[Senate Hearing 110-839]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-839
 
                          INTELLIGENCE REFORM

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



                                HEARINGS

                               BEFORE THE

                    SELECT COMMITTEE ON INTELLIGENCE

                                 OF THE

                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            January 23, 2007
                            January 25, 2007

                               __________

      Printed for the use of the Select Committee on Intelligence


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
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                    SELECT COMMITTEE ON INTELLIGENCE

           [Established by S. Res. 400, 94th Cong., 2d Sess.]

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
               CHRISTOPHER BOND, Missouri, Vice Chairman
DIANNE FEINSTEIN, California         JOHN WARNER, Virginia
RON WYDEN, Oregon                    CHUCK HAGEL, Nebraska
EVAN BAYH, Indiana                   SAXBY CHAMBLISS, Georgia
BARBARA A. MIKULSKI, Maryland        ORRIN G. HATCH, Utah
RUSSELL D. FEINGOLD, Wisconsin       OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida                 RICHARD BURR, North Carolina
SHELDON WHITEHOUSE, Rhode Island
                     HARRY REID, Nevada, Ex Officio
                 MITCH McCONNELL, Kentucky, Ex Officio
                    CARL LEVIN, Michigan, Ex Officio
                    JOHN McCAIN, Arizona, Ex Officio
                              ----------                              
                   Andrew W. Johnson, Staff Director
                Louis B. Tucker, Minority Staff Director
                    Kathleen P. McGhee, Chief Clerk
                                CONTENTS

                              ----------                              
                  Hearing held in Washington, DC, January 23, 
                      2007
Opening Statements:
    Rockefeller, Hon. John D.; Chairman, a U.S. Senator from West 
      Virginia...................................................     1
    Bond, Hon. Christopher S.; Vice Chairman, a U.S. Senator from 
      Missouri...................................................     7
Witness Statement:
    Graham, Mary Margaret; Deputy Director of National 
      Intelligence for Collection................................     9
        Prepared Statement, Office of the Director of National 
          Intelligence...........................................    13
Additional Materials:
    Letter from Kathleen Turner (Office of the DNI) dated April 
      12, 2007 transmitting responses to QFRs Hearing held in 
      Washington, DC, January 23, 2007...........................    40

                  Hearing held in Washington, DC, January 25, 
                      2007

Opening Statements:
    Rockefeller, Hon. John D.; Chairman, a U.S. Senator from West 
      Virginia...................................................    73
    Prepared Statement of Hon. Christopher S. Bond; Vice 
      Chairman; Statement for the record.........................    76
Witness Statements:
    Pistole, John S.; Deputy Director, Federal Bureau of 
      Investigation..............................................    79
    Allen, Charles E.; Assistant Secretary for Intelligence and 
      Analysis and Chief Intelligence Officer, Department of 
      Homeland Security..........................................    87
    Lanier, Cathy L.; Acting Chief of Police, Metropolitan Police 
      Department of the District of Columbia.....................   120
    Spears, James W.; West Virginia Homeland Security Advisor and 
      Cabinet Secretary of the West Virginia Department of 
      Military Affairs and Public Safety.........................   125
    Gannon, John C.; Former Staff Director, Homeland Security 
      Committee, U.S. House of Representatives, and former 
      Chairman, National Intelligence Council....................   136
Additional Materials:
    Responses to QFRs submitted by Stephen Dove, Department of 
      Homeland Security for hearing held January 25, 2007........   148

   HEARING ON PROGRESS OF INTELLIGENCE REFORM: OFFICE OF THE DIRECTOR


                        OF NATIONAL INTELLIGENCE

                              ----------                              


                       TUESDAY, JANUARY 23, 2007

                               U.S. Senate, 

                  Select Committee on Intelligence,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:34 p.m., in 
Room SH-216, Hart Senate Office Building, the Honorable Jay 
Rockefeller (Chairman of the Committee) presiding.
    Committee Members Present: Senators Rockefeller, Feinstein, 
Wyden, Feingold, Whitehouse, Bond, Warner, Hagel, Chambliss, 
Snowe, and Burr.
    Chairman Rockefeller. Ladies and gentlemen, thank you very 
much, and the absence of all but the two most distinguished 
members of the Committee should not deter you. It's simply that 
we have, in the ways of the Senate, a vote at 2:45, and Kit 
Bond has graciously agreed to wait there, so when I go down to 
vote, he will come back and we will be, as they say, seamless. 
So be tolerant of the institution to which you are speaking.
    I'll give my statement and then I'll go and Senator Bond 
will do it when he comes back.

 OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, CHAIRMAN, A 
                U.S. SENATOR FROM WEST VIRGINIA

    Just over two years ago, Congress passed and the President 
signed the Intelligence Reform and Terrorism Prevention Act, 
which was a big deal for us. A lot of people had a lot of 
different ideas. It was finally cobbled together in the 
Government Affairs Committee, and I thought they did a very, 
very good job of it--Susan Collins and Joe Lieberman. This was 
historic legislation, adopted in response to recommendations of 
the 9/11 Commission, and influenced in no small measure by the 
findings of this Committee's investigation into flawed 
intelligence on Iraq's weapons of mass destruction.
    The legislation was intended to strengthen the management 
of the U.S. intelligence community by putting in place a 
Director of National Intelligence separate from the management 
of the Central Intelligence Agency, who, with enhanced 
authorities, would bring about a new unity of effort and 
purpose against threats to our national interest and homeland 
security.
    After two years, it is appropriate that the Senate 
Intelligence Committee take stock of the implementation of the 
Intelligence Reform Act. We need to understand what has been 
accomplished, what remains to be accomplished, and what changes 
to the law are warranted in light of the experience of the past 
two years. This is an open hearing, and it's an open hearing 
because it should be.
    The central question before us today is whether the promise 
of intelligence reform has been fully realized. Intelligence is 
our first line of defense against threats to our national 
interest. I can hear those words coming out of John Warner's 
mouth. You really can't do much of anything these days without 
the right intelligence. And, as the Committee's worldwide 
threat hearing on January 11th made very plain, the threats we 
face now as a Nation are serious, persistent, complex, and 
growing.
    Today, we are focusing on the Office of the Director of 
National Intelligence itself, and an examination of the 
consolidated budget and personnel authorities we vested in the 
Director position. On Thursday we will hold a second open 
hearing devoted to the examination of the implementation and 
reforms at the Federal Bureau of Investigation and the 
Department of Homeland Security.
    In addition to the administration witnesses today, we will 
on Thursday receive testimony from outside experts and examine 
whether we have made progress since 9/11 in strengthening our 
domestic security programs and sharing information with state 
and local law enforcement and security officials.
    While Ambassador Negroponte is unable to appear, 
understandably, at today's hearing, I look forward to hearing 
from our witnesses--senior officers--all with long careers in 
public service who have been personally responsible for the 
developing and carrying out of DNI initiatives in the areas of 
collection, analysis, information sharing, and management.
    I believe it is fair to say that the Committee recognizes 
the implementation of the Intelligence Reform Act, and reform 
in general, is a work in progress. After that short amount of 
time, how could it be anything other than that, taking place 
during the wars in Iraq and Afghanistan with a multi-menu of 
threats from elsewhere, and the continued global efforts 
against al-Qa'ida and other terrorist threats. Yet even as some 
reforms may take years to come to fruition, we will be asking 
our witnesses to address whether the pace of reform reflects 
the urgency with which we were called to action two years ago.
    We also acknowledge that the Congress and the President did 
not give the DNI monolithic powers, or place him in charge of 
an intelligence department, but we will explore whether the DNI 
has used the powers assigned to the office as vigorously as the 
law allows, and if not, why not. As I say, we are prepared to 
look at everything and to act wisely. That was, after all, a 
bill that came out rather quickly. We're not always a font of 
wisdom in the Congress about all matters that are going to 
confront us, and therefore we need to be open to your ideas and 
our ideas of what could make it better.
    In addition, while progress has been made to develop 
strategies and set uniform intelligence standards, there is a 
concern on the Committee that these high-level efforts have not 
yet made a difference at the agency or field level. We will 
want to identify what obstacles exist to achieving reform, and 
how best to fix them.
    Finally, the fiscal 2008 budget that is about to come up to 
Congress will be the first that the Director of National 
Intelligence has had a chance to build from scratch. We look 
forward to hearing from our witnesses on how the Director's 
office carried out the budget formulation process, and in what 
ways the end products reflect his priorities.
    I do not now turn to Chairman Bond for any statement he 
would care to make, because I'm going to go down and vote. And 
John Warner, the distinguished former chair, and only most 
recently ranking member of the Armed Services Committee, and 
Diane Feinstein who is on all committees involved in all 
matters, may have things they wish to say. And if they wish to, 
they are free to do so. I will depart.
    Senator Warner. I would like to avail myself of this 
opportunity to propound some questions. But first off, I want 
to thank each of you for your extraordinary public service. You 
labor quietly without, hopefully, as much spotlight as you can 
possibly avoid, and I think you do a very effective job.
    I've known Ambassador Negroponte for many years. We've been 
personal friends and colleagues in the professional world. I 
think he's done an extraordinarily fine job, and while I'm 
pleased that he's going to take on this post at the State 
Department, I do wish he'd had a little longer to sort of lay a 
firmer foundation which he has started, but I guess as yet has 
not completed.
    I'd like to ask the following questions. I was intrigued 
over the Sunday talk shows when Speaker Gingrich got up and--
    Chairman Rockefeller. Senator, if I could be so rude, would 
it be possible to save questions until after the statements 
have been given?
    Senator Warner. Well, I didn't know we were all making 
statements. I thought the Chairman and the Ranking made them.
    Chairman Rockefeller. That's all. That's all, but then 
because you two are here, I thought it would be fine to have 
you make statements. But I think questions ought to be reserved 
until the entire Committee can hear them.
    Senator Warner. Well then, Mr. Chairman, I'll just have to 
submit these questions for the record.
    Chairman Rockefeller. No, no. Oh, you can't stay?
    Senator Warner. No, I cannot stay, regrettably. So, I'll do 
whatever the chair wishes, but it seems to me--
    Chairman Rockefeller. Well, why don't you read them--why 
don't you read them into the record so they can be thinking 
about them?
    Senator Warner. Well, that's, in my 29 years, a new first, 
but here we go.
    Speaker Gingrich said that he felt that perhaps the 
progress thus far of your organization had achieved but 10 
percent. The record will show accurately what he said. He 
further stated that the intelligence reform must be centered on 
the performance metrics that should be used to define success. 
So my question to you is, when the office of DNI began the 
process of reform two years ago, what metrics or benchmarks did 
or did you not establish as markers of success or failure to 
reach your goals?
    Has the ODNI identified benchmarks that must be achieved by 
individual intelligence agencies? If so, what are those 
benchmarks in the areas of HUMINT and SIGINT and analysis?
    How far toward achieving those benchmarks have you come in 
these years in your judgment? And do the same benchmarks remain 
relevant, or do you need to adjust for the years ahead?
    Now, to the national HUMINT manager. A key figure of the 
intelligence reform bill was the separation of the head of the 
intelligence community from the management of CIA. Congress 
recognized the wisdom of the 9/11 commission when it said that, 
``the CIA will be one among several claimants for funds in 
setting national priorities. The national intelligence director 
should not be both one of the advocates and the judge of them 
all.''
    This principle would seem to apply to the adjudication of 
HUMINT issues and conflicts in the intelligence community if 
the CIA remains both the national HUMINT manager and one of 
several HUMINT collectors. My question, particularly, would be 
to our distinguished witness, Mrs. Graham. What is the division 
of labor between your responsibility as Deputy Director of 
National Intelligence for Collection and the responsibilities 
of the Director of CIA as the national HUMINT manager? How are 
you able to ensure that HUMINT issues, such as information 
access, are being adjudicated fairly and in the best interests 
of the Nation, not in the parochial interests of one agency?
    How has the establishment of the National Clandestine 
Service, with the CIA as national HUMINT manager, improved the 
collection and sharing of human intelligence?
    Now, to the intelligence community's support to the 
President's Iraq plan. The ultimate goal of the 9/11 commission 
recommendations, the WMD Commission recommendations, and the 
Intelligence Reform and Terrorism Prevention Act is to provide 
the best possible intelligence to policymakers so that the 
President and members of Congress can make informed foreign 
policy and national security decisions. Since the President 
announced his Iraq plan early this month, that was on the 10th 
of January, I've taken the opportunity during numerous 
briefings and hearings, both at the White House and here in the 
Congress, and I commend the President for the hard work that he 
and his various agencies and departments put in to devising the 
plan which he announced on the 10th of January.
    I respectfully have some differences with that plan. Those 
differences were put into the record last night by way of a 
resolution, which I feel is not confrontational, but I put it 
in because the President specifically said on 10 January, if 
members of Congress had their ideas, they would be considered. 
It's in the record, exactly what he said.
    So the question I have--I believe important strides have 
been made toward intelligence reform, but it's incumbent upon 
the intelligence community to provide its best assessment of 
the Maliki government chances for success under this program. 
It is the central, core issue, in many respects, of this 
program. And I would hope that we could get some public 
testimony on that today.
    Now I further understand, and I repeatedly advised my 
colleagues and the Armed Services Committee some four, five, or 
six months ago in its authorization bill specifically requested 
that the intelligence community perform a current national 
estimate, an NIE--National Intelligence Estimate--on the 
situation in Iraq. And here we are with the President's 
programs laid down. We're about to go into a considerable 
debate, which I think is important for the Nation, and yet this 
document is continuing to be worked on and in all probability 
will come out after the Congress has finished its debate and 
the Congress may or may not--I'm not here to predict--vote on 
one or more resolutions without the benefit of having seen that 
very key document.
    And the last question. In its December 2006 report, the 
Iraq Study Group said that our intelligence community does not 
have a good strategic understanding of the Iraq insurgency or 
the role of the militias. As our Nation debates the best 
strategy to achieve a stable and secure Iraq, the Iraq Study 
Group's assertion is of concern to me. We must have solid 
intelligence, both tactical and strategic, if any plan is to 
succeed in Iraq. The ISG, that's the Iraq Study Group, 
recommended that the DNI devote greater analytic resources to 
these issues. I wanted to give you an opportunity today to 
comment on the Iraq Study Group's assertion here, and let the 
Senate have the benefit of that response as it is on the verge 
of these historic debates.
    Those are my questions.
    Chairman Rockefeller. And Senator Warner, I will commit to 
you that I will ask at least one of those, perhaps more, and my 
first choice would be the Maliki one. But I will ask that on 
your behalf.
    Senator Warner. All right.
    The vote is under way, so you best get on your way.
    Chairman Rockefeller. I'd best get on the way.
    Senator Feinstein. If I might--
    Chairman Rockefeller. No questions.
    Senator Feinstein. I would, if I could, Mr. Chairman, like 
to make just a few brief remarks. There are three of us that 
also sit on Defense Appropriations--Senator Bond, Senator 
Mikulski, and myself. Presently, Intelligence Committee staff 
have no access to the intelligence budget as it goes through 
defense approps. What we get is essentially a one-page black 
budget. It is really inadequate.
    Senator Bond and I have been making a request that we be 
able to have our staff have access to the budget. I think it's 
important. I think the Intelligence Committee's views on the 
budget are relevant. That's one point I would like to make.
    Second, I have been very disappointed in the DNI--and not 
the individual, but in the exercise of the position. I was one 
of the very first to propose legislation, when Senator Graham 
was Chairman of this Committee, for a DNI. And the way I 
envisioned it was one person who would be able to bring 
together periodically all of the chiefs of all of the different 
departments and divisions, to really develop a sense of team. 
And as it became so critical and so evident in the Iraq NIE, 
the faultiness of the Iraq NIE to really take a look from the 
top, at the analytical aspects of how this intelligence was 
done, see that the changes were made and report regularly to 
this Committee.
    I have been very disappointed that the DNI has not been 
really available and present and around. And that--I'm just 
going to say it--was certainly not my view of what a DNI should 
be. I happen to believe it was a mistake to prohibit co-
location of the DNI's office in the authorization bill, and I 
will seek to change that. I believe to have a DNI out at 
Bolling makes no sense. The DNI should be close to the 
agencies--able to inter-relate with the agencies.
    And I think because there's not a lot of territorial 
imperative in all this right now--we have a new head of service 
in terms of General Hayden, General Alexander, General Clapper, 
other things that are happening--that we have the opportunity 
now to make some of those changes. But I don't think we can 
have a DNI that is essentially isolated from the day-to-day 
operations of the community. Thank you.
    Senator Wyden. As you can all tell, we have a hectic 
schedule, and you are going to have senators coming back and 
forth. But there were two points that I wanted to make before I 
ran off, and I want to pick up on comments made by both Senator 
Warner and Senator Feinstein.
    I think if you look back at NIEs, when the administration 
wants to get them up here, in 2002 there was a National 
Intelligence Estimate that was put together in something like 3 
weeks. It was done quickly and it was done before there was a 
key vote. What is so troubling to all of us now is we are not 
going to get a relevant new National Intelligence Estimate 
until well after the United States Senate casts critically 
important votes. That is not acceptable. To have the maximum 
value of the intelligence that is furnished to us, it has got 
to be made available in a timely kind of way, and I have just 
cited my concern with a specific example.
    One other point that I hope that the Committee will be able 
to get into with you is yesterday the Congressional Quarterly 
reported that the chief of the CIA's Baghdad station ``presides 
over hundreds of operatives who cannot speak the local language 
or go anywhere.'' Now I know in an open session it is not 
possible to go into a full-fledged response with respect to 
every aspect of an article like this, but I do think that it is 
critical that this office lay out for this Committee what the 
various intelligence agencies are doing to hire people who 
possess the essential language capabilities, technology 
knowledge, and key kinds of skills.
    And I have heard all about strategic plans and the like, 
but it doesn't seem to be happening. And to have authoritative 
publications say that they don't have people there who can 
speak the local language is exceptionally troubling. I mean, 
that is a real wakeup call to have someone make that comment, 
and we need to know how the DNI is addressing it.
    Mr. Chairman, we are going back and forth so we're glad 
you're here.
    Vice Chairman Bond [presiding]. Thank you very much, 
Senator Wyden. Sometimes even the best-laid organization does 
not work properly. I had understood that Chairman Rockefeller 
was going to start it off and we were going to play a tag team. 
I know you haven't given your opening statements, but for 
better or for worse, I'm going to give an opening statement, 
and then call on our witness who is to give an opening 
statement, and then we may get back into a regular flow because 
I'm sure that Chairman Rockefeller and others will be back. 
This is a very important hearing. I'm delighted that it has 
been called for today.

OPENING STATEMENT OF HON. CHRISTOPHER S. BOND, VICE CHAIRMAN, A 
                   U.S. SENATOR FROM MISSOURI

    You know, looking back on the history of this for a minute, 
Congress passed the National Security Act of 1947 in response 
to the devastating attacks on Pearl Harbor and the numerous 
operational issues in World War II. Within a decade, it was 
apparent that the reform had not solved the problems, and 
Congress passed a series of reforms in the 1947 Act in 1958.
    Then on the military side, problems in inter-service 
coordination in Vietnam, the failed Iranian rescue mission in 
1980, and the problems that surfaced in the 1983 operations in 
Grenada, led Congress to enact the 1986 reforms known as 
Goldwater-Nichols. It took nearly 40 years from the original 
passage of the National Security Act to adjust its organizing 
legislation to facilitate operations to meet the challenges of 
the times.
    Unfortunately, we did not apply the same rigorous analysis 
to the difficulties within the Intelligence Community during 
that time period, and I believe there was a fundamental reason 
for this. During the Cold War, the primary responsibility for 
the IC was to provide the U.S. with strategic warning against 
the Soviet Union with 20,000 nuclear warheads. The tragic 
events of 9/11, however, combined with proliferation of weapons 
of mass destruction to rogue and perhaps non-state actors has 
changed this forever. We just don't have the luxury of 40 years 
to get it right.
    Ambassador Negroponte spoke recently in a meeting of 
several remaining challenges--more diverse recruitment in the 
workforce, increased foreign language training and education in 
foreign language, improved data collection and collaboration 
between analysts and collectors, and continued improvement 
through community integration.
    I agree 100 percent, but I would add more. First is 
improved human intelligence. It doesn't necessarily mean more 
human intelligence, but it certainly has to be better. The 
Committee's Iraq WMD report, as well as the WMD Commission's 
report, described the role that poor HUMINT played in the Iraqi 
intelligence failures--including lack of collection, over-
reliance on liaison, and other country services, lack of trade 
craft standards, and lack of information sharing.
    We have to improve our HUMINT by bringing in more people 
who are able to fit in and speak the language of target 
countries. We need to improve their cover mechanisms. And we 
need to have better utilization of commercial operations. 
Frankly, I don't believe the establishment of the National 
Clandestine Service has solved these problems. The sharing of 
source information has only marginally improved, it appears to 
us, and largely only to those analysts who work for the CIA.
    Testimony that we have received from National Clandestine 
Service officers suggest there is no intent to expand access to 
certain information to analysts outside the CIA. That has to 
change, friends. The IC's best analytic judgment will only come 
from analysts who have immediate access to all information they 
need. But better information sharing alone won't guarantee 
correct access. Better analytic tradecraft, combined with a 
willingness to challenge assumptions rigorously must be the 
norm rather than the exception.
    Now, analysts have worked hard in past years to make sure 
the Iraqi WMD mistakes are not repeated. I commend them for 
their efforts. We are talking not about failure of the many 
dedicated people who have worked in the IC; we are talking 
about improving the system so that it works better. But 
everybody in the community must continue to question and 
challenge the community's analytic products and briefings.
    And yet at the same time, analysts must be fully supported 
when they speak truth to power.
    Our analysts must take into account the ideological war 
that we are in today, and focus on understanding the beliefs 
that undergird militants--analyzing how and why individuals 
turn militant so that recommendations can be made for 
countering that process.
    I believe, as so many people have said, that the battle 
against an ideological foe is 20 percent kinetic and 80 percent 
ideological, and I think we're doing the kinetic part pretty 
well; we need to do it better, but we also need to focus on the 
80 percent that is ideological.
    I'm also concerned about the community's financial 
management. In 1990, Congress passed the Chief Financial 
Officers Act, which set out the goal of all departments and 
agencies having auditable financial statements. It is 2007, 
and, as best we know, not one, none, zero, of the IC agencies 
can give us an unqualified financial statement. If I'm wrong, 
please inform me; I would love to be proven wrong. In other 
words, they can't tell us where the money goes after we give it 
to you. I think the taxpayers want us to fix that.
    Finally, let me focus on the problem of leaks. While it is 
not a reform issue, we all know that leaks cost us dearly. 
Probably the most succinct statement on the leaks that have 
occurred recently came from the now Director of CIA, General 
Michael Hayden, when he came before this Committee. And I asked 
him about the leaks, and that was before the leak of the 
terrorist financing tracking system came out. And he said, ``We 
are now applying the Darwinian theory to terrorists; we are 
only catching the dumb ones.''
    Well, it's imperative we take steps to reduce the incentive 
for people to provide classified materials to those who have no 
need to have it. I would like to see people in orange 
jumpsuits, but at the very least, there needs to be a change in 
the culture that it is no longer acceptable to take classified 
information, leak it, and then move to some post in the outside 
world where one can profit from it.
    With that, if nobody has objection, I would like to 
introduce our witnesses: Mrs. Mary Margaret Graham, Deputy 
Director of National Intelligence for Collection; Ambassador 
Patrick Kennedy, Deputy Director of National Intelligence for 
Management; Dr. Thomas Fingar, Deputy Director of National 
Intelligence for Analysis; and General Dale Meyerrose, Chief 
Information Officer for the intelligence community; Mr. Mark 
Ewing, Deputy to the Deputy Director of National Intelligence 
for Requirements; Mrs. Susan Reingold, Deputy Program Manager 
of the Information Sharing Environment.
    And with that, I assume that you have a batting order that 
you would like to follow, and I would invite you to follow that 
order, and offer your comments.
    Ms. Graham. Mr. Vice Chairman, there is just one opening 
statement.
    Vice Chairman Bond. Just one? Well, O.K., thank you.

STATEMENT OF MARY MARGARET GRAHAM, DEPUTY DIRECTOR OF NATIONAL 
                  INTELLIGENCE FOR COLLECTION

    Ms. Graham. Chairman Rockefeller, Vice Chairman Bond, 
members of the Committee, you know the Director would have 
liked to have been here today, but unavoidably could not, so he 
sent the six of us.
    It is our pleasure to speak to you today about the progress 
the United States intelligence community has made during the 
two years since the Congress enacted and the President signed 
the Intelligence Reform and Terrorism Prevention Act of 2004, 
or as we call it, IRTPA.
    Over the last two years, the Intelligence Community has 
achieved good results through a concerted effort to integrate 
itself more tightly, share information more freely, coordinate 
actions more efficiently, define priorities more clearly, and 
align resource expenditures against those priorities more 
strategically.
    The ODNI has led the IC to improve the security of the 
United States and to advance important national interests by 
implementing both IRTPA and the recommendations of the WMD 
Commission that were accepted by the President. The work of the 
ODNI has enhanced the intelligence community's ability to 
support policymakers, diplomats, warfighters, and even law 
enforcement officers. We will ensure this progress continues, 
but, candidly, what you'll hear is reform in action, and more 
time will be needed to fully achieve the goals of IRTPA.
    This reality provides the context for understanding the 
developments I would like to briefly discuss today. To frame 
our assessment of intelligence reform, we would like to focus 
on structural change, on analysis, on collection, on 
management, on requirements, on science and technology and the 
information enterprise.
    Let me begin with structural change, a great deal of which 
has occurred within the IC during the past two years. We have 
taken IRTPA's call for a strong national counterterrorism 
center and made it a reality. The NCTC stands today at the 
center of the intelligence contribution to the war on terror. 
It draws on and shares information from thirty different 
intelligence networks, including foreign and domestic threat 
information. It convenes coordination meetings across the 
government three times a day on terrorist threats. It guides 
the counterterrorism analytic workload across the IC.
    Finally, when events mandate, it becomes a hub for critical 
intelligence support to our Nation's leader, as they did last 
summer when the British thwarted the civil aviation plot in 
London.
    IRPTA also focused on the FBI's contribution to national 
intelligence. The FBI's senior leadership, under Director 
Muller, has embraced this mandate in the establishment of the 
National Security Branch to bring together under one umbrella 
the FBI's counterterrorism, counterintelligence, WMD, and 
intelligence programs.
    The WMD Commission also emphasized--as you have--the 
critical contribution HUMINT plays in preserving national 
security, and called for increased interagency HUMINT 
coordination, better and more uniform tradecraft standards, and 
increased joint training. This led to another major structural 
change in U.S. intelligence, as the CIA was directed by the 
President to establish the National Clandestine Service. These 
two changes--the NCS and the NSB--were major events, 
strengthening our human intelligence effort both at home and 
abroad.
    Additional structural innovations include the creation of 
the National Counterproliferation Center, the appointment of a 
MASINT Community Executive, and the establishment of the DNI's 
Open Source Center under the executive agency of CIA.
    Let me now turn to collection and analysis. Virtually every 
observer of the intelligence community has emphasized the 
critical interdependence of collection and analysis, as well as 
the need to continuously improve finished intelligence products 
through better methodology, more outreach, more alternative 
analysis, and more transparent sourcing.
    If we are going to solve the most difficult intelligence 
challenges, our analysts and collectors must work hand-in-
glove. And they are doing that, precisely in terms of attacking 
the priority hard targets--for example, Iran and North Korea, 
just to name two.
    As Deputy Director of National Intelligence for Collection, 
my task is to rebalance, integrate and optimize collection 
capabilities to meet current and future customer and analytic 
priorities. Collection is by far the most expensive activity 
undertaken by the intelligence community, but I would suggest 
to you it is also what gives the IC its comparative advantage 
in protecting the Nation.
    To enhance this collection enterprise, we initiated a 
process to develop a capability-based, integrated collection 
architecture, which will guide future investment decisions and 
address shortfalls in the Nation's current intelligence 
capabilities. We have begun to identify these shortfalls as 
well as areas of emphasis and de-emphasis, as you will see 
addressed in the President's budget.
    By the same token, under the leadership of my colleague, 
the Deputy Director of National Intelligence for Analysis, we 
have taken many steps to bring analysts closer together. Among 
many other things, we established the Analyst Resource Catalog, 
otherwise known as the analyst yellow pages. We established a 
long-range analysis unit to stimulate focus on over-the-horizon 
issues. We have launched several initiatives to strengthen the 
quality and ensure the integrity of IC-wide analytic practices. 
And we are establishing activities to ensure that the rich 
diversity of expertise resident both within and outside the 
community is brought to bear on our analytic product.
    Let me add one final word on collectors and analysts 
working together. We are pleased with a new model we've 
developed to assess and then task the agencies of the IC lift 
and shift collection and analytic resources when we are faced 
with new and emerging crises.
    We used this process effectively for the first time last 
summer during Lebanon's crisis, and we are using it today 
against both crises in Darfur and Somalia.
    Let me now turn to management. The Deputy Director of 
National Intelligence for Management supervises activities that 
ensure the ODNI and the IC have the tools and the guidance they 
need to do the work. This begins with the National Intelligence 
Strategy.
    The principle underlying the first-ever National 
Intelligence Strategy is the transformation of the community 
through the integration of its functions. The strategy's five 
mission objectives and ten enterprise objectives have been 
translated into strategic implementation plans, which the DNI 
approved in July of 2006, and now into program and budget 
decisions.
    The ODNI is making frequent use of the new budgetary and 
acquisition powers granted by the IRTPA to manage and shape the 
community. Indeed, the Fiscal Year 2008 program build is 
critical. As you have noted, it marks the first one that the 
DNI has led at all steps of the process.
    The DDNI/M's remit also includes security, training, and 
human capital, all of which are vital to the success of the IC 
of the future. We have made strides toward making the community 
one that not only wins the war for talent while making the most 
of America's diversity, but grows and retains a corps of 
motivated, collaborative, and expert professionals.
    Working closely with agencies and departments across the 
IC, our Chief Human Capital Officer has, for example, completed 
the first strategic plan for human capital for the IC, 
completed policy that will make joint duty a prerequisite for 
promotion to senior levels of the IC, and promoted development 
of modern, performance-based compensation policies for civilian 
employees of the IC that will be completed over the next two 
years.
    Now let me speak briefly about the Deputy Director of 
National Intelligence for Requirements, who is responsible for 
ensuring the IC--and all of us--understands and is working to 
address the full range of customer needs. Working closely with 
the National Security Council, we have revamped the national 
intelligence priorities process to be effective in conveying to 
the community the Nation's highest priority national 
intelligence needs. Updated semi-annually by the NSC and 
approved by the President, the national intelligence priorities 
better focus the IC's collection and analytical effort than in 
the past. There is close, continuous, and more formal 
interaction with senior customers to better understand their 
needs and ensure those needs drive the community's priorities.
    Requirements also completed the first-ever inventory of all 
U.S. intelligence foreign liaison relationships, and we are 
using this knowledge to maximize the reach of the community to 
benefit the Nation and the community as a whole.
    Finally, Requirements also partners with the private sector 
to gain a hands-on perspective on the international environment 
that often is unavailable anywhere else. A number of respective 
groups are working with us to sponsor private sector firms' 
participation in unclassified fora to discuss foreign matters 
of interest.
    Science and Technology. In the age that we live in of 
globalization that closely reflects developments in science and 
technology, intelligence reform would have dim prospects of 
success if it did not ensure our competitive advantage in the 
realm of S&T. As in all of our reforms, S&T change cannot be 
effected overnight, but that is precisely why our Associate 
Director for S&T has chosen speed as the first of his cardinal 
values--the other two being surprise and synergy.
    Speed is exemplified by agile, flexible, proactive, and 
rapid responses to new threats and opportunities, and at low 
cost. Surprise includes new sources and methods, disruptive 
technologies, counter-denial and deception, and revolutionary 
approaches. We have laid the groundwork for an IC version of 
DARPA, which we are calling IARPA, to nurture good ideas for 
sharing and growing S&T expertise within the community.
    Synergy means connecting the dots, forming informal 
networks and finding innovation at the crossroads of 
technologies. It is an understatement to say that the fastest 
way to increase the value of intelligence is to share it for 
collaboration and make it accessible for action.
    Each IC agency and department, as you know, operates on 
legacy systems that were planned and, in many cases, deployed 
long before the Internet age. Enabling these systems to 
communicate has proved daunting. Solutions in the information-
sharing field involve policy changes to enable sharing 
information, not only internal to the community, but with non-
Federal partners and the private sector.
    Two senior officials--the DNI's CIO and the Program Manager 
for Information Sharing--have accomplished a great deal toward 
both of these ends. Under their leadership, we have implemented 
a classified information sharing initiative with key U.S. 
allies. This was stuck for a long time. We got it unstuck 
through some hard work by both of these people.
    We've developed and rolled out an electronic directory 
service--a virtual phone book for terrorism information for 
those that have counterterrorism responsibilities across the 
U.S. government.
    We've released the Information Sharing Environment 
Implementation Plan and Presidential Guidelines on Information 
Sharing. These two documents provide the vision and the road 
map for better information sharing within the Intelligence 
Community with our Federal, state, local, and tribal 
counterparts, as well as with the private sector.
    We've insisted that all significant IT deployments in the 
community be consistent with a common IC enterprise 
architecture. We've established a joint office with the 
Department of Defense CIO for managing the development and 
provision of cross-domain solutions that enable the national 
security systems to move information between networks operating 
at different security classifications.
    These are just a few examples of the relentless problem-
solving approach to information sharing and access that 
empowers everyone in the IC and everyone with whom the IC 
shares goals, objectives and information.
    In conclusion, Mr. Chairman and members of the Committee, 
we have done much to make America safer from the very real 
threats that menace our fellow Americans, our values, and our 
friends and allies around the world. The intelligence community 
and the ODNI have embraced the reforms of the past two years 
and are implementing them, resulting in improvements across the 
enterprise that is the U.S. intelligence community.
    By its nature, reform and the integration of the IC will be 
a long process--that's why I said what you are seeing is reform 
in action--but its benefits are already being realized and 
creating increased support among agencies and their customers 
to continue efforts accelerating the pace of reform.
    With that, we would be pleased to take any questions that 
you have.
    [The prepared statement of Ms. Graham follows:]

  Prepeared Statement, Office of the Director of National Intelligence
    Chairman Rockefeller, Vice-Chairman Bond, Members of the Committee, 
it is our pleasure to speak to you today about the progress the United 
States Intelligence Community has made during the two years since the 
Congress enacted and the President signed the Intelligence Reform and 
Terrorism Prevention Act of 2004 (IRTPA).
    Over the last two years, the Intelligence Community has achieved 
good results through a concerted effort to integrate itself more 
tightly, share information more freely, coordinate its actions more 
efficiently, define its priorities more clearly, and align its resource 
expenditures against those priorities more strategically.
    The Office of the Director of National Intelligence (ODNI) has 
assumed responsibility for strategic leadership of the IC, but the ODNI 
has attempted to do this in concert with its IC colleagues, relying on 
the individual agencies to execute their missions fully and completely. 
There's no other way for such a large, complex Community to succeed. In 
a true community, leadership in its fullness is a shared mandate; it 
extends across bureaucratic divisions and up and down the chain of 
command. Everyone has to feel responsible and be accountable for the 
effectiveness of his or her agency, programs, office, and personal 
actions.
    We in ODNI have helped the Intelligence Community protect the 
security of the United States and advance important national interests 
in implementing the IRTPA and the recommendations of the President's 
Commission on the Intelligence Capabilities of the United States 
Regarding Weapons of Mass Destruction (the WMD Commission). The work of 
the ODNI has enhanced the Intelligence Community's ability to support 
policymakers, senior leaders, diplomats, warfighters, and law 
enforcement officers. We strive to ensure this progress continues, but 
several more years will be needed to fully achieve the goals of the 
IRTPA and other proposals.
    This reality provides the context for understanding the 
developments discussed below. To frame our assessment of intelligence 
reform, we would like to focus on structural change, analysis, 
collection, management, requirements, the information enterprise, and 
science and technology. We shall also emphasize the ways in which the 
ODNI has helped the intelligence reform process.
Structural Change
    A great deal of structural change has occurred within the IC during 
the past two years in response both to our past failures and pressing 
threats.
    We have taken the IRPTA's call for a strong National 
Counterterrorism Center and made it a reality. The NCTC stands at the 
center of the intelligence contribution to the War on Terror.

