been a challenging road, and I thank you for your 
service.
    With that said, I'm concerned that the President's proposed budget 
will leave you hobbled on that road.
    Last year, the President's budget provided a 32% increase in 
funding and 67% increase in staffing for I&A.
    This year, the President seeks a mere 5% increase in budget and a 
modest 9% increase in staffing.
    There appears to be a ``leveling off'' of the commitment to 
Analysis and Operations by the President.This ``leveling off'' is 
troubling given that your stated goals for I&A are unfulfilled. 
Specifically, I am concerned that this budget will not provide adequate 
resources to support the following goals for I&A: integrating the 
Department's intelligence units; fully funding, staffing, and rolling 
out your State and Local Fusion Center Program; developing a robust 
border intelligence capability; and protecting the homeland from a WMD 
attack.
    I am not sure what it says about whether you have the full support 
from the President on these critical initiatives if the resources are 
not there.
    If he really believed your initiatives were a priority, surely he 
could have found more funding somewhere.
    Where this leaves you and your Office of Intelligence and Analysis 
is a mystery.
    Although the actual dollar and staffing figures for your office are 
classified, I hope you'll be able to shed some light on how you plan to 
prioritize your work over the next fiscal year.
    This will be challenging for you, I am sure, given the short shrift 
the President has shown you in his proposed budget.Welcome again, Mr. 
Allen. I look forward to your testimony this afternoon.

    Ms. Harman. I thank the chairman. The ranking member of the 
full committee is not present, and I would remind other members 
that they can submit opening statements for the record. So now 
we will welcome our witness. Welcome again, Charlie Allen. 
Charlie Allen, the Department's chief intelligence officer, is 
a living legend within the intelligence community. I don't know 
if that makes you feel good or makes you feel dead, but 
nonetheless, it is how people refer to the only person so far 
as I know, who retired after a distinguished 50-year career at 
CIA and then came back to help DHS climb out of a fairly deep 
hole on intelligence.
    That was a great sacrifice for you and your family, and we 
recognize that. And we applaud you and send thanks on behalf of 
a grateful Nation for the fact that you are doing this work. 
Prior to Mr. Allen's arrival at the Department, he served as 
Assistant Director of Central Intelligence For Collection from 
June 1998 until August 2005. He also chaired the National 
Intelligence Collection Board, which ensured that collection 
was integrated and coordinated, that is still a work in 
progress I know, across the intelligence community. He still 
serves as a member of the Strategic Advisory Group, SAG, a U.S. 
strategic command, and has been in this position since 1999.
    And over the 50 years, I don't have enough time to read the 
pages of the positions that he held in the Agency. Without 
objection, Mr. Allen, your full statement will be inserted in 
the record, and I would now ask you to summarize for this 
committee.

  STATEMENT OF CHARLES E. ALLEN, CHIEF INTELLIGENCE OFFICER, 
    OFFICE OF INTELLIGENCE AND ANALYSIS, U.S. DEPARTMENT OF 
                       HOMELAND SECURITY

    Mr. Allen. Thank you, Chairman Harman. It is a great 
pleasure again to be here, and it is a great pleasure again to 
see and discuss the issues of great concern with Chairman 
Thompson. Ranking Member Reichert, you and I had an opportunity 
to meet the other day and talk about information sharing, and I 
look forward to your questions on that. Members of the 
subcommittee, I really wish to discuss the intelligence 
initiatives that we are undertaking within the Department of 
Homeland Security, especially in the area of information 
sharing. I want to thank Chairman Thompson especially for his 
strong support of homeland security in this area, and 
especially for the help that he has provided to me and to the 
Department to ensure that Federal information flows to our non-
Federal partners.
    I would like to begin my testimony by setting forth my 
vision for homeland security intelligence and then making a 
couple of commitments. I envision a seamless community of 
intelligence professionals stretching out across the Nation to 
our partners in State and local fusion centers and inclusive of 
traditional intelligent professionals, of law enforcement 
professionals and of State, local and private sector 
intelligence professionals. This community is founded on the 
thesis that all of its members are equally essential to its 
success. The threat that we face to our Nation is too complex 
to be solved without the full engagement of the entire 
communities involved. These communities are guided by the 
principle laid out by the new Director of National 
Intelligence, Mike McConnell, when he said that each member of 
the community equally shares a responsibility to provide. It is 
in this context and in direct response to Chairman Thompson's 
letter to me, and Madam Chairman, to your conversations with me 
that I am pleased to announce the Department's support for the 
embedding of State and local government representatives in the 
interagency threat assessment and coordination group, I pledge 
my staff's full effort to make this happen as smoothly and as 
swiftly as possible.
    The interagency threat assessment and coordination group 
will facilitate the production of Federal coordinated 
information, ensuring our non-Federal partners have the 
validated, accurate, timely and actionable information they 
need to protect against terrorism. We at DHS are proud to be 
leading this group in cooperation with our partners and we 
expect to have the group up and running in the coming days.
    This is only one of many steps that we are taking in the 
area of information sharing to realize a vision of a truly 
seamless community of homeland security intelligence 
professionals where each member is treated as an equal partner 
and fully acts on this responsibility to provide.
    Madam Chairman, I further pledge to you that DHS 
intelligence, by which I conclude the intelligence programs of 
DHS's operating components, will set the standard for 
inclusiveness, access and collaboration with all of our 
partners at both Federal and non-Federal levels. In many cases, 
by nature of the Department's position at the center of these 
multiple professional communities, I expect that we will lead 
the integration of these partners into a true homeland security 
intelligence community. Let me turn now briefly to fiscal year 
2008 budget.
    Over the past year we have made significant progress in 
building our intelligence capabilities and delivering results 
to our partners and customers. The number of new initiatives in 
the area of intelligence has been remarkable. In the budget we 
are presenting for fiscal year 2008, we will not only sustain 
our current efforts and continue to build capacity across the 
DHS intelligence enterprise, but also add targeted investments 
to mature further the Department's capabilities through a 
strong open source program, the building of the national 
immigration information sharing office, enhancing our State and 
local fusion center program office and further integrating our 
program to support securing our borders.
    Let me just speak briefly on the domestic program's open 
source enterprise. This program will increase our open source 
research and analysis capabilities for the benefit of DHS 
intelligence enterprise as well as Federal, State, and local 
law enforcement agencies in the intelligence community. I 
cannot emphasize too strongly the value of open source for 
homeland security in fulfilling our determination to share 
information on all levels of government, but most importantly, 
at the State and local levels. Also the National Immigration 
Information Sharing Office which we are standing up. This 
program will facilitate the appropriate uses of citizenship and 
immigration benefits information currently being collected and 
housed at a U.S. citizen and immigration service facility in 
Lee's Summit, Missouri.
    Our support to State and local fusion centers will also 
grow over the next year. The moneys that we have requested will 
fund intelligence officers and support infrastructure to 
continue establishing robust intelligence partnerships between 
the States, the private sector, the Department and the Federal 
Government.
    In a department focused on risk management, I would be 
remiss if I did not identify for you key areas which I consider 
to be crucial that could put at risk our success in delivering 
results. These factors are recruiting and retaining the best 
and the brightest from American colleges and universities, 
integrating our Department's intelligence programs and ensuring 
adequate facilities to house our officers.
    While my focus today is largely on the Office of 
Intelligence and Analysis, I believe many of these risk factors 
also hinder, to some extent, the other six intelligence 
programs of the Department.
    DHS intelligence began delivering a positive return on its 
investment as a result of funds authorized and appropriated by 
you. For that, I am very grateful. With your strong support, we 
have inter-Alia-initiated first department-wide basic 
intelligence course. We have deployed an advanced team to El 
Paso, Texas, as part of our intelligence campaign plan to help 
integrate the Nation's intelligence support to border security. 
We are reporting information never before accessible for 
intelligence analysis in collaborating with partners that 
previously were not valued as intelligence professionals.
    We have significantly improved the quality of our finished 
intelligence, which is now informing the most senior officials 
of our government that there is much work to be done, and the 
face of threats is real today as any time since 9/11, and which 
are likely to grow rather than recede in the foreseeable 
future.
    In sum, we have only begun our work. So let me begin my 
testimony where I began, by restating my commitment to ensure 
State and local participation in the interagency threat 
assessment and coordination group, and to ensure DHS sets the 
standard for inclusiveness, access and collaboration with all 
of our partners at both Federal and non-Federal levels. Let me 
add one additional pledge, that I and DHS intelligence will be 
absolutely relentless in working to keep the Nation safe.
    We believe the budget we have submitted is sound and needs 
to be approved as submitted if we are to accomplish that goal. 
We promise to deliver more in the future than we have delivered 
in the past, and we will never lose sight of the need to 
protect civil rights, civil liberties and of the public we have 
sworn to protect. I await your questions, Madam Chairman.

