[Senate Hearing 110-1028]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 110-1028
 
  INFORMATION SHARING: CONNECTING THE DOTS AT THE FEDERAL, STATE, AND 
                              LOCAL LEVELS

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 23, 2008

                               __________

       Available via http://www.gpoaccess.gov/congress/index.html

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs



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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
            Christian J. Beckner, Professional Staff Member
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                    John K. Grant, Minority Counsel
                  Trina Driessnack Tyrer, Chief Clerk
         Patricia R. Hogan, Publications Clerk and GPO Detailee
                    Laura W. Kilbride, Hearing Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Pryor................................................    20
Prepared statement:
    Senator Voinovich............................................    35

                               WITNESSES
                        Wednesday, July 23, 2008

Eileen R. Larence, Director, Homeland Security and Justice 
  Issues, U.S. Government Accountability Office..................     4
Hon. Thomas E. McNamara, Program Manager, Information Sharing 
  Environment, Office of the Director of National Intelligence...     6
Charles E. Allen, Under Secretary for Intelligence and Analysis 
  and Chief Intelligence Officer, U.S. Department of Homeland 
  Security.......................................................     9
James M. Thomas, Commissioner, Department of Emergency Management 
  and Homeland Security, State of Connecticut....................    12
Jeffrey H. Smith, Partner, Arnold and Porter.....................    15

                     Alphabetical List of Witnesses

Allen, Charles E.:
    Testimony....................................................     9
    Prepared statement...........................................   129
Larence, Eileen R.:
    Testimony....................................................     4
    Prepared statement...........................................    36
McNamara, Hon. Thomas E.:
    Testimony....................................................     6
    Prepared statement...........................................    59
Smith, Jeffrey H.:
    Testimony....................................................    15
    Prepared statement with an attachment........................   149
Thomas, James M.:
    Testimony....................................................    12
    Prepared statement...........................................   145

                                APPENDIX

``Annual Report to the Congress on the Information Sharing 
  Environment,'' prepared by the Program Manager, Information 
  Sharing Environment, June 2008, submitted by Mr. McNamara......    64
Questions and responses for the Record from:
    Ms. Larence..................................................   164
    Mr. McNamara.................................................   166
    Mr. Allen....................................................   168


                    INFORMATION SHARING: CONNECTING
                    THE DOTS AT THE FEDERAL, STATE,
                            AND LOCAL LEVELS

                              ----------                              


                        WEDNESDAY, JULY 23, 2008

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:05 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Joseph I. 
Lieberman, Chairman of the Committee, presiding.
    Present: Senators Lieberman and Pryor.

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. Good morning and welcome to today's 
hearing, ``Information Sharing: Connecting the Dots at the 
Federal, State, and Local Levels.''
    I want to say at the outset that Senator Collins called 
and, unfortunately, there has been a crisis in Maine, and so 
she cannot be with us today. But she will certainly follow the 
transcript and the statements that you make.
    The attacks of September 11, 2001, obviously showed us how 
disastrous it can be when intelligence information gathered by 
one agency is not shared with other agencies--Federal, State, 
and local--who share the responsibility to protect our Nation 
and our people.
    The 9/11 Commission Report documented instance after 
instance where agencies either kept crucial information to 
themselves or, even if they were prepared to share the 
information, did not let other agencies know they had it. 
Because of this information hoarding, crucial clues that 
existed in different databases that, if combined and analyzed, 
might well have thwarted or stopped those attacks were missed, 
and the terrorists succeeded in the most devastating attack on 
the United States since Pearl Harbor.
    The 9/11 Commission wrote in its report, ``The culture of 
agencies feeling they own the information they gathered at 
taxpayer expense must be replaced by a culture in which the 
agencies instead feel they have a duty to the information''--to 
share the information--``to repay the taxpayers' investment by 
making that information available.''
    In today's hearing we will examine progress on information 
sharing since then. In fact, this is the first Committee 
inquiry since 2004, our first round of post-9/11 Commission 
Report hearings on this subject. And so we are going to ask in 
simple terms what has improved and what still needs to be 
improved.
    We have a panel of very distinguished and experienced 
witnesses, and I welcome you all here today and thank you for 
being here.
    Charlie Allen is--I have used so many superlatives to 
describe you. I think I should just say ``Charlie Allen.'' I 
was once at a meeting a couple years ago where Henry Kissinger 
was introduced by somebody as ``a man who needed no 
introduction.'' So Dr. Kissinger got up and said, ``It is 
probably true that I need no introduction, but I like a good 
introduction.'' Anyway, you are a national asset, Mr. Allen, 
and I thank you for being here.
    I also particularly want to welcome Skip Thomas, 
Commissioner of the Department of Homeland Security from 
Connecticut, who is here to talk about some of the very 
innovative work being done, I am proud to say, in my home 
State.
    We also are very glad to have Ambassador McNamara, Program 
Manager of the Information Sharing Environment; Jeff Smith, 
former General Counsel of the CIA, now a partner at Arnold and 
Porter, who worked with our Committee on the intelligence 
reform legislation and was very helpful; and Eileen Larence of 
the Government Accountability Office (GAO).
    In the testimony today, I am pleased to say we are going to 
hear about significant progress over the last few years to 
improve the sharing of critical information across Federal 
agencies, and between Federal, State, and local agencies. And I 
thank you for that.
    Following hearings of our Committee in 2004, which I 
referred to, Congress passed and the President signed into law 
the Intelligence Reform and Terrorism Prevention Act, which 
created the Office of the Director of National Intelligence 
(ODNI) to forge a greater unity of effort among our country's 
very diverse intelligence community. The legislation also 
established the National Counterterrorism Center (NCTC) and the 
Office of the Program Manager for the Information Sharing 
Environment (ISE), both intended to strengthen and streamline 
the exchange of terrorism-related information within the 
Federal Government.
    The 9/11 Commission Act, which we call ``9/11 II,'' signed 
into law last year, further enhanced the authorities of the 
Information Sharing Environment program manager and established 
in statute the State and Local Fusion Center program office at 
the Department of Homeland Security.
    At the National Counterterrorism Center, officials from a 
wide variety of agencies--CIA, FBI, NSA, DHS, DOD, and many 
others--now work side by side, 24/7, to assess terrorism-
related evidence, indications, and warnings and, of course, to 
jointly analyze the threat. The NCTC is now the one place where 
our government is responsible for connecting the dots that were 
left dispersed prior to September 11, 2001. And it is quite a 
remarkable achievement, and I am sorry Senator Collins is not 
here because we both have been there. It is one of those 
moments in the Senate life when you actually see something that 
you helped to create created and feel the satisfaction and 
encouragement to know that it is really making a difference. 
Those moments do not come too often, but when they come, they 
are quite satisfying.
    State and local governments are now also increasingly seen 
as partners by the Federal Government, and the network of 
fusion centers across the country, with support from the 
Department of Justice and the Department of Homeland Security, 
is playing a valuable role in the broader efforts to share 
terrorism-related information and to detect suspicious 
activities.
    Just last month, fusion centers from Indiana and four other 
States collaborated on a joint assessment that looked at 
suspicious activities related to a certain sector of public 
infrastructure, and they did so acting on their own initiative.
    This kind of horizontal, decentralized information sharing 
and analysis is exactly the kind of activity that we had hoped 
the fusion centers would be doing. It fixes one of the 
information-sharing gaps that was evident as we looked back at 
the September 11, 2001 plot, where Federal agencies did not 
connect the dots regarding those suspicious activities at 
flight schools in various parts of the country.
    However, as we will discuss, more work remains to be done 
to fulfill the 9/11 Commission's charge that our security and 
intelligence agencies change from a culture of ``need to know'' 
to a culture of ``need to share.''
    GAO has included this subject matter, which they call 
``Establishing Appropriate and Effective Information-Sharing 
Mechanisms to Improve Homeland Security,'' on its high-risk 
list since 2005, not that there has been no progress made. 
There obviously has, but I think it is a measure of the very 
high consequences of failure, unacceptably high, and how 
critical it is that all relevant agencies continue to work to 
remove this item from the high-risk list.
    As we are going to hear from GAO, the Program Manager for 
the Information Sharing Environment, according to GAO, really 
needs to create a road map so that it can objectively monitor 
progress, ensure accountability, and make participating 
agencies aware of their distinct responsibilities as part of 
the Information Sharing Environment.
    Without that kind of a road map, it is going to be very 
hard to identify and root out remaining cultural, 
organizational, or technological barriers to effective 
information sharing that we know still exist.
    We do not want to allow the continuation of institutional 
stovepipes that funnel intelligence straight up a single agency 
rather than a decentralized, networked approach, where 
information is broadly distributed.
    I think we need to build on the considerable progress that 
has been made. That is what I take away from the work that has 
been done and my understanding of it. Unfortunately, there are 
some, I gather, who would like to see the Information Sharing 
Environment program office defunded and disbanded by as early 
as 2010 and then apparently return to the old ways of doing 
business, which obviously simply did not protect the security 
of the American people. I want to make clear this morning my 
firm opposition to any such move. I will do anything I can to 
stop it from proceeding.
    So I look forward at this moment, as we approach a 
transition in government, to working with the next 
Administration in making these programs that are so critical to 
our Nation's security even more efficient and effective, and 
the work that all of you have done, to prepare for this 
morning's hearing will certainly assist this Committee in doing 
so. Thank you very much.
    Now I would like to call first on Ms. Eileen Larence, who 
is the Director of Homeland Security and Justice Issues at the 
U.S. Government Accountability Office. Thanks for being here.