      NCTC is led by an official who has been designated as the 
mission manager for counterterrorism.
      It comprises officers representing all the relevant 
federal departments.
      It draws on and shares information from thirty different 
intelligence networks, including foreign and domestic threat 
information.
      It convenes coordination meetings across the government 
three times a day.
      It guides the counterterrorism analytic workload across 
the IC.
      Finally, when events mandate, it becomes a hub for 
critical intelligence support to our Nation's leaders. NCTC played an 
important role last summer when the British thwarted the civil aviation 
plot in London.

    IRPTA also focused on the FBI's contribution to national 
intelligence. The FBI's senior leadership has embraced this mandate and 
has shown a great commitment to integration within the IC. The Bureau 
has established the National Security Branch to bring together under 
one umbrella its counterterrorism, counterintelligence, weapons of mass 
destruction, and intelligence programs.
    As you know, the WMD Commission emphasized the critical 
contribution HUMINT plays in preserving national security. The 
Commission called for increased interagency HUMINT coordination, better 
and more uniform tradecraft standards, and increased joint training for 
operators. This led to another major structural change in U.S. 
intelligence: the CIA received the President's approval to establish 
the National Clandestine Service.
    These two changes--the NCS and the NSB--were major events, 
strengthening our human intelligence effort at home and abroad. In 
coordination with the National Clandestine Service, the FBI, the 
Defense Intelligence Agency, and the military Services are improving 
the training, tradecraft, and integration of their case officers and 
operations.
    Additional innovations have followed: the creation of the National 
Counterproliferation Center, and the appointment of a MASINT Community 
Executive, for example. The DNI's Open Source Center, under the 
executive agency of the CIA, is enhancing its collection and analysis 
to complement technical collection in a cost-effective manner. 
Meanwhile, institutions of longstanding assumed important new 
responsibilities. NSA has been vital in helping support the Global War 
on Terror. DHS has made great strides in integrating homeland security 
intelligence. And NGA stepped ``out of the box'' to help our Nation 
assess and mitigate the terrible impact of Hurricane Katrina.
    We also worked side-by-side with the Department of Defense on 
establishing Joint Intelligence Operations Centers (JIOC) at Combatant 
Commands around the world and a Departmental JIOC at the DIA. JIOCs 
will improve coordination and access to information between national 
intelligence managers and DoD operators in-the-field through embedded 
personnel and enhanced horizontal integration. This will improve 
overall corporate situational awareness and adds value/granularity to 
knowledge bases throughout the entire Intelligence Community.
Collection and Analysis: Working Together
    Virtually all observers of the Intelligence Community have 
emphasized the critical interdependence of collection and analysis, as 
well as the need to continuously improve finished intelligence products 
through better methodology, more outreach, more alternative analysis, 
and more transparent sourcing.
    If we are going to solve the most difficult intelligence 
challenges, our analysts and collectors must work hand-in-glove. And 
they are doing that, precisely in terms of attacking the priority hard 
targets. For instance, the new North Korea and Iran Mission Managers 
have already begun promoting Community-wide integration and providing 
policymakers with briefings drawing on Community-wide expertise. Also, 
a founding principle in DoD JIOC establishment is better integration of 
analysts and collectors to enable more agile operations in support of 
the long war.
    In support of collection/analysis collaboration, we also initiated 
the Integrated Collection Architecture process to develop an objective 
architecture and implementation roadmap that will be flexible in 
meeting analysts' needs, to guide future collection investment 
decisions, address shortfalls in current collection capabilities, and 
help us close gaps in the Intelligence Community's understanding of 
critical targets. In so doing, we have begun to identify capability 
shortfalls and areas of emphasis and de-emphasis to be addressed in the 
President's Budget.
    The Deputy Director of National Intelligence for Collection seeks 
to re-balance, integrate, and optimize collection capabilities to meet 
current and future customer and analytic priorities. Collection is by 
far the most expensive activity undertaken by the Intelligence 
Community, but it is also what gives the IC its ``competitive 
advantage'' in protecting the United States and its interests.
    By the same token, under the leadership of the Deputy Director of 
National Intelligence for Analysis, we have taken many steps to bring 
analysts closer together. Among many other things,

      We established the Analytic Resources Catalog.
      We established a Long-Range Analysis Unit to stimulate 
intra-IC focus on ``over-the-horizon'' issues.
      We have brought IC staff and contributions into the 
President's Daily Brief beyond the traditional (and still strong) CIA 
input.
      We have launched several initiatives to strengthen the 
quality, and ensure the integrity, of IC-wide analytic practice.
      We are establishing activities to ensure that the rich 
diversity of expertise--resident within and outside of the Community--
is brought to bear on our analytic product.
    Let me add one final word on collectors and analysts working 
together: we are pleased that we have developed a new model for 
assessing and then tasking IC organizations to prepare Community 
seniors to ``lift and shift'' collection resources in response to 
emerging crises.
      Application of this process in support of intelligence 
efforts during the recent Lebanon crisis proved effective in focusing 
Community efforts and delivering important new intelligence.
      The same model is being used against the ongoing Darfur 
crisis and in Somalia.

    All of this is being undertaken to provide the best possible 
support to our policy and military communities. While we have met with 
substantial success, forging a close-knit, collaborative Intelligence 
Community remains a significant challenge, but it is one we are 
committed to pursuing with vigor.
Management
    The Deputy Director of National Intelligence for Management (DDNI/
M) supervises activities that ensure the ODNI and the IC have the tools 
and guidance they need to do their work. This begins with strategy.
    The principle underlying the first-ever National Intelligence 
Strategy (NIS) is the transformation of the Community through the 
integration of its functions. Its five mission objectives and ten 
enterprise objectives have been translated into strategic 
implementation plans (approved by the DNI in July 2006) and into 
program and budget decisions. The ODNI has revised the National 
Intelligence Program (NIP) budget structure, for instance, to improve 
transparency and consistency across all NIP programs, to facilitate a 
``performance budget,'' and to facilitate analysis of how well the 
individual NIP programs are supporting the NIS.
    The ODNI is making frequent use of the new budgetary and 
acquisition powers granted by the Intelligence Reform Act to manage and 
shape the Community. Indeed, the Fiscal Year 2008 program build is 
critical; it marks the first one that the DNI will lead at all steps of 
the process. The meshing of budgets, programs, plans, acquisition, and 
strategy has created a powerful effect on IC elements, several of which 
are now modeling their own internal governance processes on the ODNI 
pattern.
    The DDNI/M's writ also includes security, training, and human 
capital, which are vital to the success of the IC of the future, and we 
are making strides toward making the Community one that not only wins 
the war for talent but grows and retains a corps of motivated, 
collaborative, and expert professionals. Indeed, nothing is more 
important to the IC's future than its workforce, which includes 
replenishing its ranks of analysts and human collectors, attracting 
specialists in S&T and WMD, and making the most of America's natural 
diversity.
    Working closely with agencies and departments across the Community, 
our Chief Human Capital Officer has:

      Completed the first Strategic Human Capital Plan for the 
IC.
      Developed competencies for analysts and managers across 
the Community.
      Mandated individual Personal Performance Agreements for 
agency heads and senior IC executives.
      Completed policies that will make joint duty a 
prerequisite for promotion to senior levels of the IC.
      Promoted development of modern, performance-based 
compensation policies for civilian employees that will be completed 
over the next two years.

    These are just a few of the policy initiatives in the area of human 
capital that we are monitoring closely with our annual surveys of the 
IC workforce, a reminder to senior management that our colleagues' 
opinions, desires, and morale are vital elements of a strong Community. 
And this is just one of a number of initiatives well under way in the 
management area.
Requirements
    The Deputy Director of National Intelligence for Requirements is 
responsible for ensuring the IC understands and is working to address 
the full range of customer needs for national intelligence.
    Working closely with the National Security Council (NSC), we have 
revamped the national intelligence priorities process. It is considered 
very effective in conveying to the IC the Nation's highest priority 
national intelligence needs. Updated semi-annually by the NSC and 
approved by the President, the national intelligence priorities better 
focus the IC's collection and analytical effort than in the past. There 
is close, continuous, and more formal interaction with senior customers 
to better understand their needs and ensure those needs drive the 
Community's priorities.
    Requirements also completed the first-ever inventory of all U.S. 
intelligence liaison relationships, and is using the knowledge gained 
to maximize our reach and minimize the real and potential costs of 
working with foreign partners. Its Foreign Relations Coordination 
Council (which includes members from throughout the IC) will help in 
this task.
    Finally, Requirements partnered with the private sector to gain a 
``hands on'' perspective of the international environment that often is 
unavailable anywhere else. A number of respected groups, including the 
Center for Strategic and International Studies, the Intelligence and 
National Security Alliance, the Business Roundtable, and the Chamber of 
Commerce, work with the ODNI to sponsor private sector firms' 
participation in unclassified ODNI forums to discuss foreign matters of 
mutual interest.
Science & Technology
    In an age of globalization that closely reflects developments in 
science and technology, intelligence reform would have dim prospects of 
success if it did not ensure our competitive advantage in the realm of 
S&T. As in all of our reforms, S&T change cannot be effected overnight, 
but that is precisely why our Associate Director for S&T has chosen 
``Speed'' as the first of his cardinal values, the other two being 
``Synergy'' and ``Surprise.''
    Speed is exemplified by agile, flexible, proactive, and rapid 
responses to new threats and opportunities--and at low cost. We have 
launched the Rapid Technology Transition Initiative, for instance, to 
accelerate the transition of innovative technology to operations by 
funding 13 programs in FY07.
    Surprise includes new sources and methods, disruptive technologies, 
counter-denial and deception, and revolutionary approaches. We have 
laid the groundwork for an IC's version of DARPA, which we are calling 
IARPA--the Intelligence Advanced Research Projects Activity--to nurture 
good ideas for sharing and growing S&T expertise.
    Synergy means connecting the dots, forming informal networks, and 
finding innovation at the crossroads of technologies. We have developed 
a unified IC S&T Strategy and Plan that identifies and addresses IC-
wide technology gaps, establishes new joint S&T programs against high-
value, hard targets, and institutes new joint duty programs such as the 
ODNI S&T Ambassadors initiative.
Information Sharing and Enterprise Architecture
    The fastest way to increase the value of intelligence is to share 
it for collaborative critiques and make it accessible for authorized 
action. Sharing information is an issue much bigger than the 
Information Technology field. Each agency and department runs legacy 
systems that were planned and in many cases deployed long before the 
Internet age; making them communicate (to create a common IC 
identification badge, for example) has proved daunting. Solutions in 
the information-sharing field will have to involve policy changes as 
well, including sharing information with non-Federal partners and the 
private sector.
    Two senior officials--our DNI Chief Information Officer (CIO) and 
the Program Manager for Information Sharing Environment--have 
accomplished a great deal toward both of these ends. Under their 
leadership we have:

      Implemented a classified information sharing initiative 
with key U.S. allies. This was ``stuck'' for a long time. We got it 
``unstuck.''
      Developed and rolled out the Electronic Directory 
Services, a ``virtual phone book'' for terrorism information and those 
that have counterterrorism responsibilities in the U.S. government.
      Released the Information Sharing Environment 
Implementation Plan and Presidential Guidelines on Information Sharing. 
These two documents provide the vision and road map for better 
information sharing within the Intelligence Community and with our 
Federal, state, local, and tribal counterparts, as well as with the 
private sector. Implementation of both is well underway.
      Worked improved information sharing within the DoD 
through implementation of the JIOC construct worldwide.
    These are just a few examples of a relentless ``problem solving'' 
approach to information sharing and access that empowers everyone in 
the IC and everyone with whom the IC shares common goals and 
objectives. The DNI CIO is insisting that all significant IT 
deployments in the Community be consistent with a common IC enterprise 
architecture consistent with the Federal Enterprise architecture.
      As part of this, the DNI CIO has inventoried the IC 
architecture with an eye to pointing the way for IC members to 
modernize in compatible ways.
      In addition, the DNI CIO established a joint office with 
the Department of Defense CIO for managing the development and 
provision of cross-domain solutions that enable the national security 
systems to move information between networks operating at different 
security classifications, thereby improving collaboration and sharing.

Conclusion
    In conclusion, Mr. Chairman, and Members of the Committee, we have 
done much to make America safer against the very real threats that 
menace our fellow Americans, our values, and our friends and allies 
around the world. The Intelligence Community and the ODNI have embraced 
the reforms of the past two years and are implementing them, resulting 
in improvements to all aspects of the IC. Integration is not just a 
process between agencies; it is also a process within the agencies as 
we try to coordinate the insights and work of the various intelligence 
disciplines and processes. By its nature, this integration will be a 
long process, but its benefits are already being realized and creating 
increased support among the agencies and their customers for continuing 
the efforts at an accelerated pace. We are also seeing more clearly 
where the true challenges lie--and building the trust with the IC that 
will be necessary to address them. We would be pleased to take any 
questions that you might have.