                             For the Record

                 Prepared Statement of Charles E. Allen

                              Introduction

    Chairwoman Harman, Ranking Member Reichert, and Members of the 
Subcommittee: Thank you for the opportunity to appear before you today 
to discuss vital intelligence initiatives we are undertaking within the 
Department of Homeland Security.
    There has been a great deal of dialogue over the past year on the 
topic of information sharing. The Intelligence Community, especially 
under the leadership of outgoing Director of National Intelligence 
Negroponte and the Federal Government's Information Sharing Environment 
Program Office, has made a great deal of progress across a broad swath 
of initiatives. Much of the dialogue has centered on the question of 
relationships--partnerships really--among members of the Intelligence 
Community, amongst Federal departments and agencies, and arguably most 
importantly between the Federal government and the non-Federal 
government and private sector.
    Dialogue is key to understanding, and the ongoing dialogue has 
borne great fruits as we continually enhance our understanding of how 
to build strong partnerships. At the same time, some recent dialogue 
has, from my perspective, misrepresented my views of these 
partnerships. I would like to begin my testimony by clarifying my 
vision, and that of the President, for these partnerships and then 
making two pledges to demonstrate how our dialogue informs our actions.

                                 Vision

    I envision a truly seamless community of intelligence professionals 
stretching out across the nation inclusive of traditional intelligence 
professionals, of law enforcement intelligence professionals, and of 
State, local and private sector intelligence professionals. This 
community is founded on the thesis that all of its members are equally 
essential to its success--the threat is too complex to be solved 
without the full engagement of the entire community. The community is 
guided by the principle laid out by the Director of National 
Intelligence (DNI) Mike McConnell that each member equally shares a 
``responsibility to provide.''
    It is in this context that I am pleased to announce the 
Department's support for the participation of State and local 
government representatives in the Interagency Threat Assessment and 
Coordination Group and pledge my staff's full effort to make this 
happen. The Interagency Threat Assessment and Coordination Group will 
facilitate the production of `Federal coordinated information,'' 
ensuring our non-Federal partners have the validated, accurate, timely, 
and actionable information they need to protect against terrorism. We 
at DHS are proud to be leading this group, in cooperation with our 
partners, and we expect to have it up and running in the coming weeks.
    This is only one of many steps we are taking to realize my vision, 
and that of the President, of a truly seamless community of homeland 
security professionals--where each member is treated as an equal 
partner and fully acts on this responsibility to provide. Madam 
Chairwoman, I further pledge to you that DHS Intelligence, by which I 
include the intelligence programs of our operating components, will set 
the standard for inclusiveness, access, and collaboration with all of 
our partners at both the Federal and non-Federal levels. In many cases, 
by the nature of the Department's position at the nexus of these 
multiple professional communities, I expect we will lead the 
integration of these partners into a true homeland security 
intelligence community.
    Let me now talk briefly about what we have accomplished and what we 
are doing this year to build our core capacity to deliver intelligence 
to our partners and customers.

           Fiscal Years 2006 and 2007: Building Core Capacity

    The threat we face today is more borderless, complicated, stretches 
farther across the globe, and evolves more rapidly than ever before. 
DNI McConnell shared the same message in his confirmation hearings. 
Over the past few years, through your work on intelligence reform, the 
President's leadership, and the efforts of former DNI Negroponte, we 
have begun the hard work of transforming the Intelligence Community to 
provide the support our nation requires to prosper in the face of this 
new threat environment. Over the same period, my Office was building 
core capacities while simultaneously transforming structure and 
approach to keep pace with the changing homeland security environment 
and to integrate into the institutions formed to counter the many 
threats the nation is facing.

                The Office of Intelligence and Analysis

    Since its inception, the Office of Intelligence and Analysis has 
been focused on building its core capacities to deliver intelligence. 
We have worked through the challenges of standing up an outstanding 
workforce, we are establishing the policy and procedures for our unique 
approach to intelligence, and we continue to work hard to understand 
our widely diverse customers' requirements. We still have much work to 
accomplish, but I want to highlight the progress we have made.
    In response to the Department's priorities, I have restructured my 
organization, realigned our focus toward the full spectrum of threats 
against which the Department is securing the homeland, and rebalanced 
my workforce to build a capacity that is sustainable into the future. I 
brought onboard an experienced leadership team and I have filled senior 
vacancies with strong leaders and managers. I continue to focus on 
recruiting a world-class workforce and retaining high performers by 
investing in a nurturing training, education and professional 
development program.
    We have made significant progress in establishing a strong 
collection requirements and management program--building initial 
capacity in open source intelligence, streamlining the reporting of 
information of intelligence value by our reports officers, and 
improving our exploitation of information gathered through the 
Department's conduct of law enforcement. We have broadened our analytic 
scope to encompass the broad spectrum of threats to the homeland and 
have improved the quality of our analysis. We regularly produce 
homeland security intelligence assessments to brief the Secretary, 
Deputy Secretary, and other senior Department officials and directly 
support key Department efforts such as the Secure Border Initiative and 
the Visa Waiver Program. Furthermore, we have demonstrated the value of 
homeland security intelligence by contributing regularly to the 
President's daily brief and the National Terrorism Bulletin. We 
continue to provide homeland security operators and policy makers, the 
Intelligence Community, and our Federal, State, local, tribal, and 
private sector partners with tailored, timely, and actionable 
intelligence. Supporting all of this, we have established a functional 
information technology and knowledge management backbone and have laid 
the foundation for this backbone to continue to keep pace with 
advancements in technology. My Office has unique legislative 
authorities for handling all types of information relevant to homeland 
security. We will ensure our information technology system does this in 
an auditable manner that ensures both effective use of the information 
and the protection of privacy and civil liberties of Americans.

                    The DHS Intelligence Enterprise

    The Secretary demonstrated his vision of the role of intelligence 
within the Department in his Second Stage Review, where he simply 
stated, ``Intelligence is at the heart of everything we do.'' As a 
result of the review, the Secretary created the position of the Chief 
Intelligence Officer to lead and manage the integration of the DHS 
Intelligence Enterprise. I am honored to be the first person to hold 
this position. One of my first actions as the Chief Intelligence 
Officer was to establish the Homeland Security Intelligence Council, 
which is comprised of the heads of the seven intelligence components in 
the Department and key members of my leadership team. This Council 
serves as my principal decision-making forum for intelligence issues of 
Department-wide significance. I also made it a priority to issue the 
first DHS Intelligence Strategic Plan.
    Under the authorities laid out in the Department's Management 
Directive 8110, last spring I implemented the first ever DHS 
Intelligence Program Reviews. As a result of my program reviews, the 
Commissioner of Customs and Border Protection charged his Director of 
Intelligence with developing an integrated Customs and Border 
Protection intelligence structure. We continue to professionalize our 
program review capabilities and will institutionalize this process of 
careful scrutiny of investments in intelligence throughout the 
Department. Our goal is to ensure that we are efficient and effective 
in our approach across the Department and to develop an intelligence 
culture within DHS.
    Additionally, we are working throughout the Department to improve 
and integrate existing information collection capabilities, such as our 
Department's air-based systems, ground sensors, and law enforcement 
technical collection capabilities. Our efforts will result in a 
departmental approach to Intelligence, Surveillance, and Reconnaissance 
(ISR) that will complement the abilities of our partners in the 
Intelligence Community. Similarly, intelligence analysts are now 
collaborating with one another across the Department on specific 
projects, reflecting a unique Departmental contribution to 
intelligence. These efforts move us toward a Department-wide 
intelligence production plan and a culture of collaboration.

    The Homeland Security Intelligence Community
    The realization of a national homeland security intelligence 
community--rests on establishing a partnership of equals and building 
the physical infrastructure to connect all members of the community. I 
am taking steps both in the establishment of this partnership of equals 
(through my State and Local Fusion Center Program, in coordination with 
the President's National Fusion Center Framework, and a culture of 
inclusiveness) and the foundational physical infrastructure (providing 
unparalleled access, both at the Secret level and the controlled 
unclassified level). My analysts in the DHS Homeland Infrastructure 
Threat and Risk Analysis Center (HITRAC) are building an additional 
foundation for our partnership with the private sector.
    Our State and Local Fusion Center Program (SLFC Program) is a 
direct outgrowth of the Homeland Security Act (HSA) of 2002 and the 
Intelligence Reform and Terrorism Prevention Act (IRTPA) of 2004, and 
is being developed consistent with the President's Information Sharing 
Guidelines. In both the HSA and the IRTPA, the responsibilities of the 
Federal government were broadened to include a much more pronounced 
requirement to build a unified homeland security community composed of 
both Federal and non-Federal members. The DHS State and Local Fusion 
Center Program is designed to ensure that State and local officials are 
tied into the Department's day-to-day operations, just as my officers 
are embedded in theirs.
    The SLFC program is working to get DHS personnel to link the 
Federal government to our State and local customers. To date, we have 
deployed 12 officers to 12 fusion centers around the country. We will 
continue our aggressive schedule to deploy up to 35 officers by the end 
of FY 2008, and are currently conducting assessments, in coordination 
with both our Federal and State and local partners, to determine which 
centers have the greatest need. Our officers in the fusion centers are 
working with their partner homeland security and law enforcement 
intelligence professionals to share information, to collaborate on 
analysis, and to identify local information of value. The result will 
be better reporting of critical information and intelligence, both 
horizontally among the fusion centers themselves and vertically to the 
Federal community.
    This year I have directed my intelligence analysts to reach out to 
relevant SLFCs to develop joint analytic products with State and local 
partners. Recently, my Office published a special assessment of Muslim 
extremist radicalization within the California prison systems. This 
analytic assessment was possible only because of the partnership my 
Office has with members of California's law enforcement communities.
    We also realize there is a major need to provide mechanisms (the 
physical infrastructure and information management technology) to 
augment more complete sharing of intelligence reporting and analytical 
products. At the unclassified and FOUO level, we have established a 
pilot program capability, under the Homeland Security Information 
Network (HSIN), that includes an intelligence portal where we 
comprehensively post both intelligence reporting and analytical 
products at the FOUO level. We plan to expand this portal to allow for 
protected email exchange for States to collaborate while being 
protected from intrusion. At the SECRET level, my Office, in full 
coordination with the Department Chief Information Officer, is 
deploying the Homeland Secure Data Network (HSDN) to the fusion 
centers, and, in an unprecedented move for the Federal government, the 
Department is giving State and local officials direct access, in their 
own facilities, to this network that provides reporting and email not 
only from the Department but also from the rest of the Intelligence 
Community. The establishment of the HSIN portal (FOUO level) and the 
deployment of HSDN (SECRET level) are major steps forward in increasing 
the connectivity between DHS Intelligence and our partners at the State 
and local level.
    With that brief highlight of our capacity building at the Office, 
DHS Intelligence Enterprise, and Homeland Security Intelligence 
Community levels, let me turn now to our Fiscal Year 2008 budget.