TESTIMONY OF EILEEN R. LARENCE,\1\ DIRECTOR, HOMELAND SECURITY 
   AND JUSTICE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Larence. Thank you, Mr. Chairman. Thank you for the 
opportunity to summarize the results of our recent reviews of 
the government's efforts to better share terrorism information 
since September 11, 2001. As you already acknowledged, in 2005, 
GAO did place the issue of information sharing for homeland 
security on its high-risk list, and it has been monitoring 
efforts to remove barriers to sharing since then. My testimony 
this morning summarizes our recent work on: One, assessing the 
status of the Information Sharing Environment, called for in 
the 2004 Intelligence Reform and Terrorism Prevention Act; two, 
challenges to State and local efforts to create and maintain 
fusion centers; and, three, recent reforms to streamline rules 
for handling sensitive information.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Larence appears in the Appendix 
on page 36.
---------------------------------------------------------------------------
    In the 7 years since September 11, 2001 and the 4 years 
since the intelligence reform act, Federal, State, and local 
agencies are clearly sharing more terrorism information. New 
organizations were created and new processes, systems, and 
networks evolved to handle the sharing, and the Congress and 
Administration issued new laws, policies, guidance, and 
standards to promote more sharing. But there is still critical 
work that the program manager for the Information Sharing 
Environment and agencies must do, as you also acknowledged. 
They need to better integrate these pieces, continue to 
overcome agency stovepipes and change cultures that promote 
information protection over secure sharing, better monitor and 
measure progress, and perhaps most importantly, maintain 
momentum.
    In a report we are releasing to you today, GAO acknowledges 
that building the environment is a very complex challenge 
involving many stakeholders, each with equities and investments 
already in place. Nevertheless, the program manager and 
agencies have had a measure of success. The program manager 
issued an implementation plan in 2006. He initiated a 
governance structure and working groups. His office and 
agencies achieved most of Phase 1 of the plan, which focused on 
setting up and getting ready for implementation. This included 
developing information inventories and directories, uniform 
standards, and a technology framework.
    The program manager is also leveraging initiatives agencies 
independently pursued, such as terrorist watchlisting and 
fusion centers, and he has issued two annual reports that begin 
to catalogue these actions and measure progress. But progress 
has been tempered, to some extent, by several gaps to fill.
    First, the program manager and Federal agencies key to 
making the environment work--and that includes the Departments 
of Defense, Homeland Security, Justice, and State--still have 
to fully define the environment's scope and parameters or what 
it is to achieve and how it will operate. This includes what 
information all critical stakeholders need to combat terrorist 
threats, what information should be shared, how it will be made 
available to analysts, while also protecting it as well as 
civil liberties, and what technologies will be used.
    Second, work on the environment has pushed agencies to 
partner better on information sharing, but there is still some 
confusion and conflict about agency roles, responsibilities, 
and level of commitment versus that of the program manager that 
need to be resolved because of such slow progress. And 
questions remain as to whether the program manager has the 
authority needed to drive change and who is holding agencies 
accountable.
    And, third, the program manager and agencies have made 
good-faith efforts to set and refine goals, objectives, and 
metrics to design the environment. But taken together, these 
efforts do not yet provide a complete and current road map and 
accountability systems to guide future implementation and 
investments, even though the hardest part of building the 
environment is still to come.
    The 2006 plan's milestones were ambitious. It is unclear 
what has replaced it to guide agencies all in the right 
direction. Developing these tools is important to give this 
clear sense of future direction and priorities, and to measure 
how far we are in setting up the environment, as well as how 
much sharing has improved and what is left to achieve.
    Turning now to the issue of State and local fusion centers, 
our work on such centers showed that they vary widely but face 
some similar challenges. The Federal Government is helping to 
address these challenges, but they are not yet resolved. States 
and localities created centers to fill information gaps the 
Federal Government could not. The centers range in maturity and 
capability. Most focus on collecting information on all crimes 
or all hazards, not just terrorism; and most of it is collected 
by law enforcement entities, but partnered with many other 
State and local agencies and have Federal personnel assigned.
    A number of centers reported challenges: Having to manage 
too much information and too many systems; finding specific 
operational guidance and analyst training; finding and keeping 
qualified personnel; negotiating the Federal grant process; and 
of most concern, sustaining center operations long term.
    DHS and DOJ are helping to address these challenges by 
providing people, guidance, technical assistance, training, 
system access, and grant funding. But we recommended that the 
Federal Government better determine the long-term support it 
expects to provide these centers. The Administration addressed 
this to an extent in the 2007 National Information Sharing 
Strategy. In addition, provisions in the 9/11 Commission Act 
address support for fusion centers. And a new bill to remove 
grant restrictions on personnel funding addresses a concern 
centers also voiced.
    Finally, in regard to protecting sensitive information, in 
March 2006, we reported that agencies were using a myriad of 
different labels to designate information as sensitive but 
unclassified, as well as confusing and conflicting rules about 
handling it, thereby discouraging some sharing. We recommended 
that the government streamline these practices. The President 
recently issued a policy calling for the use of a uniform 
controlled and classified information label and providing 
several options for handling dissemination. This is a good 
start. But as our work demonstrated, it will be important to 
ensure individual agencies have their own guidance with 
specific examples as well as training to help employees 
determine what information should bear this label. They will 
also need an effective set of internal controls, such as 
supervisory review and audits, to ensure employees make 
accurate decisions so as not to inhibit sharing.
    Mr. Chairman, this concludes my statement, and I would be 
happy to answer any questions.
    Chairman Lieberman. Thanks very much, Ms. Larence. Good 
beginning.
    Ambassador McNamara, welcome. You are next.

   TESTIMONY OF HON. THOMAS E. MCNAMARA,\1\ PROGRAM MANAGER, 
  INFORMATION SHARING ENVIRONMENT, OFFICE OF THE DIRECTOR OF 
                     NATIONAL INTELLIGENCE

    Mr. McNamara. Thank you, Mr. Chairman, and I would like to 
thank you and the Committee for the opportunity to be here with 
the other members of the panel to talk about the progress in 
terrorism information.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. McNamara appears in the Appendix 
on page 59.
---------------------------------------------------------------------------
    Just over 2 years ago, I was appointed program manager for 
the Information Sharing Environment (ISE) with a clear mandate 
defined by statute and the presidential directives to improve 
the sharing of terrorism-related information among those 
responsible for protecting our Nation from attacks. There was 
much to do and much pressure to move quickly. We had, however, 
no Information Sharing Environment to use as a model. No 
precedents existed, at least not in government.
    My charge was not to create the Information Sharing 
Environment from scratch. Instead, the Congress and the 
President instructed me to work with others at all levels of 
government to build and expand on existing communication and 
sharing capabilities.
    I am pleased to report that priorities were set, 
initiatives were taken, and collaboration has been the hallmark 
of this effort. We have accomplished a great deal in a short 
period of time. We have defined the path to be taken in 
establishing the ISE. The Information Sharing Implementation 
Plan and the President's strategy outlined that path.
    The initial functioning of the ISE is underway, and it is 
beginning to have an impact on how the government does 
business. This is the beginning of a cultural transformation 
that if it is continued for an extended period, can make the 
ISE a routine and necessary part of government functioning.
    Our second Annual Report to the Congress is very specific 
about how information sharing has improved through our efforts. 
And by ``our,'' I mean the Project Managerof the Information 
Sharing Environment (PM-ISE) office that I head, the 
Information Sharing Council agencies that have worked on this, 
the Office of Management and Budget (OMB), the White House, our 
State, local, tribal, and private sector partners above all, 
and this Congress--all of whom have worked in partnership to 
bring about these accomplishments.\1\
---------------------------------------------------------------------------
    \1\ ``Annual Report to the Congress on the Information Sharing 
Environment,'' June 2008, submitted by Mr. McNamara appears in the 
Appendix on page 64.
---------------------------------------------------------------------------
    I want to quickly list and highlight just a couple of the 
changes that I think are important. There are many more.
    The first, sharing with State and locals. A framework for 
sharing information among Federal, State, and local and tribal 
governments and the private sector is being implemented. The 
framework is designed with substantial input by State and local 
officials. We consulted with them. I want to highlight just two 
areas that are a very high priority. The one is that we have a 
functioning Interagency Threat Assessment and Coordination 
Group now established and operating in the NCTC. This brings 
together Federal, State, and local partners and personnel who 
work side by side in developing and producing intelligence 
products that are specifically designed for State and local 
consumers, a first in the Federal Government.
    Second, we have laid the foundation for a national network 
of State and major area fusion centers. This network is 
functioning at a very preliminary stage now, but it is getting 
stronger by the day and by the month. Today, there are over 50 
fusion centers in operation nationwide. DHS, FBI, and other 
Federal agencies have personnel in many of these centers, and 
these centers are being connected to classified and 
unclassified Federal information systems.
    The second area was already mentioned by our colleague from 
the GAO. The President has issued a new standardized procedure 
for handling the otherwise chaotic jumble of information known 
as ``sensitive but unclassified.'' This new regime, called 
Controlled Unclassified Information came about as a result of 
the work of the Office of the PM-ISE and several of the 
agencies on the Information Sharing Council.
    Protecting privacy and legal rights. This has from the very 
beginning been at the top of our agenda. There are now 
Information Sharing Environment privacy guidelines, there are 
implementing procedures for those guidelines, and there is a 
user's manual for Federal agencies to use to ensure that all 
the activities taken in the context of the Information Sharing 
Environment protect the information privacy rights and other 
legal rights of Americans. Every agency has a designated senior 
privacy officer, and we have an ISE Privacy Guidelines 
Committee. Most of those privacy officers sit on that 
committee. We are working with our partners to see if we cannot 
come up with a common way to incorporate those privacy 
guidelines in the rules and regulations that govern State and 
local information sharing.
    Finally, Suspicious Activity Reports (SAR). You mentioned 
this, Senator. We are implementing a standardized process for 
sharing information related to these suspicious activities by 
State and local authorities. It will help to detect terrorists 
operating in our local communities while at the same time 
ensuring that the information, privacy, and other legal rights 
of Americans are protected. This standardized, mostly common 
approach is being implemented over the next year in a pilot 
program. And I want to commend at this point the Los Angeles 
Police Department and its chief, William Bratton, for the 
foundational work that they have done to create a SAR model 
that can be replicated by other localities. And I also want to 
commend the Bureau of Justice Assistance, the Major City Chiefs 
Association, and the International Association of Chiefs of 
Police that are working closely with the LAPD and with my 
office to incorporate the LAPD process into our pilot program. 
We are listening to the State and local authorities.
    Although I am pleased with the progress we have achieved, I 
am not suggesting we have finished the job. Far from it. The 
ISE is functioning, albeit haltingly, and not at all in some 
areas. But we have laid the basis for a fully functioning ISE 
in the future. We are, to use Churchill's famous phrase, ``at 
the end of the beginning.''
    The challenges to the Information Sharing Environment are 
not to be underestimated. Information silos, cultural habits, 
budget limitations, bureaucratic inertia, and other barriers 
that inhibit sharing are very strong, and they are impeding 
progress. The progress I have described today in my oral and 
written testimony has been a hard one. It is unfinished, 
definitely. It must be developed further and then 
institutionalized and ingrained in our work cultures if it is 
to be a long-term implementation.
    I would point out that the real power to implement, 
however, rests with the major Federal departments whose 
planning and budgets are not yet focused on the ISE. As program 
manager, I have sought to champion interagency collaboration to 
build that Information Sharing Environment. In doing this, 
there are three characteristics that have been critical to the 
success of the office.
    First, the PM-ISE acts as the honest broker in the 
interagency consideration of the issue, and it operates as the 
honest broker because it has no turf to defend.
    Second, the PM-ISE office is bureaucratically neutral. It 
has no agency axe to grind, and, in fact, it operates outside 
of the agency context that, in fact, defines the interagency 
largely.
    And, third, the PM-ISE office has the authority to build 
the ISE provided it does so by cooperating and coordinating 
with our Federal, State, local, tribal, and private sector 
partners. I am called the information manager, and I am indeed 
the program manager for information. But I am also in large 
measure the program coordinator. I don't have a budget that can 
implement the program. I rely on the budgets of the agencies.
    I hope that you understand and that the Committee realizes 
that these characteristics have been essential to the success 
and they will be essential to the future success of the ISE.
    Thank you for the opportunity to speak to the Committee, 
and I welcome any questions.
    Chairman Lieberman. Thank you for that good report, 
Ambassador.
    Next is Charles Allen, Under Secretary for Intelligence and 
Analysis and Chief Intelligence Officer at the Department of 
Homeland Security. Thanks again for all your public service, 
Mr. Allen, and we look forward to your testimony.