    Chairman Rockefeller [presiding]. Thank you very much 
indeed, and I apologize for the comings and goings, but that 
should be all for the time being.
    I want to address this to Ambassador Kennedy and other DDNI 
management. One of the greatest challenges facing Congress in 
this past year in drafting the Intelligence Reform and 
Terrorism Prevention Act was how to in fact balance 
successfully the establishment of a unified intelligence effort 
within the DNI, but that also included those within the 
Department of Defense. That was touchy; a lot of arguments 
ensued--all of this with the continuing requirement that the 
combat support agencies be able to respond to the needs of 
their military commanders.
    Now I myself think it worked out rather well, but I don't 
know how you feel. First of all, does the Director of National 
Intelligence need stronger budget and personnel authorities 
than those granted to him in the reform act?
    Ambassador Kennedy. Well, sir, I don't believe that in the 
budget and personnel arena that we need stronger authorities. 
You have given and it's written into the legislation that the 
Director of National Intelligence determines the national 
intelligence budget, and I believe that he has done so for FY 
2007 and that the budget that will be sent up here on the 5th 
of February will reflect his determinations of what the budget 
should be.
    In the personnel arena, I believe his authorities to move 
personnel, his authorities to establish policies and standards 
and procedures are sufficient, and the steps we've already 
taken, such as in the area of joint duty, I think reflect that.
    Chairman Rockefeller. I thank you. Secondly, how is the 
DNI's office balanced--how have they balanced the separate 
requirements of the military and the national consumers of 
intelligence in terms of building budgets, tasking collection 
systems and providing analytical supports? That's more of a 
technical question, but it's an important one.
    Ambassador Kennedy. I think, first, we have built, over the 
course of the existence of the DNI, a very, very close and 
positive working relationship with the Office of the Secretary 
of Defense. My office on the budget side regularly interrelates 
with the Undersecretary of Defense for Intelligence's office, 
and we work on NIP issues that are of interest to the 
warfighter, and we also have significant input into what DOD 
puts into its military intelligence budget.
    We have a regular series of meetings, but since the 
question then morphs into the area of tasking analysis, let me 
ask my two colleagues, Ms. Graham and Mr. Fingar, who deal with 
the issues of collection and analysis to add and amplify, if 
that's permissible.
    Chairman Rockefeller. Please.
    Ms. Graham. Senator, I'd give you two examples from a 
collection standpoint.
    The building of what I referred to as the integrated 
collection architecture, when that thought came to be laid on 
the table last year, Dr. Cambone and I spent a lot of time 
talking about the theory behind identifying the needs of the 
Nation for intelligence capabilities. That resulted in that 
process being done collectively--NIP programs and MIP programs, 
capabilities that the Nation needed no matter the war fighter 
or the diplomat. And so that picture of integrating, I would 
give us a B+ in our first year of effort at that.
    Another: When Dr. Cambone and the former Secretary decided 
to establish Joint Intelligence Operations Centers--JIOCs--one 
of the issues for the defense JIOC which resides here in 
Washington, it is a single floor where you can make collection 
decisions. So it was intuitive to me and it made complete sense 
that why wouldn't you want to hook up the national, the 
military, the foreign and the domestic collection systems on 
the same floor?
    And so we have begun to do that by having the back room of 
my collection strategy piece linked up with the defense JIOC so 
when we, in a crisis situation--take the North Korean things of 
last summer--when we need to make decisions, we can make them 
with the total of the national capability in a single place.
    So those are two examples I would give you of how I think 
we are making good progress. We have more to go in laying the 
road, but we're making progress.
    Dr. Fingar. Just very briefly, and it's along the same 
lines of integration of effort, within the analytic sphere, the 
guiding principle has been to ensure that we have the 
appropriate expertise to address all of the various missions 
that are supported by the intelligence community--military 
missions, diplomatic missions, those of the Treasury 
Department, Homeland Security and so forth.
    What we have attempted to do, with a reasonable degree of 
success, is to forge a community of analysts such that if there 
was a task, a question, a problem, that I have the capability 
to treat analysts across the community in all 16 agencies as 
available for deployment against that task, not by moving them 
but by tapping their expertise. Two examples I think will 
illustrate how we have done that.
    In responding to a series of requests and requirements from 
Baghdad, from MNFI, those have come in either through DOD, DIA, 
where they have come to the National Intelligence Council. The 
starting point has been to reach out to those with the most 
expertise on the subject wherever they are and bring them 
together.
    The related aspect of this gets into tradecraft and 
capability, such that if a question is assigned to one of the 
components of the community, that the other components and the 
requestor can have confidence that the answer will be of high 
quality and focused on their needs rather than a dear-
boxholder-fits-nobody response which was common in the past.
    Chairman Rockefeller. I thank you, Mr. Fingar, and I now go 
on to Vice Chairman Bond.
    Vice Chairman Bond. Thank you very much, Mr. Chairman. I'm 
just going to comment on some discussion that occurred before I 
arrived. I understand the DNI is co-located with the Defense 
Intelligence Agency. Secondly, as far as rushing an NIE to meet 
a timetable on Capitol Hill, we learned the hard way in the 
2002 Iraq WMD National Intelligence Estimate, which was 
produced in a few short weeks, that if you want it bad, you may 
get it bad, and I'm sure you are going to give us the best 
possible Iraq NIE in a timely fashion. If there's any comment 
on that, I would welcome comment.
    Dr. Fingar. Senator, I would be happy to comment on that. 
Three points.
    One is I remind myself regularly that the Office of the 
Director of National Intelligence might not exist were it not 
for that Iraq WMD estimate, which crystallized the number of 
problems. And therefore, under my hat as chairman of the NIC, I 
have accorded highest priority to ensuring that the quality of 
coordinated community products is of the highest standard we 
can attain for estimates and for all other products.
    Estimates are special, but what makes them special beyond 
the longer time frame of most of them is that they are approved 
by the heads of agencies. It was as the deputy of INR that I 
sat on the NFIB that approved that Iraq WMD estimate. So I am 
particularly conscious--
    Vice Chairman Bond. Thank you.
    I had a couple of other questions before my time runs out, 
but let me clear the air. I did not vote for the intelligence 
reform bill. I thought it gave the DNI a tremendous amount of 
responsibility without the authority to get the job done. I 
commend Ambassador Negroponte and you for playing what I think 
is a weak hand as best as possible. What we're trying to do 
here is make sure that you not only have the responsibility but 
you have the authority to make sure that information is shared, 
that there are no more stovepipes. Unfortunately, there are 
several examples that I could cite you, but not in an open 
hearing.
    I will try a different tack and ask if any of you see that 
the problems with the 2002 NIE and the problems that were 
frankly endemic within the community still need additional 
legislative authority or clarification, or is it just executive 
action needed? And I would start with Ms. Graham and then 
others who may have specific areas of concern on which we can 
focus. I'd like to do that. Otherwise we will save some of the 
examples for closed session.
    Ms. Graham?
    Ms. Graham. Senator, I would--and I'll let my colleagues 
speak further to this, but what I would say to you is that one 
of the things the DNI has done as we've gone through this first 
now 21 months is be mindful of what more could be done to 
enhance the authorities of the IRTPA. There is some work on 
that that has been done, and I think, without speaking for him, 
his decision was to come to you and to let Admiral McConnell, 
if confirmed, the next DNI, come to you with the benefit of all 
that. But I will speak for myself, for collections.
    Vice Chairman Bond. Please.
    Ms. Graham. I don't believe that in the collection realm--
because so much of this is, number one, about collaboration, 
number two about information sharing, and number three about 
culture, that there are legislative fixes needed to empower 
what I'm trying to do.
    Vice Chairman Bond. Once you get the collection to the 
analysis stage, I still hear concerns that some agencies are 
not sharing.
    Dr. Fingar. The problem has not been solved completely. 
We've taken a number of steps--three specifically.
    One is the IRTPA does give the DNI sole authority on 
dissemination, so that that is an authority that we have.
    We have already put in place measures that make available 
to analysts across the community ORCON materials, which 
previously restricted dissemination to analysts and indeed to 
whole agencies or access to databanks if there was one ORCON 
document in it. I'll General Meyerrose speak to the 
certification of systems which will allow us to move others 
more freely.
    The third way in which we have tackled this are the 
compartmented materials, with a process now that will shift the 
responsibility and authority for determining access from the 
producer of the report to need-to-know determined by Mary 
Margaret and myself.
    I'll stop there.
    Vice Chairman Bond. We'll come back. Ambassador Kennedy 
wants to make a brief comment.
    Ambassador Kennedy. I would just say, as I responded to the 
chair a few minutes ago, I think in the area of budget and 
personnel, in the macro sense, we have the authorities we need. 
You may well see in the FY 2008 authorization bill discussion 
some fine tuning and tweaking of small matters. But you've 
given us solid authorities and we may ask for, you know, a 
comma here or a clause there, but nothing--nothing that I'm 
finding that is a major shortcoming.
    General Meyerrose. If I could add to Dr. Fingar's points 
about allowing innovation into our information sharing, that's 
been something that we've been working on for almost a year. 
The policy that's in place took three years to write, four 
years to coordinate, and we've not touched it in five. And so 
clearly there is room for changing a paradigm which says that 
we avoid risk to one we manage risk, and we're working that 
very hard with the Department of Defense and the National 
Institute of Standards and Technology, and are about to come 
out with a series of proposals which winds us up for 
reciprocity, for using common criteria and those kinds of 
things, which I think will allow us to bring innovation into 
our systems to overcome issues of information sharing.
    But I would add that the major information sharing issues 
that we have managed to solve over the past year are more of 
process and policy than they have been of technology. I'll give 
you one very brief example. Other parts of the government came 
to us and asked us to set up portals for pandemic planning at 
top secret, secret and unclassified levels, which we did. An 
interesting thing occurred. In setting up the top secret 
portal, it took us a matter of two or three days; in setting up 
the secret portal it took us a matter of a little less than a 
week; and setting up the unclassified portal took us a matter 
of 8 weeks.
    And the reason was because of the procedural labels and 
headings that people put on information generated by 
organizations which prevented the sharing. It had nothing to do 
with technology, it had nothing to do with external policy or 
the bringing together of various organizations; it had to do 
with each organization's internal policies and process. And we 
did manage to overcome it. We in fact run an information 
sharing pandemic planning environment that services over 40,000 
folks in the federal government at all three levels of 
classification, and it's an example of most of the information 
sharing issues we face are cultural and process rather than 
technology.
    Chairman Rockefeller. Thank you very much.
    Senator Feinstein.
    Senator Feinstein. Thank you very much, Mr. Chairman.
    Does the present DNI have a regular process whereby the 
heads of the agencies meet?
    Ambassador Kennedy. Yes.
    Senator Feinstein. And when do those meetings take place, 
Mr. Kennedy?
    Ambassador Kennedy. The DNI has regular one-on-one sessions 
on a rotating basis with all--
    Senator Feinstein. That's not what I'm referring to. What 
I'm referring to is meet as a group to build a team that 
crosses the smokestacks.
    Ambassador Kennedy. Every Monday at 2:00, the heads of the 
six or seven largest intelligence community organizations sit 
down together, and with the Principal Deputy Director of 
National Intelligence and the rest of the team, every Monday. 
All 16 agencies get together every 8 weeks, meeting at the DNI. 
And that is complemented by a huge series--breakfast sessions, 
budget sessions that I held. And then plus all the CFOs of the 
community are now meeting together. All the chief human capital 
officers meet together. All the CIOs get together.
    In other words, we have tasked, in effect, each one of the 
titled, if I might use that word, officials in the DNI to reach 
out and have regular get-togethers, regular sessions to 
exchange information, knowledge and requirements with their 
counterparts throughout the entire community.
    Senator Feinstein. And what is the current staff level of 
the DNI?
    Ambassador Kennedy. The current staff level authorized in 
the last authorization bill was 1,579.
    Senator Feinstein. And that doesn't include--at that time, 
didn't it include the counterterrorism unit?
    Ambassador Kennedy. That includes the National 
Counterterrorism Center, Ma'am.
    Senator Feinstein. And that is, what, 350, 400?
    Ambassador Kennedy. It's about 400, yes.
    Senator Feinstein. Four-hundred, O.K.. So, net, it's about 
1,100.
    Ambassador Kennedy. Of the 1,579, about two-thirds of those 
were inherited from prior Director of Central Intelligence 
agencies, and force of law transferred 1,000, roughly, of the 
1,579 positions to the DNI in the IRTPA. And then the IRTPA 
also said we authorize 500 additional positions. And so we've 
been using the transfers plus the 500 to build the DNI.
    Senator Feinstein. What many of us--and I'm speaking for a 
long time ago now--when this was first contemplated, we didn't 
look at the DNI as a bureaucrat; we really looked at him as a 
facilitator. And I guess one of the things that has concerned 
me is the huge staff that exists over there and whether in fact 
that is necessary. It may even be an impediment. Could you 
comment?
    Ambassador Kennedy. Yes. As a bureaucrat, I don't think 
it's a bureaucracy for three essential reasons.
    The first is that if you're going to have the kind of 
leadership in the intelligence community that I believe that 
the Congress intended for it, it is essential that you 
coordinate.
    So therefore you have to have coordination leaders in the 
analytical field, which puts a small staff with Dr. Fingar. You 
have to have a group in the collection arena, under Mary 
Margaret Graham to coordinate the multi tens of thousands of 
personnel who do collection. You have to have a small CIO staff 
in order to burst through the barriers that General Meyerrose 
was outlining when we were building the influenza pandemic 
websites. And the same is true if we want to make sure that we 
have all of the requirements that the civilian and the military 
community need from the intelligence community.
    And then when you add in the mandatory items such as the 
National Intelligence Council, the National Counterintelligence 
Executive, as you just said, the National Counterterrorism 
Center, which consumes almost a third of that total number, I 
see the DNI is actually a very, very small number, and in an 
overhead in small single digits in terms of the entire 
community which it is managing.
    Senator Feinstein. All I can say is--and perhaps the 
leadership of the Committee is different--let me just speak as 
a rank-in-file member. I don't see the DNI leadership. I don't 
hear about the leadership. And what I see--and I try to do my 
homework and I try to read the intelligence--is the growth of a 
bureaucracy over there. And I have got to tell you--and you 
don't need to answer this--it concerns me very much.
    I would like to ask, if I might, Ms. Reingold, a question. 
I think it has been the conventional wisdom since 9/11 that 
information sharing was one of the key impediments to 
preventing terrorist attacks. The intelligence reform 
legislation, which we enacted in December 2004, created the 
information sharing environment, and called for an 
implementation plan in a year. I believe that was received on 
November 15th of last year. It also called for a progress 
report beginning in December of 2006, which has not been 
presented. So I would like to ask for that progress report.
    Let me ask this question. How in practice is the DNI 
getting actionable intelligence to law enforcement and Homeland 
Security officials at the state and local level? I have 
complaints everywhere I go in California, from local law 
enforcement, from mayors. I took the opportunity to get the 
mayor of Los Angeles together with Ambassador Negroponte, but 
everybody tells me, if you're not in a taskforce, there is 
still a fractured system.
    Ms. Reingold. Okay, if I could address your first issue 
about the implementation plan and a progress report, in the 
implementation plan, we made a recommendation. The 
implementation plan essentially gave a status, a progress 
report on where we are with ISC implementation, and then 
recommended that in June of every year thereafter, which would 
be this coming June 2007, that we provide an annual progress 
report. I would certainly be happy to update anything since the 
implementation plan came out and provide that to you. I just 
wanted to let you know in terms of timing.
    Senator Feinstein. I appreciate that.
    Ms. Reingold. The question about actionable intelligence, 
there have actually been some very important accomplishments 
that have occurred most recently. The President actually asked 
the program manager and the interagency to come up with a 
framework to improve information sharing between federal, 
state, local, tribal, and private-sector partners.
    And there was an acknowledgment that actionable 
information, not only from the federal level to our state and 
local and private sector partners, but also information that 
resides at the local and community level, to try to make that 
information also more available, in particular to the 
intelligence community--so very specific activity that we're in 
the process of pulling together an implementation plan is part 
of this federal, state, local framework.
    There are two pieces to it. One is to create an interagency 
threat assessment coordination group located at the NCTC that 
can produce federally-coordinated information--very important--
and this was all done with our state and local partners in 
terms of all of the implementation and this whole framework And 
we are in the process of setting up that implementation team, 
and working with state and local representation from the law 
enforcement and the Homeland Security communities to put 
together a process to improve getting that actionable 
information to the state and local level.
    Senator Feinstein. Are mayors included?
    Ms. Reingold. Mayors are included from the standpoint of 
the U.S. Conference of Mayors, all of the associations that 
represent state and local officials, National Governors 
Association. We have had representatives from these 
organizations.
    Senator Feinstein. That is not my question.
    Ms. Reingold. Oh, you mean in terms of--
    Senator Feinstein. The high-risk areas--are mayors told and 
informed of the risks?
    Ms. Reingold. Yes, part of all of this is that at the state 
and local level, mayors as well as governors have begun setting 
up what they call information fusion centers in a lot of the 
urban areas, as well as at the state level. And those fusion 
centers are there to inform their local leadership at the--
again, at the local, as well as the state level. So part of 
this whole framework is to help ensure that there is a national 
network of fusion centers that can receive the information that 
is coming from the federal government.
    Senator Feinstein. Sorry, what is a fusion center?
    Ms. Reingold. A fusion center is an entity that has 
actually been established not by the federal government by 
either a major city or the state level to actually do something 
very similar to what we do at the federal level at the National 
Counterterrorism Center, at the NCTC. It is for them to 
literally pull together at their level all hazards, all threat 
information that they collect from the community so that they 
can paint a picture, whatever they need at their level, to 
assess what the threat is to their community and to their 
region.
    So we are trying to link what we are doing through the 
intelligence community and through the broader homeland-
security and law-enforcement communities at the federal level 
with this effort at the state in major urban area level. And 
the framework that recommendations are made to the President 
and that we are moving forward with is to pull together these 
fusion centers that I am referring to. There have been federal 
funds that have come from the Department of Homeland Security 
and Department of Justice to support these centers. And as a 
matter of fact, you can follow up on Thursday when you have 
both the FBI and DHS. And I'm sure that they will be talking a 
little bit about this effort as well.
    Senator Feinstein. But if I ask--
    Chairman Rockefeller. If I may interrupt at this point, we 
are going on over 12 minutes on this question, and I need to 
call on Senator Burr.
    Senator Feinstein. Thank you.
    Senator Burr. Thank you, Mr. Chairman. I welcome our panel.
    As I have sat here and listened to the exchange, I have 
thought, with the process changes that are under way and, 
Ambassador, with your description of the directive on pandemic 
flu, and the actions that you had to take, I am somewhat 
concerned--and I say this in the form of a statement versus a 
question--that we not lose focus on our strategic long-term 
threats that exist, and our ability to look over the horizon, 
which is what is unique about U.S. intelligence.
    Ms. Graham, I think in your testimony you have covered very 
well that collection is better today. After five years, we have 
gotten better, and I applaud all of the agencies for that. But 
intel is a difficult thing to measure. And I would ask you, 
have we really tried to measure the product? Have you compared 
raw collection and finished analysis to see if in fact we have 
really improved our capabilities?
    Ms. Graham. I will be the first to tell you that metrics is 
a work in progress. How do you measure this? We must measure 
it, first of all, but how do you. So I want to tell you--and I 
think Tom can complete this story--the anecdote about analysis 
informing collection.
    There are so many things out there, both strategic, long-
term, tactical, near-term, that we need our intelligence 
community to do, that we must point them in the right 
direction.
    You will hear it said that there are requirements out 
there, that there is requirements creep, where basically every 
analyst who has a question puts it into the requirement system, 
writ large. What that does to the collectors, be they HUMINTers 
or any of the technical intelligence, SIGINT, imagery, it 
allows them to perhaps diffuse their attention. So by having 
the analysts say to us, this is the most important gap, these 
are the most important questions that will fill this gap, you 
are able to direct the collection agencies to the most 
important fruit of collection.
    We have had last summer, like it or not, some practice 
exercising what we had put in place. First we had the Taepo 
Dong II flight in North Korea. Then right after that, we had 
the problem in Lebanon, which has not gone away. Then we had a 
North Korean test of a nuclear weapon. Now we have Sudan and 
the Darfur, and Somalia. And I could go on and on. And that is 
on top of Iraq, Afghanistan.
    So the ability to focus the collectors, I believe we can 
demonstrate--not measure the way I would like to--but 
demonstrate that the collection is further refined to answer 
the analytic questions. And with that, I'll turn it over to Tom 
to answer the rest of the question.
    Senator Burr. Quickly if we can.
    Dr. Fingar. Very quickly. The old model was the analyst 
with the best rolodex and fastest finger could sort of guide 
collection. What we are doing now is convening the analysts 
from across the community, sitting them down, and say, you 
collectively decide what are the most important questions we 
need to answer, and what is the information that we need, and 
where are you likely to get it. And we set very small numbers--
three, four; not laundry lists of topics to be handed over to 
the collectors--and leave it to Mary Margaret's people to 
decide how to do that.
    The feedback loop on a lot of this is pretty short. And as 
we begin to work the new information into the analytic 
products, the sourcing that we now require makes very clear 
what information is most useful, what might be very expensive 
but is not used by the analysts. We have got a much better 
picture now than we did before.
    Senator Burr. Wonderful. Ambassador Kennedy, the DNI has 
the ability to reprogram up to $150 million, and 5 percent of 
one of the recipients. Has that been used by the DNI, and is 
$150 million and the 5-percent threshold overly restrictive?
    Ambassador Kennedy. The DNI has used that authority, 
Senator, and I would be glad to give you or your staff 
representative examples offline.
    Senator Burr. Thank you.
    Ambassador Kennedy. And to date, we have had no major 
problems that could not have been addressed within that figure, 
and I think that figure is sufficient.
    Senator Burr. The reform act also allowed the DNI to 
withhold money to a recipient if in fact they had not complied 
with the DNI's priorities. Has any agency failed to comply and 
were funds withheld?
    Ambassador Kennedy. No, sir. We have engaged in an 
extensive education process in what I call the footnote 
process. When we issue their allotments to them, we specify 
what the funds are to be used for, and that has the force of 
the Anti-Deficiency Act passed by the Congress. And so we are 
achieving very, very good compliance.
    Senator Burr. Mr. Chairman, I know my time is up. It is my 
understanding at this time no one in the government can share 
with us definitely how many contractors are employed by the 
intel community, or for that fact, how many contractors are 
employed by the DNI. I hope at some early date in the future 
that, one, if that information is incorrect, Ambassador, please 
share it with me. If it's not, I hope at the earliest possible 
time, we would know what the extent of contractor usage is.
    Ambassador Kennedy. Mr. Chairman, may I have five seconds?
    Chairman Rockefeller. Provided that you answer tomorrow. 
[Laughter.]
    Ambassador Kennedy. We have just completed that exact 
survey knowing that this is something that the DNI felt very 
specifically that we needed to have to engage in solid 
management and prepare our budget submissions. I have lots of 
raw data, Senator, and as soon as that data is in shape that I 
can come and make an intelligent presentation, first, to your 
staff, then to you, we will be getting that information up, 
because I think it is important to know, and important to see 
if we are using contractors in the right way. Are there things 
that should be contracted out that are not now? Or things that 
are contracted out now, where the taxpayer would be better off 
if they were brought in house.
    Senator Burr. I thank you, and I thank the indulgence of 
the chair.
    Chairman Rockefeller. No, that was an excellent question. 
That was an excellent question.
    Senator Feingold?
    Senator Feingold. Thank you, Mr. Chairman.
    Ms. Graham, in the Director's speech on Friday and the 
ODNI's testimony today, there's a reference to ``lift and 
shift'' collection resources in response to emerging crises. 
And one of the examples it cited is Somalia. Are you satisfied 
with the level of coordination this effort has had with the 
Department of Defense?
    Ms. Graham. Yes, sir, Senator, I am. I'd be happy to talk 
to you about the details of that, but they're not at the level 
that we're at in this room. But yes, I am.
    Senator Feingold. So we could follow up in a classified 
setting?
    Ms. Graham. Absolutely.
    Senator Feingold. Well, let me say that I fully support the 
ODNI's effort to shift collection resources to Darfur and 
Somalia. However, a year ago, I asked Director Negroponte at 
the Committee's open hearing whether sufficient resources were 
being devoted to Somalia. And the Director responded that, 
``while you can never quite do enough,'' he believed that the 
resources devoted to Somalia were about right, ``in the order 
of priorities that we've got.''
    But that is precisely the problem. Places like Somalia 
should be intelligence priorities long before they appear on 
the front page. Now, how can the ODNI help set new priorities 
and implement them?
    Ms. Graham. Senator, let me start that, and then I'll let 
my colleagues. I think the development of the national 
intelligence priorities framework lays out priorities for the 
intelligence community. But a part of the answer to your 
question is the need to get the intelligence community back to 
what I grew up calling global reach.
    We don't have that today. I think you could probably tell 
me why we don't have that. But, it is because of the period of 
time we are in, the post-9/11 world, the demands on the 
intelligence community that exist today have grown 
exponentially since that day. So our challenge is, until we 
reach that point--with your help--of getting back to a place 
where we can do global reach and pay attention to places that 
are not perhaps, high on the list today, until they become a 
problem--the way Somalia is today--then we have to be able to, 
from a mission management point of view between the two of us, 
we have got to be able to have processes in place that allow us 
to lift and shift our resources when we need to. Speaking for 
myself, I don't see any other answer until we are able to 
satisfactorily have the global reach that we want.
    Senator Feingold. I'm very pleased to hear your comments 
about the need for the global reach. Mr. Fingar.
    Dr. Fingar. Well, it's very much the same situation with 
respect to analysts--that the kinds of questions we are asked, 
the kinds of problems on which our expertise is sought require 
deep knowledge. And we need to be both global in coverage and 
to have real fire extinguisher depth on subjects, and at the 
same time, need to have sort of pre-positioned and exercise 
links to expertise outside of the intelligence community that 
can be tapped very quickly.
    I'm happy to describe with you and your staff the steps we 
have taken to do that, but we are coming off a period of 
downsizing and also shifting resources to higher priorities 
that has left many gaps.
    Senator Feingold. The next question may seem a little 
ironic because my whole concern has been that we don't have the 
global reach. In fact, our policy has become so Iraq-centric, 
that we haven't had the opportunity to put the resources around 
the world that we need. But I do want to talk about Iraq in 
this context. It's highly likely that the U.S. military forces 
will withdraw from Iraq prior to the establishment of stability 
and the elimination of terrorism there, so doesn't it make some 
sense for the intelligence community to have strategies in hand 
to deal with the challenges of Iraq as and after we re-deploy 
our troops from there?
    Ms. Graham. Senator, I'll speak for the collection side of 
the business. I think there has been development of those 
strategies. Again, this is something we would be happy to talk 
to you about in as much detail as you or your staff would like 
in a classified session.
    Senator Feingold. I think my time is about over. Let me 
just say that I look forward to that, and I hope that when I 
learn about those things it will show that today's political 
policies are not dictating the long-term strategic thinking of 
the intelligence community, particularly in this area. I do 
hope it gets back to the kind of perspective that you talked 
about as your understanding of what intelligence is supposed to 
be about. And I think that we have a great opportunity to at 
least get that right if we get out ahead of it, so I look 
forward to learning more about it. Thank you, Mr. Chairman.
    Chairman Rockefeller. Ambassador Kennedy, there has been no 
nomination to fulfill the position of the Principal Deputy 
Director of National Intelligence since General Hayden's 
departure last May. Why?
    Ambassador Kennedy. I think the answer to that, sir, is 
that the Director and the White House have been engaged in a 
very, very intensive search for the right individual for such 
an important position. And now, obviously, with the change in 
the Director of National Intelligence, assuming favorable 
action by the Senate in both cases, that the new Director, 
should he be so confirmed, would wish to have an input in that 
as well.
    Chairman Rockefeller. I hear you. I'm not sure if I 
understand the answer completely, but I hear you.
    Senator Warner had to leave, and he asked four questions, 
and I promised that I would ask one of them. So this is his 
question. The ultimate goal of the 9/11 Commission and others 
is to provide the best possible intelligence to policymakers so 
that the President and members of Congress can make informed 
foreign policy and national security decisions. Since the 
President announced his Iraq plan early this month, I've taken 
the opportunity during numerous briefings and hearings to ask 
members of the intelligence community about their assessment of 
the Maliki government's ability to achieve the benchmarks 
necessary for this plan to succeed.
    And his question is: I believe important strides have been 
made towards intelligence reform, but if the intelligence 
community cannot provide an assessment of the Maliki 
government's chance for success, one of the most important 
questions facing policymakers today, how can we be satisfied 
with the pace of reform?
    Ambassador Kennedy. I think if I could ask my colleague, 
Tom Fingar, to address that Mr. Chairman.
    Dr. Fingar. It's a fair standard to which to hold us 
accountable that I think the Estimate that we still plan to 
finish by the end of the month, as promised, we'll provide some 
in-depth look at intelligence community thinking. This is 
thinking that has evolved and been shared, and shared with the 
Hill in many products, and been shaped and shared with the 
review that led to the President's policy decision.
    The very shorthand is, it would be very difficult for the 
Maliki government to do this, but not impossible. And the logic 
that we have applied looks at the importance of security--
security as an impediment to reconciliation, as an impediment 
to good governments, and an impediment to reconstruction.
    We judge that Maliki does not wish to fail in his role. He 
does not wish to preside over the disintegration of Iraq. He 
has some, but not all, of the obvious requirements for success. 
The judgment is that gains in stability could open a window for 
gains in reconciliation among and between sectarian groups and 
could open possibilities for a moderate coalition in the 
legislature that could permit better governments. There's a lot 
of conditional statements in this analysis. But that it is not 
impossible, though very difficult.
    Chairman Rockefeller. Thank you. Ambassador Kennedy, if I 
could just come back to you for a moment, I understand that 
General Hayden left a while ago, but there's something about 
the whole concept of Deputy for DNI, or person for DNI, being 
left empty--that position being left empty simply because of 
his departure--and simply because there may be some 
conversation between the potential new person, who was not 
named long ago, and whatever other elements are concerned is 
not impressive to me. What is impressive to me is that the 
United States and the DNI would go for any period of time 
without somebody responsible for that--an acting or whatever. 
So I can't find your answer satisfactory.
    Ambassador Kennedy. If I might, Mr. Chairman. We have had 
an acting for the greatest majority of the period after General 
Hayden left--Lieutenant General Ronald Burgess, U.S. Army, who 
was the Deputy Director of National Intelligence--one of the 
four deputies other than the Principal Deputy. Ron Burgess was 
the acting Principal Deputy Director for National 
Intelligence--filled that function completely, took on all the 
responsibilities and duties permitted that Mike Hayden 
undertook--chaired meetings, met with various groups. So, Ron 
Burgess filled Mike Hayden's shoes, and if I might humbly say, 
very ably, during this period of time, sir.
    Chairman Rockefeller. That answers my question and I thank 
you.
    Vice Chairman Bond?
    Vice Chairman Bond. Thank you very much, Mr. Chairman. Just 
a couple of comments on things that have been said--talking 
about getting the analysts together and getting the collectors 
together. We understand from what we learned about the Iraqi 
Survey Group that when the analysts and the collectors work 
together, and in other examples in the field where they work 
together, they settle these things. And the collectors talking 
to the analysts tell them what they can do, and the analysts 
have to be realistic.
    Now, there's a great imperative because that's probably the 
best way they can keep from getting killed if they're in the 
field. Here, there's not that same imperative, and I wonder why 
that model is not used more often here, away from the 
battlefield, to get the analysts to talk to the collectors.
    Ms. Graham. Senator, when I travel and have been out to the 
war zones or to other places, what we're trying to do here in 
Washington you see there. You're exactly correct. I would say, 
though, that looking back at the 21 months, where we are 
beginning to see and we can identify that same kind of 
collaboration, is in this concept that we call mission 
management, or the six mission managers.
    Vice Chairman Bond. Okay.
    Ms. Graham. One of the ways that you know and, of course 
NCTC is the largest and the biggest of those--even on Iran and 
North Korea, discrete but very hard problems, you are seeing 
the analysts and the collectors work together in communities of 
interest where they are sharing information. So, we're not a 
hundred percent there yet in the Washington world.
    Vice Chairman Bond. Okay. Thank you, Ms. Graham.
    I wanted to follow up on some questions that had been 
raised previously about, number one, if we pull out what chance 
does the al-Maliki government have of succeeding. I believe 
that the community was unanimous in their last open session in 
saying that a premature pullout would cause chaos, increase 
killing of Iraqis, provide safe haven for al-Qa'ida and 
possible major conflicts among countries as well as sects in 
the region.
    And what General Hayden told us in public, and followed up 
by the further briefings that we had, that while it is by no 
means sure, providing assistance to al-Maliki's government now, 
with the commitment he's made and with the assistance perhaps 
of other friendly countries in the area, is not guaranteed, but 
it is the best hope for stability in Iraq. Is that a fair 
characterization of the position of the community?
    Dr. Fingar. Yes it is, Senator.
    Vice Chairman Bond. Has the intelligence community been 
pulled off its tasks that in the professional judgment of the 
intelligence professionals would be better utilization of their 
collection and analytical assets in order to perform a 
political task rather than to focus on the threats that the 
intelligence professionals believe to be the top priority. Has 
that happened? If so, when?
    Dr. Fingar. No, Senator. The community is arrayed against 
the threats that were described in the testimony presented by 
the DNI and the other intelligence community leaders to this 
Committee last week.
    Vice Chairman Bond. And those are threats that are not 
dictated by Congress or the executive, but are the threats that 
are perceived as such by the community?
    Dr. Fingar. Yes, sir.
    Vice Chairman Bond. So there's no question about that.
    Let me ask Ambassador Kennedy--I'm still concerned about 
the budget. In the Imagery Way Ahead, General Hayden told the 
Committee that the DNI wanted to terminate a major program and 
continue another. What worked out was that the one that he 
wanted killed is still being funded, and the one he wanted to 
continue got terminated.
    How is this determining the budget? You're going to have to 
guess what I'm talking about, but I think you could.
    Ambassador Kennedy. I'm with you. I'm not sure that I can 
give you a fulsome answer in this venue, except to say that 
when the DNI, in consultation with other senior leaders in the 
intelligence community, looked at what is the essential, 
fundamental, base, national technical means that were needed, 
we made decisions on what should be funded in the national 
intelligence programs based upon those fundamental 
requirements, those baseline requirements. And, we made the 
determination that it is essential to meet baseline needs, and 
we have done that.
    Vice Chairman Bond. Okay. Mr. Chairman, we may want to 
follow up with this in a closed hearing, I think. Thank you 
very much.
    Chairman Rockefeller. Okay. Senator Whitehouse.
    Senator Whitehouse. Thank you, Mr. Chairman. We are 
expecting a National Intelligence Estimate on Iraq in the not-
too-distant future. And this is my first go at this, so I want 
to get a bit of an understanding of the procedure involved.
    How did the preparation of the National Intelligence 
Estimate, which I think is pretty close to completion and 
delivery, relate to the discussions that have taken place 
recently with the intelligence community and the White House 
with respect to the determinations that have been made in Iraq? 
And very specifically, did the office of the President or the 
Vice President provide input to any of you on the desired 
timing or content of the NIE?
    Dr. Fingar. The answer on both the timing and content is 
no.
    Senator Whitehouse. Good. And what is the preparation 
process related to the consultations that took place over the 
past months?
    Dr. Fingar. Well, we began the preparation of the estimate 
in the fall. Estimates, by their nature, require the input of 
the most experienced analysts that we have in the community. 
And even on Iran, where we have a large number of analysts 
relative to most other subjects, the number of analysts that 
are really very good is small. And in the course of preparing 
the Estimate, we were asked to prepare a number of assessments 
that fed into the President's policy review, to prepare a 
number of briefings, a number of responses to requests from 
Baghdad, MNFI particularly.
    Given the importance of the subject, we felt it imperative 
to put our best analysts on it. So there was, in one sense, a 
competition for time of the most skilled analysts. However, the 
processes were all interlinked--that the work being done on the 
estimate informed the input that the community was making in 
Baghdad and to the reconsideration of policy here. So they were 
moving in parallel. They don't differ from one another in their 
judgments, so the specific set of questions we address is the 
same set of questions that we began addressing, but the 
production schedule for the Estimate has slipped because task 
one got in the way of task two in this. As I said earlier, we 
expect to have this completed by the end of the month, but as 
we speak, the community is in coordination on a draft.
    Senator Whitehouse. Now, looking at that situation, I see a 
world community that is taking a very meager role in helping us 
to resolve the conflict in Iraq. I see a regional community 
that I would also view as taking a very meager role, 
particularly considering the stakes at hand if Iraq were to 
spark off a pan-Arabic, Sunni-Shi'ite conflict that would 
engage Egypt, Jordan, Saudi Arabia, and other nations. They're 
very directly interested in what is going on there. And there 
also seems to be widespread skepticism about the real will and 
capacity of the Maliki administration to be able to manage some 
form of resolution among the different factions in Iraq.
    And with respect to all of those three--the hesitance of 
the world community, the lack of appropriate, given the risks 
involved, response by nearby Arab nations, and the either 
hesitancy or truculence of the Iraq factions at finding an 
accommodation--what is the role of the U.S. presence with 
respect to those different characteristics of this dispute?
    Dr. Fingar. Senator, my starting point is the very high 
expectations that others around the world and certainly in the 
region have of the United States.
    Senator Whitehouse. That's a nice way of saying it.
    Dr. Fingar. Perhaps unrealistically high expectations. But 
many of the states around Iraq have relied to a greater or 
lesser degree for their security on their relationship with the 
United States--political, economic, and military. The U.S. 
presence in the region is a part of the provision of that 
security. Iraq is unquestionably a very difficult environment 
at the moment. That reticence of neighbors to become engaged is 
one part the unappealing character of the conflict, one part 
the expectation that they are going to have to make 
accommodation with whatever emerges in Baghdad and in Iraq, 
more broadly.
    They don't believe they have a great deal of ability to 
influence that situation. They worry that they will become 
tainted by attempting to intervene on behalf of one of the 
factions or parties or groups or another. It is a situation 
that, if we could roll the clock back decades rather than a few 
years, one could imagine things evolving differently. But we're 
working with the situation sort of as it is.
    Senator Whitehouse. Thank you, Mr. Chairman
    Chairman Rockefeller. Thank you, Senator. Senator Snowe.
    Senator Snowe. Thank you, Mr. Chairman. And I want to thank 
the panel as well.
    Obviously, with the departure of Director Negroponte, it's 
raised a number of questions about the true extent of the 
authority of the DNI. And it is deeply troubling that obviously 
we not only have the departure of Director Negroponte, but also 
the Deputy. It was a long-standing vacancy at a time in which 
we're trying to ground this department in gathering 
intelligence and centralizing and consolidating intelligence 
authority. I know that, Ambassador Kennedy, you recently stated 
that DOD and the DNI had been able to resolve any differences 
and that DNI has not had to surrender any authority.
    But yet, when you look at the statute, obviously that was 
one of the central questions during the course of this debate 
in the creation of this department as to what extent the DNI 
would have concentrated authority overseeing the 16 
intelligence agencies' budget.
    Now, the language in the statute is he has the authority to 
determine the budget authority. And yet, as we know, DOD 
administers 85 percent of the budget and the personnel within 
those agencies. Do you think that, first, the statute now 
should be changed? I mean, because the perception in all of the 
comments, if you read a number of articles, it's clear that the 
perception is that the Director really has very ambiguous 
authority. And it's essential for anybody who is sitting atop a 
large agency as the DNI is has to have that authority or 
literally has no control.
    And so, I think that's one of the issues that we have to 
grapple with. I mean, you know, certainly, the question about 
the Director's departure could be central to the issue that he 
lacked that authority. And we have to get to the heart of that 
question. Now, some might say it's premature to address any 
statutory changes, but sooner rather than later if we're going 
to get this right.
    Ambassador Kennedy. Senator, I believe that in terms of the 
authority of the Director of National Intelligence to determine 
the budget, he has that authority and he has exercised it. If I 
might take a second, we receive what is called the IPBS--the 
budget request from the 16 agencies. The analysis of those 
programs is run by people who work for me, in conjunction with 
representatives from analysis, collection, requirements, 
technology, the CIO, everyone. We scrub those budgets.
    Then they come to me; I make a recommendation to myself, in 
effect, consult with the other deputies, and then take that 
package and sit down with the Director and say, this is what I 
believe should be allocated to the agencies on the basis of 
what they have requested. Cut this; add here; shift that.
    The Director then makes that determination and that goes 
over to OMB, and then it goes into the President's budget. It 
is submitted to the Congress, and after you make the 
authorization and appropriation decisions that you make, the 
money then comes back to the DNI, and we issue what are called 
advisive allotments. We say to agency X, you are hereby on the 
basis of congressional action given $50. And we put footnotes 
if there is any doubt on that advisive allotment that says, 
spend $35 on this, $10 on this, et cetera, et cetera. And those 
footnotes carry the force of law--the Anti-Deficiency Act.
    So the analysis is done within the ODNI; the Director makes 
the decision; and the way we've set up the process, the 
agencies follow that decision. They have followed those 
decisions at the end of 2005, 2006--we're now in 2007--because 
A, they respect the process, but B, you have given us 
sufficient force of law to ensure that they have to, should 
they not want to.
    Senator Snowe. So you think that the common perception 
about the lack of authority is not real and that in actuality, 
that it works and in practice, it works?
    Ambassador Kennedy. There are some minor tweaks that we 
will be submitting in the 2008 discussions, but in the area of 
the budget, I believe we have an absolutely solid foundation 
and it doesn't matter whether the agency involved in the 16 is 
in another cabinet agency or not. The process that you have 
given to us enables us to be solid and make those 
determinations and see that they are executed.
    Senator Snowe. And that was true in the preparation of the 
2008 budget? I mean, were there any challenges there?
    Ambassador Kennedy. There were lots of challenges, but not 
challenges from the--obviously, any budget preparation process 
has an element of triage in it. You wanted perfect security, 
you'd never get there because the cost curve would go vertical. 
So we make decisions, but we believe that there will be 
sufficient funds in the President's budget that you will 
receive on the 5th of February to meet our national needs, and 
we believe also that we will present to you an allocation 
spread across the 16 agencies that is the best decision that 
the Director can come to.
    Senator Snowe. So you think he has considerable authority 
then?
    Ambassador Kennedy. Yes, ma'am, I do.
    Senator Snowe. Well, you know, it's troubling then, because 
I think that there seems to be a gap at least in perception in 
terms of whether or not the DNI does have real authority. And I 
think that is a real question, because I think ultimately it 
undermines the department in terms of making sure that it does 
have that authority to do what it is required to do and what it 
has been asked to do.
    Ambassador Kennedy. The only other example, Senator, that I 
could offer in this regard is that if you had been party to the 
internal deliberations within the ODNI, you would have seen the 
DNI's decisions to move funds from one agency to another, and 
move funds from a program within one agency to another program 
within that agency. And those decisions of the DNI were 
sustained and those decisions will be before you on February 
5th.
    Senator Snowe. Well, I guess also it's a question of 
whether or not it works well in one instance; it may not work 
well in another instance, because you don't have the grounding 
in statute in terms of a clear and concise authority.
    Ambassador Kennedy. I believe we did the same thing in FY 
2007 and we did almost the same thing in FY 2006, which is the 
first budget that DNI had any responsibility for. And so, we 
now have a track record of 2006, 2007, and now the submission 
to you, Senator, of 2008.
    Senator Snowe. And how has the balance occurred between the 
military and strategic requirements in terms of intelligence? 
Has it shifted from tactical to strategic or more to tactical 
rather than strategic?
    Ambassador Kennedy. I believe that--and I can ask my 
colleagues for assistance on this--that is, the National 
Intelligence Budget--the NIB, as opposed to the Military 
Intelligence Budget, the MIB, which is under DOD, but which we 
play an advisory role on--that the focus of the NIB is solidly 
on the national and the strategic, and the focus on the MIB is 
on the tactical.
    Senator Snowe. So you're comfortable with the balance?
    Ms. Graham. Senator, one of the pieces of putting ourselves 
through having the agencies develop with us, the capabilities--
the intelligence capabilities that the Nation needs from a 
collection point of view--when you look at those capabilities 
and how you array them, things like you want your systems to be 
survivable perhaps, you want your systems to provide you 
persistence, you want your systems to provide you with 
leadership--there are strategic, leadership, persistence, 
survivable, and there are tactical.
    So when Ambassador Kennedy described that basis, the way I 
would describe it is in the NIP, in looking at the capabilities 
across the NIP, you find the strategic capabilities, which may 
be the same as the tactical capabilities. But the spending in 
the MIP on tactical capabilities, for example, urban things 
that they have to do in Baghdad--that they are doing in Baghdad 
today to find and fix--those are more in the tactical. But some 
of those same systems are using some of the same things that 
you use in your strategic systems.
    Senator Snowe. Thank you, Mr. Chairman. Thank you.
    Chairman Rockefeller. Thank you, Senator Snowe. Ambassador 
Kennedy, I'm going to pick a bone with you. And I think this is 
not unimportant, because it gets to the very relationship of 
the way the congressional branch of government and the 
executive branch of government talk with each other. We have to 
be candid and forthright.
    I asked you about an absence in Michael Hayden's position 
when he took over the CIA. You indicated that General Burgess 
was filling in on that and that everything was O.K.. I receded 
into a state of temporary satisfaction until my chief of staff 
launched at my chair and pointed out some very important 
things, which I think you need to think about in terms of the 
way you and I talk in the future.
    Number one is that he had two jobs. He was Acting Deputy 
Director of National Intelligence. He was also the Deputy 
Director for Requirements. So he was being asked to do two jobs 
at once. You did not tell me that. No, I'm not finished.
    And then, he ended his one job--two jobs--whatever you 
want--2 weeks ago. So my question stands. You cannot tell me in 
something as important as what we are responsible for from an 
oversight position that everything was just fine when in fact 
it wasn't.
    You can say he was a superperson and therefore could do the 
two jobs at once. But I'm not inclined to believe that. So now, 
I want you to correct the record for me and tell me whether 
there has been a deputy in General Hayden's position. There 
certainly has not been for the last 2 weeks, and there 
certainly was not, in my judgment, for the previous period of 
time. And those were very, very important times at which Iran 
and all kinds of things reared their head.
    Ambassador Kennedy. Absolutely, Senator. And I apologize 
for something I didn't add. During the period of time that 
General Burgess was acting as the Principal Deputy Director of 
National Intelligence, he stepped out of his job as the Deputy 
Director for Requirements, and Mr. Mark Ewing stepped into his 
job as the Acting Director of Requirements. And so I apologize 
for failing to add that to the point in my presentation, sir. I 
apologize for leaving that off.
    But, General Burgess was not occupying and doing the two 
jobs at the same time. He was filling in. He moved out of his 
office--literally, physically moved out of his office as the 
Deputy Director for Requirements--and moved into the Principal 
Deputy's office--a different office adjacent to Director 
Negroponte's.
    Chairman Rockefeller. I will give you an advantage on 
facts. I will not give you an advantage on the principle of 
discourse between the executive branch and the congressional 
branch.
    Ambassador Kennedy. Again, I apologize for any misstatement 
I may have made, but I thought I was honestly trying to outline 
that General Burgess had shifted and had taken over as the 
Acting Deputy.
    Chairman Rockefeller. But you didn't.
    Ambassador Kennedy. For the President's designation.
    Chairman Rockefeller. But you didn't.
    Ambassador Kennedy. I apologize.
    Chairman Rockefeller. Who is Deputy now?
    Ambassador Kennedy. The job is vacant because the Vacancies 
Act time has expired, as I indicated.
    Chairman Rockefeller. And then you referred obliquely to 
not tensions but discussions. And all of that interests me. All 
I'm saying is that when you and I converse, let it be open; let 
it be forthright; and let it be accurate. Our business is 
intelligence. Yours is intelligence. So let's at least deal 
with each other fairly.
    Vice Chairman Bond has a matter.
    Vice Chairman Bond. Just a couple of quick ones. I don't 
believe I recall getting a response to my question whether the 
IC has any auditable statement. Is there any auditable 
statement in any entity in the IC?
    Ambassador Kennedy. Senator, there is no auditable 
statement without exception. Two agencies have presented 
auditable financial statements. However, exceptions were taken 
in the area of plants and equipment--i.e. inventories.
    Vice Chairman Bond. What were the two that made the hurdle?
    Ambassador Kennedy. Can I provide that to you offline, sir?
    Vice Chairman Bond. Yes, provide that to us. And when are 
you going to get the rest of them controlled?
    Ambassador Kennedy. For the last year, we have been working 
with DOD and with OMB on this. We have a very difficult problem 
that we're facing in that the majority of the funding for 
several of these agencies runs through the Department of 
Defense and the Defense finance and accounting system. The 
Defense finance and accounting system does not have an 
auditable financial statement, which is beyond the control of 
the intelligence community, and until we are able to achieve 
changes in that relationship, we are going to have a problem.
    So I have commissioned a team composed of the deputy chief 
financial officer, and he is working with representatives from 
OMB and from the Department of Defense to find out how we can 
resolve those problems so that the agencies who are all working 
independently with us can have their individual finance 
statements auditable, and that we are able to reconcile things 
such as funds balances at Treasury and others, to make this 
happen.
    Vice Chairman Bond. I have had discussions with Admiral 
McConnell about establishing strong CFO positions and 
developing a career track for people within the IC with a 
strong financial management background, and we look forward to 
following up with you.
    The other thing I would add, following on a discussion that 
Senator Feinstein had with you before we were here, the 9/11 
Commission pointed out that there was a lack of coordination or 
involvement by the intelligence authorizing committees in the 
appropriations process. Senators Feinstein, Mikulski, and I 
serve on the Defense Appropriations Subcommittee. We have 
presented proposals to ensure that this Committee can have some 
meaningful input to that appropriations committee, which I hope 
will satisfy the goals of the 9/11 Commission, though maybe not 
perhaps the precise structure.
    So we will look forward to working with you to the fullest 
extent possible on the budgetary issues because one way or the 
other, we are going to be deeply--at least some of us are going 
to be deeply involved in the appropriations process.
    Ambassador Kennedy. If I might, Mr. Vice Chairman, I can 
assure you that on February 5th that we deliver to this 
Committee a complete set of the classified congressional budget 
justification documents--
    Vice Chairman Bond. And when you are asked--
    Ambassador Kennedy. If I have to do it personally.
    Vice Chairman Bond. And when you are asked for further 
information, I hope you will share that with my Committee and 
the SAC/D, and similarly, if we ask for something, I would 
assume you would keep both Committees fully involved as if both 
of us have an interest in the budgetary decisions, which we do.
    Ambassador Kennedy. I and my staff are at your disposal on 
any budgetary question at any time.
    Vice Chairman Bond. Thank you, sir, and thank you, Mr. 
Chairman.
    Chairman Rockefeller. And I thank you, Mr. Vice Chairman, 
and I will have one more question.
    Should something arise of a moderately important level in 
the field of intelligence, how would it get handled? There is 
no acting deputy director.
    Ambassador Kennedy. I believe, Senator, that it would come 
to one of the four deputies for collection, analysis, 
requirements or management, and we would take that--or the CIO. 
And we would take that matter, if we could not resolve it 
ourselves, since we do handle large numbers of issues every day 
with the agencies, we would immediately take that matter to the 
Director of National Intelligence, sir.
    Chairman Rockefeller. And when would you expect that person 
to be named?
    Ambassador Kennedy. Senator, I can't speculate on that. I 
am assuming that, subject to the will of the Senate, that is 
something that Admiral McConnell will be taking up immediately. 
But I can only surmise. I can't give you a clear answer.
    Chairman Rockefeller. I know. In the meantime, Ms. Graham, 
we are depending upon you.
    Ms. Graham. Senator, I know this isn't going to scratch the 
itch, but can I give you a little bit of the inside baseball of 
how we have been working for the past 21 months?
    Chairman Rockefeller. I am very good at inside baseball, 
and so is Kit Bond.
    Ms. Graham. All right, when we--
    Vice Chairman Bond. Ours was a little better than the 
Braves.
    Ms. Graham. Well, you have got a Yankees fan here, so I'm 
sorry.
    When we stood up in May of 2005, and the four of us 
arrived, you will recall that the Ambassador and General Hayden 
were downtown in the new executive office building. The other 
four of us were out then at Langley. And one of the things that 
we had started then, with the Ambassador's full encouragement, 
was a meeting on a daily basis. So my other half doesn't work 
in the Government; he works in corporate America.
    Think of us, the four of us, on a daily basis, with the 
acting PDDNI or the PDDNI, and the Ambassador acting as a 
corporate team. And every morning still, we sit down, and we 
walk through the issues. Now, your point about there not being 
a Principal Deputy I certainly don't quarrel with. But the 
management of the intelligence community, I don't think, has 
been lacking because of the structure that the Ambassador put 
in place in those very early days, whether it be speaking, 
whether it be participating in the job that we are here to do, 
whether it be participating in deputies committee meetings on 
any given issue that impacts intelligence. It's not perfect, 
but I think--and I'll speak for myself--I think it has worked 
in the management of the community.
    Tom.
    Dr. Fingar. I would absolutely agree with that, that we are 
all generally knowledgeable about one another's working, but 
even more importantly, I think we have grown to have absolute 
trust in one another's judgment, and if I hand something off to 
one of my colleagues, I don't worry about it being done 
properly. It will be done properly.
    Chairman Rockefeller. I'll leave it at that. Thank you very 
much. The hearing is adjourned.
    [Whereupon, at 4:40 p.m., the Committee adjourned.]
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       HEARING ON THE PROGRESS OF INTELLIGENCE REFORM: DEPARTMENT



      OF HOMELAND SECURITY AND THE FEDERAL BUREAU OF INVESTIGATION

                              ----------                              


                       THURSDAY, JANUARY 25, 2007

                               U.S. Senate,
                  Select Committee on Intelligence,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:45 p.m., in 
Room SH-216, Hart Senate Office Building, the Honorable Jay 
Rockefeller (Chairman of the Committee) presiding.
    Present: Senators Rockefeller, Feinstein, Mikulski, 
Feingold, Whitehouse, Warner, Snowe, and Burr.
    Chairman Rockefeller. Welcome, all. This hearing is 
declared open. Happily, it's open to the public as well.

 OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, CHAIRMAN, A 
                U.S. SENATOR FROM WEST VIRGINIA

    On Tuesday the Senate Intelligence Committee began to take 
stock of the implementation of the Intelligence Reform and 
Terrorism Prevention Act of 2004. At our hearing two days ago, 
we heard from the Office of the Director of National 
Intelligence on the central question of whether the promise of 
intelligence reform has been fully realized and whether the 
pace of reform reflects the urgency which we were called to 
action to two years ago.
    As the Committee examines the state of intelligence reform, 
we need to understand what has been accomplished, what remains 
to be accomplished and what changes to the law, if any, are 
warranted in light of the experience of the past two years.
    Today, we're focusing on the Federal Bureau of 
Investigation and the Department of Homeland Security. We will 
hear not only from senior career officials of the FBI and the 
DHS but also from outside experts in an effort to examine 
whether we have made sufficient progress since 9/11 in 
strengthening our domestic security program and in the sharing 
of information with state and local officials.
    From the perspective of the intelligence community, the FBI 
and the DHS Office of Intelligence and Analysis are very 
different entities.
    The FBI is one of the six largest components of the 
intelligence community and, through its National Security 
Branch, participates in the weekly planning and coordinating 
sessions held by the Office of the Director of National 
Intelligence.
    The Office of Intelligence and Analysis in the Department 
of Homeland Security is one of the smallest components of the 
intelligence community. The chief intelligence officer of DHS, 
however, has been given the responsibility to create an 
intelligence enterprise among the 180,000 personnel within the 
department, and the vast majority of those are outside the 
intelligence community.
    Even though the FBI and the DHS represent different 
components of the intelligence community, both have 
responsibilities for domestic security and domestic 
intelligence. Both have missions that require close 
coordination with state, local and tribal governments, and the 
private sector.
    We will be asking today how clearly those roles are drawn, 
how well they have been fulfilled, and whether gaps in 
intelligence collection and analysis exist that can, in turn, 
be exploited by our enemies.
    As we examine these and other issues today, I think it is 
important that we acknowledge the dedication and the hard work 
of the employees of the Bureau and the department. And this 
always needs to be said and sometimes is not taken in by those 
to whom we say it, because this is not a town which responds to 
praise as easily as it does to criticism. That, therefore, 
would be a great injustice with the two departments that we are 
working with today.
    Your folks have taken on incredibly critical 
responsibilities. We are, in fact, profoundly grateful for the 
work that they do to keep Americans safe. The Committee's goal 
is to identify where we can assist them in performing their 
missions.
    Sometimes it just comes across as criticism. When we did 
the WMD phase one report on WMD in Iraq, I think the CIA, with 
some justification, but necessarily, generally felt beaten up 
as individuals, as human beings, as people who get up early and 
go to work and work hard all day long and who could be doing a 
lot of other things that pay a lot more.
    That is never our intention. It sometimes seems to be the 
result. And we have to find a way that we do oversight that 
makes sense, that brings out possible areas of improvement, but 
do it in a way which never questions the integrity and the 
intensity and the sacrifice of those who do that work every 
day.
    Now, the FBI has had a national security mission to catch 
spies and terrorists, but it has struggled to a certain extent 
to become an effective intelligence community partner. After 
the attacks of 9/11, the Director of the FBI made a commitment 
to better integrate the FBI into the intelligence community and 
promised to address its longstanding problems of, as we say, 
culture and insularity.
    Since 9/11 we have seen the FBI set new priorities, develop 
new programs and restructure itself. Clearly, the national 
security and intelligence missions of the FBI have grown in 
significant measure, from the agents working counterterrorism 
cases to the intelligence reports the FBI issues to its federal 
partners and state and local officials.
    But there is still more to achieve. Today we want to drill 
down past the numbers to examine the progress and the results 
of the FBI's transformation and to be honest with each other 
about it. There is still a great concern over the status and 
the role of intelligence analysts at the FBI. Either that's 
well-placed or it's not, or it's in between. And this takes 
place both at headquarters and in the FBI's 56 field offices 
across the Nation.
    There has been much talk of FBI analysts being full 
partners with FBI special agents in addressing the threats 
faced by the Nation. Yet the FBI's own Web site continues to 
categorize its employees as either special agents or support 
staff, a term that includes all other employees at the Bureau. 
This support staff label suggests that the Bureau has yet to 
recognize the importance of recruiting, of training and 
retaining highly skilled intelligence analysts that are crucial 
for the FBI to meet its national responsibilities.
    Now, have we just found a word on a Web site that turns 
into this kind of a statement? I don't know. But we need to 
talk about that.
    I have concern over the development of the FBI's 
Intelligence Career Service. Director Mueller, in his December 
2006 testimony before the Senate Judiciary Committee, noted 
that there was a need to aggressively work to improve training, 
meet workforce expectations and to handle mission demands.
    I would like to know what specific progress has been made 
and was made over this last year, and what are the training 
priorities for the future. In other words, is the FBI creating 
an intelligence cadre second to none that will be able to 
proactively identify and address threats facing the homeland? 
Can we go from the one mission to the other mission? It's an 
age-old question, but it's one that has to come out properly.
    A related issue has to do with the experience and the 
expertise of FBI management. Much has been made about the 
turnover at the highest levels of the FBI, but what about the 
lower and mid levels of management, particularly at the 
headquarters level, those who are supposed to be guiding and 
supporting FBI field offices? How does that stand? And we need 
to know that.
    Does this level of the FBI's management ranks have the 
appropriate expertise, especially in international 
counterterrorism, to perform their duties? Are the mid to 
senior ranks of the FBI being given the right incentives to 
come to FBI Headquarters and to stick around at the FBI 
Headquarters, and to stick around long enough to help guide the 
FBI's national security and intelligence activities?
    With respect to the Department of Homeland Security, the 
Office of Intelligence and Analysis has improved its 
intelligence products and taken steps to integrate itself into 
the intelligence community. But I remain concerned as to 
whether the department has the tools and the resources it needs 
to perform its mission.
    With respect to both the FBI and the DHS, the Committee 
will want to be assured that actionable intelligence 
information is flowing freely to state and local law 
enforcement and homeland security officials.
    Resources are not unlimited, either in Washington or in 
state capitols. But we have a responsibility to ensure that the 
federal government is acting in as efficient and effective a 
manner as possible in its dealings with its state and local 
partners.
    This was a chief failing prior to 9/11 and we need to know 
that the walls that inhibit the flow of information have been 
removed. We passed legislation on that. Has it worked?
    As a final note, we need to face squarely the fact that in 
the area of intelligence, regarding the threats and 
vulnerabilities that exist within our borders, that we are 
discussing the collection and analysis of information, some of 
which pertains to the American people. The Committee needs to 
be assured that scrupulous attention is being paid to the 
privacy and civil liberties of Americans, as the federal 
government moves aggressively to identify local situations and 
arrest terrorists.
    Now, I have to say that Vice Chairman Bond is traveling 
with the president to Missouri today. And he asked to convey to 
the witness his regrets over not being able to attend this 
hearing. As a fellow former Governor--and in fact, we served 
together--Senator Bond has a deep appreciation and interest in 
how our domestic security efforts are being coordinated with 
state and local governments.
    The Vice Chairman, however, does have a written opening 
statement and, without objection, it will be made a part of the 
hearing record, as will all opening statements.
    [The prepared statement of Vice Chairman Bond follows:]

        Prepared Statement of Vice Chairman Christopher S. Bond
    Although I very much would have liked to have been in attendance 
for today's important hearing, I regret that I am unable to attend 
because I will be traveling back to Missouri with the President to 
participate in a roundtable on health care initiatives.
    I'd like to welcome John Pistole and Charlie Allen back to the 
Committee and thank them for their participation on this first panel. 
Both John and Charlie have always provided outstanding testimony in the 
past and I am confident that they will do so again today.
    This first panel focuses on the two intelligence components that 
have primary responsibility in the domestic arena--the Federal Bureau 
of Investigation (FBI) and the Department of Homeland Security (DHS). 
The FBI and DHS are, in many respects, defensive in nature. Their top 
priorities are attack prevention and protection of the Homeland. We all 
have a vested interest in ensuring that both the FBI and DHS are well 
positioned to protect us from such attacks.
    The intelligence and governmental reform efforts following 9/11 
were responsible for creating DHS and significantly affected the FBI's 
counterterrorism and counterintelligence operations. Both agencies have 
had the difficult task of performing their current mission while 
transforming themselves into more effective members of the Intelligence 
Community.
    The FBI was given a number of improved investigative tools during 
the PATRIOT Act and intelligence reform process. They were also 
authorized to "tear down the walls" and provide greater access to their 
intelligence information, both within the FBI and throughout the 
Intelligence Community.
    I hope that Mr. Pistole will discuss how these improvements have 
affected the FBI's intelligence operations, and whether any new tools 
are required. I am also interested in hearing how the FBI is dealing 
with its intelligence infrastructure issues, specifically addressing 
the current shortfall of Secure Compartmented Information Facilities 
and the ongoing effort to modernize its computer system and case 
management tools.
    Mr. Allen has been facing some rather difficult challenges since he 
assumed his current responsibilities at DHS. The Depai talent was 
established by the Homeland Security Act of 2002. The Act merged 22 
disparate agencies and programs into one department. It is the third 
largest cabinet department in the government, with approximately 
184,000 employees.
    In 2005, Mr. Allen took over the Department's intelligence function 
and had to meld all of the separate intelligence organizations into a 
cohesive unit, capable of strengthening intelligence and information 
sharing at all levels--within DHS itself, with other members of the 
Intelligence Community, and with state, local, and tribal governments. 
I hope that Mr. Allen will tell the Committee about the progress he has 
made since taking over the Department's intelligence program.
    I believe that the global war on terrorism is really an ideological 
war, where 20 percent of the war is kinetic and the remaining 80 
percent is ideological. To win this war, we are going to have to win on 
both fronts. We've been doing a pretty good job on the kinetic front, 
but I'm concerned that we haven't been doing nearly enough on the 
ideological front.
    Both of you are in the midst of assisting your respective 
organizations transform into better intelligence agencies. I would 
invite both of our witnesses to comment during the hearing on what 
efforts the FBI and DHS are making with respect to the ideological 
front in the war against radical fundamentalist terrorists.
    I also hope that Mr. Pistole and Mr. Allen will both describe for 
the Committee the nexus between law enforcement and intelligence. Some 
claim the wall between the two is no more, others claim that it still 
remains and I have seen some evidence of that over the past year. The 
Committee would benefit therefore from hearing your perspective on the 
proper nexus and distance between the two.
    With regard to our second panel of witnesses, I believe that 
reality dictates that state, local, and tribal law enforcement and 
emergency personnel will be the first responders for nearly all 
domestic terrorist attacks. We certainly remember the heroic efforts of 
these personnel on 9/11.
    Rather than put these first responders in that situation again, it 
makes a lot more sense to make sure that they have access to the 
intelligence and resources they need to help prevent future terrorist 
attacks. I know that the Committee will be particularly interested in 
the insights of our witnesses on how the Intelligence Community can 
improve its information sharing mechanisms to better empower our first 
responders.

    Chairman Rockefeller. Our witnesses today, on the first 
panel, are Mr. John Pistole, Deputy Director, Federal Bureau of 
Investigation, and Mr. Charles Allen, Chief Intelligence 
Officer and Assistant Secretary for Intelligence and Analysis, 
Department of Homeland Security.
    And I will just say now that, in our second panel, our 
witnesses are Chief Cathy Lanier, Chief of Police, Metropolitan 
Police Department, District of Columbia; Secretary James W. 
Spears is West Virginia Homeland Security Adviser and Cabinet 
Secretary of the West Virginia Department of Military Affairs 
and Public Safety; and Dr. John Gannon, Vice President for 
Global Analysis, BAE/IT, McLean, Virginia, former Assistant 
Director of Central Intelligence for Analysis and Production 
and former staff director of the Select Committee on Homeland 
Security of the House of Representatives.
    Deputy Director Pistole, I understand that you will give 
the first opening statement and Assistant Secretary Allen will 
follow with his statement. They're both in the record. Please 
proceed.
    Mr. Pistole. Thank you, Mr. Chairman, and thank you, 
members of the Committee, for the opportunity to be here today 
to discuss the FBI's progress in implementing the Intelligence 
Reform and Terrorism Prevention Act of 2004.
    After the attacks of 9/11, the FBI's priorities shifted 
dramatically, as we charted a new course, with national 
security at the forefront of our mission to protect America. 
Building on our established capacity to collect and act on 
information, we began enhancing the FBI's mission as a dual 
intelligence and law enforcement agency. The enactment of IRTPA 
provided us with the authority and tools to continue enhancing 
our capabilities.
    In the five years since 9/11, we have made tremendous 
changes in the Bureau. Among the most significant of those 
changes are initiatives that were authorized by IRTPA, 
including: one, strengthening our intelligence capabilities; 
two, developing a national intelligence workforce; three, 
enhancing our information-sharing; and, four, establishing a 
budget structure that reflects our new priorities.
    Our intelligence capabilities have evolved significantly 
since early 2002, when we began our efforts to develop a more 
robust intelligence program. As called for by IRTPA, we 
established a Directorate of Intelligence in February 2005 as a 
dedicated and integrated intelligence service within the FBI. 
The DI manages and oversees our enhanced field intelligence 
operations, human source development, analytical capabilities 
and intelligence workforce.
    In September of 2005, we went further, implementing a 
presidential directive, based on the WMD Commission's 
recommendation to establish a ``national security service'' 
that integrates the FBI national security programs under the 
leadership of an executive assistant director.
    The National Security Branch comprises the FBI's 
Counterterrorism Division, Counterintelligence Division, and 
the Directorate of Intelligence. As of July of last year, it 
also includes a newly-created Weapons of Mass Destruction 
Directorate which consolidates the FBI's WMD components.
    Consistent with IRTPA, we took steps last summer to 
strengthen the field intelligence groups we had established in 
each of our 56 field offices, standardizing their structure and 
clarifying the roles and responsibilities of our operational 
squads with these field intelligence personnel.
    In response to IRTPA's directive to create a national 
intelligence workforce, we created an intelligence career 
service consisting of special agents, intelligence analysts, 
language analysts and surveillance specialists.
    Since 9/11, we have more than doubled the number of IAs in 
the FBI, and increased the number of linguists in certain high-
priority languages by more than 250 percent. To build this 
intelligence cadre further, we are creating a workforce 
environment that will continue to attract and retain 
intelligence personnel with critical skills and competencies. 
We're also enhancing the training opportunities and technology 
tools they need to perform their jobs.
    Among the fundamental post-9/11 changes in the FBI, sharing 
intelligence is now a primary objective. A key question for us 
is how do we add value to our partners in the law enforcement 
and intelligence communities. We regularly post FBI 
intelligence products on platforms accessed by our law 
enforcement and intel community partners.
    We've launched an initiative with DHS to expand our 
participation in state-wide fusion centers. We recognize these 
centers as key partners in facilitating the sharing of homeland 
security and criminal-related information and intelligence.
    And to ensure that our FBI's budget adequately reflects our 
intelligence capabilities, we worked extensively with the 
Department of Justice and the Office of the Director of 
National Intelligence to develop a new methodology for funding 
the FBI's national intelligence programs.
    In conclusion, Mr. Chairman, I'm pleased to report that 
we've made significant progress in fulfilling the provisions of 
IRTPA. As a result, we've greatly enhanced our ability to 
counter today's most critical threats and we recognize that we 
have much more work to do. We look forward to continuing to 
work with the Committee to tackle those challenges.
    Thank you.
    [The prepared statement of Mr. Pistole follows:]

  Prepared Statement of The Honorable John Pistole, Deputy Director, 
                    Federal Bureau of Investigation
    Good afternoon Mr. Chairman, Vice Chairman Bond, and Members of the 
Committee. I am pleased to be here today to discuss the FBI's progress 
in strengthening its intelligence capabilities and implementing the 
Intelligence Reform and Terrorism Prevention Act of 2004 (RTPA).
    After the attacks of September 11, 2001, the FBI's priorities 
shifted dramatically as we charted a new course, with national security 
at the forefront of our mission to protect America. The historic 
enactment of IRTPA provided the FBI with the necessary tools and 
guidance to continue enhancing our capabilities.
    The intervening five years have seen tremendous changes at the FBI. 
Chief among them is the development of a more robust intelligence 
program, which we began implementing in early 2002. In 2003, we created 
an Office of Intelligence, which was charged with creating a single 
program to manage all FBI intelligence production activities. We also 
expanded our analytic, reporting, and intelligence capabilities.
    Our efforts were endorsed by Congress, the 9/11 Commission, and the 
WMD Commission, who offered additional recommendations and guidance on 
how to further strengthen the FBI's intelligence program. In response, 
the FBI in February 2005, officially established the Directorate of 
Intelligence as a dedicated and integrated intelligence service within 
the FBI. In September 2005, we implemented a Presidential directive 
based on the WMD Commission's recommendation to establish a ``National 
Security Service'' that integrates the FBI's national security programs 
under the leadership of an Executive Assistant Director. The National 
Security Branch (NSB) comprises the FBI's Counterterrorism Division 
(CTD), Counterintelligence Division (CD), and the Directorate of 
Intelligence (DI), and--as of July 2006--the new Weapons of Mass 
Destruction Directorate (WMDD).
    In this relatively short period of time, the FBI has made 
significant progress in fulfilling the provisions of IRTPA and in 
meeting the numerous other expectations placed upon the Bureau. In 
addition to those mentioned above, our accomplishments in strengthening 
our intelligence capabilities and implementing the Act include the 
following:
Strengthened Intelligence Capabilities
    Since September 11, 2001, the men and women of the FBI have worked 
tirelessly to reinforce our intelligence capabilities and improve our 
ability to protect the American people from national security threats. 
We have built on our established capacity to collect information and 
enhanced our ability to analyze and disseminate intelligence. The 
development of the DI and the NSB also enhanced the FBI's mission as a 
dual law enforcement and intelligence agency.
    As part of our efforts to strengthen the FBI's capabilities, we 
have overhauled our counterterrorism operations, expanded our 
intelligence capabilities, modernized our business practices and 
technology, and improved our coordination with our federal, state, 
local, and tribal partners.
    As called for in IRTPA, the Director of the FBI carries out his 
responsibility for intelligence collection, processing, analysis, and 
dissemination through the DI. By virtue of the Director's designation 
of the EAD-NSB and the designation of the DI as a component of the NSB, 
the EAD-NSB assumes authority for these intelligence functions. This 
authority is carried out under the joint guidance of the Attorney 
General and the Director of National Intelligence (DNI).

         Collection Against National Intelligence Requirements

    The EAD-NSB is responsible for implementation of strategies for 
collection against national intelligence priorities and ensures that 
the national priorities drive intelligence collection in each FBI 
division. To implement that responsibility, the DI has developed an 
intelligence requirements and collection management process that 
actively manages the transmission of national intelligence and FBI 
requirements to the field.
    To ensure that intelligence tasking is aligned with DNI priorities, 
the FBI is currently participating in the Office of the Director of 
National Intelligence's (ODNI) Integrated Collection and Analysis 
Requirements System (ICARS), previously known as Intelligence Community 
(IC) MAP. ICARS is a web-based collection requirements management 
environment that provides a common, secure, single point-of-entry for 
all authorized users. When completed, this information technology 
project could be used to automate FBI intelligence collection 
management, linking information requirements to collection and tasking 
and intelligence production.

                       Field Intelligence Groups

    The FBI has established a Field Intelligence Group (FIG) in each of 
its 56 field offices to manage and coordinate intelligence functions in 
the field. The FIGs are the mechanism through which the FBI contributes 
to regional and local perspectives on a variety of issues, including 
the receipt of and action on integrated investigative and intelligence 
requirements. In addition, FIGs provide the intelligence link to the 
Joint Terrorism Task Forces (JTTF), Fusion Centers, FBIHQ, and other 
Intelligence Community agencies. FIGs are staffed by Intelligence 
Analysts (IAs), Special Agents (SAs), Language Analysts (LAs), and 
Surveillance Specialists. As called for in IRTPA, each FIG reports 
directly to a field office senior manager responsible for intelligence 
matters.
    In June 2006, the DI issued an Electronic Communication (EC) to 
standardize FIG structure and clarify the roles and responsibilities of 
operational squads and field intelligence personnel. In September 2006, 
the DI issued a FIG Handbook, which provides additional specific 
guidance, instructions, and policy for many aspects of FIG 
organization, operations, and administration.

                           Domain Management

    Traditionally, the FBI has derived intelligence primarily from our 
cases. The establishment of the NSB in 2005 required that we expand our 
intelligence capacity beyond case-driven investigations. The focus is 
to remain ahead of the threat. After completing successful pilots in 10 
field offices across the country, the FBI has adopted a comprehensive 
domain management methodology that will form the basis of our approach 
to analysis and integration throughout the FBI. Domain management is 
simply about ``questions and choices'': What do we need to know about 
our territory to protect the people in it? What do we know about the 
threats and vulnerabilities that worry us most? What don't we know 
about the threats and vulnerabilities that worry us most? What are we 
going to do to address our threats and vulnerabilities?
    The domain management process is a continuous, systematic approach 
designed to achieve a comprehensive understanding of a geographic or 
substantive area of responsibility. It provides the basis for 
investigative, intelligence, and management direction by enabling 
leaders to consider and select courses of action through the knowledge 
gained, identified gaps in knowledge, and identified gaps in 
capability. Although the selected course of action may at times involve 
diverting resources to close those knowledge gaps, the purpose of 
domain management is to better arm our leadership with strategic domain 
knowledge to proactively identify and neutralize national security and 
criminal threats.

                           Strategic Analysis

    A key part of the FBI's national security emphasis is the capacity 
to understand homeland threats in a strategic context. To that end, the 
NSB has placed an emphasis on achieving and sustaining an appropriate 
operational balance between strategic and tactical analysis. The 
Senior-Level Intelligence Officer positions authorized by Congress and 
approved by the DNI will provide a dedicated cadre of senior analysts 
who will sustain the focus on issues about which policy makers and 
planners need information now to manage or confront challenges when 
they emerge.
    In that vein, the FBI has become an active participant in the 
process for identifying and authoring items for the President's Daily 
Brief and the National Terrorism Bulletin. FBI analysts have also done 
groundbreaking work on subjects such as Islamic radicalization and the 
counterterrorism, counterintelligence, and counterproliferation threats 
to the United States.

                      Human Intelligence (HUMINT)

    In response to IRTPA and a Presidential directive, the FBI, in 
collaboration with the Department of Justice (DOJ), has begun a 
Confidential Human Source Re-engineering Project to enhance and improve 
the administration and operation of the FBI's Human Source Program.
    As part of the Re-Engineering Project, the FBI and DOJ have worked 
to update guidelines on Human Source policy and Human Source 
validation. The ultimate goals of the Re-engineering Project are to 
streamline, consolidate, and update all human source guidelines; 
develop a ``one source'' concept; strengthen the validation of human 
sources; and introduce an advanced information technology application 
(Delta) that will support new human source management policies. The 
changes to the existing policies will enhance the FBI's ability to 
share human intelligence information within its organization and will 
encourage SAs to open and operate new Human Sources.
National Intelligence Workforce
    Consistent with IRTPA, the FBI has also created an Intelligence 
Career Service (ICS) of SAs, IAs, LAs, and Surveillance Specialists. 
The DI continues to build up the ICS, bringing an additional 370 IAs 
onboard in fiscal year 2006. The FBI currently has approximately 2,200 
IAs onboard as a result of these efforts, more than double the number 
on board before 9/11. The number of linguists, meanwhile, has climbed 
to more than 1,300, with the number of linguists in certain high-
priority languages (Middle Eastern and North African languages) 
increasing by more than 250%. In addition, our linguists are playing a 
more integral role in our intelligence program.

                   Recruitment and Retention Efforts

    As part of its recruiting efforts, the FBI is seeking IAs and SAs 
with substantial expertise to meet national security needs, as defined 
by the DNI. The FBI will ensure that our standards reinforce and are 
integrated with the DNI's IC-wide effort to establish a common set of 
core, competency-based qualification standards for analysts.
    The FBI is continuing to enhance our process for ensuring that we 
continue to hire the most highly qualified analyst applicants. In 
addition to the existing online application and panel interview, we are 
currently validating a selection tool that would incorporate a writing 
sample, specialized tests, and situational exercises into the selection 
process. This proposed selection system is modeled on the success of 
the Special Agent program.
    The FBI is implementing several workforce programs to build our 
national security capabilities, including specialized SA, IA, and 
Professional Support career paths. These programs are designed to 
enhance and establish national security workforce specialties and 
create training and developmental opportunities for SAs, IAs, LAs, and 
Surveillance Specialists in the FBI's national security programs. They 
will be developed in close coordination with the DNI, to ensure that IC 
joint duty requirements and other functionally specific cross-community 
career paths are addressed.
    An example of our recruitment and retention efforts is the use of 
the authority afforded the FBI in the Consolidated Appropriations Act 
of 2005 to obtain Senior Intelligence Officer positions using senior 
level positions and critical pay authority. The Attorney General, the 
Office of Personnel Management, and the Office of Management and Budget 
have approved the FBI's request for 24 Senior Intelligence Officers and 
corresponding critical pay authority. The Senior Intelligence Officer 
for Counterterrorism position was posted in October 2006, and an 
applicant has been selected for this job.
    In the leadership development arena, the FBI created an FBI 
Intelligence Officer Certification (FIOC) Program, as recommended by 
the 9/11 Commission, and mandated by Presidential directive. FIOC 
complements the larger Intelligence Community Officer (ICO) Program, 
which develops senior intelligence professionals to serve as future 
leaders of the IC. FIOC, which is aligned with ICO certification 
criteria, will serve as a credential for those who wish to pursue ICO 
certification. Both the FBI Intelligence Officer and the ICO must 
demonstrate in-depth knowledge, work, and experience in intelligence 
issues. However, FIOC is unique to the FBI in its emphasis on 
integrating the FBI's dual investigative and intelligence missions. 
This program is available to SAs, IAs, LAs, and Surveillance 
Specialists.

                          Training Initiatives

    Consistent with IRTPA, the DI in October 2005 launched the ICS 
Cohort Program, a training initiative designed to prepare new ICS 
members to work collaboratively against national security and criminal 
threats to the United States.
    We are currently in the process of enhancing and updating the 
Cohort initiative, incorporating lessons learned and other suggestions 
from students to ensure that we are giving our new hires the skills 
necessary to do their jobs in the most effective way possible. The 
refined entry-level training program will focus more sharply on 
fundamental analytic tradecraft skills (i.e., critical thinking, 
expository writing, and briefing).
    The FBI is fully engaged in the ODNI's efforts to strengthen 
intelligence analytic tradecraft. On an interagency level, we 
participated in the ODNI's pilot ``Analyst 101'' training program, 
which provides training in analytic tradecraft to an IC-wide student 
body. The FBI intends to participate in future training sessions.
    More generally, the FBI is expanding current classroom, in-service, 
and computer-based training for Bureau employees and our partners in 
other federal, state, local, and tribal agencies. Extensive efforts are 
underway to provide new and existing training opportunities for all 
employees working in national security matters.
    To enhance the coordination of our national security training, we 
recently created the NSB Executive Training Board, made up of 
executives from the four NSB component divisions. The board is working 
collaboratively to develop national security training requirements, 
curricula, and thresholds for new agent and analyst career paths and 
training sets for new agents and analysts. For example, New Agent 
Training has been recently modified to provide 100 additional hours of 
training in all national security-related areas.
    The NSB is also developing a catalog of specialized national 
security training courses. Created in conjunction with the ODNI, the 
catalog will be broken down into core and elective instruction and will 
help employees and managers develop programs appropriate for their 
specific roles and responsibilities. Courses will also be available in 
a variety of formats to better serve users at FBI Headquarters and 
field offices.
    The NSB is devoting particular attention to Human Source 
development training by conducting an evaluation of existing HUMINT 
training, including identifying best methods and practices used by 
other members of the IC. This evaluation is being conducted to ensure 
compliance with developing ODNI standards as well. Among the 
particulars are extensive modifications to New Agent Training, the 
modification of advanced training courses, and the new ``HUMINT Source 
Targeting and Development Course,'' which was piloted in fall 2006 and 
which the DNI called an important first step toward development of the 
FBI's domestic HUMINT training program. We are currently working with 
the CIA to refine the course and will re-launch it in 2007.
    In addition to Human Source development training, new courses have 
been and are being developed to explain the role of the NSB to the IC; 
state, local, and tribal law enforcement; and our own FBI employees. 
Among these initiatives is a collaborative effort between the FBI's 
Counterterrorism Division and the U.S. Military Academy's Combating 
Terrorism Center (CTC) to develop a counterterrorism curriculum, 
exchange instructors, and work on knowledge development projects. This 
collaborative effort includes providing training to JTTFs, hosting a 
Counterterrorism Leadership retreat at West Point that was held in 
August 2006, developing and delivering instruction to New Agent 
Trainees, and the future development of FBI case studies and a 
counterterrorism textbook.
Infrastructure
    Although the FBI's information technology (IT) systems and other 
infrastructure have offered us some of our greatest challenges, they 
have also resulted in some of our most significant improvements in the 
last five years. We are ensuring that our IT systems and other 
infrastructure are being developed along with the architecture as 
required in Section 8402 of the IRTPA. We are ensuring consistency with 
the Information Sharing Environment Architecture.

                      Investigative Data Warehouse

    An example of a technology application that has surpassed our 
expectations is the Investigative Data Warehouse (IDW). IDW is a 
centralized repository for relevant counterterrorism and investigative 
data that allows users to query the information using advanced software 
tools. IDW now contains over 560 million FBI and other agency documents 
from previously stove-piped systems. Nearly 12,000 users can access it 
via the FBI's classified network from any FBI terminal throughout the 
globe. And, nearly 30 percent of the user accounts are provided to task 
force members from other local, state and federal agencies.

                 Foreign Terrorist Tracking Task Force

    The Foreign Terrorist Tracking Task Force (FTTTF) was created 
pursuant to Homeland Security Presidential Directive No. 2 and was 
consolidated into the FBI pursuant to the Attorney General's directive 
in August 2002. The FTTTF uses innovative analytical techniques and 
technologies that help keep foreign terrorists and their supporters out 
of the United States or lead to their location, detention, prosecution, 
or removal.
    The participants in the FTTTF include the Department of Defense, 
the Department of Homeland Security's Bureaus of Immigration and 
Customs Enforcement and Customs and Border Protection, the State 
Department, the Social Security Administration, the Office of Personnel 
Management, the Department of Energy, and the Central Intelligence 
Agency.
    To accomplish its mission, the FTTTF has facilitated and 
coordinated information sharing agreements among these participating 
agencies and other public and proprietary companies to assist in 
locating terrorists and their supporters who are, or have been, in the 
United States. The FTTTF has access to over 40 sources of data 
containing lists of known and suspected foreign terrorists and their 
supporters, including the FBI's Violent Gang and Terrorist Offenders 
File (VGTOF).

                        Secure Work Environment

    The FBI's expanded role in intelligence operations has 
significantly increased the requirement to build Secure Work 
Environment (SWE) facilities. The goal is to provide the physical 
infrastructure and IT connectivity to enable FBI personnel to execute 
their mission of protecting national security. A database of existing 
Sensitive Compartmented Information Facilities (SCIF) space and SCIF 
requirements has been developed, which includes SCIF construction 
projects underway. This database is at the center of the NSB's plan to 
develop and build out the SCIF requirements of the FBI.
    The NSB directs the prioritization of the deployment of SCIF space 
and Sensitive Compartmentalized Information Operational Network (SCION) 
connectivity based upon established threat-based criteria and available 
resources. A prioritized list of 100 field office headquarters and 
resident agencies was completed to facilitate the construction of SCIF 
space and the deployment of SCION connectivity. In FY 2006, retrofits 
of existing SWE facilities were begun in 48 of the top 100 locations. 
Construction was completed at 25 locations, 15 of which were accredited 
in FY 2006. In FY 2007, retrofits of existing SWE facilities are 
scheduled to begin at an additional 60 locations.
    We also are working to provide SCION access to as many locations as 
quickly as possible so we have a baseline level of connectivity in 
every field office and resident agency. From the inception of the 
project to the end of FY 2006, SCION has been deployed to 55 field 
offices (New Orleans Field Office deployment remains incomplete due to 
reconstruction from Hurricane Katrina), 29 Resident Agencies (RAs)/off-
sites, and one LEGAT (London). In FY 2006 alone, SCION was deployed to 
37 field offices, 12 RAs/off-sites, and one LEGAT, thereby exceeding 
the congressional mandate of 20 field office deployments for FY 2006.
Budget Authority
    As recommended by the WMD Commission, and mandated by Presidential 
directive, the EAD-NSB exercises direct budget authority over the 
Counterterrorism/ Counterintelligence and Intelligence budget decision 
units, which include funding for all FBI national security programs.
    The FBI has further implemented the WMD Commission recommendation 
by funding the intelligence activities of the FBI in the National 
Intelligence Program (NIP) in the President's FY 2007 budget request, 
consistent with the DNI's statutory authorities. Under the IRTPA, the 
DNI is responsible for developing and determining the annual 
consolidated NIP budget. Consistent with the IRTPA, the FBI works 
closely with the DNI and provides his staff the FBI's assessment of our 
needs, our priorities, and other technical and subject matter 
assistance as requested. In addition, the DNI also has the authority to 
reprogram (with certain limitations) and monitor the execution of these 
funds.
    During the FY 2007 budget formulation process, the FBI, along with 
DOJ, reviewed its NIP, and agreed with the ODNI that it did not 
adequately reflect the FBI's intelligence capabilities. With the 
mandate of the President to create the NSB, the FBI worked extensively 
with the DNI staff to create a new NIP budget structure that would 
encompass all FBI intelligence related activities, without hindering 
counterterrorism and law enforcement functions. The FBI worked 
extensively with the DOJ and the DNI to devise and obtain approval for 
a new methodology that would better reflect the FBI's intelligence 
program, as well as map to other programs/priorities within the rest of 
the IC. The FBI, DOJ, and DNI agreed to this new methodology in 
December 2005, and it is reflected in the FBI's FY 2007 Congressional 
Budget Justification Book (CBJB).
    The DNI will provide strategic guidance through his budget 
authority, while tactical and operational control over the FBI's 
investigative, intelligence, and law enforcement resources will remain 
with the Attorney General and the Director of the FBI. Preserving this 
chain of command ensures that the Attorney General will be able to meet 
statutory responsibilities to enforce federal law.
    To ensure the DNI has full visibility into the FBI's portion of the 
NIP budget, the FBI's NIP budget submissions will contain DNI-specified 
detail. Also consistent with the IRTPA, the DNI will provide guidance 
to the Attorney General on the development and execution of the 
remainder of the budget under the management of the EAD-NSB. Further, 
the FBI regularly conducts budget execution reviews with the ODNI to 
ensure the NIP budget and program remain visible throughout the 
execution of each fiscal year.
    The ODNI and the FBI/DOJ continue to assess the impact of the 
budget realignment that has been reflected in the FBI's FY 2007 NIP 
Budget. Initial review of the impact is centered on developing an 
accounting process to ensure appropriate allocation of resources and 
the distribution of expenses between NIP and non-NIP funding.
Collaboration
    As envisioned by the authors of IRTPA, the FBI has become a full 
member of the Intelligence Community. To enhance collaboration with 
other IC agencies, the Director designated the EAD-NSB as the lead 
official responsible for coordination with the ODNI and the rest of the 
IC. The EAD-NSB ensures appropriate FBI representation in the 
interagency process and participation in IC activities as requested by 
the DNI.
    The NSB senior management represents the FBI at the DNI's weekly 
Program Manager meetings, Information Sharing Council meetings, and the 
monthly DNI Intelligence Community Leadership Committee (ICLC) 
meetings. The EAD-NSB meets regularly with the Principal Deputy DNI 
(PDDNI) and periodically with the DNI to ensure effective coordination 
and communication. FBI personnel participate in approximately 170 IC 
boards, councils, and regular working groups. The effective 
coordination of the FBI's role in these groups is a high priority 
within the NSB.
    The DI represents the FBI on those IC bodies that coordinate 
collection requirements, analysis, and production functions, and other 
activities related to the DI mission. Other FBI officials, such as the 
Chief Information Officer (CIO), the Chief Human Capital Officer, and 
senior managers from the Security Division, Facilities and Logistics 
Services Division, and the Science and Technology Branch, represent the 
FBI on bodies that coordinate IC policies and programs under their 
jurisdictions.