    Fiscal Year 2008 Budget: Enhancing Capacity Through Targeted 
Investment
    We have made steady strides since the inception of the Department 
in building our intelligence capability and delivering results to our 
partners and customers. In Fiscal Year 2008, we will continue to 
enhance our capacity across our mission areas (Intelligence 
Requirements, Collection and Dissemination; Analysis and Warning; 
Information Sharing and Knowledge Management; Mitigation, Prevention 
and Readiness; Mission Advocacy; Planning and Integration) by 
sustaining current investment levels and adding modest targeted 
investments to further mature the Department's capability.

        Intelligence Requirements, Collection and Dissemination

    I will sustain current investments in intelligence requirements, 
collection, and dissemination. In addition, we are requesting modest 
additional investments in targeted capabilities in Open Source 
Intelligence and the National Immigration Information Sharing Office.
         Domestic Programs Open Source Enterprise: This program 
        will increase our open source research and analysis 
        capabilities for the benefit of the DHS Intelligence 
        Enterprise, as well as Federal, State, and local law 
        enforcement agencies, and the Intelligence Community. We will 
        develop a strong Open Source Intelligence (OSINT) capability 
        focused on our areas of expertise and responsibility to 
        complement the broader Intelligence Community's open source 
        investments. This OSINT capacity will respond to the modern 
        recognition of the value of open-source intelligence. Our open 
        source initiative will seek to fulfill three of the Secretary's 
        budgetary goals of protecting the homeland from ``dangerous 
        people,'' ``dangerous goods,'' and to ``protect critical 
        infrastructure.''
         National Immigration Information Sharing Office 
        (NIISO): This program will facilitate the appropriate uses of 
        citizenship and immigration benefits information currently 
        being collected and housed at a U.S. Citizenship and 
        Immigration Service's facility in Lee's Summit, MO. This new 
        initiative will seek to fulfill the Secretary's budgetary goal 
        to protect the homeland from ``dangerous people.''
                These new initiatives, along with the maturation of the 
                DHS' Integrated Collections Strategy and integrated 
                approach to Intelligence, Surveillance, and 
                Reconnaissance (ISR) will improve Department's 
                responsiveness to our internal and external partners 
                needs, as well as complement the abilities of our 
                partners in the Intelligence Community. In addition, I 
                will continue to professionalize and sustain my 
                investment in my Reports Officer program. This program 
                which has been underway for the past 2 years is 
                designed to facilitate our access to a broader range of 
                information. DHS Reports Officers maximize the quality 
                of information provided to the Intelligence Community 
                by ensuring that law enforcement information is 
                protected and that all departmental records and 
                databases are reviewed.

                          Analysis and Warning

    I will continue to improve the quality of analysis and warning by 
sustaining current levels of investment across my Intelligence Watch 
and Warning; Chemical, Biological, Radiological, and Nuclear 
(Protecting the Homeland from attacks using WMD is a top priority of 
the Department, resulting in major efforts across the homeland security 
intelligence enterprise. In FY2008 we expect to be well underway in 
implementing our Homeland Intelligence WMD Strategy.); Homeland Threat 
Environment; and critical infrastructure (via HITRAC) focus areas. I 
will increase our depth and knowledge by making a modest additional 
investment in my borders analytic capability (through my Integrated 
Border Intelligence Program). The primary impetus for improvement, 
however, will come from institutionalizing the realignment of my 
Office's analytic corps instituted during FY 2006 and FY 2007, 
including specific branches dedicated to analyzing radicalization 
within American society and travel systems vulnerabilities. In 
addition, we are solidifying our relationships with our Departmental 
partner organizations as the Domestic Nuclear Detection Office, Science 
and Technology Directorate, National Preparedness and Protection 
Directorate, Office for Civil Rights and Civil Liberties, and the 
Office of Health Affairs, in order to leverage their information and 
knowledge to support our analytical efforts.

              Information Sharing and Knowledge Management

    Having made solid investments in information sharing and knowledge 
management in FY 2006 and FY 2007, I will continue to provide services 
in these areas, further developing the enterprise architecture and 
expanding our connectivity with our Federal and non-Federal partners. 
One of the cornerstones of these endeavors is the expansion of a 
collaborative information environment at the SECRET level, which will 
foster classified communication amongst the Department's components and 
with our state and local partners. This capability, coupled with the 
Department providing access to both intelligence reporting and 
analytical products at the unclassified and FOUO levels, will enhance 
our information sharing relationships with State, local, tribal and 
private sector partners. In this effort, we are fully engaged with the 
DHS Science and Technology (S&T) Directorate and other Departmental 
components through an Integrated Process Team process to identify, 
develop, and acquire technology to help us improve information sharing. 
For example, S&T resources are targeted to develop technology that will 
improve data sharing and data fusion for information sharing.

                  Mitigation, Prevention and Readiness

    I am sustaining my current investments in mitigation, prevention 
and readiness. In FY 2007 we are making the initial transition toward a 
shared DHS Intelligence Enterprise continuity of operations capability 
and I will use my current levels of funding to continue to finalize 
that transition in FY 2008.

                            Mission Advocacy

    I will bolster my investment in mission advocacy to ensure we meet 
my pledge to build a seamless homeland security intelligence community 
uniting the Intelligence Community, the law enforcement intelligence 
community, and our non-Federal and private sector homeland security 
partners. In particular, I am making a new investment in our State and 
Local Fusion Center Program (SLFC) to bolster our agency investments 
made in FY 2006 and FY 2007 to jumpstart this critical program.

         Support to State and Local Fusion Centers (SLFC): This 
        program will fund intelligence officers and support 
        infrastructure to continue establishing robust intelligence 
        partnerships between the States, private sector, the 
        Department, and the Federal government. This initiative will 
        seek to fulfill four of the Secretary's budgetary goals--
        protect the homeland from ``dangerous people,'' protect the 
        homeland from and ``dangerous goods,'' ``protect critical 
        infrastructure,'' and build ``a nimble, effective emergency 
        response system.''
    I am working to implement the President's vision of a National 
Network of Fusion Centers. We envision a network of State, local, and 
Federal intelligence and law enforcement professionals working together 
to achieve a common goal--protecting the homeland. The Federal 
government recognizes that State and local authorities have been 
working at this far longer than the Federal side. Working together--
leveraging our networks, moving relevant information and intelligence 
quickly, and enabling rapid analytic and operational judgments - will 
be the central purpose of a National Network of Fusion Centers.

                        Planning and Integration

    I will continue to focus on planning and integration in FY 2008 by 
maintaining the investment commitments I have made in this area, while 
adding a new capability to integrate the parts of our DHS Intelligence 
Enterprise focused on border security.
         Integrated Border Intelligence Program (IBIP): 
        Provides additional personnel and support infrastructure for 
        direct intelligence support to all border security operations 
        and an increase in Intelligence and Analysis' border analysis 
        capability. This initiative will also seek to fulfill all five 
        of the Secretary's budgetary goals.
    Some of this new capability I discussed above in the analytic area. 
A major additional component of this capability is an investment in the 
deployment of additional intelligence professionals to key hubs on the 
southwest border in order to build a more integrated DHS Intelligence 
capability. These efforts will be supported by ongoing Departmental 
integration activities, such as offering Department-wide intelligence 
training programs and institutionalizing the Intelligence Campaign 
Planning Program.