     TESTIMONY OF CHARLES E. ALLEN,\1\ UNDER SECRETARY FOR 
INTELLIGENCE AND ANALYSIS AND CHIEF INTELLIGENCE OFFICER, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Mr. Allen. Thank you, Chairman Lieberman. It is a pleasure, 
and ``Charlie Allen'' is a fine introduction. I don't need 
anything else.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Allen appears in the Appendix on 
page 129.
---------------------------------------------------------------------------
    I really want to commend your Committee for the work that 
it did in helping create this environment for the sharing of 
terrorism information through the Intelligence Reform and 
Terrorism Prevention Act of 2004. And I am pleased to have an 
opportunity today to talk about what the Department is doing in 
cooperation with its Federal, State, local, tribal, and private 
sector partners to ensure that the phrase ``information 
sharing'' is not just a buzz word but that it really does 
reflect action on the part of the Department in helping share 
information with its principal stakeholders, particularly at 
the State and local levels. It is a great pleasure to be here 
to appear with my colleague Ambassador McNamara, with Skip 
Thomas, with my old friend from the CIA, Jeff Smith, with whom 
I worked some years ago, and also to have the GAO offering a 
very good overview of where we are in the area of information 
sharing.
    We at the Department have a statutory mandated role in the 
Homeland Security Act of 2002, which you had a lot to do with, 
that is very distinctive in the intelligence community because 
of our unique set of customers and our focus on the homeland. 
This role is made even clearer in implementing the 
recommendations of the 9/11 Commission where the Department was 
designated as having the lead responsibility for the Federal 
effort to integrate State and local fusion centers into a 
National Fusion Center Network to which Ambassador McNamara 
alluded. And as the Under Secretary for Intelligence and 
Analysis, I am responsible for implementing those mandates on 
behalf of the Secretary and the Department, and I want to 
explain some of the things that we are doing.
    Achieving the Department's information-sharing mission 
requires people and tools, and we have devoted significant 
resources to providing both of these. Within my office, my team 
has created the Department's State and Local Fusion Center 
Program Management Office to build essential relationships with 
the fusion centers. Through the program office, we have 
deployed intelligence officers to 25 fusion centers that serve 
alongside with their State and local partners. We are going to 
have 10 more intelligence officers deployed by the end of the 
year, and these men and women serve at the front line for 
information sharing. They are providing State, local, tribal, 
and even other Federal partners with the information they need 
to keep America safe. These same skills permit them to cull the 
best of what fusion centers are collecting and analyzing and 
ensure that these data get to the appropriate people in other 
States, as well as here to the Federal Government.
    DHS is committed to providing fusion centers with the 
information-sharing tools they need to participate in the 
Information Sharing Environment described by Ambassador 
McNamara.
    At the Secret level, we have deployed the Homeland Secure 
Data Network (HSDN). This network is now in 23 fusion centers, 
and we are working to deploy it to 17 more by the end of the 
year. Among other things, the network provides access to NCTC 
On-line classified portal that maintains the most current 
terrorism-related information at the Secret level. The network 
also provides the fusion centers with a window into the 
National Intelligence Community that they can use for their own 
information needs. Ultimately, every fusion center with this 
network access will have its own web page where relevant State 
and local products can be posted and made available to other 
fusion centers and, of course, to the National Intelligence 
Community.
    At the unclassified level, the Homeland Security 
Information Network's Intelligence portal provides more than 
8,000 people with access to finished intelligence products. To 
better foster collaboration and share the best practices and 
lessons learned within the fusion center network, DHS also 
sponsors the Homeland Security State and Local Intelligence 
Community of Interest, which we call Homeland Security SLIC. It 
is a virtual community of intelligence analysts, hundreds of 
them. Its membership has grown significantly in the past year. 
We have 43 States participating in SLIC, as well as the 
District of Columbia, and seven Federal departments. This is a 
way that intelligence analysts across the country can 
collaborate via threat conferences, biweekly at the Secret 
level with secure video teleconferences, and in a virtual 
community of interest on the Homeland Security Information 
Network (HSIN) intelligence platform. SLIC also sponsors 
Secret-level conferences that are annual analytic conferences, 
and we have at least on annual theme-oriented conference per 
region.
    DHS also is working to ensure that information we share is 
what our partners need. To do this, we undertook a project with 
six fusion center partners to examine day-to-day information 
needs of the fusion centers. As a result, my office was able to 
develop a set of priority information needs for the fusion 
centers. We are now seeing joint analytic products serving all 
levels of the government and the private sector being written 
by fusion centers in conjunction with DHS and the FBI.
    The Department also is providing leadership to important 
multi-agency organizations dedicated to improving information 
sharing with our non-Federal partners. An important piece of 
multi-organizational efforts is the National Fusion Center 
Coordination Group, a Federal-State partnership that was 
established as part of the Information Sharing Environment. The 
Director of my State and Local Fusion Center Program Management 
Office serves as co-chair of this important group with the 
Deputy Director of Intelligence at the FBI. The coordination 
group has had success in fostering the development of fusion 
centers and bringing them into a cohesive partnership at the 
State and local level as well as with the Federal partners.
    On the content side, Ambassador McNamara talked about the 
Interagency Threat Assessment and Coordination Group (ITACG), 
which was established at the direction of the President and 
implementing recommendations of the 9/11 Commission Act of 
2007. This is to facilitate increased sharing of 
counterterrorism information between the National Intelligence 
Community and with our State and local partners. By pulling 
together in one place an outstanding group of Federal, State, 
local, and tribal homeland security, law enforcement, and 
intelligence officers at the National Counterterrorism Center, 
there is now a focal point to guide the development and 
dissemination of Federal counterterrorism intelligence products 
through DHS and the FBI to our State and partners.
    The ITACG achieved Initial Operating Capability on January 
30. It is led by one of my senior intelligence officers who 
serves as its Director. The Deputy Director is a senior analyst 
from the FBI. Currently, the team includes four law enforcement 
officers from State and local police departments who work full-
time at NCTC. We are working to expand this to at least 10 non-
Federal participants from a broad range of expertise, including 
fire and health departments, homeland security advisers, and 
other organizations as needed.
    The ITACG members have essential systems connectivity in 
NCTC, participate in key briefings, and are engaged in the NCTC 
production processes and activities so that they have a broad 
perspective of the intelligence community, which then they can 
share information down to the State and local levels.
    I chair an Advisory Council of the ITACG on behalf of the 
Secretary. The council, of which at least 50 percent of the 
members must represent State, local, and tribal organizations, 
has become a very robust organization. It includes 
distinguished Americans, including the Lieutenant Governor of 
Nebraska. It meets at least four times a year, but I have 
decided as Chair to meet every month. We either meet face to 
face or in teleconference. So I am very pleased that the ITACG 
is truly up and operating effectively.
    We are also establishing an attractive Fellowship Program 
so that we can get the very best from our State and local 
governments, both law enforcement and non-law enforcement 
officers to serve in the ITACG. And I am very proud of what we 
have assembled, both for the detail and for the Advisory 
Council.
    I have only touched on a few areas of where the Department 
is engaging in information sharing involving its partners at 
the State and local level. I think we are making real progress. 
We believe that information sharing is central to our mission. 
It cannot be an afterthought. The Secretary and I remain 
committed to implementing the information-sharing mandates of 
both the Intelligence Reform and Terrorism Act, the Homeland 
Security Act, and the 9/11 Commission Recommendations Act of 
2007. We also work to protect civil rights and civil liberties 
and privacy, as Ambassador McNamara pointed out.
    I look forward to your questions.
    Chairman Lieberman. Thanks very much. I was just thinking, 
as I was listening to you, because you have been involved in 
intelligence work on our Nation's behalf for quite a while, 
that you have seen some remarkable changes occur. I take it 
beyond the written word that you have just given us, this is 
quite a change from not so long ago in the intelligence 
community. Am I right?
    Mr. Allen. You are absolutely right, because I have worked 
very closely with the National Intelligence Community, being a 
CIA officer for some decades, and the lack of information 
sharing among intelligence community agencies, it may have been 
a model that worked in the Cold War. We did not make the 
changes that were required. We did not break down those 
barriers in the 1990s when we should have. And as a result, 
this country suffered greatly. We can never afford to do this 
again, Senator, and I will do everything in my power to ensure 
that we continue to change and build the culture that Mr. 
McNamara is trying to build.
    Chairman Lieberman. I know you will and you have, and I do 
not want to jump ahead, but I do think that listening to the 
testimony--we will go on now--there ought to be reassurance to 
the American people insofar as they know about what we are up 
to. And in some sense there ought to be deterrence to our 
enemies that we have not only raised our guard but broadened 
it, if I can put it that way.
    Mr. Allen. At every level, in the private sector, State and 
local, and at the Federal level, our air, land, and sea 
borders, it is tough. And we are making it tougher every day.
    Chairman Lieberman. Yes. Thanks.
    OK. Commissioner Thomas, great to have you here from 
Connecticut, and I appreciate now hearing from the State 
perspective about the question at hand.

 TESTIMONY OF JAMES M. THOMAS,\1\ COMMISSIONER, DEPARTMENT OF 
     EMERGENCY MANAGEMENT AND HOMELAND SECURITY, STATE OF 
                          CONNECTICUT