                          Information Sharing

    Among the fundamental post-9/11 changes in the FBI, sharing 
intelligence is now a primary objective. We have developed an FBI 
intelligence presence within the intelligence and law enforcement 
communities by sharing Intelligence Information Reports (IIRs), 
Intelligence Assessments (IAs), Intelligence Bulletins (IBs), and 
related intelligence information on platforms routinely used by our law 
enforcement and Intelligence Community partners, including the Joint 
Worldwide Intelligence Communications System (JWICS), Secure Internet 
Router Protocol Network (SIPRNet) and Law Enforcement Online (LEO), as 
well as on the FBI Intranet. In one measure of our information sharing 
efforts, the FBI disseminated more than 7,100 IIRs in FY 2006 to our 
Intelligence Community partners via SAMNET.
    The FBI has also expanded its analytic investment in the National 
Counterterrorism Center (NCTC), with more than 40 analysts now deployed 
to NCTC. The FBI also maintains a substantial cadre of counterterrorism 
personnel at CIA, and established the National JTTF (NJTTF) in July 
2002 to serve as a coordinating mechanism with the FBI's partners. Some 
40 agencies are now represented in the NJTTF, which has become a focal 
point for information sharing and the management of large-scale 
projects that involve multiple partners. The activities of the NJTTF 
are consistent with the Information Sharing Environment (ISE) 
Implementation Plan and Presidential guidelines.

                             Fusion Centers

    Information sharing with state, local, and tribal law enforcement 
is also crucial to fulfilling the FBI's intelligence mission. The FBI 
has expanded its efforts to share raw intelligence reporting and 
analysis with state, local, and tribal entities on LEO. The FBI also 
produces joint bulletins with the Department of Homeland Security (DHS) 
for our law enforcement partners on threat issues. These activities 
were reinforced in 2006 with the dissemination of policy and guidelines 
for FBI integration with state-wide fusion centers, a partnership with 
DHS to jointly codify expectations for our roles in these centers and 
continuation of actions to put a minimum of one SA and one IA in the 
lead fusion center in each state.
    The FBI recognizes that fusion centers are fundamental in 
facilitating the sharing of homeland security and criminal-related 
information and intelligence and considers our participation in fusion 
centers an extension of our traditionally strong working relationship 
with our state, local, tribal and private sector partners. The FBI has 
been an active participant in the ISE Program Manager's development of 
Guideline 2, and is ensuring our partnerships with fusion centers are 
consistent with that guideline. Moreover, the FBI is a partner in 
developing the implementation plan for a national level coordination 
group to facilitate timely information sharing.
Conclusion
    The FBI has a mandate from the President, Congress, the Attorney 
General, and the DNI to protect national security by producing 
intelligence in support of our investigative mission, national 
intelligence priorities, and the needs of other customers. The FBI has 
always used intelligence to solve cases; however, today, we count on 
our agents and analysts working hand-in-hand with colleagues around the 
country and around the world to collectively piece together information 
about multiple, interrelated issues.
    With the authority and guidance provided by the IRTPA and other 
directives and recommendations, the FBI has implemented significant 
changes to enhance our ability to counter today's most critical 
threats. We recognize that additional work remains to be done. We look 
forward to continuing to work with the committee to tackle those 
challenges.
    I appreciate the opportunity to be here today. I would be happy to 
answer any questions you may have.

    Chairman Rockefeller. Thank you, sir.
    Mr. Allen?
    Mr. Allen. Chairman Rockefeller, members of the Committee, 
thank you very much for inviting me to speak to you today about 
the progress of the Department of Homeland Security in 
implementing intelligence reform. And thank you for permitting 
me to submit a written statement for the record. I will have a 
very short oral opening statement.
    I have long been an advocate for intelligence reform and I 
firmly support congressional efforts to address the threats of 
the 21st century. As the department's first chief intelligence 
officer, I have pursued the goals of intelligence reform by 
focusing on five priorities--improving intelligence analysis 
across the Department of Homeland Security; integrating 
intelligence within the department, strengthening our support 
to state, local and tribal authorities and the private sector; 
ensuring that the Department of Homeland Security intelligence 
takes its place within the national intelligence community; and 
solidifying our relationship with Congress by improving 
transparency and responsiveness.
    Mr. Chairman, I believe we've made progress in all five 
areas.
    First, we have devoted considerable effort to improving 
analysis. We provide crucial intelligence support to the 
Secretary and to DHS leaders, as well as key departmental 
efforts such as the Secure Border Initiative and the Visa 
Waiver Program.
    Additionally, DHS intelligence analysts are now working 
closely with our counterparts at the state, local and tribal 
levels of government to produce collaborative assessments.
    Moreover, we are pulling our weight in the national 
intelligence community, preparing special assessments and 
producing articles for the intelligence community at the 
highest level of classification. And we work very closely with 
the Federal Bureau of Investigation in production of those 
items.
    To improve further analysis, I have increased our focus on 
border security, weapons of mass destruction and infectious 
diseases, critical infrastructure protection, extremism and 
radicalization and demographic forces that drive migration to 
the United States.
    Second, we have integrated DHS intelligence in a number of 
ways, notably, by driving ever-increasing cooperation among DHS 
intelligence components through the mechanisms of the Homeland 
Security Intelligence Council as well as, for example, the 
Intelligence Campaign Plan, which is directed at the Southwest 
border.
     We're also improving and integrating departmental 
information collection capabilities, including air-based 
systems, ground sensors, law enforcement, technical collection.
    Third, we have strengthened our support to state, local and 
tribal authorities in the private sector in a number of ways. 
To date, we have deployed intelligence officers to 12 state and 
local fusion centers, and will continue an aggressive schedule 
to embed officers in over 35 fusion centers by the end of 
fiscal year 2008.
    In response to guidance from the White House, we're 
establishing a federal coordination group to ensure that the 
federal government speaks with one voice on emerging and 
potential threats to our homeland. Co-located with the National 
Counterterrorism Center, this group will be led by one of my 
senior intelligence officers, supported by a senior deputy from 
the Federal Bureau of Investigation, along with participation 
from the Department of Defense and other federal intelligence 
agencies.
    Fourth, we have taken our full place within the 
intelligence community in various ways. For example, the 
Department of Homeland Security is now a member of the DNI's 
program managers' group. We're able to interact more 
effectively with key agencies of the intelligence community.
    Additionally, my office is leading an effort in the 
intelligence community to develop a homeland WMD intelligence 
strategy that will outline goals and actions needed for us to 
meet this challenge.
    Finally, I believe we have solidified our relationship with 
the Congress by regularly conducting threat briefings, 
particularly with the Bureau, testifying repeatedly to 
oversight committees, and establishing contacts with key 
members and staff of both parties so that ours continues to be 
a true partnership.
    Undergirding all these priorities is an aggressive 
commitment to attracting and attaining a diverse, innovative 
and world-class workforce. Last year, we launched a two-year 
plan to transform our intelligence training, education and 
professional development capabilities. We're taking another 
major step in this transformation by conducting the first DHS 
basic intelligence training course.
    We're also continuing an aggressive recruiting plan that 
includes bringing the best and brightest graduates from our 
colleges and universities. We must build future cadres of 
experienced all-source analysts dedicated to homeland security 
intelligence.
    Even as we work to strengthen DHS intelligence, we are 
maintaining a continuing respect for civil rights, civil 
liberties and privacy of our citizens. I continually consult 
with my own counsel as well as with relevant experts in civil 
liberties, civil rights and privacy and as well as officials in 
the Office of the Director of National Intelligence to ensure 
our programs conform to the letter and spirit of the law.
    Members of the Committee, this concludes my oral remarks, 
and I look forward to answering your questions.
    [The prepared statement of Mr. Allen follows:]

 Prepared Statement of The Honorable Charles Allen, Chief Intelligence
    Officer and Assistant Secretary for Intelligence and Analysis, 
                    Department of Homeland Security
I. Introduction
    Chairman Rockefeller, Vice Chairman Bond, Members of the Committee: 
Thank you for inviting me to speak with you today about Intelligence 
Reform. I have been a strong advocate for many years for intelligence 
reform, and I firmly support congressional efforts to enact sound 
reforms of the U.S. Intelligence Community, to ensure it can meet the 
changed threat environment of the 21st Century.
    The threat of terrorist attacks is as real today as at any time 
since 9/11. The disrupted aviation plot of last summer demonstrated 
that international terrorism continues to represent a direct and major 
threat to the Homeland. The United States and its allies are engaged in 
a global struggle against a broad range of transnational threats. Our 
Nation's communities face the threat of terrorism, of cross-border 
violence spurred on by the poison of illicit trafficking in narcotics, 
and of the diminishment of our humanity by the exploitation of men, 
women, and children by international criminal organizations. The 
Intelligence Community has no option but to hold itself accountable 
both for its successes and failures, and to reform its structure and 
tradecraft to be the best possible advisor to the Nation's federal and 
non-federal leadership as they seek to secure the Homeland and protect 
its people.
    Today I will discuss our progress in DHS Intelligence in 
implementing the principles of intelligence reform. I will also speak 
to how the implementation of the Intelligence Reform and Terrorism 
Prevention Act of 2004 is strengthening DHS Intelligence's ability to 
support our national, departmental, and non-federal partners in 
securing the Homeland.
II. DHS Intelligence Integration
    It is a challenge to define the current threat environment with the 
level of precision required to act. We seek to strengthen the 
capability of DHS Intelligence to collect intelligence and to produce 
finished analysis tailored to the needs of our key customers. We seek 
to provide our Nation's leaders at all levels of government with the 
best possible understanding of the threat to inform their decision-
making, their policies, and their operational responses. In many 
respects, DHS Intelligence, in supporting the Department and its 
partners in the law enforcement and homeland security communities 
(including the private sector), is the last defense between the 
transnational threats and our communities and families. It is for this 
reason that we continually seek to strengthen DHS Intelligence.
    We are guided by many of the same principles that inform the 
broader reform of the Intelligence Community: a strong, shared, and 
common direction for our enterprise; an improvement in our core 
capabilities of collection and analysis; a renewed sense of purpose and 
accountability for our efforts; and an aggressive commitment to 
attracting and retaining a diverse, innovative, and world-class 
workforce. And equally important, we must undertake our work with a 
continuing respect for the Constitution and for the civil rights, civil 
liberties, and privacy of our citizens.

         A. Secretary Chertoff's Second Stage Review (``2SR'')

    The Secretary demonstrated true vision in his Second Stage Review 
by elevating the role of Intelligence within the Department. Although 
the Second Stage Review was issued before I arrived at DHS, I strongly 
support the Secretary's statement that, ``Intelligence is at the heart 
of everything we do.'' As a result of the Second Stage Review, the 
Secretary created the position of the Chief Intelligence Officer to 
lead and manage the integration of the DHS Intelligence Enterprise. I 
am honored to be the first person to hold this position.
    One of my first actions as the Chief Intelligence Officer was to 
establish the Homeland Security Intelligence Council, which is 
comprised of the heads of the seven intelligence components in the 
Department and key members of my leadership team. This Council serves 
as my principal decision-making forum for intelligence issues of 
Department-wide significance.
    I also made it a priority to issue the first DHS Intelligence 
Strategic Plan. This document laid the foundation for a strong and 
shared direction for our Enterprise. I think we can draw a strong 
parallel between these actions and the Director of National 
Intelligence's (DNI) establishment of the Program Managers Group and 
the publication of the National Intelligence Strategy.

                           B. Five Priorities

    When I arrived at DHS in late 2005, I said I would deliver results 
against five priorities, all of which ensure that the direction of DHS 
Intelligence is firmly aligned to the intent of intelligence reform 
within the Department and in the Intelligence Community. My priorities 
are:

      Improving the quality of intelligence analysis across the 
Department;
      Integrating DHS Intelligence across its several 
components;
      Strengthening our support to state, local, and tribal 
authorities, as well as to the private sector;
      Ensuring that DHS Intelligence takes its full place in 
the Intelligence Community; and,
      Solidifying our relationship with Congress by improving 
our transparency and responsiveness.

                              C. Progress

    The business of intelligence is collection and analysis. I am proud 
to highlight the progress we have made in strengthening the core 
capabilities of the DHS Intelligence Enterprise in both of these areas. 
Over the past year, we have defined homeland security intelligence as 
our unique mission--to serve the Secretary and the Department, our 
partners at the state, local, and tribal levels and in the private 
sector, and in the Intelligence Community.
    On the front end of the intelligence business is collection--a 
topic near and dear to my heart, as you well know. DHS Intelligence has 
made great strides in maturing our collection management capabilities. 
We have developed new capabilities in open source intelligence, 
streamlined the reporting of information of intelligence value, and 
improved our exploitation of the information gathered through the 
Department's conduct of law enforcement and regulatory 
responsibilities.
    With the support of the Office of the Director for National 
Intelligence (ODNI), and especially the Assistant Deputy Director for 
National Intelligence (ADDNI) for Open Source, DHS Intelligence is 
developing a strong Open Source Intelligence (OSINT) capability focused 
on our areas of expertise and responsibility to complement the broader 
Intelligence Community's open source investments.
    To improve the Department's ability to evaluate the information it 
possesses for intelligence value, we began a training program 
throughout the Department to teach intelligence professionals how to 
recognize information with intelligence value, how to write good 
intelligence reports, and how to report this intelligence in a timely 
manner. Last fall, we piloted a similar training program at a state and 
local fusion center, and we will seek to expand that pilot this fiscal 
year. The result will be to increase the exchange of information with 
intelligence value between the Department and its homeland security 
partners.
    Additionally, we are working throughout the Department to improve 
and integrate existing information collection capabilities, such as our 
Department's air-based systems, ground sensors, and law enforcement 
technical collection capabilities. Our efforts will result in a 
departmental approach to Intelligence, Surveillance, and Reconnaissance 
(ISR) that will complement the abilities of our partners in the 
Intelligence Community. The ISR conference we hosted last year was a 
major milestone in moving toward the goal of being able to adroitly 
task any part of the Department's collection capability and move the 
results of that collection to any part of the Department for 
exploitation and analysis.
    In addition to this progress in collection, we are successfully 
implementing the lessons learned in the Intelligence Community in 
response to intelligence reform. For example, we are building an OSINT 
capability that responds to the modern recognition of the value of 
open-source intelligence reflected in the ODNI's creation of the ADDNI 
for Open Source. We are evaluating our collection capabilities and 
improving our core abilities and collection management, much as the 
ODNI seeks to do with the Integrated Collection Architecture and the 
continuing use of the Mission Review Board. Above all, we are focusing 
the Department's information gathering efforts on the priorities 
established by the President, the DNI, and the Secretary to ensure that 
we contribute towards answering the key intelligence questions 
confronting the Homeland. In all of our efforts, we are acting with 
full respect to the Constitution. I continually consult with our 
counsel and both the Department's and the ODNI's Civil Liberties, Civil 
Rights, and Privacy experts to ensure we are protecting our citizens 
and legal residents--both from the transnational threats confronting 
our Nation and from the inappropriate use of our capabilities.
    My Deputy Assistant Secretary for Intelligence, Dr. Mary Connell, 
deserves credit for the progress in improving the quality of 
intelligence analysis. Most importantly, we have realigned the Office 
to reflect our critical mission. The essence of what constitutes 
homeland security intelligence is a simple concept--threats to the U.S. 
Homeland. Currently, the key threat to the Homeland remains terrorism. 
While we must focus on this terrorism threat, we cannot take our 
attention away from other threats to the Homeland as we continue to 
provide intelligence support to our customers in the Department, the 
Homeland, and the Intelligence Community.
    Our analytic focus now includes:

      Border Security: We look at all borders--air, land, and 
sea on the Southwest, Northern, and maritime borders. The threat to our 
borders is far more complex than terrorism. It more likely stems from 
narcotrafficking, alien smuggling, money laundering, and organized 
crime, which are all intertwined in networks that cross our borders 
into the Homeland.
      Chemical, Biological, Radiological, Nuclear (CBRN) 
attack: We clearly are concerned with the nuclear threat--improvised 
nuclear devices (INDs) and radiological dispersal devices (RDDs)--and 
especially the bioterrorist threat, a key Department prerogative. We 
also focus on explosives and infectious diseases such as avian flu and 
foot-and-mouth disease, threats for which DHS also has 
responsibilities.
      Infrastructure: We are enhancing the Department's 
Homeland Infrastructure Threat and Risk Assessment Center (HITRAC), 
which is a unique partnership of homeland security intelligence 
analysts, infrastructure specialists from the Office of Infrastructure 
Protection, and the private sector. DHS has a particular mission to 
work with our 17 critical infrastructure and key resource sectors to 
provide insight into threats and vulnerabilities, so they can more 
effectively defend against and respond to potential attacks.
      Extremism/Radicalization: We have created a branch to 
focus on the threat posed by domestic terrorists prone to violence--
Islamic extremists (Sunni and Shia) to be sure, but also white 
supremacists, black separatists, and environmental extremists. Our 
homeland security intelligence approach to this potential threat is 
collaboration with our state, local, and tribal partners that can 
provide unique expertise and insight.

    We are still in the ``building'' mode--we have yet to develop the 
required expertise and experience to fully implement our mission. 
Nonetheless, we already have made strides in serving our customers. We 
regularly produce Homeland Security Intelligence Assessments to brief 
the Secretary, Deputy Secretary, and other senior DHS officials, and 
support key Department efforts such as the Secure Border Initiative and 
Visa Waiver Program. For the first time, DHS Homeland Security 
Intelligence analysts are working closely with their counterparts at 
the state, local, and tribal levels to produce collaborative 
assessments. Finally, we have laid down a marker in the Intelligence 
Community for homeland security intelligence in producing a number of 
Presidential Daily Briefs on our mission topics and co-authoring 
special assessments.
    Over the coming year, my goal, as part of developing mission 
expertise, is integration. We cannot achieve our mission alone. We 
especially need a more integrated intelligence effort particularly with 
our operating components. This area truly reflects a unique DHS 
contribution to intelligence. The Homeland Intelligence Integration 
Board is building momentum, but most important will be DHS intelligence 
analysts collaborating on specific projects with operating components' 
intelligence analysts. We also need a more integrated effort with our 
state, local, tribal, and private sector partners. As a formal 
beginning, we are hosting the first-ever analytic conference that will 
bring together a large number of these analysts to focus on Homeland 
threats. We have only begun, but homeland security intelligence is a 
critical mission and we are pursuing it with urgency.

                     D. Management of Intelligence

    My Deputy Assistant Secretary for Mission Integration, James 
Chaparro, deserves credit for building an integrated approach to 
program and career force management. I take the responsibility of 
leading and managing DHS Intelligence extraordinarily seriously, and I 
recognize that with these responsibilities comes accountability. As the 
Chief Intelligence Officer, I must take personal responsibility for the 
success or failure of DHS Intelligence. Under the authorities laid out 
in the Department's Management Directive 8110, last spring I 
implemented the first ever DHS Intelligence Program Reviews. I worked 
with the DHS Office of Strategic Plans and the Chief Financial Officer 
to issue intelligence guidance as part of our resource planning and 
programming cycle. My staff reviewed the resource allocation plans from 
each of the DHS Intelligence components. I then conducted program 
reviews of each of the DHS Intelligence components and advised the 
Secretary and the component chiefs on future program investments. As a 
result of my program reviews, the Commissioner of Customs and Border 
Protection charged his Director of Intelligence with developing an 
integrated Customs and Border Protection intelligence structure. This 
is exactly the type of management the Chief Intelligence Officer must 
provide to build the strongest possible DHS Intelligence capability.
    This year I will again issue intelligence guidance as part of the 
resource allocation planning and programming cycle, and again conduct 
reviews of each intelligence component. In addition, I will expand the 
reviews to look at each program's mid-year successes in meeting its 
objectives, and I will examine investments in other intelligence-
related activities that complement the investments we are making in our 
intelligence components. We also continue to professionalize our 
program review capability and to institutionalize the process so 
careful scrutiny of these investments in intelligence increasingly 
becomes a part of our culture. Our goal is to ensure that we are 
efficient and effective in our approach across the Department.
    I have aligned these efforts within the Department, in order to 
mirror the approach suggested by intelligence reform that created the 
Office of the Director of National Intelligence (ODNI). I am reviewing 
our program and budget authorities to ensure strong accountability for 
investments in our Nation's intelligence capabilities.
    Last year I embarked on a two-year plan to transform our 
intelligence training, education, and professional development 
capabilities. I am pleased to announce that in 2 weeks, we will kick 
off the next major step by holding the first DHS basic intelligence 
course--a six-week, in-residence course hosted at the Federal Law 
Enforcement Training Center in Cheltenham, MD, to whom we are indebted 
for their great support. This course will include representatives from 
throughout the Department's intelligence cadre, and we are working to 
open the enrollment to the broader Intelligence Community and our 
partners in the state and local fusion centers.
    For the rest of this year, we will continue to pursue an aggressive 
training schedule, develop learning roadmaps for our junior and mid-
level employees, and build a close partnership with the ODNI and DHS 
Human Capital offices, as well as our partner institutions such as the 
National Intelligence University and the Federal Law Enforcement 
Training Center. I will continue working with the Homeland Security 
Intelligence Council to develop common approaches to recruiting and 
retaining qualified personnel to ensure all of DHS Intelligence is 
strengthened.
III. DHS Role in Overall U.S. Intelligence Reform

 A. Importance of the Intelligence Reform and Terrorism Prevention Act 
                           of 2004 within DHS

    The implementation of the Intelligence Reform and Terrorism 
Prevention Act of 2004 (IRTPA) is strengthening DHS Intelligence's 
ability to support our national, departmental, and non-federal partners 
in securing the Homeland. From my perspective, having served as a 
senior intelligence official in a number of capacities, including six 
years as the Assistant Director of Central Intelligence, I place the 
IRTPA in the same category as the Goldwater-Nichols Act as one of the 
most important pieces of legislation to strengthen our homeland 
security. In particular, I would like to speak briefly about the 
creation of the Information Sharing Program Manager and Information 
Sharing Environment, and the impact on homeland security intelligence.

                         B. Information Sharing

    Section 1016 of the IRTPA created the Information Sharing 
Environment, which improved the Department's ability to perform its 
mission. DHS--in particular the Office of Intelligence and Analysis--
has developed a strong working relationship with the ODNI's Program 
Manager for the Information Sharing Environment through the Information 
Sharing Policy Coordination Committee and the Information Sharing 
Council. Many of our ongoing initiatives will contribute to our 
effective response to the Program Manager's action items. These 
relationships and initiatives will continue to grow as we move toward 
the implementation of the Information Sharing Environment.
    The Implementation Plan for the Information Sharing Environment, 
which was approved and delivered to Congress in November 2006, contains 
89 action items designed to drive its creation, implementation, and 
management. These items overlap many performance measures for important 
activities such as Sensitive But Unclassified standardization, state 
and local fusion center coordination, and information sharing metrics. 
As the programmatic lead for DHS in reporting to the Program Manager, 
the Office of Intelligence and Analysis has taken several important 
steps to execute key items. For example, the Office of Intelligence and 
Analysis has identified Information Sharing Action Officers so that we 
can use our existing working groups, programs, and initiatives to more 
effectively respond to action items. We also established the DHS 
Information Sharing Coordinating Council, composed of the Information 
Sharing Action Officers, who will meet regularly to coordinate and 
execute actions related to the Information Sharing Environment.
    The value of these activities comes from our coordinated approach 
to the Information Sharing Environment implementation plan: improved 
flow of internal information, reduced redundancy and overlapping 
activities, and improved collaboration with the members to ensure that 
the Information Sharing Environment supports DHS' missions and 
requirements. DHS took a leadership position in developing performance 
metrics to measure the effect of information sharing on its mission. 
DHS Program Evaluation and Analysis is incorporating these measures 
into the Future Year Homeland Security Plan and the Five Year Plan.
IV.Conclusion

                           A. Threat is Real

    Throughout our discussion of intelligence reform, we cannot lose 
sight of the continuing transnational and domestic threats to our 
homeland. These threats are very real. They threaten to undermine the 
safety of our communities and challenge our values of liberty, 
equality, and rule of law.

                         B. Benefits of Reform

    Reform cannot exist merely for reform's sake--it must be focused on 
improving our capability to secure the Homeland. It is in this light 
that I would like to conclude by discussing three final mission areas 
of progress resulting from the DHS response to intelligence reform--our 
State and Local Fusion Center Program, our Intelligence Campaign Plan 
for Border Security, and our participation in the development of a 
Homeland Weapons of Mass Destruction (WMD) Intelligence Strategy.
    The first of these, the State and Local Fusion Center Program, is 
an outgrowth of the Homeland Security Act (HSA) of 2002 and the IRTPA. 
In both the HSA and the IRTPA, the responsibilities of the federal 
government were broadened to include a much more pronounced requirement 
to build a unified homeland security intelligence community composed of 
both federal and non-federal members. This was a true revolution of 
intelligence affairs. It brought into existence a new community of 
homeland security intelligence professionals who are experts in fusing 
law enforcement and first responder intelligence with foreign 
intelligence. The result is a new intelligence discipline and 
tradecraft that is giving us a new understanding of the threat. I view 
the Department as the nexus of this unified homeland security 
community.
    With the support of both the DNI and the Department of Justice 
(DOJ), the Department has created the State and Local Fusion Center 
Program, which places DHS homeland security intelligence professionals 
in state and local fusion centers that are part of the National network 
of fusion centers. My Principal Deputy Assistant Secretary, Jack 
Tomarchio, has been superb in executing this program and in 
strengthening our support to our state, local, tribal, territorial, and 
private sector partners. To date, we have deployed 12 officers to 12 
fusion centers around the country. We will continue our aggressive 
schedule to deploy up to 35 additional officers by the end of FY 2008, 
and are currently conducting assessments to determine which centers 
have the greatest need. Our officers in the fusion centers are working 
with their partner homeland security and law enforcement intelligence 
professionals to share information, to collaborate on analysis, and to 
identify information of intelligence value. The result will be better 
reporting of valuable information, both horizontally between fusion 
centers and vertically to the Intelligence Community. Similarly, our 
headquarters officers are working with their counterparts in DHS 
Intelligence and the Intelligence Community to identify intelligence 
that is of value to the state and local fusion centers and to ensure 
that it is shared with them daily.
    Our efforts to build a unified homeland security intelligence 
community with our non-federal colleagues are positively aligned with 
the intent of intelligence reform. As I discussed earlier, we are 
working with the ODNI Information Sharing Program Manager and our DOJ 
counterparts to build a truly seamless partnership and information 
sharing environment. We already are seeing the effect this new 
broadened homeland security intelligence community is having in the 
work on which DHS has collaborated with its non-federal partners in 
analyzing radicalization. We have also seen continuing improvements in 
the critical infrastructure intelligence produced by our Homeland 
Infrastructure Threat and Risk Analysis Center because of our 
partnership with the private sector. Similarly, we are working with our 
Intelligence Community partners, in promoting intelligence reform, to 
further collaboration and information sharing efforts. For example, DHS 
has representatives stationed at many federal intelligence centers and 
offices run by the Intelligence Community, including the National 
Counterterrorism Center, the Terrorist Screening Center, and the ODNI 
staff.
    A second mission area I want to discuss is how intelligence reform 
is guiding our approach to border security intelligence and 
strengthening our ability to secure the border. This was not an area 
that was at the forefront of the thinking that underpinned the 
development of legislation on intelligence reform, but I think a short 
discussion of border security intelligence will show how prescient the 
work on intelligence reform has been, and why it is so important to 
continue to evaluate our progress and make intelligence reform a living 
process.
    When I arrived last September, the Office of Intelligence and 
Analysis already was leading a working group on intelligence 
initiatives in support of the Secretary's Secure Border Initiative, or 
SBI. One of my first acts was to launch an Intelligence Campaign Plan 
for Border Security, or ICP, which Deputy Secretary Jackson introduced 
on September 27, 2005, to General Michael Hayden, then the Deputy 
Director for National Intelligence. From the very start of this 
activity, we relied on the new management structure of the ODNI to help 
us bring the full capabilities of the Intelligence Community to bear on 
this new area of emphasis.
    We approached our intelligence campaign planning as both a DHS 
Intelligence activity and an Intelligence Community activity, working 
on the principle that a shared common vision for how to employ 
intelligence in support of border security would result in the 
strongest capability.
    We have worked, and continue to work, with the key analytic and 
collection organizations to survey the landscape of capability and to 
identify where new emphasis and investment are required. We are working 
on the principle that reform must improve our core business areas of 
intelligence collection and analysis if it is going to have a 
substantive impact. We have received truly commendable support from our 
partners, such as the National Geospatial Intelligence Agency. New 
collection has been generated and shared with the policy and 
operational communities, thus resulting in better, more targeted 
enforcement and investigations. Every week we are sending newly 
collected intelligence down to our operational units on the Southwest 
border and sharing as much as we can with our state and local partners. 
In addition, I am building a strong border security strategic 
intelligence analysis capability in the Office of Intelligence and 
Analysis. This unit is working with all of its colleagues across the 
community to fuse intelligence information and produce the highest 
quality finished intelligence analysis. The resulting threat 
assessments and analysis have helped guide the activities of our Border 
Enforcement Security Task Forces and have informed departmental policy 
discussions.
    In addressing the intelligence needs for border security, we have 
focused on both the immediate needs of our customers and on building a 
sustainable capability for the future. Our approach is based on the 
principles of sound management and accountability that underpin 
intelligence reform. We are working closely with the DNI and all of the 
intelligence components in DHS to target our investments in a rigorous 
and efficient manner. My Program Reviews and our partnership with the 
SBInet Program Office are helping to implement a sound intelligence 
investment strategy for border security intelligence.
    Finally, we have created a collaborative approach that spans the 
Intelligence Community and the federal government, and that reaches 
into our non-federal homeland security intelligence partners as well. 
Our approach embraces the principle that the best understanding of the 
threat to our borders is going to result from fusing National, 
departmental, and non-federal information and intelligence. We are 
aggressively sharing our border intelligence products by using our 
state and local fusion center officers to reach out to fusion centers 
in border states. We have also deployed an advance team to evaluate how 
a DHS Homeland Security Intelligence Support Team, in a location such 
as El Paso, Texas, could create a hub for fusing intelligence across 
multiple communities and building a robust operational picture of the 
threat on the Southwest border.
    Looking to the future, we will continue to assess our own success, 
and work with the DNI in evaluating the Intelligence Community's 
success in providing the intelligence our customers need to secure the 
border as a critical step in protecting the Homeland. We may want to 
explore extending management structures, such as the DNI mission 
manager approach, to the topic of border security, or broadening the 
focus of the National Intelligence Officer for Transnational Threats to 
have, for example, a Deputy for Border Security or International 
Organized Crime. Lastly, we must continue to evaluate our tradecraft 
and our ability to collect and produce analysis for our border security 
partners at all levels.
    I want to end my remarks by discussing a third mission area. 
Protecting the Homeland from attacks using WMD is a top priority of the 
Department, resulting in major efforts across the homeland security 
intelligence enterprise. We are leading an effort in the community to 
develop a Homeland WMD Intelligence Strategy that will outline the 
unique aspects of the WMD threat, along with the goals and actions 
needed for us to meet this challenge. A major emphasis of this strategy 
will be on collecting and analyzing non-traditional sources of 
information, along with traditional intelligence, to deduce indicators 
of the transfer of knowledge, expertise, and materials among 
individuals with WMD knowledge and experience, known terrorist 
organizations, and other criminal or extremists groups. Our mission is 
to provide homeland security operators and policy makers, the 
Intelligence Community, and our federal, state, local, tribal, and 
private sector partners with tailored, timely, and actionable 
intelligence to counter WMD threats.
    We are developing our capabilities in WMD intelligence to meet five 
goals. Two goals are associated with preventing WMD attacks from a 
``borders out'' and ``borders in'' perspective. Our ``borders out'' 
work focuses on developing the intelligence needed to prevent 
extremists with the knowledge, capability, and intent to conduct WMD 
attacks from entering the country, and assessing the ability of known 
terrorist groups to develop, acquire, and use WMD. Our ``borders in'' 
efforts focus on providing tailored intelligence products to homeland 
security operators in order to prevent the transport of WMD devices or 
materials into or within the United States; to avoid unauthorized 
access to weapons useable materials in the United States; and to deter 
domestic extremists from acquiring and using WMD. Our preparedness and 
response activities fulfill our responsibility to provide intelligence 
and advice to incident management planners and operators. We are also 
developing the capability to prevent technology surprise by providing 
homeland security policy makers, regulators, and our public and private 
sector partners with information on new and emerging threats. Finally, 
we are committed to developing the homeland intelligence tradecraft 
through the recruitment and training of a first-class WMD intelligence 
analytic cadre.
    Continual evaluation represents an unwillingness to rest until the 
job is done--until the mission is accomplished. This restlessness in 
the pursuit of excellence, which is at the heart of any good reform 
movement, will continue to be my overriding guiding principle as long 
as the Nation is threatened. Your oversight of and advocacy for our 
community is a critical component of successful reform.
    DHS Intelligence is a modestly-sized program, but we have begun 
delivering an enormous return on that investment. We will deliver even 
more in the future, but I will need your support in ensuring we have 
the resources commensurate with our mission and with our future 
potential. Our Nation, our communities, and our families deserve 
nothing less than our very best--and DHS Intelligenceis responding to 
that call.
    Members of the Committee, this concludes my prepared remarks. I 
look forward to answering your questions.