      Risks: Human Capital, Continued Integration, and Facilities

    In a Department focused on risk management, I would be remiss if I 
did not discuss with you those key areas that I consider to be factors 
that put at risk our success in delivering results. While my focus 
today is largely on the Office of Intelligence and Analysis, after 
consulting with my Homeland Security Intelligence Council, I believe 
many of the risk factors that apply to my Office also hinder the other 
six intelligence programs in the Department. These challenges--
primarily in human capital, integration, and facilities--are immense 
and not only slow our delivery in priority areas, but contribute to an 
atmosphere that exacerbates the challenge of daily worklife. Even 
though these conditions continue to hamper the valuable contributions 
of the people of the Office of Intelligence and Analysis and the DHS 
Intelligence Enterprise, they are nonetheless resolute in their 
devotion to duty.
    Throughout the Intelligence Community, there has been a significant 
effort to recruit and retain a world-class intelligence professional 
workforce. As a result of the number of intelligence vacancies 
throughout the Intelligence Community and the private sector, my 
Office, as well as our counterparts throughout the DHS Intelligence 
Enterprise, are facing great challenges to fill our vacancies and 
retain the staff we have onboard. I and my staff have been open and 
transparent with you in the challenges we are facing in filling our 
vacancies. To overcome these challenges, we are vigorously implementing 
our recruiting strategy, which includes participation in career fairs; 
making innovative use of the Pat Roberts Scholarships for vacancies in 
the Office of Intelligence and Analysis as well as for continuing 
education; and employing the hiring flexibilities available to us. 
Nonetheless, our progress is sluggish and we are not consistently 
successful in competing with the rest of the Intelligence Community and 
the private sector for candidates. I attribute some of this to the 
imbalance created by having the majority of the Intelligence Community 
eligible for excepted service and some, like the Office of Intelligence 
and Analysis, in the traditional, more rigid competitive service. In 
addition, factors such as the security clearance process only serve to 
further delay our hiring process. While I realize this is a complicated 
area, I am coming to the conclusion that we must grant DHS Intelligence 
the same excepted service flexibility available to its partner 
organizations in the Intelligence Community; this will create a more 
unified and mobile intelligence workforce as envisioned by intelligence 
reform.
    When I first arrived at the Department, I made integration of the 
DHS Intelligence Enterprise a priority. As I noted earlier, we have 
made progress in integrating our intelligence capabilities through the 
establishment of the Homeland Security Intelligence Council, publishing 
the DHS Intelligence Strategic Plan, and conducting the first 
intelligence program reviews. However, I am concerned by the acute 
separation between our current status and what needs to be done to 
reach that goal. I am working with the Secretary to augment the 
authorities I have received under Management Directive 8110 to help 
tear down some of the internal walls that prevent some aspects of 
integration. For example, I am working to gain greater flexibility in 
moving intelligence resources between programs to be able to rapidly 
support shortfalls throughout the DHS Intelligence enterprise. I am 
also working to gain more flexibility in supporting all members of DHS 
Intelligence Enterprise in recruiting and retention and to make it 
easier to rotate personnel throughout the DHS Intelligence Enterprise 
for career development purposes.
    While real improvements have been made over the past year for which 
we are very thankful for the support of the Under Secretary for 
Management and his facilities team, we still labor in facilities that 
are not comparable to those of other Intelligence Community agencies 
and have limited our analytical and integrative capabilities. In 
addition, I am certain that the condition of the facilities has 
negatively impacted our ability to recruit and retain a world-class 
intelligence professional workforce. While the Department has made 
strong progress in upgrading our facilities and has identified a long 
term solution (facilities on St. Elizabeth's that will be tailor made 
for DHS Intelligence), we are a long way from having facilities on par 
with our status as a member of the Director of National Intelligence's 
Program Managers Group.

                               Conclusion

    DHS Intelligence is a modestly-sized program, but we have begun 
delivering a positive return on that investment--we initiated the first 
Department-wide basic intelligence course last month. . .we have 
deployed an advance team to El Paso, Texas as part of our Intelligence 
Campaign Plan to invigorate the integration of the nation's 
intelligence support to border security. . .we are reporting 
information never before accessible for intelligence analysis and 
collaborating with partners that previously were not valued as 
intelligence professionals. . .we have significantly improved the 
quality of our finished intelligence, which is now informing the most 
senior officials of our government--but there is much work yet to be 
done in the face of threats as real today as at any time since 9/11.
    The disrupted aviation plot of last summer is a grim reminder that 
international terrorism continues to represent a direct and extremely 
dangerous threat to the Homeland. The United States and its allies are 
engaged in a global struggle against a broad range of transnational 
threats. Our nation's communities face the threat of terrorism, of 
cross-border violence spurred on by the poison of illicit trafficking 
in narcotics, and of the diminishment of our humanity by the 
exploitation of men, women, and children by international criminal 
organizations.
    So let me end my testimony where I began--by restating my pledges 
to engage State and local participation in the Interagency Threat 
Assessment and Coordination Group and to ensure DHS Intelligence sets 
the standard for inclusiveness, access, and collaboration with all of 
our partners at both the Federal and non-Federal levels and by adding 
one additional pledge:
    I, my Office, and the DHS Intelligence Enterprise along with our 
Federal, State, local and private sector partners, will be absolutely 
relentless in the pursuit of excellence; we will deliver more in the 
future than in the past; and we will never lose sight of the civil 
rights and civil liberties and of the public that we have sworn to 
protect. I ask for your support as we seek to honor the pledges we have 
made to you and to the American people today.