    Mr. Thomas. Thank you very much, Senator Lieberman. Just 
for the record, my name is James M. Thomas, and I am the 
Commissioner for the Connecticut Department of Emergency 
Management and Homeland Security, and I am here to talk to you 
about the Intelligence Reform Act.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Thomas appears in the Appendix on 
page 145.
---------------------------------------------------------------------------
    I want to start off to tell you that in my 39 years of law 
enforcement experience, I have never seen such a strong 
willingness for people to come together and share information. 
It was not always like this, and it has taken place as a result 
of September 11, 2001, I am sure.
    We work very closely with the Department of Homeland 
Security, and they work not only with our State but all the 
other 50 States. As I am here today, our colleagues are in New 
York City meeting with New York, New Jersey, and the other New 
England States on interoperability and information sharing. 
Monday of this past week, we were in New York City, again, 
sharing information.
    I have participated in and seen the benefit of this 
collaborative approach, not only in Connecticut but throughout 
the country. I think DHS has set some standards, guidelines for 
fusion centers. Everybody is following those standards. That is 
what we need to do. I think it is very important.
    I think that since September 11, 2001, under the leadership 
of Charlie Allen and Secretary Chertoff, DHS has been a leader 
providing training, expertise, and analysts to help us get 
going in this critical mission, and DHS has been successful in 
preventing future terrorist attacks.
    I think the key for me--and I came from a local law 
enforcement agency to the State-level--to terrorism prevention 
is good, timely intelligence. The motto, which is in our State, 
should be ``Gather, evaluate, analyze, and then share 
information.'' That is our motto. Every single piece of paper 
we put out, we talk about gathering information at the local 
level, passing it up to the State level, analyzing, and then 
sharing it. That is what we do 24 hours a day, 7 days a week.
    I can tell you that in our part of the country information 
sharing has never been better. For example, this week, and 
every week, the Connecticut Intelligence Center weekly bulletin 
is shared with 169 towns in our State and with tribal nations. 
It includes information from the local law enforcement, State 
Police, Department of Corrections, Federal agencies such as 
FBI, ATF, DEA, TSA, U.S. Coast Guard, and DHS. The Connecticut 
Intelligence Center weekly bulletin--I brought ours in. It has 
reports from New York, New Jersey, and the other five New 
England States.
    I think the key thing for us is we can issue these 
bulletins on an hourly basis, a daily basis, or they always 
come out every single week. As a former chief of police in two 
communities, I want to make sure it is hitting the street where 
the officers need it. I think that is where we are going to 
make the difference in terrorism-related situations. So when I 
am out--and I am one of these people who goes out to talk to 
the police departments, and I want to talk to the officers in 
the field--I am assured every single day from the patrol 
officers to chiefs and other command people that they have the 
information, they are receiving it. They have never seen 
anything like it in all their careers either.
    I think that if we do not do this, this is clearly a big 
mistake and I appreciate the work you have done, Senator, and 
that the DHS, FBI, and others have brought into this 
collaborative effort. There is too much risk if we do not share 
information with each other. The men and the women out in the 
field are professionals. They are on the front line. They 
deserve the very best means of preventing or stopping a 
terrorist incident from happening.
    I think the key for us is, again, it must be done at the 
local level. That is where the information is. In our State, we 
ask every organized police department to put an intelligence 
liason officer (ILO) program in place. We at the State level 
put five regional intelligence officers (RILOs) out. Our five 
regions in the State of Connecticut touch base every single day 
with the ILOs. That is where the information comes in. We 
gather it, we analyze it, we disseminate it. I think the ILO/
RILO program we have in our State is really what makes our 
State unique, and it is really working well.
    In our Intelligence Center, we have local officers, State 
officers, Federal officers. You would not know who they are and 
what agency they are from. We also have analysts primarily from 
FBI, Homeland Security, TSA, Coast Guard, and the governor has 
authorized us to hire a State analyst also.
    I think it is really important that we also engage the 
private sector, and, again, really through the Department of 
Homeland Security, Mr. Allen's office in particular, we have an 
analyst in the State of Connecticut. She provides us with what 
we call ``open source documentation,'' stuff that is out there 
that is non-classified, but very important information, and it 
is given to us at a State level, a regional level, national, 
international. We take this information. which is open source. 
We put it on our secure portal. We make it available to people 
on our State portal with the private sector.
    As a result of engaging the private sector, we are getting 
information from them on a daily basis. We have a very 
effective Suspicious Activity Report (SAR) program, in 
Connecticut. We think it models what they are doing in Los 
Angeles, but we are always looking for change, and we are 
looking for the best possible practice.
    In conclusion, times have changed. The threat of terrorism-
related activities is real and a constant concern. So the way 
we do business needed to change. This change is now taking 
place. I believe and hope that your Committee will continue to 
support and fund the fusion centers that have been developed 
and will support our goal of having well-trained intelligence 
analysts from the Federal, State, and local agencies working 
side by side analyzing the information and intelligence that 
they receive and, most importantly, disseminating it back to 
the street where it needs to be shared.
    This past March, the Department of Homeland Security and 
the Department of Justice sponsored a National Fusion Center 
Conference. All 50 States, territories, and possessions were 
there. Highly interactive. I was there. And I could tell you, 
working together, we can and will make a difference. We need to 
work together like we have never done it before, and if we work 
together, I honestly believe the United States will be a safer 
place.
    I see the first responders--the local and the State 
officers--as first preventers. They are the ones who are going 
to make the decisions out in the field. And our State and I 
think a lot of States are also doing that through the mobile 
data terminals. An officer in the field, through their little 
computer in the car, has access to our intelligence briefing--
again, hourly, daily, and weekly. Information is really at 
their fingertips, and we are very pleased for that.
    Again, thank you very much for the opportunity to speak to 
you today, Senator. I am proud of what we are doing in 
Connecticut, but, more importantly, I am proud of what we are 
doing on a regional basis and the national level under your 
leadership.
    Chairman Lieberman. Thanks very much, Commissioner. I am 
grateful for what you are doing in Connecticut and beyond.
    Just while I think about it, say a little bit more about 
the involvement of the private sector because that is, 
obviously, critical in terms of the control of critical 
infrastructure but more generally. Are they self-motivating in 
this area?
    Mr. Thomas. Yes, I think we realize that, just from a 
security viewpoint, you take any urban area in the State of 
Connecticut and 85 percent of the assets are owned by the 
private sector. They need and support the Federal Government 
and State government. They want to be engaged. They even have 
their own security forces that sometimes outnumber the local 
law enforcement by 10-fold. In a city like Hartford or New 
Haven, they may be lucky if there are 70, 80 officers in the 
field. There are thousands of private security. If we can 
engage them, they know what is happening, and they see 
suspicious activity. If they trust us and we have a 
relationship with them, which I think is critical, they will 
report suspicious activity. That is where it is. We think that 
working with the private sector is a smart thing to do. We are 
doing it in Connecticut. We have had many conferences with 
them. They want to be engaged with us, and we are doing that.
    Chairman Lieberman. Great. Thanks very much.
    Our final witness on the panel is Jeffrey Smith, a partner 
at Arnold and Porter, previously with the Central Intelligence 
Agency, a real expert in this field. Thanks for being here, 
Jeff. I look forward to your testimony.

  TESTIMONY OF JEFFREY H. SMITH,\1\ PARTNER, ARNOLD AND PORTER

    Mr. Smith. Thank you, Mr. Chairman. It is a pleasure to be 
here and to appear on this panel and to thank the Committee in 
person for the efforts that you have done over the years.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Smith with an attachment appears 
in the Appendix on page 149.
---------------------------------------------------------------------------
    I have been asked to appear this morning because of my 
service on the Markle Foundation Task Force, and under the 
leadership of Zoe Baird and former Netscape CEO Jim Barksdale, 
the Markle Foundation convened a bipartisan task force, of 
which I am a member, to examine national security in the 
information age.
    Let me emphasize at the beginning that I am appearing here 
today on my own behalf, not on behalf of the task force, 
although I have consulted with several members of it.
    This diverse group met with government officials, private 
industry, experts on technology and civil liberties, and 
foreign partners in order to find solutions for this critical 
information-sharing problem. We issued a series of reports and 
advocated the creation of a trusted information-sharing 
environment that ensures the twin goals of national security 
and civil liberties. I am pleased that the government has taken 
many of our recommendations to heart, and this Committee 
deserves special recognition for the role it has played.
    As the GAO found in its report released today, the 
Information Sharing Environment has improved dramatically. The 
Congress, the President, and the intelligence community have 
made much progress, although much still needs to be done. 
Significant cultural, institutional, and technological 
obstacles remain. There is reason to be concerned that the 
initial focus and momentum have dissipated a little bit, while 
confidence in the process and deliverables has decreased. I 
don't mean to be the only one speaking negatively, but we are 
picking up some of this, I think, despite the really 
extraordinary efforts of Ambassador McNamara, Charlie Allen, 
and others. One cannot allow the recent reforms or the absence 
of a new attack on our homeland to lull us into complacency.
    It is true, as you say, Mr. Chairman, the Nation is 
certainly safer, but our enemies get smart as well, and we need 
to stay one step ahead of them.
    As our task force recommended, this effective information-
sharing environment must be built on trust. The agencies must 
trust each other with sensitive information. The American 
people must trust their government to protect their civil 
liberties and privacy. Realization of this trust environment 
urgently requires sustained leadership and strong oversight 
from all branches of government; clear policies, processes, and 
guidelines; and technologies that facilitate sharing while 
protecting privacy and security.
    The Markle Task Force will continue to assess the 
government's progress, and we are currently preparing a report 
card that will make what we hope to be constructive 
recommendations to give to the next President and to Congress 
that will help the Nation move forward in its information-
sharing system.
    Let me touch on a few issues. I have a longer prepared 
statement, Mr. Chairman, but let me just touch on a few of 
these.
    Congressional leadership is needed to proactively exercise 
oversight responsibilities and provide adequate funding for the 
implementation of information-sharing provisions. There is a 
lot of new legislation that has passed, but I also urge the 
Congress to stay on top of this. I also worry a little bit 
about the overlapping jurisdiction of some of the oversight and 
appropriations committees, which is always a difficult issue up 
here. As the Chairman will remember, I was General Counsel of 
the Armed Services Committee for a while, and I am very 
familiar with these issues. I know it is difficult, but I hope 
the Congress will take a hard look at these issues.
    Presidential leadership is also necessary to steer 
implementation across agencies, facilitate the kind of cultural 
transformation that is required, and encourage public 
confidence in the government's information-sharing policies. 
The White House has recently issued a comprehensive 
information-sharing strategy, standardized the classification 
system, and streamlined the security clearance process. All 
good moves.
    Earlier this year, Ambassador McNamara released his second 
Annual Report to Congress. I commend you for your work and that 
of your colleagues. The Executive Branch efforts have initiated 
a paradigm shift from a ``need to know'' to a ``need to share'' 
culture.
    I also welcome the GAO's report and Charlie Allen's effort. 
However, the Administration must ensure that transforming the 
government in order to improve information sharing and 
collaboration is an urgent priority that does not wane or fall 
victim to turf battles and ambiguity about responsibility and 
authority.
    Finally, leadership is needed at the State and local level 
to improve coordination, standardize information-sharing 
procedures, and evaluate progress. I am impressed by what 
Commissioner Thomas just reported to us, that there has been a 
lot of progress. Again, we continue to hear occasional problems 
at the fusion centers that have their roots not in bad 
intentions, but in inadequate sharing of information and a 
certain amount of turf warfare that is inevitable in any 
organization.
    Let me talk about two or three of the most important policy 
recommendations of the Markle Task Force. I have listed others 
in my statement, but let me touch on just a couple.
    First, a core recommendation of the Markle Task Force is 
the adoption of an authorized use standard. Under such a 
standard, agencies or employees could obtain mission-based or 
threat-based permission to access or share information, as 
opposed to the current system which relies on place-of-
collection rules, U.S. Person status, or originator control--
ORCON--limitations. The Administration has looked at this and 
said that they thought adopting that would be difficult because 
of privacy guidelines. I am confident that if we work hard, an 
authorized use standard is achievable.
    Also, let me touch briefly on an issue of enormous 
importance to all of us--the protection of privacy and our 
civil liberties. The ISE has issued guidelines that require 
that information sharing complies with the Constitution. Each 
agency now needs to develop its own guidelines consistent with 
the ISE's.
    As this Committee knows, the law also established the 
Privacy and Civil Liberties Oversight Board, and that 
functioned briefly. However, after its first report in 2007, 
one of its members resigned because he believed that the board 
interpreted its responsibilities too narrowly and lacked 
sufficient independence from the White House. In response, 
Congress wisely reconstituted the board as an independent 
agency within the Executive Branch. By statute, the board 
should have been up and running by January 30 of this year. It 
is regrettable that a full slate of new board members has 
neither been nominated nor confirmed. And the Congress and the 
President should breathe new life into this important 
institution, if not this year, surely in the new 
Administration.
    We also have called for greater training and development of 
human capital. We have talked about measures to improve 
decisionmaking by officials. The Director of National 
Intelligence (DNI) has done a great job in focusing on greater 
use of open source information. The success of the mission 
managers for hard targets like North Korea and others have 
proven to be a big success. I think they go a long way, but we 
still have a ways to go.
    I also believe that we need to focus on vertical 
integration of State, local, and private actors. The 
Interagency Threat Assessment and Coordination Group has begun 
to support the NCTC by sharing Federally coordinated 
information with others. That is important.
    Finally, the status of technology. We believe in the Markle 
Task Force that there is some technology that can be extremely 
valuable to achieving this goal of improving our security and 
protecting civil liberties. These include the use of immutable 
audit logs and anonymizing information technology. Again, the 
Administration has looked at these and said that they are not 
convinced that the technology exists. Well, let me state that 
differently. They believe it exists, but have reservations 
about the expenses associated with trying to adopt it and the 
good results that could be achieved. Our view in the task force 
is that this technology is there, can be adapted, and we urge 
the Administration and Congress to consider funding this 
technology.
    Mr. Chairman, I look forward to your questions. The Markle 
Task Force will continue its work with Congress. It looks 
forward to working with the transition team for the new 
President, and as I said earlier, we hope to make some 
recommendations to the new Administration. We do this on a 
bipartisan basis. This is far too important for any partisan 
issues to creep in. That has been the way our task force has 
worked. That is the way this Committee has worked. And we look 
forward to working with you.
    Chairman Lieberman. Thanks, Mr. Smith. Very helpful.
    Incidentally, the Markle Task Force has followed the lead 
of the 9/11 Commission in that your members have stayed active 
and continue to monitor progress in this area. It is very 
important.
    Take a minute and just tell us a little more about a word 
that we do not see in use much here on Capitol Hill. It is 
called ``anonymization.'' I guess I had a double meaning in my 
reference, but now I mean a singular meaning. Tell us about 
anonymization technology.
    Mr. Smith. Anonymization technology is technology that 
permits information to be shared without identifying the person 
about whom the information describes. In other words, in the 
current rules, based on old technology, we have a series of 
minimization procedures in which if we acquire information that 
has the name of an American citizen, that is stricken and that 
name can be disclosed with proper authorization.
    Anonymization would permit looking across much broader 
pieces of data banks, data information, and looking at that 
information to detect patterns, but at the same time not 
identifying to the user the names of the American citizens who 
might be in that data bank. And it is very sophisticated 
technology that we believe would permit the government to do 
some of the things it needs to do without impinging on the 
privacy of American citizens.
    Chairman Lieberman. Understood. Charlie Allen, do you have 
a reaction to that? Is that something we should be investing 
in?
    Mr. Allen. Well, I think we have to look at all such tools 
because, as you know, part of our issue has been how to 
lawfully and appropriately use information on U.S. persons. And 
I agree with the Markle Foundation recommendations ought to be 
fully examined as a tool to do this.
    The main thing we have to do is what I do, that all my 
officers, including myself, take every year very rigorous 
review of how to handle U.S. information. There has to be 
reasonable belief before us to use that type of information. We 
just do not use any information on U.S. persons. It has to be 
used with great rigor and great oversight from our Legal 
Department.
    Chairman Lieberman. Let me ask this question, and I suppose 
appropriately it should be to Charlie Allen, Ambassador 
McNamara, and Commissioner Thomas. You have given us some 
encouraging reports as to the progress we have made on 
information sharing since September 11, 2001. I wonder, within 
the bounds, obviously, of either--this is another form of 
anonymization, as I think about it--not disclosing classified 
information or discussing cases that have become public in some 
way, whether you can put a little flesh and bone on this. In 
other words can you bring to mind any specific situations where 
the new information-sharing environment has actually helped you 
to connect the dots in a way that allows you to take action you 
would not otherwise take? Obviously I do not need names here if 
they are not public. Do you have any that comes to mind, Mr. 
Allen?
    Mr. Allen. I think absolutely where we had some arrests in 
South Carolina last year--first responders, as Skip Thomas 
pointed out, were very vital. That information we immediately 
put at the Federal level, involved the State of Florida.
    Chairman Lieberman. So it came from first responders?
    Mr. Allen. Absolutely, and I was called on a Saturday 
night, and I activated my officers in both South Carolina and 
in Florida, and we had a lot of information that I could 
immediately brief the Secretary on.
    So the information-sharing examples--we just recently had 
one over the 3rd and 4th of July. It was a minor incident that 
turned out to be a criminal event back in the Northeast. But 
initially it was--it did give us some alarm, but working with 
State and local officials, who were very open, we were able to 
run traces and checks and found out it was a criminal action 
and had nothing to do with terrorism at the time. But it did 
give us concerns initially, and I remember talking to the 
Secretary even about the issue.
    So we have had incidents here, incidents in California 
where Chief Bratton and others have called upon the Federal 
Government, NCTC, and ourselves to quickly supply information, 
as well as the Bureau. It is a whole new culture. It is 
learning to collaborate and work together in ways that are 
absolutely unprecedented.
    Chairman Lieberman. So in the South Carolina case, did 
local first responders apprehend someone or see something 
suspicious?
    Mr. Allen. They stopped a car that was speeding, and then 
because of the suspicious behavior of the occupants, they then 
detained the individuals, and as a result of that, without 
getting into the particulars, it is clear that it became an FBI 
investigation case.
    Chairman Lieberman. Excellent. Commissioner, do you have 
any examples?
    Mr. Thomas. Yes. I think what Mr. Allen had indicated to 
you is a prime example I believe. It is going to be an officer 
in the field, a trooper in any one of the 50 States who can 
make a routine stop, run a name through the computer, and if 
there is cause--and that is what happened in South Carolina, 
and as a result, information was developed. And I have seen it 
just on a practical basis. That is why in Connecticut we do an 
all-crimes approach. We do everything from--you name it--
murder, rape, robbery, or assault. That bulletin hits the 
streets. It is full of photos of suspects, actual crimes that 
have occurred. And I will tell you, within hours sometimes many 
cases are solved. Others lead to other situations.
    Chairman Lieberman. Because you are running them through 
other databases.
    Mr. Thomas. Correct. And, it crosses State lines, and it is 
amazing. It is a tremendous source of information. It is 
effective, and people really trust each other. And when the 
people in the field know that they are being heard and they 
have credibility, they are really likely to give you more 
information.
    Chairman Lieberman. Ambassador, do you have any examples?
    Mr. McNamara. I think the best example I can give is a 
pilot program that we ran with the FBI, my office and the FBI, 
in which we actually took the information from the databases, 
and we were able to move it to a controlled environment that 
allowed BlackBerry access to it by law enforcement officers on 
the street in New York and Washington, DC. In doing this, we 
found that they were able to pinpoint much more accurately 
exactly who it was they were looking for, who they would find. 
They were able to look at photographs, for example, on their 
BlackBerry while the individual that they were working on was 
present within eyesight.
    The BlackBerry project was so successful that the FBI in 
the end has funded this BlackBerry program for every FBI agent 
and all the Joint Terrorism Task forces (JTTFs) around the 
country. And we hope to see it extended to all the local law 
enforcement officers that work with the JTTFs.
    In practical terms, that pilot program was underway in New 
York at the time of the JFK tank farm case. And it played a 
role in that particular case.
    Chairman Lieberman. That is great.
    My time is up. I will say that by coincidence you have 
before you the two Members of the Senate who may be most 
BlackBerry addicted. [Laughter.]
    We are constantly competing, Senator Pryor and I, to see 
who has the latest version. Perhaps the program that you have 
described, Ambassador, could be extended to the Senators.
    Mr. McNamara. I will see about that, Senator.
    Chairman Lieberman. All right. Senator Pryor, thanks for 
being here.