    Chairman Rockefeller. Thank you very much, sir.
    Mr. Pistole, I thank you for your testimony and, once 
again, for your service to our country. Still, as happy as I am 
to hear that the Bureau is in the process of making the 
necessary changes to meet today's threat environment, I am 
troubled that, more than five years after 9/11, the FBI appears 
to just be beginning to make some of those reforms. And you 
refute me if you don't think I'm correct about that.
    The Automated FBI Intelligence Collection Management 
Project, you state, is still in progress. The field 
intelligence group for the standardized structure, clear roles 
and responsibilities, and access to a secure workplace and, 
therefore, the most sensitive intelligence, is still a work in 
progress.
    Domain management and an overall strategy for FBI field 
offices to collect intelligence and identify future homeland 
threats are just getting under way. Capacity to understand 
homeland threats in a strategic context by identifying and 
supporting a cadre of senior level analysts is also just 
beginning.
    Mr. Pistole, if this were late 2002, I would feel much 
better about the Bureau's pace of change. And I may be wrong. 
That's why you're here.
    In your testimony you stated that the FBI has more than 
2,200 intelligence analysts who are ``on board,'' and that 
you've hired 370 new intelligence analysts in 2006 alone. This 
would mean that nearly 20 percent of your analysts have less 
than a year of experience at the FBI.
    Let me do one more. You have also spoken about the creation 
of an intelligence career service and FBI efforts to create a 
consistent and effective training program for both new and 
currently employed analysts. The ICS program is also, to my 
understanding, a work in progress. And yet, another new analyst 
training program, one of several attempts, is ready to be re-
launched.
    Is this and so many areas why it has taken the FBI so long 
to adapt to the new threat environment? Or do I overestimate?
    Mr. Pistole. Mr. Chairman, let me respond to that from two 
perspectives--one, a traditional FBI, investigative if you'd 
like to call it intelligence cycle, and then what we're doing 
today. If you look at what the FBI was charged with, the 
responsibility prior to 9/11--and as a career FBI agent, I can 
speak to this from my two-plus decades of experience--we 
basically had two aspects of the intelligence cycle. If you 
look at the collection of information, if you want to call it 
intelligence, and then the acting upon that, whether that was 
an indictment or some type of criminal prosecution, I don't 
think many people would criticize us for being very good 
collectors of information and acting on that information.
    What we realized, post-9/11, is that the two interim steps 
that we had not focused on--the analysis and the sharing of 
that information--were our weak points, and that is what we 
have focused on over the last five years. There have been a 
number of steps that we have taken, starting on the 
intelligence side, to make sure that intelligence was 
integrated throughout the FBI. And by that, for example, in all 
of our thousands of counterterrorism investigations that we 
have ongoing and have had since 9/11, each and every one of 
those investigations is first and foremost an intelligence 
investigation.
    Only in the event that there is a collective decision made 
through our 101 joint terrorism task forces and our 
Counterterrorism Division at headquarters that it is in 
everybody's best interests to pursue criminal sanctions, 
whatever that may be, is there a move forward in that regard.
    In other words, the criminal prosecution is put in the back 
seat, is held in abeyance until such time as the intelligence 
from all those investigations is fully exploited.
    So what that may mean is that we work with our 
counterparts, for example, overseas and with the Agency, to say 
that this individual from this particular country would be 
better suited, in terms of deportation back to his host 
country, for example, as opposed to a criminal prosecution in 
the U.S.
    So part of that cycle that we have looked at is focusing in 
on how do we analyze and share information.
    And there's a lot of metrics, if you will, in terms of the 
training that we're doing for both analysts and agents. We've 
expanded the new agents' training from 18 to 21 weeks, 
specifically for national security matters, intelligence cycle 
issues. We have at least 10 training classes for analysts that 
we did not have on 9/11.
    And so there's been a very intentional focus on how we can 
professionalize and make sure that we are full players in the 
intelligence community and the law enforcement community, to 
make sure that all the information that we're collecting is 
being shared on a timely basis, and basically under the rubric 
of share everything and then restrict what we must. So if 
there's restricted sharing from, you know, a foreign agency, 
then obviously there's a limitation with that.
    But basically, we are trying to share everything and 
restrict only what has to be restricted. So there are a number 
of aspects to that, but hopefully that starts to address your 
question.
    Chairman Rockefeller. I thank you. And my time is up, and I 
call on Senator Feinstein.
    Senator Feinstein. Thank you very much, Mr. Chairman.
    On Tuesday I referred to the fact that the information-
sharing part of your job with local officials, I think, is 
still not very smooth.
    Today I'd like to be explicit. I would like to say that I 
agree with pages six and seven of Mr. Spears' comments, written 
comments, about the sharing of intelligence.
    With respect to California, we have four fusion centers. 
Los Angeles has a joint regional intelligence center, manned by 
the sheriff's department, police department, FBI and DHS. 
Sacramento has a fusion center with FBI. And the Bay Area and 
San Diego have fusion centers with local personnel from 
Homeland Security and law enforcement agencies.
    My staff, my intelligence liaison, has called both Los 
Angeles and Sacramento. What he reports to me is that there is 
a problem in Sacramento, with the Governor's office, to be 
specific, and with DHS, to be even more specific. What they say 
is this. DHS has resisted allowing state and local officials to 
get top security clearances for what the state believes are 
territorial reasons.
    Two, intelligence that the Director knows exists doesn't 
get sent to him. He's spent a good deal of time trying to get 
someone to pass him intel instead of having it pushed to him.
    Three, DHS is generally overly protective and resistant to 
working cooperatively from what the Director believes is a fear 
of becoming irrelevant.
    Four, the state has two secure video facilities, one in the 
Governor's office, one in the emergency operations center, but 
that's not enough to have video conferences with other state 
and federal players. The state would be happy to pay for more, 
but can't buy them without the approval of a federal sponsor. 
That's what we are told.
    Mr. Allen, I'm going to ask you to respond to these.
    And finally, DHS has shut down its Office for State and 
Local Assistance, and there is no good channel between the 
Secretary's office and the Governor's office. There needs to 
also be better state and local representation at the National 
Counterterrorism Center.
    The conversation with the Los Angeles JRIC was almost 
completely the opposite. The Los Angeles experience is 
positive, with good information-sharing between Los Angeles 
people, the FBI and DHS. Intelligence comes to the sheriff's 
department, the police department as soon as the FBI and DHS 
officials have it.
    It seems to me, Mr. Allen, if you can have a good 
relationship in Los Angeles, it's important to also have that 
relationship with the state capital and the Governor's office.
    I'd like your response.
    Mr. Allen. Senator Feinstein, thank you for the question. 
It's a good question. I'm happy to respond.
    Let me just speak specifically and then maybe more 
generically on what I do and my view of information sharing.
    One, on top secret clearances, we certainly will sponsor 
top secret clearances for any senior official in Sacramento 
that needs it. Mr. Betenhausen has a top secret clearance.
    Any information that goes beyond, in a compartmented area, 
we certainly will get that information sanitized and to them 
immediately if there's threat warning, threat assessment. We 
will clear people that Mr. Betenhausen, who is your homeland 
security adviser; Mr. Hipsley, his deputy.
    We are embedding an officer in Sacramento. That officer 
arrived this month. That was one of my highest priorities.
    We are not overprotective with sensitive information. We 
have the clear responsibility from the Director of National 
Intelligence, Mr. Negroponte, and certainly Mike McConnell when 
he is confirmed, to share information of a sensitive level 
immediately and securely with Sacramento. If additional secure 
video facilities require it, I will look into it and all that I 
have to have is where you need it, and we will certainly find 
the funds and put it in.
    As far as having a state and local official, I think you're 
referring to that at one time, there was a state and local 
official in what is now the National Operations Center, which 
does not operate under my direction.
    But I am certainly supporting the re-establishment of that. 
I'm sending a letter off to the Undersecretary, Roger Rufe, who 
is Vice Admiral, retired, U.S. Coast Guard, to do that.
    As far as NCTC, we're standing up, as I described, the 
federal coordinating group. I went out and we looked at the 
facilities just a couple of hours ago with a senior FBI agent. 
That will stand up this week to do threat warning, threat 
assessment--and also Chief Lanier always calls this 
foundational documents about terrorists, techniques, tactics 
and procedures.
    We're going to share a lot of information. The Los Angeles 
police department, with Chief Baca and Chief Bratton, we have a 
very good relationship. Both are coming in, I believe, to see 
the Secretary on the 30th, 31st. They're coming in with some 
additional proposals which I support and which I will advocate 
to the Secretary that he support.
    So we have a very rich relationship with California, 32 
million to 38 million people. And California's very much on my 
mind.
    Senator Feinstein. My time is up, but may I just say this. 
Thank you, and I trust that you will look into this situation 
in Sacramento and that it will be reconciled and remedied.
    Mr. Allen. By having a new officer there, that will make a 
world of difference.
    Senator Feinstein. Thank you. Thank you very much.
    Chairman Rockefeller. Senator Mikulski?
    Senator Mikulski. Well, Mr. Chairman, first of all, we want 
to welcome our witnesses, two outstanding and very seasoned and 
dedicated professionals who bring, probably, almost 70 years of 
experience in law enforcement and intel before us.
    Mr. Chairman, I really want to thank you for holding this 
hearing on domestic intelligence. It is my very firm belief 
that this is an area that has been terribly neglected by this 
Committee. Often this Committee has been looking at foreign 
intelligence, which we absolutely need to do, but in the global 
war against terrorism, we need to look at domestic 
intelligence, and I don't believe we have.
    More importantly, I also don't think that the Congress 
understands the role that the FBI is playing in this because of 
the way we've just treated them in the whole appropriations 
process.
    Two years ago there was an article, ``Remaking the FBI.'' 
Why is it so hard to get you men to think like spies? Mr. 
Pistole, I'll be asking you that question. But why is it so 
hard for Congress to think that the FBI is in the domestic 
intelligence business?
    Why am I so agitated about this? Right now, this minute, I 
am fighting for the FBI's funding in a continuing resolution. 
That should not have to be done. When the Congress adjourned 
for the 109th Congress, everyone made sure that Defense 
passed--and it should. Everyone made sure that Homeland 
Security passed--and it should. But guess who was left out of 
the picture? The Commerce-Justice appropriations that has the 
FBI. And we had a good bipartisan bill, chaired by Senator 
Shelby, former member of this Committee. So we were on the side 
of the FBI having the right resources so we could do 
accountability and oversight.
    Well, guess what? Right this minute, Shelby and Mikulski 
are negotiating with leadership at the highest level just so 
they come out even. I'm going to ask them where they would be 
if they're going to be funded at this level.
    But what is the biggest travesty there is nobody thought to 
include the FBI to make sure they were in the global war 
against terrorism. That is our problem. That is not Director 
Mueller's problem. That is our cultural change. And I think 
it's time to change the culture of oversight in this Committee, 
and also the culture of understanding who is involved in the 
global war against terrorism.
    Right now, when we look at this, you're going to find out 
that DHS was funded, CIA was funded, NGA was funded, et cetera, 
but not them. So I hope to be able to work to implement the 9/
11 Commission report in terms of oversight. I'm the 
appropriator for the FBI.
    I'm also a proud member of this Committee, and I know we're 
trying to look at should there be an intel separate 
appropriations committee. That will be decided by a higher 
power than me, but I intend to do that oversight. We're going 
to be pursuing this.
    Mr. Chairman, please join with me in helping the Congress 
understand the role of the FBI. You've done a great step today, 
a fantastic step, in doing this. But I am telling you, the FBI 
cannot be left out of the picture. When the DNI does his 
appropriation, it can't be left out of the picture when the 
Congress does its appropriation and it can't be left out when 
we do oversight, and I feel very strongly about it.
    Moving then to my question, Mr. Pistole, if the Congress 
funded you at the 2006 appropriations level, could you share 
with us the impact that it would have in the FBI, and to the 
extent that you can discuss in an open hearing, the impact it 
would have in your ability, the FBI's ability, to fight the 
global war against terrorism?
    Mr. Pistole. Senator Mikulski, thank you very much for your 
support and for your observations. Let me briefly try to 
address that.
    As you've correctly pointed out, we are the only agency 
within the intelligence community that is not funded for 2007, 
and, as a result of the continuing resolution, we have at least 
one and perhaps three critical areas at risk, one area, of 
course, being our information technology upgrade, known as 
SENTINEL, which we have funding that we have at risk both with 
the contractor and in terms of moving forward with phase one 
completion, which is due for April, and then moving into phase 
two, there was $157 million that was needed for FY 2007.
    The second area is in the hiring of exactly the right 
people that we need for the continuing mission to address the 
homeland threat, the threat that's faced from the homegrown 
extremists and from those others.
    And if we continue on the C.R., the continuing resolution, 
we will probably have a net loss of approximately 800 
employees--that's 400 agents and 400 analysts--that we would 
not be able to replace through attrition. And so that's a very 
tangible bottom-line issue.
    There are some other areas that I can go into in more 
detail in a classified setting that would be adversely 
affected. So thank you for that question.
    Senator Mikulski. Thank you.
    Mr. Chairman, my time's expired. But I think I've made my 
point. I really thank you.
    Chairman Rockefeller. You certainly have made your point, 
and you've made it eloquently. And thank heavens for it and for 
you.
    Senator Whitehouse?
    Senator Whitehouse. Thank you, Mr. Chairman.
    Mr. Pistole, could you tell me a little bit more about how 
domain management has developed in the last four or five years 
and to what extent data mining plays any role in it?
    Mr. Pistole. Yes, Senator.
    Domain management is basically the FBI's approach to asking 
questions of our 56 field offices that cover the country--and, 
of course, our Boston office, which covers Rhode Island. And I 
was privileged to serve in Boston, and had some dealings there 
in Rhode Island. Very good folks.
    Senator Whitehouse. ``Crocodile Smile'' ring any bells?
    Mr. Pistole. Some good experiences there, Senator.
    The domain management is having our Special Agent in Charge 
and our field intelligence group ask some very basic questions 
as to what do we know about what's in our territory--that field 
office's territory--and then what capabilities do we have to 
address the threats that are posed to that territory or 
emanating out of that area; and then what gaps do we have; what 
steps do we need to address to fill those gaps?
    And that's all part of trying to collect against 
requirements, as established by the Office of the Director of 
National Intelligence and the broader intelligence community. 
So we really have a two-fold purpose in trying to collect 
against those requirements and basically positioning ourselves 
in a proactive way that allows us to say--for example, if 
there's threat information that, let's say, a Pakistani male 
between 25 and 30 is coming into the country and may be coming 
into Rhode Island, let's say, well, it would be good for us to 
know ahead of time what the environment in Rhode Island is, to 
be dealing with the Rhode Island state police, dealing with the 
Providence police, to deal with those folks who know the 
situation on the ground, know where there may be some hawalas 
that are being used--money being sent to Pakistan.
    That type of information goes into the domain management. 
And so, again, it's basically knowing the territory, knowing 
who the constituents are and where the possible threats may be. 
And that goes across the board.
    In terms of data-mining, we obviously rely on a lot of 
information such as the I-94 information for folks coming into 
the country. Where do they put down--what address--where are 
they going? Is there a high number of people going to the same 
address? Is that suspicious? What type of information do we 
have about, for example, are there any false visa applications 
that have been identified? Are there people who are wanted for 
some crimes that, perhaps, would not come up?
    There's lots and lots of data. We have what's known as an 
investigative data warehouse, which actually is able to query, 
do a federated query, across 53 different databases. And I 
would offer a demonstration to all the Senators, the entire 
committee. If you have not had a demonstration of IDW--
investigative data warehouse--I think you would be very pleased 
with what we are doing in terms of both taking a lot of 
information, while protecting the civil rights and civil 
liberties of U.S. persons.
    But we look at those databases as a way of knowing our 
domain and ensuring that we are doing everything proactively to 
address the potential threats in that area.
    So that's a brief overview, and there's more information if 
you'd like.
    Senator Whitehouse. Okay. And I take you up on your offer 
to see the warehouse. We can talk after the hearing about 
scheduling that.
    Mr. Pistole. Absolutely.
    Senator Whitehouse. In terms of the boundaries between an 
external investigation that brings information into the United 
States, and now an internal investigation, a domestic 
investigation begins and domestic surveillance begins, how 
clearly can you explain to us the boundaries and the handoff 
methodologies for taking the matter from the control of, say, 
the CIA, or some other foreign-targeted agency, to yours?
    Mr. Pistole. Yes, Senator.
    Basically we divide things into two areas--investigations 
that have some type of foreign power nexus, that there's some 
connection. We work collaboratively with the agency and other 
agencies to establish is there a foreign nexus, a foreign power 
nexus, including within the FISA definition which would be--the 
Foreign Intelligence Surveillance Act--is there a nexus to a 
terrorist organization? So that's one of the defining areas.
    If it does not have that nexus, then it may be a situation 
such as we had Torrance, California, a year-and-a-half ago with 
a group that called itself basically al-Qa'ida in America. It's 
a prison-based group that was out robbing convenience stores to 
fund potential acts against some Jewish targets and also the 
Army National Guard and some other targets.
    So even though they may have been inspired by al-Qa'ida, 
they had absolutely no foreign ties, and so it was a question--
so that's one way of distinguishing. And then the purely 
domestic groups, the Animal Liberation Front, the Earth 
Liberation Front, some of those groups, the white supremacists 
groups, things like that would be considered domestic groups.
    So we believe, through our integration at the National 
Counterterrorism Center and our location of our 
Counterterrorism Division at Liberty Crossing, where a good 
portion of the agency's counterterrorist center is located, 
that we have that integration and the smooth hand-off of 
information coming from foreign services, as people may enter 
the U.S., where then we have the responsibility for conducting 
an investigation.
    Senator Whitehouse. I appreciate it.
    Thank you, Mr. Chairman.
    Chairman Rockefeller. Thank you, Senator Whitehouse.
    Senator Burr, it's your turn. And I just want to make clear 
that our rule here always is people are recognized in terms of 
their order of appearance. And so there was, sort of, this slew 
of Democrats that were asking questions, and I didn't want you 
to get nervous about that.
    Senator Burr. I feel particularly honored to be able to 
hear the passionate plea of my colleagues over there.
    Thank you, Mr. Chairman. And, more importantly, Mr. Pistole 
and Mr. Allen, thank you. And it's great to have somebody from 
North Carolina, Charlie, that's here.
    I'm going to tackle JTTFs and fusion centers, but I'm going 
to save that for last if I can.
    Mr. Allen, in 2005, Secretary Chertoff made some 
significant changes to the role of intelligence within the 
Department of Homeland Security. You, as the chief intelligence 
officer, report directly to the Secretary and coordinate, 
really, all of DHS's intelligence activities. But some 
question, and I leave it open to you, whether you have the 
sufficient authority that you need.
    Should you have the programmatic funding and personnel 
decisionmaking authority for all intelligence activities at 
DHS?
    Mr. Allen. Senator Burr, it's a very good question. I have 
a mission directive signed out by the Secretary on the sixth 
of, I guess, January 2006, which gives me authority to oversee 
and give guidance and direction and evaluate all of the 
intelligence arms of the operating components, as well as 
conduct and drive analysis of my own direct office.
    I believe I have significant authority under that mission 
directive. The Secretary wants me to look further at how he can 
strengthen my intelligence oversight responsibilities. We're in 
the process of doing that, and probably have a new derivative 
of our mission directive which will further give us more direct 
oversight over, certainly, the programmatic planning.
    I don't know that I require things like direct budget 
authority, but I do believe that we have to synchronize our 
overall intelligence within the department, and I think we're 
well on our way to doing that.
    I run the Homeland Security Intelligence Council which is 
composed of the heads of the intelligence arms and their 
operating components. We meet every other week. It's a 
decisionmaking body. We're setting up some common standards for 
training, recruiting, retaining our officers that need 
particularly that intelligence training.
    We're in process. The second year, it is clear from the 
directions of the Secretary and from the former DNI, 
Negroponte, that they want me to further integrate intelligence 
and strengthen it and ensure that we harvest the intelligence 
collected particularly by the operating components of DHS. And 
I'm in the process of doing that, Senator.
    Senator Burr. And as you know, Mr. Allen, the 9/11 
Commission made some very specific recommendations. H.R. 1 in 
the House, I think, addresses one of those in the fact that it 
proposes to elevate your position at DHS from Assistant 
Secretary for Intelligence and Analysis to an undersecretary 
within DHS.
    Does the title ``undersecretary'' allow you to do the 
intelligence activities within DHS better? Or does it enhance 
or hurt your relationship with others in the intel community at 
all?
    Mr. Allen. Senator, that's an interesting question. I don't 
think it would hurt my relationships with any of my colleagues 
in the intelligence community because all the national 
intelligence community leaders at the senior level, I know 
them, and we work on a very--I know them and we work with deep 
respect with each other against common threats.
    I believe, in my role as chief intelligence officer, the 
need to have that strong oversight and guidance, and the 
ability to evaluate not only my own office, but that of all of 
the intelligence activities of that department, I think that's 
very vital.
    Senator Burr. Mr. Pistole, it's awfully good to see you 
again. And let me ask you specifically on special agents in 
charge.
    They've taken some hits in the past, some criticism, 
especially as we try to integrate with the locals. What 
instructions, what training do we do that's unique to SACs 
today to try to eliminate some of that controversy that we've 
seen as we've tried to integrate into a more local- and state-
friendly operation?
    Mr. Pistole. Thank you, Senator, and it's good to see you.
    We have done several things in terms of ensuring that each 
of our SACs--and we have a number of new ones, obviously, 
across the country, in the last two years. In fact, there's 
only one SAC who was an SAC prior to 9/11 who is still in 
place, so we have a complete turnover in that regard.
    Each one of those we met with several months ago. And I, as 
their rating official--I oversee their activities--met with 
them and talked about the importance of focusing on their field 
intelligence groups and to share by rule, withhold by 
exception--that general concept, that I mentioned earlier, that 
we share information by rule, withhold it by exception, whether 
it is in counterterrorism information or in traditional 
criminal investigative areas.
    So each of those SACs have that instruction. I'm starting, 
next week, a series of secure video teleconferences with the 
regions of the country, four SACs at a time, to go over what 
they're doing in their field intelligence groups to ensure that 
they are following through on the directions and the guidance.
    And those 65 or so people, because we have multiple ones in 
our largest offices, New York, Washington and Los Angeles, all 
are part of a group of over 13,000 FBI employees who've taken 
four mandatory class courses, online courses, in terms of 
Directorate of Intelligence, counterterrorism, 
counterintelligence, and information sharing in general.
    So we're trying to make sure we're doing everything that is 
consistent with the information sharing environment that has 
been constructed and sharing that, again, on as timely and 
relevant a basis as we can.
    Senator Burr. I certainly thank you for that.
    Mr. Chairman, I realize my time has run out and I won't 
have an opportunity to get into the fusion center and JTTFs. 
But let me ask you, if you could, to submit for the record your 
assessment of JTTFs and fusion centers.
    And if I could ask both of you to do it, because, Mr. 
Chairman, I think it's important. JTTFs emerged prior to the 
creation of DHS.
    Mr. Pistole. The first JTTF was in 1983 in New York, so 
yes, it's been around.
    Senator Burr. And certainly post-9/11 I think there were 
some new visions that were executed at JTTFs. If, in fact, 
that's a one-way street, which is what many think, that the 
Bureau is only there to receive information versus to share it, 
I would urge the Bureau to rethink it.
    If, in fact, both serve an important function, then I think 
it's crucial that we keep them. I think it's important for 
members of this Committee, and those people at state and local 
levels to understand if they're two entities, what is the 
difference between them and what is the role for each and how 
does both help to disseminate the information that's 
appropriate and needed at a state and local level. I thank both 
of you.
    Mr. Allen. Senator, I'll be able to answer along with Mr. 
Pistole in that response to that question. That's a very good 
question and we have, I think, some good responses that will 
help you.
    Mr. Pistole. I agree. Mr. Chairman, with your permission, I 
would provide a brief response to that?
    Chairman Rockefeller. Please.
    Mr. Pistole. Thank you, Mr. Chairman. Didn't mean to put 
you on the spot like that, sir.
    Clearly the JTTFs, the 101 joint terrorism task forces that 
we have around the country are seen as the operational arm of 
the U.S. government for counterterrorism information. And, for 
example, there's a national JTTF with 40 agencies that 
participate in that.
    The fusion centers, on the other hand, the state and local 
creations in large part, we have over 150 FBI employees that 
are participating in those, much newer over just the last 
several years. But it's something that we see as an additional 
link-up with state and locals in addition to the JTTFs.
    So we'll provide a much more extensive response in the 
written statement, but thank you for that question.
    Senator Burr. Mr. Chairman, thank you.
    Chairman Rockefeller. Thank you, Senator Burr. And thank 
you for your patience.
    Senator Feingold?
    Senator Feingold. Thank you, Mr. Chairman.
    I'm going to follow up on Senator Whitehouse's question, 
and I want to thank him for raising these issues about domain 
management. Mr. Pistole, could what you call strategic domain 
knowledge include social networks or membership in religious 
and other private groups?
    Mr. Pistole. No, Senator. It would involve, for example, 
information, as I've shared with Senator Whitehouse, in terms 
of trying to understand who is in a community.
    For example, if you're the head of the FBI office in 
Detroit, you should know something about the constituency of 
Dearborn, Michigan. If you don't, then shame on you for not 
being aware of who's in your area. So it's that focus. The 
Dearborn Police, for example, have a much better sense of what 
goes on on the street than the FBI would, and so we rely on our 
state and local partners to provide part of that information. 
We rely on a lot of available public information in terms of 
that.
    So in terms of association with a particular group, 
absolutely not.
    Senator Feingold. As part of the domain management 
Initiative, how is information on Americans who are not linked 
to specific threats or investigations stored and disseminated 
within the FBI and to other elements of the intelligence 
community? Is this information part of the information sharing 
environment?
    Mr. Pistole. Well, Senator, of course we would not be 
collecting any information in the first place unless there was 
some predication for doing that. We're very sensitive to the 
issues of collection. There has to be some type of predication.
    What we have tried to do is look beyond what the FBI is 
known for and have an excellence in specific case 
investigations, that we have a particular investigation on a 
certain person, or, for example, in the case of organized 
crime, maybe a group under the RICO statute, an enterprise, a 
group of individuals associated in fact.
    We've tried to look beyond that to say is there other 
information out there that we should be aware of that may not 
be case-predicated. And that's where we get into looking at, 
for example, I-94.
    We've had several examples of where there's a particular 
address used in an apartment building for dozens--if not, 
perhaps, a hundred--individuals who are entering the country. 
That should raise some type of question if there is threat 
information that says that individuals from that country may be 
coming to the U.S. to, perhaps, be fundraisers, be 
facilitators, perhaps even operators, in terms of material 
support or actually conspiracy to commit a terrorist attack.
    Senator Feingold. So this does go to other parts of the FBI 
and the intelligence community in those instances that you just 
described?
    Mr. Pistole. Yes, if there's predication to collect that 
information, then we try to share those as broadly as we can.
    Senator Feingold. How do the ODNI's privacy guidelines 
apply to the sharing of this information?
    Mr. Pistole. Well, the Attorney General guidelines actually 
work consistently with the ODNI guidelines in terms of making 
sure that we're protecting U.S. person information, that 
anything collected is done under the authority of the Attorney 
General guidelines, either for general criminal crimes, the 
national security guidelines--so the DNI's guidelines do not 
implicate in a negative way, if I could say it that way, the 
authority that we would collect under.
    Senator Feingold. Thank you.
    Mr. Allen, the ODNI recently issued privacy guidelines 
requiring government agencies to identify their data holdings 
that contained protected U.S. person information and establish 
mechanisms for the protection of privacy.
    How important is it that this process move forward in a 
timely manner so that there are clear rules governing the 
integration of information and dissemination of intelligence?
    Mr. Allen. Did you address that to me, sir?
    Senator Feingold. Yes.
    Mr. Allen. On U.S. person data, obviously, we have the 
right to receive data on U.S. persons. My immediate office does 
not collect intelligence, as you know. We analyze data that 
comes in from intelligence and law enforcement agencies. Our 
operating components, obviously, have the right to collect 
information as they work, particularly to secure land, air and 
sea borders.
    The information that we have--we only keep information on 
U.S. persons in accordance with guidelines and with the law. 
There has to be reasonable cause to retain and analyze data on 
U.S. persons. Non-relevant data is certainly purged in 
accordance with all those guidelines.
    All my officers have to take mandatory training on how to 
handle and manage U.S. persons data, including myself, and we 
do it on a yearly basis. So it's a very rigorous process. And 
we do respect the privacy and the civil liberties of Americans.
    Senator Feingold. Thank you, Mr. Chairman.
    Chairman Rockefeller. Thank you, Senator Feingold.
    I should warn our audience and panelists and Committee that 
there are two votes expected around 3:45. That could not be 
more awkward, but then, again, we're the Senate.
    What I suggest we do is proceed to ask all of our 
questions--each of us ask all of our questions. That will give 
you a chance to hear them, think about them, and then respond 
to them when we come back. My understanding is there will be 
two votes. And I'm sorry about that.
    Mr. Pistole, the FBI has encountered numerous problems in 
its attempt to modernize its computer and information-sharing 
system. And I'm sure you're thrilled to hear about that. 
[Laughter.]
    Chairman Rockefeller. The virtual case file system, 
abandoned in early 2005 at the cost of $100 million, was 
supposed to enhance information-sharing and make the FBI a 
paperless organization.
    The latest case management system, SENTINEL, is now under 
development. Issues surrounding the FBI's infrastructure have 
been a longstanding concern of this Committee, which you know. 
This includes not only the backbone information technology of 
the Bureau but also the number and size of the SCIFs--that is, 
sensitive compartmented facilities--in FBI field offices so 
that intelligence personnel can have access to information at 
the top-secret/SCI level.
    Number one, what is the current status of the SENTINEL 
program to modernize the case management system of the Bureau, 
and how will the SENTINEL system differ from the current 
automated case management system, ACS?
    Question number two, how will SENTINEL connect agents and 
analysts across this country, help increase the investigative 
synergies that are particularly necessary to uncover networks 
that can span beyond a particular FBI field office, region or 
country? At what point do you believe the FBI will be able to 
say it has information technology up to the 21st century 
standards? That last one was not kind, but I'm interested.
    Mr. Allen, my question for you would be, what is the 
responsibility of the Department of Homeland Security in 
providing federal direction and training for state fusion 
centers, and should it be expanded?
    Mr. Pistole, one more for you. The West Virginia homeland 
security adviser has been advised by the new special agent in 
charge for West Virginia that the FBI is undergoing a 
reorganizing plan and is dismantling the JTTF in West Virginia, 
reassigning the agents to their home squad agencies.
    Is this accurate? Will there no longer be a JTTF in West 
Virginia? Can a special agent in charge reorganize or dismantle 
a JTTF without the approval of headquarters? And the follow-up, 
does the extent of local control over JTTFs interfere with the 
FBI running a truly national counterterrorism program.
    Senator Mikulski, do you have questions to ask?
    Senator Mikulski. Mr. Chairman, just a few.
    Recognizing that at the FBI we've set up an agency within 
an agency, and after 9/11 did not go to the route of an MI-5, 
my question to the FBI, because they were a law enforcement, go 
after the criminals, how have they changed the culture of the 
FBI and how do they measure that cultural change?
    Then, the other, for both Homeland Security and the FBI, I 
think there still is confusion about the various roles played 
by the intel community on American soil. And I would like to 
know, are there bright lines for the various roles played by 
FBI, Homeland Security, and the Department of Defense, because 
I hear they had gone into this?
    Then, the other is, who has the primary responsibility for 
notifying state and local law enforcement entities of threat 
information and following up on that, because there does seem 
to be confusion. And is it the FBI, Homeland Security, and so 
on?
    So it's more kind of what's the job and therefore what do 
we need to do to help clarify law or other things.
    Thank you.
    Chairman Rockefeller. Thank you, Senator.
    Senator Whitehouse?
    These are questions to be answered as soon as we return. We 
will return and then we'll go after the answers, unless people 
want another round, to the second panel, which is equally 
important.
    Senator Whitehouse. Mr. Allen, in your recent answer to 
Senator Feingold, you indicated there had to be reasonable 
cause to retain data. That's a phrase that sounds to a lawyer 
an awful lot like ``probable cause.'' And I don't know if that 
was just a word that you happened to use or if that's a magic 
word, if that's jargon--if it has statutory rulemaking 
significance. And if you could explain that to me when we get 
back.
    Mr. Allen. Sure.
    Senator Whitehouse. Thanks.
    Chairman Rockefeller. That being the case and there are no 
other Senators, we stand in recess until we can make two 
significant votes.
    [Whereupon, from 3:51 p.m. until 4:30 p.m., the Committee 
recessed.]
    Chairman Rockefeller. Gentlemen and, ladies, we'll return 
to our hearing, and I apologize for that interruption.
    Mr. Pistole, I asked you four questions. How about that?
    Mr. Pistole. Yes, Mr. Chairman. Your first question dealt 
with SENTINEL, our major IT project.
    Right now, there's four parts to SENTINEL. We are near the 
conclusion of the first portion of the four parts. Right now, 
it is on track, on budget. And we have every expectation, 
through weekly meetings that either I chair--sometimes the 
Director, sometimes our Associate Deputy Director chairs with 
the program management team--which we did not have in place for 
our prior iteration of virtual case file--that we believe it to 
be deliverable on time and on budget.
    That's our current expectation and current belief. The 
difference you asked about from our current system--
    Chairman Rockefeller. Can I just ask one thing?
    Mr. Pistole. Yes.
    Chairman Rockefeller. When we say it came in at $100 
million over, whatever, there's going to be a reason for that. 
It may be a bad reason, but there's always a reason.
    Can you, sort of, give a little perspective on that?
    Mr. Pistole. Yes, Mr. Chairman. The former iteration, 
virtual case file, was largely based on non-COTS products, 
commercial off-the-shelf products.
    There was original code being written for every aspect of 
it. It started prior to 9/11. Obviously, after the events of 9/
11, the requirements that we saw as needing a truly first-class 
information technology system changed dramatically to confront 
the changes that we were dealing with.
    And so we changed the requirements considerably for what 
was delivered, which obviously pushed back both the delivery 
time and the cost. And so a combination of, frankly, poor 
program management within the FBI, some issues with the 
contractors--
    Chairman Rockefeller. But there's a difference between poor 
and having the art form changed.
    Mr. Pistole. Yes.
    Chairman Rockefeller. The art form changed is not 
necessarily poor management that you didn't expect.
    Mr. Pistole. That's what I'm saying. It's a combination, I 
believe. It was largely driven by the requirements changes that 
we imposed on the contractor.
    There's been some discussion of some litigation about that, 
so I won't go into much more detail, other than to say that 
there were things that we could have done better. We believe 
there's things the contractor could have done better, all 
issues that we have addressed in the handling of SENTINEL.
    So we have every expectation to believe that because the 
contractor is using primarily COTS products and simple 
modifications to those--our automated case system is an 
electronic case system we've had since 1995. What SENTINEL will 
really do, in a nutshell, is make it much more user-friendly.
    It's based on a Windows-type approach, as opposed to our 
current system, which is not user-friendly--a lot of screens, 
not a Windows approach. This will make it much more user-
friendly. It will allow our agents, our analysts, our clerks 
who have to actually enter some data, to do that with 
electronic approvals, for example, instead of printing out a 
hard copy and taking it into your supervisor. You simply 
prepare the document, you send it electronically to the 
supervisor, who approves it. It electronically goes into a 
file. It's available for everybody who has access to our system 
to see.
    So that will be one of the benefits. But it's a tremendous 
improvement over where we are right now in terms of 
accessibility and getting to that key issue of how we share 
information, that allows us to share information within the FBI 
in a much more pronounced way which enables us to share outside 
the FBI.
    So I'll try to be brief on these other aspects of the 
question if you'd like.
    Chairman Rockefeller. I think it was one Charlie Allen who, 
in another iteration, said that to share information is a false 
term, that if you share information, that means that you own 
it.
    Did you ever say that?
    Mr. Allen. If you share information, you own it? I may have 
said that in the past, and that's correct. And I think that's--
    Chairman Rockefeller. And that's a problem.
    Mr. Allen. No. I think that's an opportunity now and in the 
future. I think in the Cold War, we did not share information; 
we worked against a known enemy around the world, the Soviet 
Union.
    Today, our imperative, and that of the Department, is to 
share information down to the first responder. And we can get 
that information in a sanitized way if there's threat warning, 
threat assessment. And we can also do what Chief Lanier said--
terrorism and tactics, techniques and procedures.
    So we're in a different era. We're in a different threat--a 
threat without borders, a threat without a fixed enemy. So we 
have to work very differently today, Mr. Chairman.
    Chairman Rockefeller. Thank you. The second question had to 
do with connecting agents and analysts.
    Mr. Pistole. Okay. In that regard, what we have now, in 
terms of counterterrorism is, in addition to our automated 
cases, ACS, investigative data warehouse, which I mentioned 
earlier, is one of the key aspects of that connectivity which 
allows an agent or an analyst to, again, do a federated query 
across 53 different data sets and allows, just recently, for 
the type of push system that most agencies have in the 
intelligence community. So if you are an analyst and have 
interest in a particular person, any new information that's 
inputted into the system is then pushed to you, up to X number 
of interests that you may have.
    So we are making good progress there. That has not expanded 
across all of our traditional criminal areas yet, but 
eventually it will be.
    You also had a question about our sensitive compartmented--
    Chairman Rockefeller. It will expand way out beyond regions 
and countries and the rest of it?
    Mr. Pistole. Oh, absolutely. If it's anything in our data 
sets, sure.
    Chairman Rockefeller. Okay, and then 21st century?
    Mr. Pistole. Twenty-first century. We are moving, in that 
regard, through several areas. One is the build out of the 
sensitive compartmented information facilities, the SCIFs that 
you also asked about. All of our 56 offices, save New Orleans 
because of Katrina, have SCIFs based on the number of our 
resident agencies. We have 396 resident agencies around the 
country. A number of those larger ones have secure space.
    And I was at our Austin, Texas resident agency yesterday. 
We have 100 people with the JTTF there. It has separate SCIF 
space for other folks to come in, too, and for us to work in a 
secure environment. So that's one aspect.
    In terms of updating to the 21st century, I believe 
SENTINEL will go a long way in delivering that. But that's one 
of a number of things.
    Between the investigative data warehouse, between what we 
do with the Foreign Terrorist Tracking Task Force and any 
number of other aspects of what the FBI either has 
responsibility for or participation in--you know, all the 
people we have at the National counterterrorism center--the 
connectivity there is substantial and meaningful in terms of, 
if you're a person who has a need to know information about a 
particular group or individual, you have access to that 
information.
    And then you had a question about the West Virginia JTTF.
    Chairman Rockefeller. I did.
    Mr. Pistole. Yes. It has not been dismantled. It has been 
reorganized, and I say that--
    Chairman Rockefeller. In Pittsburgh?
    Mr. Pistole. I'm sorry?
    Chairman Rockefeller. In Pittsburgh? [Laughter.]
    Mr. Pistole. No, no.
    Chairman Rockefeller. Okay.
    Mr. Pistole. No, the information that I have here is that 
some of the task force officers from the local police agencies 
were actually driving up to 140 miles to get to Fairmont.
    And because of the concerns over the viability of doing 
that, the decision was addressed with the West Virginia State 
Police, Charles Town Police, the Fairmont, Wheeling and one 
other department, I believe, to see whether it would make sense 
to have those officers, instead of being co-located in a single 
location, to work closer to their departments, still with the 
FBI. And so it's a diffused joint terrorism task force, which 
we have in a number of offices.
    Chairman Rockefeller. I understand. And the Secretary will 
comment on that, I'm sure.
    Mr. Allen, the responsibility of the department in 
providing federal direction and training for state fusion 
centers?
    Mr. Allen. Yes, sir, Mr. Chairman. That's something that 
we're working with the state fusion centers at this time.
    One of our responsibilities, of course, is working with the 
Department of Justice. The Department of Justice and the 
Department of Homeland Security put out federal guidelines for 
state and local fusion centers back in 2005, which we think 
offers suggestions to states and local governments. They can 
form the fusion centers the way they want to, but we think we 
have good ideas.
    Now, as far as training, we're already beginning to train 
people from state fusion centers because they need analytic 
training. They need to learn the tradecraft of intelligence 
analysis. I'm doing this under a training program that I've 
established over the last year.
    When I arrived, DHS did not have a organized training 
intelligence program. We now have that.
    The Federal Law Enforcement Training Center also is looking 
at ways to establish more courses that talk about intelligence 
and terrorism so that law enforcement officers that work within 
the department can get a better understanding of intelligence 
tradecraft.
    But I have officers now from New Jersey, New York, other 
states, coming and receiving intelligence training, along with 
my own officers and those of the operating components. We've 
got a long way to go, and we're very immature, but we're going 
to greatly accelerate that over the next year.
    Chairman Rockefeller. Will there come a time, do you 
suppose, that that training will be done together with others 
at places where it's more traditionally done?
    Mr. Allen. I think that probably will occur. I believe that 
state and local governments can take advantage of the 
intelligence community's intelligence courses run by CIA, NSA, 
perhaps other agencies, certainly DIA, the National Military 
Joint Intelligence College.
    We have, in DHS--I arranged with Dennis Cliff to have 17 
officers go for intelligence training over at the National 
Joint Military Intelligence College.
    Chairman Rockefeller. Great. I thank you, sir.
    Senator Mikulski?
    Senator Mikulski. Thank you very much.
    You recall when I left was the question about how has the 
culture changed and how do you measure it as we look to 
creating an agency within an agency or the National Security 
Bureau?
    Mr. Pistole. Yes, thank you, Senator.
    I think it comes down to the importance that the Director 
places upon the proactive, intelligence-driven, threat-based 
approach to all of our investigations, and we do that through 
several means. One is the metrics we use to evaluate all of our 
senior executives, including our Special Agents in Charge, our 
SACs.
    We include metrics in there which get away from the old 
numbers game of how many indictments, how many convictions, how 
many arrests, things like that. If it is considered, it is only 
a very small portion of how do we assess these senior 
executives in terms of their performance.
    And part of it is some of the new metrics that I mentioned 
earlier in terms of knowing their domain. Their community 
outreach, for example, with the Arab-American, the Muslim-
American community, what are they doing in terms of knowing the 
people in their community?
    There are other ways. In terms of promotions, we've tried 
to be very intentional about identifying the best and the 
brightest across the FBI and promoting them into positions of 
responsibility within the National security branch to say that 
even if you have a traditional counterintelligence background, 
for example, working espionage and foreign counterintelligence 
and foreign intelligence your whole career, we are putting 
those people in positions of responsibility over whole field 
offices.
    For example, the Director just selected six individuals to 
go to what we call National Executive Institute, which is a 
prestigious school that we host at the FBI Academy with state 
and local chiefs, sheriffs. And one of the six people that we 
selected has almost exclusively a counterintelligence 
background. Now, in years past, that was unheard of because 
that just wasn't a natural asset, but the idea is to have that 
person with the counterintelligence experience share that 
experience with those who are attending this class.
    So there's any number of ways that we've tried to do that 
and be would glad to provide more in a written response if that 
would be beneficial.
    Senator Mikulski. Well, I appreciate that answer. It will 
be for my own subcommittee on Appropriations--Commerce, 
Justice, Science. I'm going to be organizing a tutorial with 
Director Mueller for my subcommittee and I'm going to invite 
Appropriations so they understand what I said earlier about, 
``Hello, let's include the FBI.'' But I also would invite our 
colleagues here.
    I went out to the National Counterterrorism Center, as you 
know. I would really think that's an excellent visit, Mr. 
Chairman, because you really do see how they work and their 
famous 8-1-3--you know, your time when you come together--and 
we asked about fusions and domains and all that.
    But after that, I also then went through a pretty intense 
description of where does the FBI fit in. What I want my 
colleagues to hear is what I heard so that we all really 
understand what your job is, how you want to do your job, how 
we should provide accountability, oversight and guidance. But, 
at the same time, I'm not so sure we understand this.
    And this is not the environment to go into it in detail. 
And for me, I don't know about my colleagues, but I love case 
examples to see how it really works. And of course it doesn't 
lend itself in this environment. But I believe you are making 
change. I think you are trying. I think it's not only about the 
budget and appropriations.
    And also, I do think, though, I am interested in the lines 
of authority.
    But, anyway, I'm going to be putting that together, and 
I'll discuss it with you, too, Mr. Chairman, because I think 
it'd be just a good way for us to get a knowledge of it.
    But my question goes to the primary responsibilities, if I 
could--and this will be my last question.
    With you two--I mean, when I say Homeland and FBI--you are 
the primary domestic intel. Which agency in the federal 
government has the primary responsibility for notifying state 
and local law enforcement about urgent threat information? And 
then how is that followed through, because of the need to know, 
the need to share, and all of that.
    And who has that primary responsibility? We sometimes hear 
all kinds of things--that people are taking video shots off the 
Chesapeake Bay Bridge, and that became a Homeland Security 
thing. Other things, the FBI are in. And it's not about 
Maryland, but it's about the country.
    Could you tell me which agency has the primary 
responsibility for notification, but then how you see 
yourselves coordinating, both for urgent and non-urgent?
    Mr. Pistole. If I may start, Senator, I think there's two 
aspects to this. And one is the actionable intelligence that is 
derived from whatever source. If there's actionable 
intelligence, then the FBI, through the joint terrorism task 
forces, has the responsibility to get that to the right people. 
And that would be the JTTF, depending on if there is one in 
that area, to the state and local police.
    Department of Homeland Security has responsibility with the 
homeland security coordinators, whether it's the mayors, the 
Governors, whoever that may be, to provide that. If there's 
private sector individuals involved, there is that 
responsibility also. There is sometimes a sharing between the 
JTTF, depending on what that actionable intel is.
    But the FBI has that primary responsibility for the action 
part of it.
    Mr. Allen. Senator, I agree with Mr. Pistole completely.
    We obviously look like we have primacy in sharing with your 
with your homeland security adviser, Mr. Schrader, in the case 
of Maryland.
    We also work very closely in sharing information with the 
fusion centers. Mayors, I get on the phone, or state police, 
local police chiefs. But if it's actionable, immediate threat, 
we obviously look to the FBI to take the point.
    But information sharing is something that we do jointly in 
many cases if there's threat warning, threat assessment. We 
work collaboratively together between the analytic efforts of 
the FBI and my own office. And we put out joint assessments and 
we can do it in a matter of minutes or a matter of hours if 
required.
    We get the information out in an actionable way and we're 
doing it better every day. And we can only do this in close 
collaboration, ensuring we don't have bumps in the road with 
the Bureau.
    That's my goal. When I first walked in, one of the first 
things I said when I assembled all my officers, ``We don't have 
any quarrel with the FBI. We're here to collaborate with the 
FBI.''
    Senator Mikulski. Chairman, I think that wraps it up for me 
for today.
    Chairman Rockefeller. Thank you, Senator, very much.
    Senator Whitehouse?
    Senator Whitehouse. With respect, Mr. Chairman, I have to 
leave in about one second to go preside, so I'll yield back my 
time.
    Mr. Allen. Senator, could I just talk about reasonable 
cause? What I meant to say was reasonable belief--that's under 
Executive Order 12333. That's the policy under which we have 
the authority to retain information on U.S. persons or foreign 
nationals--reasonable belief.
    Senator Whitehouse. As I head out the door, let me ask you 
both a quick yes or no question. Are you both comfortable that 
your agencies have clear enough guidelines from Congress as to 
where the privacy lines are so that you can operate in a way 
that you're comfortable and not cause a public backfire?
    Mr. Pistole. Absolutely.
    Senator Whitehouse. You're comfortable with the guidelines?
    Mr. Allen. Yes, sir. Believe me, that's a subject we 
discuss very frequently at Homeland Security.
    Senator Whitehouse. Thank you, Mr. Chairman.
    Chairman Rockefeller. Thank you, Senator Whitehouse.
    Gentlemen, thank you very, very much. I apologize for the 
flow of time, but I can't handle that one. And I thank you for 
your time. I thank you for your service.
    Barbara Mikulski always makes an exceptional effort to say 
that in closed hearings, as well as open hearings, and she 
really means it, and so do we all. But sometimes we sort of 
forget to say it enough.
    Senator Mikulski. And worldwide.
    Chairman Rockefeller. And worldwide.
    Mr. Pistole. Thank you, Mr. Chairman.
    Chairman Rockefeller. Thank you.
    Now we go to the very important panel two.
    I hope your morale is still high. Coke is available--I 
mean, Coca-Cola is available. [Laughter.]
    Chief Lanier. Thank you. Thank you for that clarification.
    Chairman Rockefeller. And that would be James W. Spears, 
the West Virginia Homeland Security Adviser and Cabinet 
Secretary of the West Virginia Department of Military Affairs 
and Public Safety; Cathy Lanier, who's well known to all of us, 
Acting Chief of Police, Metropolitan Police Department, 
District of Columbia.
    Acting?
    Chief Lanier. Until confirmed, sir.
    Chairman Rockefeller. When's that going to happen?
    Chief Lanier. It looks like March.
    Chairman Rockefeller. Well, hang in there.
    And John Gannon, who is the former staff director of the 
House Homeland Security Committee and former Chairman of the 
National Intelligence Council.
    And I would like, if it's all right with you, Cathy Lanier, 
to ask the chief of police to start off.
    Chief Lanier. Thank you.
    Mr. Chairman, members of the Committee, staff and guests, 
thank you for the opportunity to present this statement 
concerning homeland security and information sharing in the 
national capital region.
    Since 9/11, people often refer to local law enforcement 
officers as first responders, and appropriately so. As 
demonstrated so vividly and heroically by the brave men and 
women who responded to the World Trade Center and the Pentagon 
on that fateful day, our police officers, along with our 
firefighters and emergency medical services personnel, are the 
very first to rush towards danger, even as others are fleeing.
    Local law enforcement is very good at responding to danger. 
That is what we train for, that is what we are equipped to do, 
and that is what our professional mission demands of us.
    But I would argue that our mission demands that local 
police be more than just first responders to incidents that 
have already occurred, whether those incidents involve street 
crime or terrorism.
    In the post-9/11 world in particular, our local police must 
be viewed as first preventers, as well as professionals who 
have the knowledge, skills and abilities to support the global 
war on terrorism and who are uniquely positioned to detect and 
prevent terrorist incidents right here in our local 
communities.
    After all, it is the men and women of local law enforcement 
who know best their neighborhoods they patrol and, most 
importantly, who are in the best position to detect and 
investigate criminal activity that may be connected to 
terrorism. A local money laundering scheme, identity theft 
case, burglary, or even a suspicious request to one of our 
local businesses, if discovered early and matched with the 
right intelligence, can help detect, disrupt and prevent a 
terrorist plot.
    For local law enforcement to perform this role of first 
preventers, and to perform it effectively, our police officers 
must be equipped with the right intelligence at the right time. 
And in order for local law enforcement to be equipped with the 
right intelligence, there needs to be an organized, effective 
and trusting flow of information between our federal partners 
and local police.
    You will notice that I qualified our need for intelligence 
by referring to the right intelligence. By ``the right 
intelligence,'' I'm referring to intelligence that is relevant 
to the local jurisdictions, is timely and actionable by police.
    Local law enforcement is not seeking access to every piece 
of intelligence generated nationally or internationally by the 
intelligence community. But when there is intelligence that is 
detailed and specific and when intelligence has potential 
public safety implications for our communities, then I believe 
the intelligence community has an obligation to share that 
information, in a timely fashion, with local law enforcement.
    If we learn about a threat only when it becomes imminent, 
it's too late. Just like our federal partners, local law 
enforcement needs time for training, equipment acquisition, and 
the development of a response, mitigation, and most 
importantly, a prevention strategy. Trying to do all these 
things under the pressure of an imminent threat is impossible 
and certainly not an efficient strategy.
    Mr. Chairman, in your letter of invitation to me you asked 
me about the impact that the joint terrorism task force and the 
fusion centers have had on anti-terrorism efforts. I must say 
that here in the national capital region, the flow of 
information among federal, state and local partners through our 
JTTF has been, and continues to be, quite good.
    Part of the reason for this is that our agencies have 
worked together for years predating the 9/11 attacks on sharing 
information and coordinating responses to a variety of 
situations. The fact that we had a preestablished relationship 
and a track record of trust made the transition into the post-
9/11 environment much smoother than it might have otherwise 
been.
    Another important factor is that the JTTFs understand what 
local law enforcement does, and they appreciate what we can do 
when given access to the right information at the right time. I 
believe that other parts of the federal homeland security 
community could learn from the experiences of the JTTFs, and 
could apply some of the same principles in its relationships 
and interactions with local law enforcement.
    Has information sharing among federal, state and local 
entities improved in recent years? Absolutely it has. But are 
we where we need to be in terms of sharing information that can 
improve the way we coordinate and maximize all of our resources 
in the fight against terrorism? I'm afraid we haven't yet.
    Part of the problem, I believe, lies in the historical and 
cultural differences between the intelligence community and law 
enforcement. For decades, our government erected a wall, a very 
solid wall, between these two functions, and it's difficult to 
change that dynamic overnight.
    Part of the problem also lies in a difference of 
perspective. For the most part, the Department of Homeland 
Security has adopted an all hazards focus, which encompasses 
not only--
    Chairman Rockefeller. A what?
    Chief Lanier. All hazards. Information that is shared from 
the Department of Homeland Security with local law enforcement 
tends to encompass not only criminal activity, but natural 
disasters and other noncriminal events.
    While local law enforcement certainly has a role to play in 
responding to natural disasters, our homeland security focus 
must be much more narrow, and include an all-crimes 
perspective.
    We are most concerned with criminal activity that may be 
related to terrorism, because intervening in that activity and 
preventing crime are what we do best.
    When looking at the whole issue of information sharing, I 
believe our federal partners need to keep this distinction in 
mind. Information about weather patterns and similar topics may 
be interesting, and sometimes useful, to local law enforcement, 
but our information needs are much more specific, more detailed 
and more focused on criminal activity and the potential 
motives, methods and tactics of known and suspected terrorists. 
This type of all-crimes approach is what local police need in 
order to do our part in responding to--and, most importantly, 
preventing--crime, including the crime of terrorism.
    Often times, we talk about federal, state and local 
information-sharing as a one-way street, with information 
flowing from the federal government to state and local 
agencies. I personally don't view the situation that way, and I 
don't think my fellow police chiefs and sheriffs do, either. We 
recognize that, in addition to needing timely intelligence from 
federal agencies, we must also be willing and able to share 
timely and useful information that we have gathered at the 
local level with our federal partners.
    In the minds of most local law enforcement executives, this 
is what the whole fusion center concept is about.
    Chairman Rockefeller. Can I interrupt?
    Chief Lanier. Sure.
    Chairman Rockefeller. You earlier said that there was a--
you had an adjective and I forgot what it was--but it was a 
very massive wall that prevented information from going here to 
there, there to here. Now you've just said something quite 
different.
    Chief Lanier. Well, no--what I'm trying to clarify is that 
the goal of the fusion center is to bring that wall down.
    Chairman Rockefeller. Oh, so that's the goal?
    Chief Lanier. And fusion centers are developing. But we are 
not there. That wall is still something we have to overcome. 
And a lot of that is cultural.
    Chairman Rockefeller. In that I'm the only person here, can 
I press you on that?
    Chief Lanier. You know, I'd rather not read this.
    Chairman Rockefeller. I know--we're just...
    Chief Lanier. I'd rather you just asked me.
    Chairman Rockefeller. We're trying to make our country 
better. No, no. You finish what you were going to say, but talk 
to me about how you see that wall? Here you are in the middle 
of everything. Common sense says that this is the number one 
target, and you've got a wall.
    Now, why does that wall start? Granted, we had to pass the 
PATRIOT Act, for heaven sakes, to allow the FBI and the CIA to 
talk to each other. But this sounds like a different kind of a 
wall. This sounds like a wall of disdain, a wall of we're big 
and you're little or whatever. What kind of a wall was it? How 
did it hurt you? Give me an example.
    Chief Lanier. Let me go back to two comments that were 
made, one by the Department of Homeland Security, Mr. Allen, 
and one from Mr. Pistole from the FBI. The two things that came 
up is the need to know. This is where the wall begins.
    The Department of Homeland Security is not a law 
enforcement agency like the FBI is a law enforcement agency and 
has typically worked with local law enforcement. So it's very 
difficult for them to understand what my need to know is if 
they don't know what it is that I do.
    If they're not familiar with what I do on a daily basis, 
what resources I have and how I can reduce vulnerabilities, the 
daily activities of more than 4,500 employees here in 
Washington D.C. in the police department, it's very difficult 
for them to see my need to know.
    So a lot of information doesn't get to me because they 
don't believe I have a need to know.
    Chairman Rockefeller. And why wouldn't they? I mean, I 
don't know where New York City and Washington--how they fit, 
but you are the target. You're responsible for--
    Chief Lanier. I think it's just a lack of understanding, 
and this is not all DHS's fault. Local law enforcement is just 
as much at fault. The Department of Homeland Security is not 
completely aware of what our operational capabilities are and 
how the information, if passed on to us, could be used to 
reduce the vulnerability.
    We have a lot of operation capabilities they're unaware of. 
So information that may be shared with us is not shared with us 
because they don't think it's something that we can do anything 
with or that we can use to help reduce that vulnerability.
    Chairman Rockefeller. Well, if they're not aware of it, 
does that mean that they've declined to meet with you, to hear 
about it?
    Chief Lanier. We have met several times. I have met with 
Mr. Allen several times and have been a very vocal local 
representative with the National Operations Center, where Mr. 
Allen has his operations. And we are working toward that. But 
it's a difficult move. There's a lot of cultural differences.
    So, somebody mentioned a case study, a case example. Let me 
give you an example that might make this a little more clear.
    The intelligence community may have information about a 
potential plot that's developed somewhere else outside of the 
United States. They're very concerned about it. It's specific, 
maybe, to Washington, D.C. They have details on what this plot, 
how it may be carried out, and possibly even targets within 
Washington, D.C. But they haven't verified the credibility. And 
it doesn't appear to be imminent. So, as they work to verify 
credibility and determine how far off this plot may be, the 
information is kept.
    For me, with 3,800 sworn members in the Metropolitan Police 
Department, if I had just the basic information of what type of 
plot, what type of resources, and just some other tactics that 
I may need to be aware of, it doesn't matter to me where the 
information came from. It doesn't matter to me what country it 
comes from. I don't need names.
    But I need to understand what types of potential threats I 
may face, because to turn the capabilities of a 3,800-man 
police department once the threat becomes imminent is too late.
    So the discussions have been, when there have been cases 
that were specific--and I found out about those threat streams 
through another avenue--when I would ask, ``Why didn't you 
think that was important to share that with me,'' the answer 
from the Department of Homeland Security typically is, ``That 
threat was not imminent. And when it became imminent, we would 
let you know.''
    Imminent is too late for me.
    Chairman Rockefeller. I would think so.
    Chief Lanier. Again, I don't need details. I don't need 100 
percent verified intelligence. But I need to know what the 
potential realities are so I can work on those up front.
    Chairman Rockefeller. What would it take for them to inform 
you, as you should be informed? What would they have to do?
    Chief Lanier. I think there needs to be a better 
understanding of what we do. The reason that the FBI and the 
JTTFs are a little bit more effective is because it's a 
longstanding conduit for information sharing. We have a long 
relationship that is operational in the field so that the FBI 
knows what law enforcement capabilities are.
    The Department of Homeland Security does not know that. So 
it's an education process. It's a learning process. The best 
way to do that is to be a little bit more active about 
interacting with each other and partnering with each other on 
the operational side of what we do so that they understand what 
it is that we need.
    Chairman Rockefeller. Let me ask you a silly question. You 
want to be more aggressive about it, and you care about knowing 
whether it's imminent--you just care about having the 
relationship. You want them to know what you have at your call. 
But that's not the situation now?
    Chief Lanier. That's correct.
    Chairman Rockefeller. You march into somebody's office and 
you say, I'm going to take 20 minutes of your time. You ask for 
20 minutes of their time and you don't get it. But what's the 
deal? Why can't they understand that? What do you have to do, 
and what happens when you try to do it?
    Chief Lanier. Actually, you may be familiar with both 
myself and former Chief Ramsey--have been very vocal about it. 
And, in fact, we've had several meetings not only with Charlie 
Allen and several other members of the Department of Homeland 
Security, and they are committed to trying to move this 
forward.
    But it's not moving forward fast enough. I think that this 
is too important, this is too large a gap for it to exist as 
long as it has, so I think it needs to move forward faster than 
it is.
    We have a person in my department. I have a person who is 
dedicated full-time, and works out of the National Operations 
Center. There is intelligence in that center that is passed 
along to the federal intelligence community on a daily basis, 
and there are local representatives in that center that do not 
get the same information, even when it is specific.
    So there has been a lot of discussion, but not a lot of 
progress.
    Chairman Rockefeller. I can't push that one farther. I 
mean, I can, but you may have other things you want to say to 
me.
    Chief Lanier. The last thing that I want to kind of touch 
on before I turn this over for any additional questions and for 
my colleagues to also have a chance to speak, I think there's 
another gap that we really need to be concerned about, and 
particularly in the National Capital Region, but across the 
United States.
    There are existing conduits, in most major cities, in most 
large local law enforcement agencies--and that is the JTTF. We 
have a very good working relationship, and that JTTF is a 
conduit to get critical information and to have a place to give 
critical information that needs to get to the FBI.
    The problem is there are several small jurisdictions, small 
police departments in the surrounding jurisdictions around 
Washington, D.C., that don't have the resources to plug in 
personnel to the national JTTF or the joint terrorism task 
forces, the local terrorism task forces.
    So they are completely in the dark. They not only do not 
get information. They don't get the understanding of the 
motives, methods and tactics that are being used by terrorists 
around the world.
    So they are left in the dark and they are probably the ones 
that are most likely to observe or to intervene in a plan or a 
plot that is underway to carry out an attack in Washington, 
D.C.
    So without having some way of plugging them in so that they 
understand what it is to look for and who to call when they get 
that information, when they have small bits and pieces of 
information that need to get to the right person for further 
investigations, we have a huge gap. And I think that gap is 
existing around large urban areas all over the country.
    So we have to do a better job of making sure that all of 
the 800,000 local law enforcement agencies in this country have 
some way to plug in to that intelligence. And there's just no 
existing way to do that right now.
    Chairman Rockefeller. Is that a matter of equipment? Is 
that a matter of maybe you have the equipment but you don't 
have, necessarily, the training to know what questions to ask 
or how to interpret what's coming over the line at you?
    Chief Lanier. Part of it is education. And education always 
comes back to resourcing.
    It's not so much equipment. It is having the personnel and 
the time and the finance to actually educate officers on those 
things that they need to know--what to recognize, activities, 
just in their daily routine activities, what should they be 
looking for and how to recognize certain things. And, then, how 
do they get that information to the right person in a timely 
way?
    But the other part of it is a lack of coordination. And I 
think that some of the larger departments, like the 
Metropolitan Police Department, we bear some of that 
responsibility. It's my job to make sure that I reach out to 
the other small departments in the National Capital Region and 
make sure I share information with them.
    But I can't get them clearances. I can't get them a lot of 
the other resources that they need. And then how do we find a 
way to plug all of those smaller jurisdictions into this?
    And I think the fusion centers are a good start, because 
with the fusion center projects, we can reach out through 
liaison officers. So, if you have a 10-man police department in 
Prince George's county, in a municipal area of Prince George's 
County, they can assign one person as a liaison officer.
    We can share our resources in the urban area to train that 
officer who can then take that information back to his 
department and plug in with the Metropolitan Police Department 
to the JTTFs without having to assign personnel, because they 
just don't have the resources.
    But there is a real coordination problem, and that always 
comes back to resources and funding.
    Chairman Rockefeller. But the clearance problem, if you 
have the other two and you don't have the clearance, it still 
doesn't work. Is the clearance based upon the other two? If you 
have the other two and you have the information and you can 
operate in that environment, you have the clearance or is that 
a special type of problem?
    Chief Lanier. I have a clearance. I actually have a Top 
Secret/SCI through the FBI, and the FBI has been good about 
getting clearances for those that were most appropriate in my 
agency. Prior to taking over as the Chief, I was Commander of 
the Special Operations Division in Homeland Security.
    So I had the clearance for the reasons that I needed the 
clearance. I don't necessarily think that lack of clearances 
should stop the process from moving forward. We don't have to 
share information that is specific enough for it to remain 
classified.
    If I get information now at the top of my organization 
about a very specific threat, a potential tactic that's going 
to be used in a particular area of the District of Columbia, 
and I have to communicate with my bomb squads or my SWAT teams 
that this is a potential reality that we may face, I do that 
through exercises.
    I don't have to go and report to everybody in my agency: 
This is what I've learned and this is the source of that 
information. What I do is I create exercises and training so 
that they can train on new and, you know, potential threats.
    Prior to 9/11, we weren't training for airplanes to run 
into buildings.
    So if there is a threat that's out there, that's important. 
And, to take that one step further, we also now share with our 
fire department. Again, they are left out of this because they 
are not perceived as having a need to know.
    Well, just a few months ago, with the airliner threat, if 
there's a person in the fire department that has the ability to 
either staff the foam truck or not staff the foam truck, it's 
kind of important that he's let in on a threat that may involve 
airliners.
    So there is a real need to know. But without understanding 
the daily operations of our agencies, that need to know is 
lost.
    Chairman Rockefeller. Well, that certainly makes a lot of 
sense. It's sort of like everything in the city of Washington, 
which has national responsibilities, is so large and so 
overweening in their standards that clearing or not clearing a 
local fire department person or a jurisdictional fire 
department person when that person can do something and is not 
a risk to the Nation.
    Chief Lanier. No.
    Chairman Rockefeller. It's stupid. Is that right?
    Chief Lanier. I agree.
    I will say we were able to get our fire chief, special 
operations chief in the D.C. Fire Department, a secret 
clearance. And we have, for several months, included him in our 
weekly briefings. So he does sit in on secret-level briefings. 
And, certainly, whenever I get information, if I get 
information from the FBI that I think he has a need to know, I 
certainly make sure he gets that information.
    [The prepared statement of Chief Lanier follows:]