    Ms. Harman. Thank you very much. That testimony will be 
extremely helpful. Let me note that the chairman of the full 
committee has left briefly, but he will be back, and when he is 
back, I will recognize him out of order to ask questions. I 
would also like to acknowledge that Ms. Brown-Waite, a member 
of the full committee but not of this subcommittee, was here 
briefly, and if she should return, I would ask unanimous 
consent for her at the end of questions of others to be able to 
question the witness.
    And finally, I would ask unanimous consent to submit for 
the record a letter dated January 25, 2007, in which Chairman 
Thompson--I want to be sure you are alive, Charlie--sent to Mr. 
Allen with respect to information sharing.
    Ms. Harman. It was that letter that requested the embedding 
of State and local personnel in the NCTC, and I am very 
pleased, Mr. Allen, to have heard you say at the top of your 
statement that that is something you will do, and I think it is 
the right thing to do, and it also shows on the first hearing 
of the 110th Congress that this committee is working in 
partnership with you to make information sharing better.
    So I think it is a win-win-win, obviously a win for you in 
terms of how you will be able to do your job, a win for us in 
terms of how we will be able to do our job, but most important, 
a win for our communities, which should, as a result, get 
better intel out to first preventers so that they know what to 
look for and what to do in a timely fashion.
    I thank you for your testimony. I am reminding every member 
of this subcommittee that he or she will have 5 minutes to 
question the witness, and I now recognize myself for 5 minutes, 
and I will adhere strictly to my own time, and urge all of us 
to do that. If we do have time we can do a second round of 
questions.
    Mr. Allen, as I said in my opening remarks, the fear of 
radicalization is huge in Britain, and Britain is preparing for 
major attacks and has, fortunately, with our help, unwrapped 
unraveled a plot last summer that could have killed thousands 
of people, many of them Americans and had the ugly specter of 
British citizens killing American citizens as they tried to fly 
here.
    So could you address this subject briefly for us and tell 
us what work you are doing in the area of radicalization and 
what tools you believe the intelligence and law enforcement 
communities need to stop and to prevent extremists or disrupt 
extremists before they attack us here at home.
    Mr. Allen. Yes, Chairwoman Harman. We are taking a very 
serious look at radicalization in American society. We think we 
have some elements of that. We do not believe it is 
sufficiently broad or deep, but there are pockets. The 
Department, as a whole, is undertaking a strategic effort under 
Secretary Chertoff to look at radicalizations, and then, of 
course, to begin to design initiatives that could counter this. 
We are working very closely with our partners throughout the 
U.S. intelligence community, particularly the Department of 
Justice and the Federal Bureau of Investigation, and more 
importantly, I think we are also reaching out and talking to 
our officials at the very local level, as you have emphasized 
is so important.
    We have a small radicalization working group of my office 
that works with Stewart Baker, assistant secretary for policy, 
who has helped spearhead an overall effort. We hope to move 
forward with not only just looking at it and listing and 
prioritizing initiatives, but to develop an end-to-end 
strategy, and that is in the Secretary's interest.
    Already at the intelligence level we have produced some 
papers, looking regionally at your State of California, we are 
looking at the northeast. We have a small team looking down the 
southwest today. We have to talk with the local level, not just 
at the Federal level with their Federal partners. We obviously 
look at inbound intelligence from overseas that may give clues 
to things that are occurring in our society, but fundamentally, 
we are really working from the bottoms-up and it does involve 
the States, State prison officials, local law enforcement 
officers, public officials at the local level across a broad 
spectrum. I am very pleased that the Secretary is moving ahead 
with this radicalization strategy.
    Ms. Harman. I thank you for that answer and would note that 
one of the cells that we have successfully wrapped up in 
America is one that was in Torrance, California, in my 
district, and it was astute police work at the local level that 
discovered something was wrong, and then the Torrance P.D. 
collaborated with the FBI and found a much larger plot that was 
going to attack military recruiting centers, Jewish synagogues 
and so forth, in Los Angeles.
    I am obviously applauding you for the work that you did and 
noting that there may be many more home-grown cells out there 
of all stripes we need to learn about.
    My final question in my minute and 14 seconds left is about 
the problem of overclassification, another issue that this 
committee will look at. As you know, if things go out to State 
and locals with stamps of top secret, secret or confidential, 
that may prevent someone who needs the information from looking 
at it. Of course we are for classification for protecting 
sensitive sources and methods, but too often, classification 
can be used as a means to keep embarrassing information from 
becoming public or to protect someone's turf, and I would just 
invite, in a half minute, your observations on this topic and 
whether you think it is something that we and you should be 
addressing.
    Mr. Allen. I think, Madam Chairman, that we should continue 
to vigorously address this, and we look to the Congress to 
continue to prod the Federal Government in this direction. I 
think we have a new Director of National Intelligence, Mike 
McConnell, a friend of mine. He is, obviously in my discussions 
with him prior to confirmation, said this would be his watch 
word is to ensure we actually do share.
    That is the reason I quoted him in my opening comments. 
There is a lot of opportunity for us to get sensitive 
information down at the official use level. If there is a 
threat out there, it is going to get down to the local level, 
it is going to be shared, and it is going to be shared in order 
for first responders to be able to protect themselves, protect 
their citizens.
    And regardless of the sensitivity of the information, we 
have ways and means to get it to the customer, get it released 
and help protect the country. We can't hide behind 
classification the way we have in the past.
    Ms. Harman. Thank you very much. It is now my pleasure to 
turn to my colleague, my partner, the ranking member, Mr. 
Reichert, for 5 minutes of questions.
    Mr. Reichert. Thank you, Madam Chair. I have a follow-up 
question somewhat related to the overclassification issue, and 
that is the clearances, the classified clearances for law 
enforcement. It has been one of the things that I have heard, 
you know, as we got an opportunity to share, Mr. Allen, just a 
few days ago about our careers just a little bit, my 33-year 
career in law enforcement span from patrol car to the sheriff's 
office, and one of the complaints I hear now from the sheriffs 
and the police chiefs still is that there is a backlog in 
clearing people to have access to information. Could you 
respond to that question?
    Mr. Allen. Thank you, Congressman. Yes. There may be a 
backlog, but it is small and it is going to grow a lot less. My 
office has inherited the DHS State and local clearance program. 
I have taken it over. We have--right now we have cleared more 
than 1,000 people at the State and local level. We have 931 
clearances active at this moment. I have a staff that is small 
but vigorous that will work with you and work with any police 
department or fusion center that feels it needs clearances.
    The only issue where it may require a little more time is 
if the request is for officers coming to work at DHS and to get 
SCI clearances, special compartment information clearances. It 
takes a little longer. But getting the clearances at State and 
local level should be a very expedited process and I have taken 
this on because there was a problem, as Chairman Thompson as 
said. We can't, you know, hide behind dirty linen. At one time, 
I don't think we were as vigorous and active. Today we are and 
I work closely with the Director of Security to make sure this 
happens.
    Mr. Reichert. Does that also include the elected officials 
in the city government?
    Mr. Allen. Yes, it does. It includes homeland security 
advisors. It includes, obviously, officials that require close 
clearances in order to serve the governor or to serve in 
sensitive capacities at the State level. Homeland security 
advisors, all of them have top secret clearances, and if 
required, you know, we will look at their need for a special 
compartment information.
    Mr. Reichert. The second topic I would like to touch on is 
the fusion center, and we are fortunate enough, I have learned 
recently, to have someone assigned from homeland security to 
Seattle starting up a fusion center. How much support do you 
need to provide fusion centers in fiscal year 2008?
    Mr. Allen. We will need--as you know, when I came in a year 
ago, as Chairman Thompson said, it wasn't 18 months ago, I 
think it was 16 months ago, we had no one out there, and we had 
no dollars allocated for putting people in State and local 
fusion center, allocating resources to support them with secure 
communications. We have a broad program underway, State and 
local program office, which we are still establishing but at 
the same time we are pushing people out, finding qualified 
officers, finding the right qualified officers with the right 
experience, and analytic expertise is hard but we are doing it. 
The moneys that we have put forward in our fiscal year 2008 
program will cover what we can do for fiscal year 2008, and at 
the end of fiscal year 2008, we will have officers in over 35 
fusion centers throughout this country.
    Mr. Reichert. Again, along the lines of the fusion center 
discussion, can you explain how the fusion center interacts 
with the JTTFs and the JAGS, and also in Seattle, we are pilot 
program for links and how the fusion center interacts with 
those MTs?
    Mr. Allen. Yes. The fusion centers, in some cases, are 
collocated with the joint terrorism task forces, and there is, 
of course, sharing of information, even though the JTTF is 
slightly compartmented, because it is always at the special 
compartmented information level.
    But there is a steady flow of information. Where they are 
not collocated, there is open dialogue and interactive work 
between our officers and those of the FBI that runs and directs 
the JTTFs. That is one of the requirements. We train our 
officers that this is an information sharing environment and 
they must work professionally side-by-side with the FBI. There 
can be nothing that divides, there can be no window of 
separation.
    As far as the links system, it is using ICE information, 
Immigration and Customs Enforcement data out in Seattle. 
According to the Deputy Director of ICE that that system is 
working well. We are now looking, as you know, to develop a 
pilot project with the Los Angeles Joint Regional Intelligence 
Center to further develop our understanding on how to use the 
links system in order to pull in the law enforcement data from 
say in Los Angeles case, 37 police offices, I think that will 
be a great step forward.
    Mr. Reichert. Thank you for your answer. I yield.
    Ms. Harman. Thank you. And I would note that some time in 
the future, the committee will hope to visit the fusion 
centers, both in Seattle and in Los Angeles. And perhaps in 
other locations like Denver. And meanwhile we will make a tour 
of some of the things in the Washington area. This will be a 
focus of our subcommittee.
    Let me note before turning to the next member for 5 minutes 
that the freshman class comes in all shapes and sizes. Some are 
veterans, some are even intelligence officers. And so it gives 
me a real pleasure to have, as a member of our subcommittee an 
intelligence officer and I hope he will put his experience on 
the record. The Chair now recognizes Mr. Carney of Pennsylvania 
for 5 minutes.
    Mr. Carney. Thank you, Madam Chair, for the kind comments, 
and as a little bit younger version intelligence officer, I 
want to thank you, Mr. Allen, for the model that you have 
provided for the entire community for your tireless work. And 