               OPENING STATEMENT OF SENATOR PRYOR

    Senator Pryor. The Chairman always has a nicer BlackBerry 
than me. It causes a lot of consternation on my part. I am 
always a step behind him.
    Let me start with you, Mr. Allen, and follow up on 
something you said in your statement. You mentioned that the 
Department of Homeland Security is establishing a fellowship to 
allow State and local fusion center analysts to serve on the 
Information Sharing Coordination Group. Can you tell us a 
little bit more about that and what the timetable on that is?
    Mr. Allen. Yes, and this has been a very energized effort 
on our part because we and the FBI, working under the 
management of the National Counterterrorism Center, are 
establishing this Interagency Threat and Coordination Group. 
The FBI had an established program for bringing officers in 
from the State and local level. This is something new to the 
Department of Homeland Security. So we have worked very hard--
my office and my information managers, working with the ITACG 
and the Advisory Council of the ITACG. We have established a 
program where now we have the same kind of incentives and 
benefits essentially that the FBI has in bringing people from 
State and local law enforcement officers, homeland security 
specialists, or health specialists into this ITACG. And it has 
worked out very well because they have to have a place to stay 
here, they have to have some funds to travel home on a 
relatively reasonable basis. They have to have a vehicle in 
order to get around the Washington area. And they have to have 
something that, when they finish their tour of duty here, which 
right now is for a year at a time, that they can go back to 
their own police departments, and this will be a boost to their 
career. Being away from a police department does not help 
unless you have something to really show for it when you go 
back. We are going to train really outstanding people who know 
all-source intelligence, working with all this sensitive 
information, and are able then to help sanitize a lot of it and 
get it down to State and local.
    This experiment, I think, as Ambassador McNamara said, is 
proving to be a very successful, good beginning. We have only 
been in business about 6 months, but we are making progress.
    Senator Pryor. And how many do you think will be in the 
fellowship at any given time?
    Mr. Allen. We hope to have up to 10 people at any given 
time, and then rotate them in and out on a staggered basis, the 
individuals serving a year at a time.
    Senator Pryor. Mr. Allen, let me ask if the DHS strategy 
with respect to supporting State fusion centers, and sometimes 
the Federal Government and the State government have a 
different view of things. Do you feel like that your strategy 
in trying to support State fusion centers has the same 
objectives and goals that they do at the State level?
    Mr. Allen. I think we have the same goals because we deal 
primarily, obviously, against the terrorism threat, but we also 
support, as Mr. Thomas said, all threats to our homeland, which 
is a little broader. So I think our goals are the same. What we 
have to do, of course, is to learn--and in my written 
statement, I talk about how we have run a pilot program with 
six of the fusion centers to make sure we understand fully the 
needs and requirements and the priorities of State and local. 
Because at the Federal level, we provide intelligence obviously 
that may not be as relevant or as useful at the State and local 
level.
    We have learned a lot over the last couple years, so I 
think we have identified the priorities and needs, at least in 
a measured sense at the State and local level, but we have a 
lot to learn, and we are very sensitive to the need to listen 
rather than to transmit from the Federal Government.
    Senator Pryor. And do you see fusion centers playing a 
long-term role with the Department of Homeland Security?
    Mr. Allen. I think they are going to play a role for years 
and decades to come, knitting together in what we call this 
National Fusion Center Network and working horizontally with 
other fusion centers across the country. They are naturally 
sort of grouping into various sectors, like the Southeast, the 
Southwest, and the Northeast. And as they work vertically up to 
the Federal level, I think we are going to see a richer 
exchange of information, and also I think we are going to see a 
safer country, because we are going to be able to hopefully 
detect and disrupt activities that are nefarious and designed 
to hurt this country.
    Senator Pryor. A minute ago, we talked about the Fellowship 
Program that you are establishing right now. Let me ask a 
question on the training that analysts go through. Is it 
important that analysts have a consistent training across the 
country? Or should that training be more individualized on the 
State level?
    Mr. Allen. I think it is important that we at the Federal 
level take the lead because we have been working on 
intelligence training and analytic trade craft for decades. 
Obviously, it has to be changed and modified for the State and 
local intelligence officer, intelligence analyst, but we are 
doing this.
    Right now, with the help of the Director of National 
Intelligence, we are developing a State and local intelligence 
course, which we will have ready by the 1st of October, that is 
really directed at the official use level where we can teach. 
Meanwhile, we are sending mobile teams out to train 
intelligence analysts, and also I am bringing officers in as 
part of my intelligence training program to train my own 
analysts because I have a lot of analysts that need training.
    This is very essential. If we are going to be successful, 
the Federal Government has got to work with the State and local 
to help train those analysts and train them in what we have 
learned over many decades as a result of our experience in the 
Cold War and beyond. The context, the information, and how we 
do analysis are different. But the principles remain the same, 
and the Federal Government has to work very hard with State and 
local government. And I am committed to this, Mike Leiter at 
the NCTC is, I know Mr. McNamara is, and I know the DNI is 
committed to help us train analysts at the State level and 
local level.
    Senator Pryor. And a question we always get from our State 
and local people is who pays for that training.
    Mr. Allen. Well, that is a bit issue, and that is one that 
the Secretary is in a better position to answer. I do know that 
the Secretary has extended working with OMB. We extended for a 
third year intelligence analytic training, and so there is an 
additional year that has come about as a result of the 
Secretary's work with the Office of Management and Budget.
    I believe at a certain level, the Federal Government has to 
be involved because we have the--we work very hard with the 
schools. There is a CIA University. There is a National 
Intelligence University. The Defense Department teaches over in 
the Defense Military Intelligence College. There are a lot of 
tools, techniques, and ways that we should be helping the State 
and local governments, and we need to impart that information.
    Senator Pryor. Thank you, Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Pryor. I appreciate 
your being here.
    Notwithstanding all the improvement that we have made--and 
it really is quite significant, nonetheless, as I indicated 
earlier, GAO continues to put information sharing on the high-
risk list. And I wanted to ask you, Ms. Larence, if you would 
just say a little bit about why and what you are looking for to 
be able to have GAO remove this from the list. In other words, 
what are the parameters of it, first? Is it information sharing 
generally? Is it related to homeland security? What is missing?
    Ms. Larence. It is more specifically related to terrorism 
information sharing as opposed to the homeland security 
emergency response information sharing. And what GAO looks for 
in making the decision whether to take something off of the 
list is: Do we have a clear, organized, and structured plan in 
place; do we have the resources and the commitment in place; 
and do we have a good way to measure progress.
    So we do not wait to ensure that all the I's are dotted or 
all the T's crossed, but if that infrastructure is in place and 
we can demonstrate that it is, then we entertain taking those 
issues off the list.
    We have been working collaboratively with the Ambassador's 
office and the Office of Management and Budget on what the plan 
is for coming off of the list, what commitments they would make 
to the plan, and what it would take to get off the list. And we 
have been monitoring that progress every 6 months.
    Chairman Lieberman. Right. So let me now ask you, 
Ambassador, and perhaps Mr. Allen, how you understand the 
placement on the high-risk list and what you are doing to try 
to get off it.
    Mr. McNamara. Well, it may sound somewhat paradoxical, but 
I welcome the fact that information sharing is on the high-risk 
list because I think it is a matter that demands constant 
attention and a priority position, and things on the high-risk 
list tend to get that attention and get that priority. That is 
also the reason why I welcome the GAO report. It is a fresh set 
of eyes looking at a very complex problem and giving us 
insights into where we need to do better.
    We all welcome the pat on the back when we do well, but it 
is also good to have somebody looking over our shoulders to try 
to help us to do even better.
    I think that the way to get off the high-risk list is to 
institutionalize and routinize the Information Sharing 
Environment. Since we have not yet gotten to the point where 
the Information Sharing Environment is fully functional, that 
is the first thing we have to do. And by making it fully 
functional, I mean, as I said in my opening remarks, that it 
becomes part of the ordinary way in which government does 
business. That has not happened yet, and it is not surprising 
that in a few years--this huge bureaucracy and the complex 
government structure we have, this Federal structure goes out 
to the State and local and tribal areas, and, indeed, there is 
even the cooperation to a more limited extent with our allies 
and partners overseas--it has not become routinized in the way 
in which we hope to have it.
    So I think that by placing the priority on it--and here I 
do disagree with GAO. There is a road map. The initial road map 
was the implementation plan, as I said in my opening remarks. 
That has been refined by the President's National Strategy for 
Information Sharing. Nobody can doubt what the priority areas 
are and what the road ahead is as seen by the Administration, 
writ large. So we are probably a little behind--and here I 
agree with GAO's critique. We are behind in, if you will, the 
metrics of how we measure the progress we have made, but I 
think there is no doubt that we have made a significant amount 
of progress. And, indeed, making the progress, in my book, took 
precedence over measuring whatever progress we made.
    Chairman Lieberman. Yes.
    Mr. McNamara. And I think that the way we are going to get 
off the high-risk list--and I do not think we should come off 
the high-risk list until there has been a determination made by 
the Administration, by the Congress, and by those of us working 
on this, that we have institutionalized a fully functioning 
Information Sharing Environment. And that is some years in the 
future.
    Chairman Lieberman. Mr. Allen.
    Mr. Allen. Mr. Chairman, I agree with my colleague. I like 
to have oversight, and I like to have the pressures. And if GAO 
and you all view our information-sharing work today as high 
risk, I would agree because we are in the very early stages of 
this. We are breaking barriers month after month, and as you 
can see, just forming the ITACG, just building connectivity, 
both unclassified and secure, getting our officers deployed, 
starting to speak the same language at the State and local 
level takes time. With the accesses that we now have, some of 
the information we have is very sensitive, and we have to strip 
out the information from the sources and methods.
    We know how to do this. In the past, we have been reluctant 
to really work at that problem. Now we understand how to do it. 
The security rules are changing. This controlled and classified 
environment, controlled unclassified info (CUI), that we are 
now working on here with Ambassador McNamara is going to help a 
great deal. But it is going to take a while to institutionalize 
this. We are just in the early stages, and we are just in the 
early stages of working and training analysts at the State and 
local level and to intelligence analytic trade craft. But we 
are going in the right direction, and we just need to now push 
a lot harder in the next several years.
    Chairman Lieberman. Interesting. So really you are saying 
flat out that this is not something we should want to see come 
off the high-risk list next year. If it does, you would say it 
would be unjustified because of the tremendous change in the 
status quo that is necessary, but also because of the 
consequences.
    Mr. Allen. I think that, as Ambassador McNamara said, has 
to be a decision made by the Administration and by the 
Congress, and it has to be evaluated.
    Chairman Lieberman. Right.
    Mr. Allen. And he is right. Using metrics, we still are 
working hard to determine their progress. We know we have made 
progress, and we see visible results on a daily basis. But we 
need a more structured, organized, institutionalized way of 
operating our Information Sharing Environment.
    Chairman Lieberman. Ms. Larence, do you want to say 
anything in response to what the Ambassador and Mr. Allen have 
said?
    Ms. Larence. No, sir. It sounds good to us.
    Chairman Lieberman. OK. Ambassador McNamara.
    Mr. McNamara. Could I add a couple of points with respect 
to how we measure this?
    Chairman Lieberman. Sure.
    Mr. McNamara. When I came into this job a little over 2 