 Prepared Statement of Cathy Lanier, Acting Chief, Metropolitan Police 
                    Department, District of Columbia
    Mr. Chairman, members of the Committee, staff and guests--thank you 
for the opportunity to present this statement concerning homeland 
security and information sharing in the national capital region.
    Since ``Nine-Eleven,'' people often refer to local law enforcement 
officers as ``first responders''--and appropriately so. As demonstrated 
so vividly and heroically by the brave men and women who responded to 
the World Trade Center and the Pentagon on that fateful day, our police 
officers--along with firefighters and emergency medical services 
personnel--are the very first to rush toward danger, even as others are 
fleeing. Local law enforcement is very good at responding to danger: 
that is what we train for; that is what we are equipped to do; and that 
is what our professional mission demands of us.
    But I would argue that our mission demands that local police be 
more than just first responders to incidents that have already 
happened, whether those incidents involve street crime or terrorism. In 
the post-9/11 world in particular, our local police must be viewed 
``first preventers'' as well--as professionals who have the knowledge, 
skills and abilities to support the global war on terrorism, and who 
are uniquely positioned to detect and prevent terrorist incidents right 
here in our communities. After all, it is the women and men of local 
law enforcement who know best the neighborhoods they patrol and, most 
importantly, who are in the best position to detect and investigate 
criminal activity that might be connected to terrorism. A local money-
laundering scheme, identity-theft case, burglary or even a suspicious 
request to a local business--if discovered early and matched with the 
right intelligence, could help detect, disrupt and prevent a terrorist 
plot.
    For local law enforcement to perform this role of ``first 
preventers''--and to perform it effectively--our police officers must 
be equipped with the right intelligence, at the right time. And in 
order for local law enforcement to be equipped with the right 
intelligence, there needs to be an organized, effective and trusting 
flow of information between our federal partners and local police.
    You will notice that I qualified our need for intelligence by 
referring to the ``right'' intelligence. By the ``right'' intelligence, 
I am referring to intelligence that is relevant to the local 
jurisdiction, that is timely, and that is actionable by the police. 
Local law enforcement is not seeking access to every piece of 
intelligence generated nationally or internationally by the 
intelligence community. But when there is intelligence that is detailed 
and specific--and when the intelligence has potential public safety 
implications for our communities--then I believe the intelligence 
community has an obligation to share that information in a timely 
fashion with local law enforcement. If we learn about a threat only 
when it becomes imminent, then it is too late. Just like our federal 
partners, local law enforcement needs time for training, equipment 
acquisition and the development of response, mitigation and prevention 
strategies. Trying to do all these under the pressure of an imminent 
threat is nearly impossible and certainly inefficient.
    Mr. Chairman, in your letter of invitation to me, you asked about 
the impact that the Joint Terrorism Task Forces and fusion centers have 
had on anti-terrorism efforts. I must say that here in the national 
capital region, the flow of information among federal, state and local 
partners through our JTTF has been, and continues to be, quite good. 
Part of the reason for this is that our agencies have worked together 
for years--predating the 9/11 attacks--on sharing information and 
coordinating responses to a variety of situations. The fact that we had 
pre-established relationships and a track record of trust made the 
transition into the post-9/11 environment much smoother than it might 
otherwise have been. Another important factor is that the JTTFs 
understand what local law enforcement does, and they appreciate what we 
can do, when given access to the right information at the right time.
    I believe that other parts of the federal homeland security 
community could learn from the experiences of the JTTFs and could apply 
some of the same principles in its relationships and interactions with 
local law enforcement. Has information sharing among federal, state and 
local entities improved in recent years? Absolutely. But are we where 
we need to be in terms of information sharing--so that we can 
coordinate and maximize all of our resources in the fight against 
terrorism? Not yet, I am afraid.
    Part of the problem, I believe, lies in historical cultural 
differences between the intelligence community and law enforcement. For 
decades, our government erected a wall--a very solid wall--between 
these two functions, and it is difficult to change that dynamic 
overnight. Part of the problem also lies in a difference of 
perspective. For the most part, the Department of Homeland Security has 
adopted an ``all hazards'' focus, which encompasses not only criminal 
activity but also natural disasters and other non-criminal events. 
While local law enforcement certainly has a role to play in responding 
to natural disasters, our homeland security focus must be a narrower, 
``all crimes'' perspective. We are most concerned with criminal 
activity that may be related to terrorism, because intervening in that 
activity and preventing crime are what we do best.
    When looking at the whole issue of information sharing, I believe 
our federal partners need to keep this distinction in mind. Information 
about weather patterns and similar topics may be interesting and 
sometimes useful to local law enforcement. But our information needs 
are more specific, more detailed and more focused on criminal activity 
and the public safety implications for our communities. This type of 
``all crimes'' approach is what local police need in order to do our 
part in responding to and, yes, preventing crime--including the crime 
of terrorism.
    As I am sure the Committee is aware, Representative Thompson of 
Mississippi, the new chairman of the House Committee on Homeland 
Security, recently released a report titled ``LEAP: A Law Enforcement 
Assistance and Partnership Strategy.'' This report contains seven 
proposals to improve information sharing between the federal government 
and state, local and tribal law enforcement agencies. I think these 
seven, common-sense proposals provide an excellent framework for future 
discussions about information sharing--discussions that, I hope, will 
lead to a common, nationwide approach to this issue.
    The LEAP report also touches upon an issue that is critical to the 
success of our homeland security efforts. Often times, we talk about 
federal-state-local information sharing as strictly a one-way street, 
with information flowing from the federal government to state and local 
agencies. I, personally, don't view the situation that way, and I don't 
think my fellow police chiefs and sheriffs do either. We recognize that 
in addition to needing timely intelligence from federal agencies, we 
also must be willing and able to share timely and useful information 
gathered at the local level with our federal partners. In the minds of 
most local law enforcement executives, this is what the whole fusion 
center concept is all about. And we stand ready and determined to do 
our part in contributing to--and receiving and acting upon--the 
information that we hope will be shared more extensively in the future.
    I would like to close with one final observation. Even as we are 
working to enhance intelligence-sharing with law enforcement, it is 
essential that we look ahead to the next steps. I recommend that we 
start planning now for an even broader ``two-way street.'' From 
firefighters and paramedics, to health workers and tax auditors, local 
governments are filled with professionals well positioned to contribute 
valuable information to help protect our communities and the country. 
Here in the District of Columbia, Mayor Adrian Fenty has committed to 
enhancing homeland security training throughout the government. The 
police department can help train other agencies to identify and share 
critical intelligence--but that will only create a one-way street. In 
order to harness this resource, intelligence-sharing networks must be 
more inclusive of other government resources. The intelligence 
community will still need to work on developing and sharing 
intelligence that is actionable for other professions. I hope that we 
can begin planning for this new front now.
    As I wrote in a recent column in the Washington Post, ``for too 
long, the participation of local law enforcement in terrorism-
prevention efforts has been an afterthought. I am heartened that we 
finally have Congress's attention''--including the focus of this 
important Committee. I look forward to working with this Committee and 
others in developing and implementing a national information-sharing 
strategy that makes sense and that helps to make our communities safer 
and more secure. Thank you again for the opportunity to appear before 
you today.