you are somebody we certainly respect and look up to. And I am 
thrilled that you have come out of retirement to give your 
talents to the Nation yet again. I certainly appreciate that.
    I have just a couple questions to start off, at least. Mr. 
Allen, we understand the Department is planning a pay-for-
performance pilot program within the Office of INA. What will 
this pilot program entail? And in your view, how appropriate is 
it for a pay-for-performance model within INA?
    Mr. Allen. They have a system that is being introduced 
which is called MAX HR, which is a new way of evaluating their 
employees because, I think--and I have seen this be introduced 
obviously out--it was introduced at the Central Intelligence 
Agency at one point.
    The whole idea is to be able to get performance bonuses or 
incentives based on the quality of your work. I am not an 
expert on MAX HR, and I would like to get back to you as a 
question for the record, if I may.
    Mr. Carney. Sure. Thank you. I also understand the 
Department is deploying the Homeland Security Data Network.
    Mr. Allen. Mm-hmm.
    Mr. Carney. Diffusion centers, in order to share the 
classified information with State and local governments. The IG 
last year found big problems with a similar network, the HSIN 
and found the few State and locals actually use it. What are 
you doing to ensure the HSDN does not go the same way as HSIN?
    Mr. Allen. Well, I have a lot of confidence in the Homeland 
Security Data Network. I brought in a senior CIA officer to 
help build my information management system, Dr. Carter Morris, 
who sits behind me.
    And we are now--this is a robust system that where we can 
now, with the supernet--you are very familiar, sir, I know, 
with supernet has that kind of robust quality. So we can flow 
information at a classified level down to the fusion centers, 
or to the local police departments that has the terminal.
    We are putting terminals wherever we have officers. And not 
only are we making the terminals available to our officers, but 
we are also going to provide these terminals with passwords to 
local officials.
    So long as they have a secret clearance, and they have a 
need to operate for that fusion center's purposes, they will 
have that access. We are working with the Department of Defense 
to ensure that we could actually get an aperture from the real 
supernet into HSDN to further broaden the access of State and 
local government to a broader set of counterterrorism 
information.
    We also informed the homeland security work intel portal, 
which really is able to share the information we produce at the 
official use level and we are sending that all across the 
country, everywhere HSIN exists. I agree with you, HSIN was not 
a good system. It has been improved and we are using the very 
best features of it at the official use level and our Homeland 
Security Data Network, the secret level one, I have confidence 
it is going to work very well.
    Mr. Carney. Thank you. Just one final question. What 
percentage of the workforce do you have consists of full-time 
equivalents, FTEs versus contractors? To what extent is your 
office looking to replace contractors with FTEs? And what are 
your long-term plans in that regard?
    Mr. Allen. On that, Congressman. I will be very candid, we 
have more contractors than we have government employees. As a 
startup organization, I think that is inevitable to find the 
right experienced people with the right backgrounds and 
clearances so that we can--we draw very heavily on our 
contractor force. It is about a 60--40 breakout right now. I 
will not be comfortable until that ratio is reversed. We have 
positions that we have advertised, recruiting and competing 
within the intelligence community is very hard. We lose 
officers to other agencies, to the CIA, to the FBI, to NGA.
    That is the reason it is very vital that I get full support 
for good facilities for our officers. I have talked very 
personally with Paul Schneider, our new under secretary for 
management, and we are gradually building out our building 19. 
We hope you will come visit, which we can then house all of our 
officers. I have had over a hundred officers that did not have 
desks, as you probably know.
    Mr. Carney. Thank you. I yield my time.
    Ms. Harman. The Chair now recognizes for 5 minutes the 
gentleman from Pennsylvania, Mr. Dent. I guess not. The Chair 
recognizes Mr. Shays of Connecticut.
    Mr. Shays. Thank you, ma'am. Thank you very much for being 
here, Mr. Allen, and I would like to ask you what you think the 
new strategy of our government to defend against our enemies 
is. In the Cold War, it was contain, react and mutually assure 
destruction. What do you believe our strategy is today?
    Mr. Allen. Well, I think it is a great question, 
Congressman, and I know you are very familiar with the Cold 
War, and I worked the Cold War and know it very well. Today we 
have--
    Mr. Shays. I was a young kid when the Cold War started, 
sir.
    Mr. Allen. I was too, actually. Because we knew where the 
Warsaw Pact was, we knew when a battalion of BMPs moved, we 
knew when they went.
    Mr. Shays. What is today's strategy?
    Mr. Allen. Today's strategy is without borders. Today's 
strategy is to prevent and disrupt prior to attack. The attack, 
I think--and as Chairwoman Harman indicated in the opening 
statements, radicalization has not grown across this country, 
thank God, and we have to have good narratives to combat that. 
I think that is very important. The real threat is inbound, as 
we saw last August. And that was a very close thing.
    Mr. Shays. Let me get to my next question. Jane Harman and 
I and others, but particularly, Jane Harman was a strong 
proponent of the Department of Homeland Security. We knew that 
it would be a large new department that would have to--that we 
would have to spend a number of years to try to perfect. The 
intelligence part of that was a newer part. In other words, in 
my judgment, we weren't taking from other departments. We were 
creating a new part within the Department of Homeland Security, 
whereas other elements, we took FEMA in, we brought Coast Guard 
in, and so on. There was the terrorism index, survey of 
America's top experts on the state of terrorism in the U.S., 
and the U.S. national security done by the Center For American 
Progress.
    The experts said we are less safe, and I feel that we are 
safer. I feel we just don't feel safer because the world had a 
false sense of security earlier, previous. What is your sense? 
Did you feel you were less safe or more safe?
    Mr. Allen. Congressman, I believe we are safer because I 
believe the kind of hardening of our borders air, land, and 
sea, the kind of screening that occurs of containers overseas, 
the kind of active aggressiveness by the U.S. against al-Qa'ida 
central leadership has been very effective, but I believe 
internally the extraordinary measures that are being taken at 
the Federal, State and local levels is having a real effect. 
And I believe we are doing this while balancing the need for 
security with civil liberties.
    Mr. Shays. Let me ask you this, in getting your part of 
homeland security in the condition you want, are you 50 percent 
of the way there--60 percent of the way there, 20 percent of 
the way there? Where are you at?
    Mr. Allen. I think we are 50 percent of where I hope to be. 
We have got to grow another 50 percent in the next 2 years, by 
the end of this administration, we must be vigorous robust DHS 
intelligence enterprise.
    Mr. Shays. I understand. So you are 50 percent of the way 
there. And that is helpful to know. I like the fact you have a 
reach here. I would describe our going back--if I was to answer 
my first question not too different from yours, I would say it 
is detect, prevent and then preempt.
    In other words, your job is to make sure we don't react but 
that we actually are able to do what the Brits did, and I 
understand the Brits did it with our help as well. Last year I 
was in with my staff in Great Britain, we met with the Scotland 
Yard and we also met with Tony Blair's assistants on 
terrorists.
    And it was very interesting because I asked Scotland Yard, 
did homeland security have anything to do in the United States 
with uncovering this? And they said no. And yet Department of 
Homeland Security said yes. When I got to Tony Blair's office 
and asked the same question, they said yes. And it was a great 
answer for me because what it said was, Scotland Yard didn't 
need to know the interaction that was taking place for with the 
United States, but the people who did need to know knew. And 
frankly, it restored some--I mean, it helped restore some 
confidence, in my sense, that we are making progress.
    Mr. Allen. Congressman, may I respond? We were involved in 
that from the outset. We watched the threat evolve, and it was 
a very disturbing time in July of 2006, when we saw the threat 
and how it was directed inbound, directly against the United 
States, above all. And the British showed DHS great confidence 
in sharing and without going into details, I and my officers on 
a very--with only a small number of people had access to this 
incredibly sensitive information, we worked collaboratively 
within the intelligence community and with our British 
colleagues.
    Mr. Shays. Congratulations. Thank you, Madam Chairwoman.
    Ms. Harman. Thank you. I would just observe, as I did 
earlier, that it is rare that the intelligence community can 
celebrate openly a great success. That was a great success. 
Finding out about that plot and preventing it before it 
happened. It would have caused massive, massive harm. I would 
also observe to my friend, Mr. shays, who was right that he and 
I were among a small hearty lot of godfathers and godmothers to 
the Department that while we can get the organization right of 
the Department, we will never have 100 percent security that we 
will prevent every attack.
    It can work as well as possible, but there may be things 
that slip by. What we can do is to try to minimize the risk and 
I do think as I said earlier that the INA function at DHS is 
finally getting traction and doing a much better job to perform 
a new function that we all felt was necessary.
    Mr. Shays. Mr. Dent is here and we do not look alike.
    Ms. Harman. That is true, Mr. Shays. But you were blocking 
my view. That is why I didn't know that Mr. Dent had had 
temporarily disappeared. The Chair will now yield to another 
new member of this committee, new member of the Congress for 5 
minutes of questions, Mr. Perlmutter, the gentleman from 
Colorado.
    Mr. Perlmutter. Thanks, Madam Chair. And Mr. Allen, I just 
have a couple questions. Mr. Shays really began down this path, 
and since I am new to the Congress and certainly new to this 
committee, were there any of the original agencies that were 
placed into homeland security that now are part of your 
department, your division?
    Mr. Allen. Congressman, the intelligence arms of the 
operating components were not part of the original absorption 
as part of the Office of Intelligence and Analysis, but they 
are, through Secretary Chertoff's directive, responsive to my 
oversight, my guidance, my policy direction and my evaluation, 
and whether it is in custom and border protection or 
Immigration and Customs enforcement or Transportation Security 
Administration, I oversee the work of the intelligence arms of 
those agencies. We have a long way to go because they are not--
they did not have inoperable databases because they were very 
separate agencies.
    So we have a major information sharing and management 
problem within our own department. The Secretary, however, has 
just signed out a very important memo, which you all need to 
know about, which directs that there be full information 
sharing and it makes me the executive agent for ensuring that 
within the Department. That is a huge step forward by the 
Secretary.
    Mr. Perlmutter. Thank you. In developing your department, 
your division of the Department of Homeland Security, you 
mentioned it a little bit in one of your answers to the 
Chairman's questions. You were talking about recruiting and 
maintaining and developing your staff. Can you go into a little 
more detail? Because I think in either a report or some 
comments that we may have had from some of the other officers 
and secretaries of the Department, there has been a real--you 
have had real difficulty holding on to staff that you are 
developing and training and it is as if they come to you for 