years ago, what I was hearing--to use the phrase very 
frequently used here on the Hill--from my constituents or my 
customers at the State and local level was, ``It is broken. We 
are not getting the information.'' What I am hearing now, and 
what you have heard here in this hearing from non-government 
officials, is that, ``It is not fully fixed, but it is an awful 
lot better than it was before.''
    I take that as a metric. I go out, my staff goes out to 
dozens of conferences. We have visited dozens of fusion 
centers. We have talked with hundreds and hundreds of first 
responders, homeland security officials, law enforcement 
officials, and government officials at the State and local 
level, and they are all saying, ``It is much better.'' That is 
a metric. I am not sure GAO could quantify it, but I take that 
constituency response as being a metric.
    One other point. I said at the beginning of my statement 
that we had no model on which to build this ISE. We looked 
around and there was nothing in government that we could model 
on. I take it as a compliment and as an indication of progress 
and of success that, in the last several months, three other 
efforts to create Information Sharing Environments within the 
government have come to us to try and learn from what we have 
done. I am sure you and the Committee are aware of the FAA's 
next-generation air transport system.
    Chairman Lieberman. Right.
    Mr. McNamara. The FAA has come to our office to learn about 
the technologies, the architecture, and the standards that we 
have set up so that they can adapt and apply them for their air 
transport system. The Maritime Domain Awareness Network that is 
being set up by the Department of Defense, the intelligence 
community, the Department of Transportation, and others is 
looking to try to integrate the information flows within the 
maritime environment, both military and commercial. That means 
ports, transport, etc. They came to us to study our progress 
over the course of the last couple of years to see how much of 
that they could take and apply to their upcoming information 
environment.
    And, finally, the Department of Health and Human Services 
is sponsoring a nationwide Health Information Network that they 
hope to have up and running. They also came to us to try and 
take our templates, if you will, and apply them.
    So I think we are moving along at a pretty good clip.
    Chairman Lieberman. I would say you should take that as a 
compliment. That is great.
    Let me move to this question of the authorized use 
standard, which the Markle Task Force recommended, which would 
replace the current system of place-of-collection rules and 
originator control with mission-based and threat-based 
permissions to access and share information.
    The 9/11 Commission Act required the ISE to report to 
Congress on the feasibility of an authorized use standard, and 
we did, in fact, receive that report in March. The ISE noted 
that such a standard would be difficult to implement under 
existing law and would potentially contravene privacy- and 
civil liberties-related laws and executive orders.
    I wanted to ask you first, Ambassador McNamara, given these 
objections, one, whether you believe that the move to the 
authorized use standard is a good idea; and, two, how you 
believe the legal framework would need to be altered to permit 
that standard to go into effect.
    Mr. McNamara. I think in principle, an authorized use 
standard is a very valuable tool that would assist in 
establishing a fully functional Information Sharing 
Environment, a fully functioning ISE. There are, in fact, 
regulatory and legal rules that prevent us from moving directly 
to an authorized use standard in the short term. But I think 
we--and by that I mean the program manager's office and the 
major agencies involved in this--and that is the Department of 
Justice, the Office of the Director of National Intelligence, 
the Homeland Security Department, and the Department of 
Defense--have, in fact, underway studies to see how one can 
move to that.
    I think in all likelihood--and I am not an expert in this 
area by any means--that we are going to move to that by stages 
rather than just one fell swoop. For example, I think it will 
be easier to move to authorized use within an agency structure 
than it will be to move multiple agencies at the same time to 
an authorized use standard.
    Chairman Lieberman. Mr. Smith--I am sorry, Ambassador. Do 
you want to go further?
    Mr. McNamara. One last thing, and that is that we need to 
define authorized use, and then we are going to have to come 
back to the Congress and change laws and regulations that right 
now operate on a different standard.
    Chairman Lieberman. Thanks.
    Mr. Smith, why don't you talk a bit about what definition 
of authorized use you would like to see, and then comment on 
the ISE's report and the necessary legal changes to implement 
this idea.
    Mr. Smith. The notion of an authorized use standard is to 
sort of turn things around. To make sure we all understand it, 
in the current rules, the purpose for which information is 
disseminated is determined by the person who collects it. It is 
driven by a series of rules, like if it is a U.S. person and 
information, it follows certain channels.
    The idea was that we ought to have, instead of these rules 
that are based on the manner in which it was collected, it 
ought to be disseminated for the purpose for which it can be 
used. And in that sense, it is kind of turning things on its 
head.
    In the Markle Task Force, we anticipated some of these 
problems. I will be frank with you. I think we thought it would 
be a little easier than it has proven to be. But we certainly 
respect what the Administration has done. I am pleased that 
Ambassador McNamara's report, that they are looking hard at it.
    I don't know, Mr. Chairman, as I sit here this morning, 
that I have specific suggestions as to what laws might need to 
be changed or whether regulations need to be changed. But to 
the extent they do need to be changed, I think they are worth 
looking very closely at because we do think that this can go a 
long way.
    In my mind--and I would be interested in the reaction of my 
colleagues--it is not unlike what the intelligence community is 
doing on the front end; that is to say, with the mission 
managers, where they have a more effective way of trying to 
coordinate targeting of intelligence collection. And this would 
in a sense, then, be the other end of that telescope where the 
information is then disseminated for the authorized use of that 
information rather than necessarily basing it on whether it is 
SIGINT, HUMINT, COMINT, or something else, which then puts it 
into a particular channel that determines its dissemination.
    Chairman Lieberman. Good enough. Mr. Allen, do you have a 
reaction to this discussion?
    Mr. Allen. I simply affirm essentially what both Jeff Smith 
and Ted McNamara have said. It is going to take time. It is 
going to be incremental. We obviously have to change because 
the rule set today I think is too rigid about those who 
originate and collect the information. But under the current 
policies and probably certainly from a legal perspective, there 
will have to be significant change over time to implement an 
authorized use standard. I think we have to work toward that. I 
believe that Jeff Smith is right. But I think like Ambassador 
McNamara, it is going to take time. But we should work at this 
goal because in the past it has inhibited the full flow and 
sharing of information. In our Department, it took us 18 months 
to ensure that we can share information just across all 
segments of this Department, which is 210,000 people. You would 
think you could have done that in a month. It took 18 months.
    Chairman Lieberman. Understood.
    Commissioner, let me go to you on the fusion centers. These 
have been really a significant forward development to 
facilitate information sharing among Federal, State, and local 
agencies. Let me just ask you the open-ended question 
acknowledging that you have testified that they have made real 
progress, they have been helpful. Is there anything further 
that you would like to see or that you need from the Federal 
Government to assist you at the State level in your mission 
here?
    Mr. Thomas. I think the key thing for us, Senator, is the 
long-term sustainability of these fusion centers. I think we 
have started making great progress, and I see it at the local 
level, I see it at the State level, and the cooperation we have 
been receiving from the Federal level--whether it be from DHS, 
FBI, Coast Guard, or others I could name--has been tremendous. 
But for us this is going to have to be a long-term investment.
    Coming from the local side, I cannot expect the Federal 
Government to pay 100 percent of it. We are paying a lot of 
personnel--it's a big commitment--but we have to do this for 
many decades. And I think it is critical that we have a portion 
of the homeland security--some of the advisers have even said, 
OK, let's take a percentage of any homeland security grant we 
get. The most important thing for us today, I think, is going 
to be information sharing. The days of buying equipment and 
training, those are good, but you need information.
    So the most important thing we can look for is going to be 
long-term sustainability of these intelligence/fusion centers. 
That to me is going to be the key.
    Chairman Lieberman. Ambassador McNamara.
    Mr. McNamara. Yes, I fully agree. I think what we are doing 
here is we are going through a period of adjustment as a new 
phenomenon or, if you will, a new set of institutions comes 
onto the horizon, and that is fusion centers.
    I want to stress that, at least from my perspective, it is 
very important to see the fusion centers in terms of all 
crimes, all hazards, not just terrorism, because I think they 
are not sustainable around the country if they only do 
terrorism. There are a few places where that will work. New 
York City is an example, L.A. and probably Washington, DC, 
where you would get a very high volume of terrorism work and 
information that needs to be worked on. But for the country at 
large, I think they need to be all crimes, all hazards. That 
means we have to look at the funding with a much broader 
perspective than just homeland security, just terrorism, or 
just even law enforcement in many cases.
    I think we need to look at this so that these fusion 
centers evolve and develop into valuable commodities for the 
localities in which they are in; that is to say, the States and 
the major urban areas. And if that is the case, then they will 
get funding from the States and the major urban areas because 
it is worth it to those governments and those localities to 
fund it. And the Federal Government will get information coming 
from those State and local fusion centers that will be valuable 
to the Federal Government, not just in terrorism but in other 
areas.
    If we can look at it with this more holistic approach, I 
think we can work out the details of who funds what and what 
share of the cost ought to be borne by what element of our 
federated governmental structure.
    Mr. Allen. I would just like to add----
    Chairman Lieberman. Go ahead.
    Mr. Allen. Mr. Chairman, I agree with that, this broader 
all-threat, because in homeland security intelligence, we look 
at terrorism, but we look at it through the prism of homeland 
security intelligence, which includes secure borders, because 
bulk cash couriers could be carrying money for drug-trafficking 
organizations, or they could be carrying money for Hezbollah. 
So trying to narrowly separate out terrorism from these broader 
threats does not help. I think representing the fusion centers 
as all-threat, all-hazard is the right way to go, and I believe 
Ambassador McNamara has the essence of the issue here, that 
there are broader reasons than just terrorism why these fusion 
centers are going to be very valuable--smuggling networks, 
other proliferation, loss of U.S. technology. There are a lot 
of reasons why State and local fusion centers are needed and 
needed for the foreseeable future.
    Chairman Lieberman. Yes, absolutely. You all make a strong 
point, and obviously modern information technology enables that 
kind of sharing and networking to occur, not only more easily 
but more instantaneously than before. So this is a new age we 
have entered.
    Secretary Allen, let me ask you about a particular case 
which shows both the value of information sharing, but then 
some of the privacy challenges that we have. I know the 
Department of Homeland Security has been working with the 
National Counterterrorism Center to find a way to provide 
access to information in the arrival and departure information 
system run by the US-VISIT program in a way that appropriately 
cross-checks that database against known terrorism information, 
but is also consistent with privacy laws and standards, for 
example, by promptly disposing of records where there is not a 
match.
    Can you talk to us about that, about some of the challenges 
associated with that kind of activity. Very important to do, of 
course, for our homeland security, and yet we want to be 
careful about the information we gather. How is that going?
    Mr. Allen. I think it is going well. Still, as Secretary 
Chertoff, were he here, would say, there is progress to be 
made. We are very good on air and sea entries into this 
country. We very carefully ensure that the names of individuals 
are checked against the Terrorist Screening Center, which is 
run by the FBI, to ensure that they are not on any lists that 
would indicate any type of nefarious activity. And that works 
well. It is rare that anyone--extremely rare that anyone gets 
past that particular check.
    We also are working hard, as you know, with the Western 
Hemisphere Travel Initiative, to have identity cards, and so 
that we will avoid the kind of problems that some people have 
because even though they have nothing to do with another 
individual of the same name or similar dates of birth, that is 
something we are working very hard on. The watchlist, as it has 
been reported in the press, is being refined, and where you 
have only the last names or the first names, those kinds of 
data are being eliminated from the watchlist so that we have a 
more streamlined and more effective way of tracking people as 
they come into this country and they are not held up when they 
are traveling.
    A problem, of course, is on the outgoing to ensure--we do 
not have at this time complete systems for exit determining who 
has left the country.
    Chairman Lieberman. Right.
    Mr. Allen. And that is going to be--that is a huge 
challenge. It is going to take a lot more study and a lot of 
technology, and it is obviously going to take a lot of 
resources to do that.
    But I think overall--and I know that the Secretary has 
given this high attention because he was speaking about this 
earlier this morning.
    Chairman Lieberman. Excellent. Thanks.
    Another question that is about incentives within the 
Department. The 9/11 Commission Act of 2007 included a section 
that gave agencies the authority to consider, ``the success of 
an employee in appropriately sharing information,'' and that 
should be considered when making determinations on monetary 
incentives and cash awards to Federal employees.
    I wonder if you have any report on what progress is being 
made to implement this provision to provide incentives to 
employees to effectively promote and engage in information 
sharing, either Ambassador or Secretary.
    Mr. Allen. I would just say that my intelligence 
organization is moving to pay for performance in accordance 
with what the Director of National Intelligence desires. That 
is obviously one of the criteria that will be used in 
evaluating employees as to their performance, and we are 
looking for ways to innovate, and some of the innovation that 
we have developed within the Department on new systems of 
connectivity--I talked about the State and local community of 
interest, the fact that we can link now to 43 States and the 
District of Columbia where endless talk weekly, either at a 
classified level or official use level, is unprecedented. And 
we are awarding people who are involved in this kind of 
innovative thinking within the Department.
    Chairman Lieberman. Ambassador, do you have a response?
    Mr. McNamara. Yes. In fact, one of the metrics that we have 
set up is to measure the incentives and disincentives to 
information sharing in the agencies that are members of the 
Information Sharing Council. There are 17 of them.
    We are finding the responses from the agency are that 
information-sharing incentives a year ago were about 40 
percent, and they grew to about 73 percent, according to the 
reports from the agencies. What we are now doing, having gotten 
in that data, is we are going back and through the summer, 
spring, and fall of this year examining exactly what those 
incentives are. But we know of many of them, and others we are 
looking very closely at.
    One of them, for example, is the one that Charlie Allen 
alluded to, and that is, the Director of National Intelligence, 
Mike McConnell--who, by the way, is an absolutely committed and 
very strongly committed individual with respect to information 
sharing--has mandated that within the intelligence community 
that there be in all employee reports an aspect of the 
employee's evaluation report which covers that employee's 
performance with respect to sharing information. We know, for 
example, that the FBI has an awards program for sharing 
information, and other agencies are also coming in.
    We are also interested in reducing disincentives, that is, 
to reduce the number of rules and regulations that are being 
applied within an agency that restrict information flows, and 
obviously originator controlled (ORCON) information is one of 
those. But reducing the ORCON and other restrictions generally 
tends to be done agency by agency, and what we are looking to 
do is to set up--and we have not gotten to it yet--a set of 
guidelines for incentives and disincentives to information 
sharing that we can get a general agreement on throughout the 
interagency, and then issue the guidelines with instructions 
that agencies should implement the guidelines and include the 
incentives and disincentives in their programs.
    We are also working with the Office of Personnel 
Management, OPM, to see whether or not OPM can help us with 
these incentives and disincentives.
    Chairman Lieberman. That is excellent.
    Two more questions from me. One is the fusion center 
guidelines that were published jointly by DHS and DOJ suggested 
that there was a role for non-traditional sources of 
intelligence, from the not so non-traditional as the fire 
service to, for instance, private sector. And, Secretary Allen, 
let me start with you. I wonder if you think there is a value 
to the fire service and other non-traditional entities being 
involved in the Information Sharing Environment, and if so, 
particularly through the fusion centers, what is happening in 
that regard from your perspective.
    Mr. Allen. I would believe that non-traditional sources of 
information are important--the fire departments and public 
health service are going to be important as we look at 
controlling pandemics perhaps or getting early warning of 
pandemics. We are developing a relationship with fire 
departments across the country, with the New York City Fire 
Department, I have a very close relationship, and we have 
provided information, equipment, and classified capabilities to 
the New York Fire Department, as we do to the New York City 
Police Department.
    So it is going to be important that we find non-traditional 
information. We think that, still respecting private sector, 
civil rights, and civil liberties, non-traditional intelligence 
sources are going to be vital to us in the coming months. When 
we had the terrible accident in New York City, the Corey Lidle, 
the small plane that hit an apartment building, it was the fire 
department that was there first to help deal with that problem.
    Information from fire departments is going to be very 
important to us in the future, and I know that probably Skip 
Thomas would support that view.
    Chairman Lieberman. Yes, that is good to hear. I was going 
to ask you, Skip, what your response is.
    Mr. Thomas. I think it is very critical----
    Chairman Lieberman. Are they involved with you now at all?
    Mr. Thomas. Yes, to some degree, and what we think--the 
fire marshal's office, which is extremely critical regarding 
any major investigation, plus the fire service is just a 
tremendous source of information out there. They deal with all 
kinds of hazardous material. They have access to every facility 
that is in any city, town, or county in the United States. I 
think they are extremely critical of that. Again, that trust 
relationship has got to be there. There are tremendous men and 
women in that service.
    It is the same thing with public health. We had a very 
difficult case in Connecticut, if you remember, the anthrax 
case, and the first people on the scene were EMS, fire service, 
public health officials, and we worked with their laboratories. 
So we have to reach out to everybody and to still respect the 
rights of everybody that is impacted. But the Fire Service and 
public health are really tremendous sources. That is why we 
think even in the private sector--in our State, we have an 
Infoguard chapter with our FBI. It is very strong, about 800 
members in it. And we continue to meet, at least on a quarterly 
basis, and again, it is true collaboration at its very best.
    Chairman Lieberman. Good.
    Ambassador, let me ask you the last question about the 
desire of some people, apparently, in the budget bureaucracy--
in OMB to defund and disband your office, presumably by fiscal 
year 2010. I presume you think that is a bad idea. I hope you 
do. And I just wonder if you could give us a response to the 
reality of that threat and how you respond to it.
    Mr. McNamara. Well, as you know, Senator, we are funded 
through 2009, and the decision of OMB was that they were not 
going to put into their current cycle of budget figures new 
initiatives that were not already in there. It turned out that 
our office has been funded by the ODNI out of hide; that is to 
say, the ODNI has given us the funding without actually 
stipulating in the budget that it was to be funded.
    Chairman Lieberman. You mean for 2009 or----
    Mr. McNamara. Before 2009--or since we started operating.
    Chairman Lieberman. Oh, I see what you are saying, right.
    Mr. McNamara. So it did not show up, and according to the 
OMB regulation, if you will, or rule for this cycle, since it 
is the end of the Administration, it did not show up and, 
therefore, I guess technically they are defunding it for fiscal 
year 2010. But I think that is something that the new 
Administration is going to have to look at when they come in.
    Chairman Lieberman. So did you think it was not substantive 
but procedural?
    Mr. McNamara. I think it started as being a technical 
aspect of this cycle of the budget call for data, the budget 
data call that OMB was putting out. You will have to ask them. 
They have not told me. I have not been consulted on this. I 
have not been asked for my opinion, and I am prepared to talk 
about it on the proper occasion as this transition period comes 
upon us.
    Chairman Lieberman. Got it. In any case, of course, it will 
be relevant for the new Administration making a recommendation 
for the 2010 fiscal year.
    Mr. McNamara. Yes. I think, to give you my personal 
opinion, that the Office of the Program Manager has been an 
engine for change in this area. We have not done all the 
change, but we have been the engine driving the change. And the 
fact is that we have a 3-year implementation plan out there. As 
the GAO has noted, we have not finished with that. There is 
work still to be done. I have not heard anybody say that we 
have done what needs to be done in this area.
    I think it is up to the President and the Congress to 
decide on the future of this office. It was intended to be 
temporary. The original mandate was for 2 years. I think people 
recognized immediately the complexity of the problem made the 
2-year limitation almost laughable. And, therefore, both the 
Congress and the President, jointly and separately, have 
extended it indefinitely.
    I think it is up to the President and the Congress, 
therefore--the Congress originally launched the idea of the 
Information Sharing Environment, and this Administration has 
supported it strongly.
    Chairman Lieberman. Right.
    Mr. McNamara. And, therefore, I am ready to discuss and put 
my 2 cents in, if you will. I plan myself personally to be 
leaving. I came out of retirement, as I said to someone a 
couple of weeks ago, I came here to build the foundation, not 
to complete the building. And I intend to move on. But I think 
the question of the office is important and needs to be 
discussed, and I think we have to make a distinction between 
the office and the functions. The office may be and indeed is 
temporary. But the functions that are being developed and being 
carried out by this office are going to be around for a long 
time.
    For example, the CUI that we have, we built the framework 
for the CUI. The President endorsed it and instructed agency 
heads to go out and implement the CUI regime. Rather than 
maintain the control of the CUI regime in our office, we passed 
it off to the National Archives and Records Administration 
(NARA), a permanent entity but an entity like us that has no 
bureaucratic turf to defend and no agency stake in it. They--
NARA--will run the CUI regime indefinitely into the future. 
Somebody has got to--once we get the SAR program up and running 
fully, somebody other than the PM-ISE Office is going to have 
to take that on in order that the program be continued 
indefinitely into the future. And so much of what we are doing, 
the function remains even when the office disappears.
    Chairman Lieberman. Well, first, you are right that 
Congress intended the office to be temporary, and I think that 
is still the intention. I hope we come to a point where, as you 
have said, the office is not necessary. But it is very clear 
that we have not reached that point yet, so I think there will 
be a lot of opposition, beyond my own, to defunding or 
disbanding the office, if that is a decision that the next 
Administration makes. I also want to thank you for taking this 
role, and I think you should feel some pride yourself that you 
built a strong foundation for whoever follows to build the 
building.
    I want to thank all of you for your testimony today. To me, 
this is a very encouraging hearing, notwithstanding the 
constant necessity to try to get as close to perfection as we 
can because of the consequences of imperfection here. But there 
has been really a remarkable transformation in information 
sharing among the different levels of government and within the 
Federal Government. And I cannot thank you enough for what you 
have all done to bring that about. If I may modify a familiar 
phrase, your persistent vigilance is, in fact, the price of the 
safety and liberty of the American people, and I thank you for 
it. And this Committee will continue to do whatever we can to 
both monitor and oversee your progress, to pester you 
occasionally, but most of all, to try to support you in the 
critical work that you do.
    We are going to leave the record of the hearing open for 15 
days if any of you want to submit any additional comments for 
the record or if any of my fellow Committee Members who could 
not be here this morning want to submit questions to you. But 
in the meantime, I cannot thank you enough, really, for what 
you do, not just in testifying today but what you do every day 
for our country.
    Thank you very much. The hearing is adjourned.
    [Whereupon, at 11:55 a.m., the Committee was adjourned.]