training and then move on to a different agency. Can you tell 
us what things you are doing to maintain individuals in the 
Department?
    Mr. Allen. That is an excellent question. As you know, we 
are out recruiting across the universities, and some of the 
real problems, of course, is a very bureaucratic process for 
recruiting, and bringing them onboard, but I now have direct 
higher authority for certain categories of positions which we 
can offer, make a conditional offer on the spot. I am working 
with the Director of Security to expedite clearances because we 
lose a lot of people to whom we have given conditional offers 
of employment, except they will not wait a year and 18 and 24 
months.
    I discussed this with the new DNI, Mike McConnell. He is on 
my side. He wants to assure that we find ways to break down the 
barriers of security clearances. Retaining is a very hard job 
because we do not have the facilities that other agencies can 
bring to bear. But we are working at it. We have bonus--we have 
bonus incentives to hire people and bonuses if people are 
offered jobs by another department. Under certain rules we can 
match that job offer and ask our officers to stay with us 
because we are mentoring and developing officers only to see 
some of them leave.
    Mr. Perlmutter. It is kind of, like, you have a graduate 
program. Once they have undergone training with you, they move 
on to other places, and I know that as you get a new home, you 
know, there is a new office building or whatever, you know, you 
may have better chances.
    Last question, and this comes from some questions Mr. 
Reichert was asking, and I know it is kind of awkward. We are 
here on a budget meeting with you, but we really can't talk 
about the budget or the actual numbers. But my question to you 
is, in developing these fusion centers, it is my understanding 
that you are using grants to local governments to get them 
trained and established, but my concern is that ultimately 
those grants run out.
    And when they run out, the States aren't in a position and 
the local governments aren't in a position to replace the money 
that the Federal Government has granted to them, and then I am 
worried these fusion centers are going to somehow deteriorate 
or disintegrate. Can you respond to that?
    Mr. Allen. I think you have--Congressman, I think you have 
put your finger on a very sensitive strategic issue. Right now, 
there is a great deal of enthusiasm. The centers are still 
forming, still being shaped, building professionalism within 
those fusion centers. Right now we can train, help them hire 
people, analysts, help train those analysts, help equip those 
centers. Even contractors under the rules we can bring in and 
even train contractor personnel that the fusion centers may 
have hired. But to sustain this over the long term, 
particularly if there are no immediate attacks upon the United 
States, and God knows we want another 5 years, 6 years or 7 
years without any attacks, sustaining this is going to require 
I think a substantial support from the Congress through the 
grant system.
    Mr. Perlmutter. Thank you. Thank you, Madam Chair.
    Ms. Harman. I thank the gentleman for raising this issue, 
and as I think you know, following our classified briefing on 
this 2008 budget, those of us who were there are committed to 
seeing what we can do to augment funding for these fusion 
centers. We think that they are a very promising development. I 
would now yield 5&nutes to the real Mr. Dent of Pennsylvania.
    Mr. Dent. Thank you. Chris was very flattered. Thank you, 
Madam Chairman. I just had to get that in there, but Mr. Allen, 
the National Operation Center, as you know, manages the 
Homeland Security Information Network, I guess the acronym is 
HSIN. But your Office of INA is a primary user of this system. 
Do you feel that this system, this HSIN system is a success? 
And how would you measure that success?
    Mr. Allen. Congressman, I actually do not own or manage the 
HSIN program. The Homeland Security Information Network is 
owned and managed by Vice Admiral Roger Rufe, who is head of 
the operations directorate. We do share a portal for 
information that we can share in State and local levels at the 
official use level.
    The HSIN system requires a significant degree of hard look 
and evaluation. Our Inspector General's report, of which I 
think you are referring, was an excellent report. It showed the 
flaws and the weaknesses of that system. We are certainly going 
to use it fully for our intelligence sharing throughout--
anywhere HSIN can be received, they can also receive--if 
certified, to receive information of that level the 
intelligence aspects of that. But I do not manage the program. 
It is managed by Vice Admiral Rufe.
    Mr. Dent. And if you have any further comments on the best 
ways to disseminate information from the Fed down to the 
States, and the States back up to the Fed, I hear quite a bit 
from my folks back home about this issue of the product that 
they receive coming from the DH sock, wherever it is coming 
from in Washington. A lot of concern about that information and 
their ability to manage it and sift through it. I am just 
curious to hear your thoughts on this vertical sharing of 
information and intelligence.
    Mr. Allen. Congressman Dent, I think you have your finger 
on a problem because what I found when I came to homeland 
security 16 months ago, it was--that was exactly the problem. 
There was a lack of content management, trying to determine 
what should flow both ways. We are still in the early stages of 
ensuring that the information, for example, that flows through 
this system back to the Federal level has some disciplining 
content to it. That is the reason I am embedding officers at 
the State level.
    But at the national level, it tends to be polyglot type 
information, and I believe this is going to be a significant 
challenge in the next couple of years to get the Homeland 
Security Information Network working properly. I am very 
convinced, as I said earlier, that the Homeland Security Data 
Network, which is a classified network, will work, but we still 
have a good ways to go, and there are a number of other 
information sharing numbers as systems, as you are aware, for 
law enforcement purposes that also are part of the mix, and I 
think there has to be continuing serious--this issue has to be 
addressed and has to be resolved.
    Mr. Dent. Well, thank you very much for that very complete 
answer. And I also do want to thank you for your outstanding 
service to our country. Appreciate it very much. And I yield 
back.
    Ms. Harman. I thank the gentleman for yielding. I have been 
hoping that the chairman of the full committee would return. He 
is not here, but Mr. Allen, if you have some additional time, I 
think members are interested in a second round of questions. 
Are we all prepared to stay a bit here?
    Mr. Allen. Madam Chairwoman, I am here at your disposal.
    Ms. Harman. Let me suggest that we continue this hearing 
until 5:00 p.m.. Will that work for you, Mr. Allen? I will 
yield out of order to Chairman Thompson if he comes back, and I 
have two brief questions. The first is about fusion centers, as 
I mentioned. They will be a priority for this committee, as 
they are a priority for you. Some early alarm bells have been 
raised by the civil liberties community about what the function 
of these centers is. And I did note, Mr. Allen, in your summary 
of your remarks, you said that all the programs of your agency 
will be carried out consistent with the civil liberties of 
Americans.
    I just would invite you to put on the record any thoughts 
about why these fusion centers will respect the civil liberties 
of Americans.
    Mr. Allen. Thank you. Thank you for the question. We have 
to balance security with the civil liberties, and we cannot 
abridge those civil liberties. It is vital that as we--as you 
know, the State and local fusion centers operate generally 
under Federal guidelines, developed by the Department of 
Justice with the support of the Department of Homeland 
Security.
    What we do with our officers as they move down to the State 
level, we give them very explicit training on what type of 
information may or may not be collected or disseminated say 
back to the Federal level. There are certain--we have to have 
reasonable belief that the information is of a security 
interest and potentially could pose harm to the interest of the 
United States in order to retain information on U.S. persons.
    We do this under executive order 12333, which is overseen 
by the Director of National Intelligence. We operated under 
these guidelines in a very rigorous, and if there is any 
question the information is not to be retained but to be 
purged. I believe that this is an issue that always needs to be 
looked at, and everyone needs to be vigilant, but these State 
fusion centers are all threats, all hazards, they don't 
always--they deal with all threats to our homeland whether it 
is secure borders, CBRN, chemical, biological, nuclear, 
radiological, whether it is radicalization.
    What I have seen and I have visited fusion centers, talked 
to the State officials and they understand clearly the civil 
liberties aspects of this. I think as you have the opportunity 
to take members of the subcommittee out and visit fusion 
centers, they will come away with the same strong feeling that 
civil liberties is very much foremost in the minds of people 
running and administering the State and local fusion centers. I 
have no doubt about the officers that I send that they 
understand the rules under which they operate.
    Ms. Harman. Well, I appreciate that answer.
    Ms. Harman. I appreciate that answer, and it will be 
something this subcommittee continues to focus on.
    I would note that H.R. 1, which passed this House very 
early last month, includes provisions to strengthen the Privacy 
and Civil Liberties Board that was part of the Intelligence 
Reform Act of 2004. It would make all of the members of that 
board subject to confirmation. It would increase the funding 
for the operation and give it subpoena power. And something 
similar to that is being considered by the Senate this week, so 
I would guess that we will have a new watchdog board that will 
help reassure the public that we are all focused on civil 
liberties as we focus on serious threats at home and try to 
prevent and disrupt them.
    I think that I will stop there and now yield for a second 
round, 5 minutes to Mr. Reichert.
    Mr. Reichert. Thank you, Madame Chair.
    Just a quick question and then a little bit longer one.
    You mentioned in your testimony that you are working to 
gain greater flexibility in moving intelligence resources and 
personnel between programs. I am just wondering if you need 
additional budget authority to continue that process. Or are 
you actually maybe doing it to realize some cost savings?
    Mr. Allen. I think that is one of the stresses that has 
been put on my office and my position as Chief Intelligence 
Officer is the fact that many of these initiatives, 
Congressman, are new. A year ago, if I were sitting here, I 
could not say we are going to State and local governments, that 
we have an intelligence campaign against the borders, that we 
have a whole new effort set up to look at radicalization. We 
had none of that.
    So we have moved officers among a variety of initiatives, 
and some of our people are doing essentially double time, 
trying to also ensure that we set common training standards and 
that the operating component intelligence arms move with the 
same pace and priorities that I do in my immediate office.
    I think all of that is going to take continued, sustained 
support from you, because integration of the operating 
component intelligence arms is not easy. Having served as the 
Assistant Director of Central Intelligence on integrating the 
Intelligence Community's collection arms, that was a struggle. 
I fault that for 5 or 6 years, and we made a lot of progress, 
but there is still a long ways to go, as the new DNI knows. We 
have to work very hard over the next 5 years to integrate the 
Department, and we are going to need really sustained support 
from you to accomplish that goal.
    Mr. Reichert. I want to just comment that there has been a 
lot of progress made after September 11th and during an 8-year 
period there. I was the sheriff in Seattle, and was approached 
by the U.S. Attorney's Office to join a new program called 
Links; and you know, we in the local law enforcement arena are 