                            A P P E N D I X

                              ----------                              


                PREPARED STATEMENT OF SENATOR VOINOVICH

    Mr. Chairman and Ranking Member Collins, I commend you both for 
convening today's hearing to discuss information sharing among Federal, 
State, and local governments.
    The importance of sharing law enforcement and homeland security 
information became apparent after the events of September 11, 2001. In 
recent years, dozens of information sharing fusion centers have been 
created across the country to streamline intelligence gathering and 
share information among Federal, State, and local officials.
    My home State of Ohio has such a fusion center that is experiencing 
success with its information sharing efforts. The center is working 
with more than two dozen Federal, State, and local agencies as well as 
the private sector, and that work has allowed interested parties to 
write important and useful reports that have been used for a variety of 
purposes. In fact, Ohio's fusion center was one of six State centers 
that were recently recognized for outstanding performance at the 
National Fusion Center Conference.
    Information sharing is allowing for important national security 
work like that being conducted at the Ohio fusion center. However, 
there are unresolved questions and areas of concern as Federal, State, 
and local law enforcement work to share information.
    First, the potential use of private sector data by fusion centers 
has led to questions about privacy and civil liberties violations. We 
must ensure that as law enforcement officials collect and share 
intelligence, they afford appropriate protections to personal 
information and appropriate deference to individuals' right to privacy. 
At the National Fusion Center Conference, Ohio was recognized for its 
privacy protection policies and practices. I hope Ohio's work and 
efforts can serve as a useful guide for other information collecting 
and sharing efforts.
    Second, as the Chairman knows, Senator Akaka and I have worked for 
years to bring a performance-based approach to how the government 
manages access to sensitive national security information. Included in 
these efforts are our work to lessen the amount of time it takes to 
investigate and adjudicate security clearance applications as well as 
our efforts to ensure that Federal agencies recognize security 
clearances granted by other Federal agencies. To my dismay, I 
understand State and local officials have had difficulties obtaining 
security clearances in a timely manner for individuals who need access 
to classified information and also problems getting Federal agencies to 
recognize security clearance granted to State and local officials by 
other Federal agencies. We have got to find a way to address these 
problems, and I hope today's hearing discusses some potential 
solutions.
    Again, I want to thank the Chair and Ranking Member for calling 
today's hearing, and I appreciate the witnesses spending some time with 
the Committee today to discuss this matter. Sharing information in a 
smart way can greatly help us secure our Nation.

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     GENERAL PRINCIPLES FOR DEVELOPING THE AUTHORIZED USE STANDARD

Ensure Applicability Across the Government. Generally speaking, 
categories of authorized use should apply to all information sharing 
environment components, although, as discussed elsewhere in this 
report, the guidelines will also have to be tailored to the specific 
missions and authorities of individual departments and agencies.
Tailor to Anticipated Uses. The authorized use standard for access to, 
or sharing of, information generally should be lower when the 
information is to be used for terrorism-related analysis, policymaking, 
or alerting functions; and higher when the anticipated authorized use 
is reasonably expected to include some action (such as detention, 
travel restrictions, or denial of a benefit) within the territory of 
the United States or against U.S. Persons.
Treat Anonymized Information Differently. The Task Force has 
recommended the use of anonymization technology to enable information 
analysis without disclosure of personally-identifiable information. 
When combined with anonymization techniques, the implementation of a 
properly-defined and implemented authorized use system could facilitate 
use of information in ways that enhance both national security and the 
protection of civil liberties. For example, if an agency has an 
authorized use to obtain only a few records in a large dataset, the 
overall information could be correlated anonymously to determine the 
finite number of matching records. The receiving agency could use the 
matches discovered in the anonymized information to request specific 
records for sharing only when it meets a higher threshold of 
justification. This not only has obvious civil liberties benefits, but 
also would contribute to operational efficiency (i.e., less information 
transferred means less information to keep current).
Articulate Authorized Use Guidelines. Authorized use guidelines should 
be developed through an appropriate public process. Legislation would 
set out the framework for an authorized use regime and the Executive 
Branch would develop specific implementations through a formal high-
level process with as much transparency as possible. This process 
should include the participating agency's information sharing 
environment privacy and civil liberties officer, and should be reviewed 
by the Privacy and Civil Liberties Oversight Board prior to final 
approval by the President. Expansions to an authorized use should 
receive a thorough review and specific approval that is made public.
Electronic Record of Authorized Uses and Compliance Monitoring Through 
Audits. Transmitting agencies would be required to keep an auditable 
record of each dissemination for which an articulation of an authorized 
use was made. The sharing and subsequent use of the information would 
be subjected to auditing and monitoring of compliance to ensure that 
information is utilized consistently with authorized uses. This 
auditing will be helpful to protecting civil liberties, as well as the 
security of information against insider compromise. Auditing monitoring 
sharing logs would have the added benefit of creating new intelligence 
and knowledge for analysts, policymakers, and others, as well as 
facilitating dispute resolution, by creating real-time, electronically-
accessible records that automated software could use to identify common 
questions by different analysts. Such real-time logs will also play a 
role in helping identify unauthorized access, both for counter-
intelligence purposes and to protect civil liberties.
Minimize Transaction Costs. The system must be designed from the outset 
to record authorized uses electronically in the simplest possible way 
consistent with the sensitivity of the information requested. Sometimes 
it will be automatic, such as when an entire agency or component is 
authorized to receive information based on its mission. Other times it 
will require a single mouse click or a short explanation where an 
officer receiving, forwarding or authorizing access to information must 
affirmatively articulate an authorized use. To the extent that this 
process can be electronic--which we strongly recommend as the preferred 
solution wherever possible--it will minimize transaction costs to 
users. It will be critical, however, that, as the government seeks to 
minimize transaction costs for articulating authorized uses, it also 
creates mechanisms to ensure that authorized use determinations do not 
become either arbitrary or automatic. Officers must be required to 
think through, albeit quickly, their selections, and be able to 
articulate why they selected the authorized use they did.
Clarify Roles and Responsibilities. It is important to clarify the 
roles and responsibilities of all participants in the information 
sharing environment. Implementation of authorized uses will help ensure 
that departments and agencies stay in their lanes, as authorized by our 
nation's leadership and understood by the public.

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