somewhat skeptical when the Federal Government comes to us and 
says, ``We are from the Federal Government, and we are here to 
help,'' but we did eventually join that effort. But initially, 
the FBI was not a part of it and did not want to be attached to 
it.
    Naval intelligence, actually with the U.S. Attorney's 
Office, took the lead, and Links has progressed and proceeded 
forward and has now, I think, shown itself to be very valuable 
to local law enforcement in their ability to share information 
with the Federal agencies.
    You expressed early in your testimony that you had 
difficulty even with them, the Department of Homeland Security, 
gathering intelligence data from the departments under your 
purview.
    How are you received now by local law enforcement as you 
come out to the fusion centers? Are you able to bring those 
people together, and do you feel like there is some trust that 
is being gained? And have you also been able to gain some trust 
with the FBI and the CIA and others who have intelligence-
gathering responsibilities outside of the Department of 
Homeland Security?
    Mr. Allen. I think, Congressman, we have made a lot of 
progress. I think a year ago our efforts would have been viewed 
with significant skepticism because we had not deployed 
officers, we had not deployed systems, we had not done the 
security clearances that were required.
    I think when I go--and today, I am not sure we will meet 
the needs of every State and local fusion center, and I think 
there will be continued complaints at some levels, but I think, 
overall, we have met with the chiefs of police of major cities. 
We have listened to them; the Secretary, in particular, has 
listened to them. We have set up a number of initiatives to 
improve our relationships with the chiefs of police of major 
cities.
    Do we need to go further? Yes, absolutely. At the CIA, they 
have strong confidence because I come from that environment. I 
know it very well, so I have no worries over the CIA. With the 
FBI, I think, early on, as we began these new initiatives with 
the Federal Bureau of Investigation, there was some concern 
about where we are going and would we get into their lanes. 
Deputy Director Pistol and I testified before the Senate 
Subcommittee on Intelligence the other day, and it was a very 
successful hearing because we work in partnership and because 
we have people like Deputy Director Pistol and leaders like the 
head of the National Security branch, Willie Hulon. We get 
through any bumps in the road with the FBI.
    I think the proof of the pudding is in the eating. I think 
we still have to demonstrate a lot, that we have to do a lot 
more before we get the full confidence of the State and local 
officials. We are working at it every day. I do not look for 
miracles, but I do hope they are beginning to feel that we 
speak sincerely in our efforts to help them and support them 
and to get out threat warning/threat assessment quickly when we 
see it coming.
    Mr. Reichert. I thank you, and I am glad that you are 
leading this effort forward.
    Ms. Harman. I thank the gentleman.
    Mr. Allen, I would just note on that point that your action 
that you have announced today to embed State and local 
officials in the NCTC process will go a long way to building 
that trust relationship and building products that are easiest 
for them to use. After all, it is critical that the 
intelligence be accurate, but also that it be actionable and 
timely, as you well know; and I think having more efforts to 
develop the products jointly will assure that that is the case.
    I apologize to you. I have been reminded that I have a 
critical meeting in the Capitol at 5 o'clock, but we will keep 
this hearing going until all members have had a chance to ask a 
second round of questions, and I think this may be the first 
time that Mr. Perlmutter has chaired a hearing.
    So I would welcome him to the chair, and I would right now 
yield 5 minutes to Mr. Carney of Pennsylvania.
    Mr. Carney. Thank you, Madame Chair.
    Just one more question, Mr. Allen.
    You testified recently that you are in the process of 
creating a Homeland WMD intelligence strategy, and I know the 
FBI has something very similar within the Counterterrorism 
Division.
    How does Homeland Security's new strategy differ from and 
complement what the FBI already has in place both at the 
Federal level and, of course, the regional level?
    Mr. Allen. I think that is a very good question because the 
FBI has stood up an almost, I think, 100-person directorate 
that is focused on weapons of mass destruction and trying to 
ensure that as it looks to threats of this country, 
particularly inbound or internal, that it looks at it 
particularly from an investigative intelligence perspective.
    And that, in my view, is good; and the new strategy that I 
am developing is very complementary to this because the 
Secretary is charged with preventing a bio and nuclear 
terrorist attack upon the United States and, of course, to help 
direct the recovery if such a horrible attack ever occurred 
here in our homeland.
    What we are trying to do is to look both inbound at the 
very basic levels because a lot of our work is in support of 
the Domestic Nuclear Detection Office, which we support on a 
daily basis. We are the intelligence arm to support the DNDO 
under Vayl Oxford. There is also the national bioterrorism 
system, NBS, which deals with bioterrorism under our chief 
medical officer.
    So what we are trying to do is to complement a broader and 
a deeper, more bottoms-up effort to what the FBI is doing with 
a more intelligence investigative purpose. We have met with the 
FBI. We have worked out the rules. The rules sat in the lanes 
in the road on this, and the FBI, I am very confident, is 
comfortable with this. I know Mr. Pistol is comfortable with 
it, and I am comfortable with it.
    Mr. Carney. Is there an MOA to that effect or is this just 
a gentlemen's agreement?
    Mr. Allen. We do not have an MOA. I have no problems with 
developing one. I have a senior scientist advisor to me 
directly driving this program, Dr. Maureen McCarthy. That is a 
good question. I will ask her.
    Mr. Carney. Very good. Thank you, sir.
    Mr. Perlmutter. [Presiding.] I thank you.
    Mr. Shays, if you have another round of questioning, go 
ahead.
    Mr. Shays. Thanks.
    Tell me your biggest challenge.
    Mr. Allen. I think, fundamentally, my biggest challenge is 
to ensure that we integrate the Department's intelligence arms, 
that we all flow together at the same pace with the same 
priorities and the same goals, that this is aligned carefully 
with the national Intelligence Community because it represents 
the priorities of the President and the National Security 
Council.
    I do not think that we--I have made as much progress in 
integrating intelligence across the Department as I should 
have. We have made great progress in beginning our information-
sharing efforts. We have made great progress in building good 
analytic product and developing and co-mentoring our officers 
so that they can write for the President's daily brief or for 
the national Intelligence Bulletin. We were not doing that 
until I arrived a little over a year ago.
    But I think the greatest challenge right now is making sure 
we flow as a department. I think the information sharing memo 
just signed by Secretary Chertoff will help in very measurable 
ways to help me further integrate the Department's intelligence 
actions.
    Mr. Shays. Thank you for that answer.
    You mentioned that one of your challenges is bringing 
online qualified folks who can get their security taken care 
of.
    Can you quantify the number of people that right now you 
are waiting to have--
    Mr. Allen. Yes. We have made conditional offers to 60 or so 
people. Many of them have to go through, first, the process of 
being found acceptable by the Office of Personnel Management, 
and then of course there are always the long-term security 
clearances, both--
    Mr. Shays. And you may have said this, but I apologize if I 
did not pick it up. How long a wait has that been?
    Mr. Allen. It varies.
    Mr. Shays. What would the average be?
    Mr. Allen. Well, I think it takes--
    Mr. Shays. I want to know why it is taking you--let me just 
say I have some experience in this. I chair the National 
Security Subcommittee. We have probably had five hearings on 
this issue. I consider it a huge problem, and I would like to 
think that one of the things that would come out of this 
hearing is some way we can put our heads together and move this 
forward.
    I think it is outrageous that you have such an important 
department, and we are having this delay.
    Mr. Allen. Well, I think it is a real problem. I think the 
whole security clearance process is painstaking for SCI. For 
new people out of universities, they may have done things like 
I did in college--and perhaps you did, too, sir--but the 
adjudication process is slow and painful.
    Mr. Shays. I tried to get into the CIA, and I did not 
qualify, and I will leave it at that.
    Mr. Allen. Okay. The director of security has made 
commitments so that suitability reviews and adjudication 
reviews will be accelerated. I was dissatisfied in my first 
year as Chief Intelligence Officer. Hopefully, in the second 
year, things will be expedited. Vice Admiral, Retired, Mike 
McConnell has asked me to join him and find ways to ensure we 
break through some of those barriers as well.
    Mr. Shays. Well, I would like to suggest that you work with 
this committee a bit on this issue. I mean, we learn a lot from 
your contribution, but I think we can be a bit helpful, and I 
just think it is a problem throughout the government, and we 
need to sort it out because we are losing good people.
    So, obviously, I do not need to go forward. Thank you very, 
very much.
    Did you have any other comment you want to make?
    Mr. Allen. I just want to say that I want great diversity. 
Chairman Thompson spoke about diversity. I want to be able to 
hire first and second generation Muslims. I want to have people 
who are Muslims, who understand Islam. I want Sunnis and Shi'as 
working in my office, and I am anxious to get on with this.
    Mr. Shays. Well, I will just say that I had someone in my 
office applying to one of our agencies, and because her family 
is from Beirut, Lebanon, she was waiting 10 months to know if 
she had the possibility, and she could not make the clearance 
because of it, and yet, she spoke perfect Arabic, and she 
wanted dearly to do this work--dearly.
    At any rate, thank you.
    Mr. Perlmutter. Thank you, Mr. Shays.
    I will yield 5 minutes to myself for just two questions.
    Mr. Allen, thank you for the time that you have given us 
today. The first question goes to the series of questions the 
gentleman from Connecticut was just asking. Besides Arabic and 
Farsi, are you looking to try to develop agents or Department 
members with other languages besides those?
    Mr. Allen. I think you have put your finger on the areas we 
want. We want Urdu and Dari speakers. We want mainly, you know, 
people with great analytic minds who can bring some area 
expertise.
    If we are going to do analysis to help defend the homeland, 
we have to have officers who understand what is occurring in 
South Asia, what is occurring in the Levant, as Congressman 
Shays just indicated. So we not only, in addition to 
languages--Indonesian is going to be very important. There is a 
growing threat, as you know, in Southeast Asia. We have got to 
have both of these qualities. We have got to recruit people 
with language and country area expertise. Otherwise, we will 
have people who will not be able to understand the 
intelligence, the raw intelligence, they receive and how to 
integrate and assess and evaluate that intelligence.
    Mr. Perlmutter. Thank you, and we appreciate your 
testimony. You have met with us formally and informally. I 
know, on behalf of Mr. Reichert and myself and the rest of the 
panel members who have been here today, we appreciate your 
testimony.
    I know that, if we have additional questions, we will 
submit them to you and to the members of your staff, and we 
will seek some answers to those in writing, but with that, 
unless you have something else, this committee will stand 
adjourned, and thank you for allowing me to be at chair for a 
moment.
    Mr. Allen. Thank you, Mr. Perlmutter.
    [Whereupon, at 4:56 p.m., the subcommittee was adjourned.]

                                 
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