    Chairman Rockefeller. Okay. Well, let me go on for a 
second.
    Thank you very much, Chief.
    Mr. Spears?
    Mr. Spears. Yes, sir. Good afternoon, Mr. Chairman. I 
appear before you today wearing many hats.
    Chairman Rockefeller. You sure do. It took about five 
minutes just to read your title. [Laughter.]
    Mr. Spears. Well, thank you. Sometimes I have that trouble 
myself.
    But the first is that of Cabinet Secretary where, as 
Cabinet Secretary for the Department of Military Affairs and 
Public Safety, I have responsibility for 12 divisions in the 
state of West Virginia. Those divisions include the National 
Guard, the State Police, all of our prisons, our jails, 
emergency management system as well as homeland security.
    It's in that last role that I also have been designated as 
the state's homeland security adviser. In these two roles, I 
have overall responsibility for the security concerns of all 
the citizens of West Virginia.
    I am also wearing the hat as Chairman of the Catastrophic 
Planning Committee for the Homeland Security Advisers Council 
of the National Governors Association; plus, I'm a member of 
the executive board of the All Hazards Consortium.
    I was asked how we have enhanced West Virginia's security 
posture in the last two years.
    Chairman Rockefeller. Surely you weren't asked how much 
you've enhanced. You were asked how you had improved.
    Mr. Spears. Yes, sir; it's a quirk how we've improved. And 
I will admit to you that when I was appointed as homeland 
security adviser, our homeland security program was in great 
disarray.
    As such, I completely overhauled our program significantly. 
I put all of the oversight and management capacities of that 
program in my office so that I have daily, direct oversight of 
our homeland security program.
    The result is that now West Virginia's homeland security 
methodologies and grant monitoring processes are being cited by 
the National Criminal Justice Association as a promising 
practice, and our methodologies and processes are now being 
practiced in workshops and preached in workshops all across the 
Nation.
    The other thing that I would try to mention to you is West 
Virginia's greatest security concern. That greatest security 
concern is one of being a secondary victim. What I mean by that 
is, West Virginia realizes that we are not high on an 
international terrorist target list, but we also realize that 
our Nation's capital is.
    As a matter of fact, as we look at the more spectacular 
ways that terrorists look to strike blows at our Nation, we 
must keep in mind that it's not without reason to be prepared 
for a chemical, biological, nuclear, or radiological attack on 
our Nation's capital.
    When I say a secondary victim, I see D.C. and its residents 
as being the primary victim. But, should such an attack occur--
    Chairman Rockefeller. Guess who's responsible for 
evacuating them.
    Chief Lanier. He's in good hands.
    Mr. Spears. Should such an attack occur, Mr. Chairman, we 
believe, and a recent West Virginia University survey supports, 
that potentially millions of the residents, hundreds of 
thousands of residents in the greater Baltimore-Washington area 
would self-evacuate.
    Should they do so, this would create the potential for 
possibly hundreds of thousands, if not millions, moving across 
the states of Pennsylvania, West Virginia, Virginia, and North 
Carolina. And, simply put, West Virginia's infrastructure 
cannot handle such a massive evacuation.
    Chairman Rockefeller. But isn't the starting point here 
that our Guard is responsible for the Washington capital area; 
in such a situation, it bears responsibility for the 
evacuation?
    Mr. Spears. Yes, Mr. Chairman. There is a certain role that 
the West Virginia National Guard has in supporting the 
activities in an evacuation of Washington, D.C. It is 
considered one of their primary responsibilities, should they 
be federalized.
    As such, that would make it very difficult for us to rely 
on our own National Guard to support us and the state in 
support of our evacuation needs, in support of the citizens 
that would be evacuating into our state and through our state. 
It would create a very difficult burden on our state resources.
    I was also asked to address our relationship with the FBI 
and Department of Homeland Security. In the last six years, we 
have had 11 major disasters in the state of West Virginia, most 
of which have been natural disasters. And we have worked very 
closely and effectively with FEMA.
    In terms of incidents of significance--such as significant 
bomb threats or the uncovering of a bomb laboratory--we have 
also worked very closely with the Department of Justice 
agencies, the FBI, the DHS agencies, ATF, et cetera.
    Just as I was sitting here, earlier today I received an e-
mail of a suspicious incident around our state capitol. I was 
glad to see that proper procedure was followed, that we shared 
that information immediately with the FBI and the Department of 
Homeland Security.
    In terms of the JTTF, as you mentioned, we have been 
advised of ongoing changes that are taking place with the JTTF. 
Whether or not this is going to be a wise move or not, it's 
still too early to tell, since it is just being implemented.
    Looking at fusion centers, when we look at a fusion center 
in West Virginia, it will require the active and full 
participation of all the partners, to include those at the 
federal level, the state level, the local level, as well as 
private and public sectors. It will also require a number of 
skilled analysts.
    Now, that might not seem like a big problem to many people. 
However, for a rural state such as West Virginia, we do not 
have a vast number of skilled intelligence analysts at our 
ready disposal. And we would look to the federal government to 
assist us in this.
    In looking at our state's interaction with federal 
agencies--
    Chairman Rockefeller. What would they need to do? And to 
whom would they need to make that available?
    Mr. Spears. The fusion center is a concept where I see it 
as a key in how we move forward. One of the areas that, I 
think, has evolved over time is the fact that there have been 
many well-placed programs, councils, committees, agencies put 
in place, all with their own way of passing information and 
synthesizing that information.
    The fusion center needs to be the focal point of all of 
those committees, councils, task forces, et cetera. And in 
doing so, if that becomes the single portal in and out of the 
state, then I think we can have true synthesis of information 
at a local level where it can become actionable not only 
locally, but then also actionable at a federal level.
    We need federal support to provide us the resources in 
terms of analysts, in terms of setting up the infrastructure, 
in terms of setting up the computer and the information flow 
that needs to go in and out of a fusion center.
    Chairman Rockefeller. It wasn't that long ago--and I'm sure 
I'm wrong when I say this, but it wasn't that long ago that--
I'd say three years ago--that I used to say that of the 67 West 
Virginia State Police--65--that fewer than 10 had Internet 
capacity.
    Mr. Spears. The lack of widespread Internet is a big 
problem with us in the state. We have a problem in getting 
Internet capability throughout the state. We are trying to 
address that in many ways. One of the ways that the state's 
Internet capability could be greatly enhanced would be from the 
SAFECOM initiative for the 700 megahertz overlay into the 
state's interoperable communications capability.
    We need that information and data overlay so that we can 
provide such an Internet capability across the state. We're in 
the process of trying to provide that Internet capability on a 
statewide basis through an interoperable radio backbone.
    Chairman Rockefeller. Now are you saying that, when the 
fusion center, which makes a lot of sense because it becomes 
the recipient from all over the country or all over the area, 
however it is set up, for information which otherwise people 
don't know how to share, how does that information come to 
them?
    I mean, what is the mechanism? Is it text messaging? Is it 
Internet? Is it phone calls? Is it people riding on horses as 
fast as they can? I mean, I'm serious. I mean, how do they get 
this information, and then how do they collate it so it makes 
sense?
    Mr. Spears. I would just say, E, all of the above. The 
sources of getting the information should be derived through 
the local entities as they go through their law enforcement 
day-to-day activities, as well as the information that is 
telephoned in to them as well as the day to day contact with 
the federal level. We need that interconnectivity on a timely 
basis through the Internet.
    Chairman Rockefeller. What is that interconnectivity?
    Mr. Spears. Through Internet, through phone calls, through 
secure video teleconferencing, the electronic means, but most 
importantly, we need to have had that face-to-face contact with 
our DHS counterparts.
    Chairman Rockefeller. Does that mean that--and I apologize 
to the two of you that aren't from West Virginia--does that 
mean that if somebody in Braxton County can send information to 
you and you can send it on to the fusion center, but the people 
in Webster County, because they don't have Internet service or 
whatever, that they don't have a way of contacting you so that 
they're just left out in the cold? Is that what the situation 
is?
    Mr. Spears. That is a partial description of the situation, 
Mr. Chairman.
    Internet capability is huge in terms of passing our 
information. Up till now, in those areas that don't have that 
capability, we're having to rely on telephone and other 
traditional means of communication. In order to make that 
information exchange timely, we do need Internet capability, 
broadband capability--yes, Mr. Chairman.
    Some of the problems that we face in that regard are also 
the limited number of frequencies and the quiet zone 
restrictions, as you are well aware of, that are placed on our 
state. These restrictions are very restrictive in terms of us 
having quick and ready access in an interoperable 
communications fashion.
    I would also like to make a couple of comments. Chief 
Lanier raised the issue of the need to know. I would say that 
our interaction with the federal agencies is one of mutual 
trust that is evolving over time. What we must overcome is that 
need-to-know excuse barrier that is sometimes put up that 
prevents the timely flow and exchange of information.
    We must have a standard security clearance process among 
the federal agencies. But, most importantly, states need to be 
treated as equal partners.
    That concludes my statement.
    [The prepared statement of Mr. Spears follows:]

   Prepared Statement of the Honorable James W. Spears, West Virginia
 Homeland Security Adviser and Cabinet Secretary of the West Virginia 
            Department of Military Affairs and Public Safety
Introduction
    Good afternoon Chairman Rockefeller, Vice-Chairman Bond, and 
members of the committee. My name is Jim Spears and I sit before you 
wearing many hats. The first is that of Cabinet Secretary of the West 
Virginia Department of Military Affairs and Public Safety. As Cabinet 
Secretary I coordinate and have direct oversight over a dozen 
divisions, including: the West Virginia State Police, the state's 
National Guard, the Fire Marshal's Office, West Virginia's Capitol 
Police, Corrections, our state's Regional Jail Authority and West 
Virginia's emergency management agency. These are all agencies that 
generate and/or protect information impacting Homeland Security and 
emergency response.
    My second hat is that as West Virginia's Homeland Security Advisor, 
a role to which the Governor appointed me immediately after my 
appointment as Cabinet Secretary. In these two roles I am responsible 
for the state's homeland security posture and have coordinating 
responsibility with state government leaders from Agriculture, 
Emergency Medical Services, the Health Department, Natural Resources, 
Environmental Protection and Transportation. In short, through my 
designation as Homeland Security Advisor to the Governor, and as 
Cabinet Secretary, it is my responsibility and my duty to coordinate 
the entire range of government services for the public safety and the 
protection of and response to disasters of all types for the citizens 
of West Virginia.
    In June of last year the National Governors Association (NGA) 
Center for Best Practices formed the Governors Homeland Security 
Advisors Council to provide a structure in which the homeland security 
directors from each state and territory can discuss homeland security 
issues, share information and expertise, and keep governors informed of 
the issues affecting implementation of homeland security policies in 
the states. Hence, my third hat. Upon formation of this body and until 
last Friday, I served as Vice-Chair of the Standing Committee on 
Catastrophic Planning. As of last week I was named Acting Chair of this 
Committee. Two of the four priorities set by the Council directly 
interface with the subject matter of this hearing: 1) Improving 
interstate and regional communication and 2) Facilitating communication 
between state and federal agencies.
    Another of my hats relates to my membership on the Board of 
Directors of the All Hazards Consortium (AHC). The AHC was formed with 
stakeholders from government, industry, education and non-profit 
organizations in North Carolina, Virginia, West Virginia, District of 
Columbia, Maryland, Delaware, Pennsylvania, and New Jersey. It is a 
grassroots effort to enhance regional collaboration in homeland 
security by facilitating discussion of regional issues and sharing best 
practices, ideas, and strategies in a forum that includes academia, 
government, and private industry.
    Finally, under my hats, I was a professional intelligence officer 
as a collector, analyst and consumer while serving in the U. S. Army 
for over 20 years.
    I've been invited here today to provide my views on intelligence 
sharing and counterterrorism coordination among the FBI, the Department 
of Homeland Security, and state and local officials over the last two 
years and discuss the following:
    1. The actions I have taken as the state Homeland Security Advisor 
and Secretary of the Department of Military Affairs and Public Safety 
to enhance security in West Virginia.
    2. Are the roles and missions of the FBI and the DHS in the 
homeland security arena clear and well understood by state and local 
officials?
    3. Has the creation of new Joint Terrorism Task Forces and new 
state and local fusion centers enhanced the effort against terrorism 
and other threats?
    4. Is information sharing improving between federal and state and 
local entities?
    5. What additional steps should the Executive Branch and the 
Congress take to improve the information sharing and counterrorism 
performance of the U.S. intelligence community as it relates to state 
and local governments?
 Security In West Virginia
    It has been difficult and complicated to bring about security 
enhancements in the last two years but I believe West Virginia has a 
very positive story to tell. Shortly after assuming my current 
position, I discovered certain irregularities in the state's 
administration of homeland security grant funding. At the U.S. 
Department of Homeland Security's inception, West Virginia, as with 
most states, received an infusion of funding to obligate within an 
extremely short time frame, with little guidance and no long-term 
sustainment plan. In sum, states were asked to formulate security needs 
and spend money towards those requirements in a relatively short time 
span while simultaneously having to create the proper administration 
and oversight of the nascent program. As one can imagine, in many 
cases, this led to improper spending and lax oversight.
    In West Virginia, after my dual appointments as Cabinet Secretary 
and Homeland Security Advisor, it became apparent that our state's 
program was lacking in focus, sound management, and direction. After an 
investigation and analysis of the program's policies and procedures, I 
saw it necessary to transfer the state's Homeland Security State 
Administrative Agency (SAA). to my office, the Office of the Cabinet 
Secretary, and completely overhaul the state's homeland security grants 
process.
    Two major problems were uncovered. The first was the state's 
spending of homeland security grant funds on unallowable expenses 
during the FFY 2003 and 2004 funding cycles. After uncovering these 
unallowable expenditures, my staff and I held numerous discussions with 
our federal homeland security partners. As a result, West Virginia was 
asked to repay this debt to the federal government; a requirement to 
which the state readily complied.
    The second significant discovery was that the previous grant 
managers had over-obligated homeland security funds for local projects 
by several million dollars. Desiring to honor the promises made to 
local entities, the State searched for funding from within and made 
good on these obligations.
    After reviewing the above problems and analyzing the state's 
homeland security oversight requirements, we implemented a system that 
not only has our Homeland Security house in order, but is so effective 
that the National Criminal Justice Association (NCJA) recently named 
West Virginia's Homeland Security Grant Monitoring a ``Promising 
Practice'' and is now using our monitoring policies and procedures when 
conducting grants management workshops across the country. Also, the 
NCJA is reviewing our Homeland Security Grant Administration Manual and 
this, too, may also be labeled as a ``Promising Practice.'' We are even 
fielding calls from other states who want to discuss our grants 
management policies and procedures and request copies of our documents 
to perhaps help them in improving their processes.
    As I said, enhancing West Virginia's security posture during the 
last two years has been challenging. Prior to my tenure the state's 
homeland security emphasis had been on enhancing first response 
capability to Weapons of Mass Destruction (WMD); a major challenge 
given West Virginia's mountainous geography. This was accomplished by 
dividing the state into hazardous material/ WMD response team regions 
in which each region was given large amounts of specialized equipment 
and response training. Although the grant had not been administered 
properly, the state's WMD/HAZMAT response capability was greatly 
improved.
    Our State is home to over one hundred chemical plants, multiple 
coal-fired power plants, hundreds of miles of natural gas transmission 
lines, a port that is the 6th busiest in America in terms of tonnage, 
miles of coal mines, and a burgeoning coal bed methane gas industry and 
robust locks and dams systems. West Virginia occupies a critical place 
in the Nation's electrical grid. There is a multitude of public and 
private critical infrastructure in this state that interfaces with the 
economy, communications, energy and other integral resources that are 
critical to the continuity of life in the eastern portion of the United 
States.
    Since my arrival, we've taken a hard look at these areas of 
greatest security concern in our state. However, the greatest concern, 
as we determined and as you will hear in this testimony, has an impact 
that reaches far beyond our state's borders and has the potential to 
affect millions of Americans. It is no secret that Washington D.C. and 
New York City are at the top of the international terrorist hit list 
and that today's terrorists are looking at how to inflict the most 
catastrophic of blows on our Nation. Therefore, it is not unreasonable, 
nor should we overlook the potential of a terrorist chemical, nuclear, 
biological or radiological attack on our Nation's capital. Should this 
occur, it is of great concern to West Virginia, that vast numbers of 
Americans will evacuate the Baltimore-Washington area in a chaotic 
uncontrolled exodus.
    A person can't help but note that even one of Hollywood's most 
popular television series is currently using a terrorist ``dirty bomb'' 
attack as its main story line. Correctly, the program's producers 
recognized and infused the resulting mass exodus of citizens who would 
seek to escape the radioactive cloud. Unfortunately, our concern is 
very real and is not one of Hollywood. We believe, and a recent West 
Virginia University survey supports, that a large number of people 
would self-evacuate in such a scenario. When this happens West 
Virginia's largely rural infrastructure will be quickly overwhelmed and 
potentially many lives could be lost if we are unprepared to handle 
such an evacuation. Given the rugged terrain, the preservation and 
protection of potentially impacted critical infrastructure is also of 
concern for the continuity of government plans and continuity of 
operations plans of federal agencies which may be planning to move to 
West Virginia or Pennsylvania. Unfortunately, the Department of 
Homeland Security officials responsible for such planning remain 
unconvinced that such a scenario could occur and have failed to apply 
the necessary resources for planning and preparing for this.
    Instead of recognizing this glaring issue of national significance, 
the Department of Homeland Security's most recent grant guidance, 
continues to use its threat and risk methodology that considers urban 
risk the highest factor without consideration of the widespread impact 
to rural areas. We in West Virginia agree that Washington D.C. is a 
likely terrorist target. However, that risk underscores to us that we 
are likely to be secondary victims. There is no indication that the 
federal government recognizes that another direct attack on Washington, 
D.C. will have a regional impact, and that a coordinated regional 
response radiating out to the states of Maryland, Virginia, 
Pennsylvania and West Virginia will be required for the safety of all 
this region's citizens.
    If the HSGP Risk Methodology is perpetuated, the secondary 
victimization will continue. It embraces the notion that when looking 
at an area of the country, there is a greater ability to measure 
consequence than vulnerability. In fact, in this regard, this is not 
occurring. It cannot occur with this methodology because the area of 
vision is limited to the directly impacted area and not the surrounding 
areas that will be indirectly impacted or directly impacted by the 
aftermath. DHS is not giving consideration to the high likelihood of 
self-evacuation despite studies that have so confirmed. Accordingly the 
threat to West Virginia is enormous.
    West Virginia's attempts over the last two years to obtain 
direction from FEMA, DHS and even surrounding states on how best to 
implement a coordinated multi-state mass evacuation planning strategy 
were met with little interest at best and with outright derision at 
worst. That is, of course, until Hurricane Katrina made landfall. The 
fact that our calls to action were prophetic is not gratifying. Our 
State's experience hosting hundreds of Katrina victims ultimately 
provided the impetus to West Virginia to organize and host the August 
2006 groundbreaking multi-state ``West Virginia Urban-Rural Evacuation 
Conference'' in Canaan Valley, West Virginia. Invitees included the 
Homeland Security Advisor, Homeland Security State Administrative 
Agency Points of Contact, Emergency Manager, Emergency Management 
Planner, Homeland Security Planner, Adjutant General, Chief Law 
Enforcement Officer, Emergency Medical Services/Threat Preparedness 
Officer, Transportation Director, Volunteer Agency/Citizen Corps 
Director from Delaware, Kentucky, Maryland, Ohio, Pennsylvania, 
Virginia, West Virginia, and the District of Columbia. Subsequent 
regional meetings were held around our state to facilitate local 
regional planning integral to readying the local community for a 
population surge. At the October 2006 All Hazards Forum in Baltimore, 
West Virginia was presented with the 2006 Mid-Atlantic Regional 
Recovery Award for our vision and leadership in this area. We, nor our 
neighboring states, are ready to handle such a large number of 
evacuees, but West Virginia is continuing to plan and prepare as best 
it can given its limited resources.
Roles and Mission of FBI and DHS
    West Virginia has a great deal of experience with emergency 
response to natural disasters. Since 2000, the President has declared 
and we have responded to eleven Major Disaster Declarations, an 
Emergency Declaration and two Fire Management Declarations. Through and 
with these emergencies we have developed and maintained strong 
relationships with our federal partners--FEMA, the Army Corps of 
Engineers, the National Guard, the Small Business Administration, etc., 
all of whom have a seat in our state Emergency Operations Center. Our 
responses in each disaster were enhanced by knowledge gained from each 
previous experience and built on the previous foundation of 
relationships, enabling quick and efficient responses in each event. In 
talking with our state agency partners, there is some confusion of the 
role and mission of DHS. These same agencies, however, see the FBI as 
the principal federal law enforcement agency.
JTTF and Fusion Centers
    We queried Virginia, Pennsylvania, Maryland and the District of 
Columbia along with West Virginia state agencies and have found a 
sometimes improving relationship with their federal partners. Within 
West Virginia, there appears to be a general consensus that the federal 
partners of the Joint Terrorism Task Force are not as forthcoming with 
information as they are at absorbing information provided by local and 
state agencies. Collaborative information exchange seems to be most 
effective when state agency representatives are co-located with the 
JTTF. Although co-location is the most effective method for information 
exchange, another method is through the internet. For West Virginia, 
however, many of our rural areas still only have access to dial-up 
internet connection. It is also impractical to physically bring 
together far-flung local law enforcement entities for information-
sharing events. It is even more important to note that we have recently 
been advised that the FBI is undergoing reorganization and is 
dismantling the JTTF in West Virginia, reassigning the agents to their 
home squads/agencies.
    Fusion centers are another matter. Though there is no formula for a 
standard one, many information gathering centers have been established 
across our country, often top-heavy with law enforcement personnel. A 
fusion center needs to go beyond the traditional law enforcement 
community for its sources of information. At the state level, we 
obviously need the participation of federal agencies willing to share 
information and intelligence. We also know that we can include valuable 
sources of information collected from within jails and prisons. We are 
also aware that the security operations of various private sector 
businesses can contribute valuable information on threats and risks 
that we might not otherwise be aware. For example suspicious behaviors 
toward banks, railroads, chemical plants and utility plants may all be 
identified by their respective security forces long before the public 
sector is aware. By bringing information routinely from these sources 
into a fusion center, analysts may determine a pattern of activity 
needed to thwart criminal or terrorist activity.
    We have varying capabilities in our region. West Virginia and 
Pennsylvania currently operate law enforcement intelligence exchanges 
while our sister states of Virginia and Maryland operate robust fusion 
centers. The District of Columbia is just establishing its fusion 
center. We, too, are in the beginning stages of establishing a true 
fusion center, but it has been difficult. There is little federal 
direction and training. Each of our neighbors indicates an increasing 
need for additional skilled analysts. Fortunately, the All Hazards 
Consortium has launched a dialogue to facilitate fusion center 
development across our region. It is clearly still too early to tell 
whether these fusion centers will have an impact on terrorism.
Information Sharing
    The world that changed on September 11, 2001 brought a new 
awareness to many of us at the state and local level--specifically that 
we must be prepared to respond to risks and threats of intentional man-
made disasters. As a Nation we learned that information was available, 
but that ``dots weren't connected'' in ways that could prevent tragedy. 
But at the state level we found we hadn't necessarily identified the 
``dots'' correctly. There are mountains of information to be gleaned 
from a plethora of sources both in government and the private sector, 
but there is no standard system in place to synthesize that information 
into intelligence. Our informal survey of our sister states and 
intrastate partners make it apparent that even today, there is trouble 
distinguishing information and intelligence. Unfortunately, at the 
state level, sometimes information and intelligence have the same 
effect. Because we are often called upon to respond quickly, we don't 
always have time to analyze the information into intelligence.
    The history of our interaction with federal intelligence 
information sharing is one of slow evolution and building of trust. Our 
initial experience has been that federal agencies were eager to acquire 
what information and intelligence we had to offer, but were slow to 
pass information along to the general state and local levels. 
Conservative judgments by federal agencies of which agencies or 
organizations had a ``need to know'' left many at the state and local 
level with the feeling of being used as a pawn, not an equal partner. 
More recent efforts by Homeland Security and the Federal Bureau of 
Investigation have begun to break down this attitude. Joint FBI and 
Homeland Security Alerts are useful and relevant because they are more 
timely than quarterly briefings, and often sent within days of an event 
or suspicious activity. But our analysts still wonder if we at the 
state level are receiving perceived threats and alerts as soon as 
possible.
    As a Homeland Security Advisor, I have a need for strategic 
intelligence--that is, information that has been analyzed and made 
relevant to help me identify threats that may imperil my state. That 
means I must have access to information that affects my state. I have 
to understand the vulnerabilities of the industries in my state such as 
chemicals and rail transportation, and realize the impact that targeted 
destruction of those facilities could bring about. Most important, I 
need to know the federal agencies that are located in or that plan to 
move to West Virginia in times of disaster. Unfortunately, obtaining 
such a comprehensive list has been problematic.
    Ironically, the need to bring together multiple sources of 
information into an intelligence system transcends law enforcement and 
the public sector and reaches into information owned by the private 
sector. Our efforts to prevent or mitigate acts of terror require that 
we work confidentially across public and private barriers to gather 
information.
    The Intelligence Reform and Terrorism Prevention Act was intended 
to improve information sharing. The focus was to establish an 
Information Sharing Environment among federal, state, local, private 
and international components, not build out a system. It has been 
recommended that to create a federal voice, state and local advocates 
be located in the National Counterterrorism Center and that the 
coordination group be comprised of federal, state and local members and 
that a senior DHS employee provide oversight/coordination between DHS 
and DOJ. We concur.
    It is important to note the communication disconnect between the 
states and DHS. Historically, there has been a shortage of meaningful 
consultation with states. The DHS relationship with states is often 
one-sided, with requests for representation often being ad hoc. There 
has been poor outreach to states and locals on how to better serve 
their needs and how DHS could better support the leading roles states 
and locals play in all-hazard events. Remember, all disasters are 
``local.'' There have also been occasions when DHS has communicated 
directly with locals, governors, chiefs of staff, without notifying the 
Homeland Security Advisor. This leads to a disconnect on multiple 
levels.
Recommendations
    As any prudent manager must do, we in the Homeland Security arena 
juggle many responsibilities and wear many hats, including the 
preparation and response to events over which we have no control. We 
must also do all we can to mitigate or prevent harmful incidents over 
which we may exert some influence. For each of these situations, 
accurate and current information is critical in making correct choices.
    State partners can make strong partners in the national security 
efforts, particularly as related to terrorism. An integral component of 
our Nation's homeland security effort is the information sharing 
between federal and state entities. To facilitate this we would 
recommend timely distribution of significant terrorist intelligence and 
information to those who direct the first responses to these threats. 
Critical information must be shared in a timely manner with Governors, 
Homeland Security Advisors and other selected state officials. 
Information passed should be actionable and consistent with the current 
threat level. The security clearance process should be standardized 
across agencies and states so that information exchange is truly 
reciprocal between the FBI, DOD, DHS and other agencies and all levels 
of government.
    As our country leans forward to develop and implement emergency 
preparedness plans at the federal, state and local levels, it is 
imperative that we coordinate and collaborate our efforts. With 85% of 
our Nation's critical infrastructure privately owned, we recognize that 
private sector partners play a key role in maintaining our country's 
security. They also have information to share. We must keep in mind the 
business community's role and continue to coordinate with our private 
sector partners. Our preparedness and recovery efforts must ensure that 
the limited federal resources are effectively allocated across all 
geographic areas, not just urban areas.
    To reiterate, a vulnerability of our state is that of secondary 
victimization. We have a small population base spread over a largely 
rural environment and we are not immune to the consequences of a direct 
attack upon a major population center. As I mentioned earlier, a 
foreseeable consequence of a ``dirty bomb attack'' upon Washington, DC 
would be the likely evacuation of the Washington metropolitan area. 
With limited evacuation routes, West Virginia could very well be 
overwhelmed in our ability to manage evacuees streaming through our 
state toward safe harbors. The surge in demand for food, fuel, health 
care, and housing could well cripple the state in short order without 
proper planning and oversight to manage such an event. This level of 
strategic planning can only be accomplished with critical analyzed 
thought applied to the mass of information that makes up the picture of 
our state. It also implies that we need to look not just in the borders 
of our state, but also in a regional view with jurisdictions 
surrounding our state.
    Accordingly, it is imperative that the risk methodology employed by 
DHS be amended to reflect recognition that an attack on an urban area 
will have an impact on the surrounding regional area, and that a 
coordinated regional response will be required for the safety of all 
citizens.
    DHS is perfectly positioned to provide us with a road map on how to 
plan and prepare for regional disasters. We would recommend the 
formation of a ``Greater Washington Mass Evacuation Planning Group'' 
(GWMEPG) with a full-time coordinator located in DHS's Office of 
National Capital Region Coordination. The planning group would consist 
of one representative each from West Virginia, Pennsylvania, Delaware 
and North Carolina. The coordinator's responsibility would include 
acting as the liaison between the GWMEPG and the National Capital 
Region Planning Group and DHS to integrate plans and secure the 
resources that such a large preparedness effort would require. The 
GWMEPG would develop the subcommittees necessary to conduct a thorough 
review and build a comprehensive regionwide evacuation plan beyond the 
Washington Beltway.
    We look forward to working with our federal partners for the mutual 
benefit that collaborative information exchange and cooperation can 
each achieve.
    Thank you for allowing me the opportunity to address the committee.

    Chairman Rockefeller. The federal government's not very 
good at that, is it?
    Mr. Spears. Pardon, sir?
    Chairman Rockefeller. The federal government's not very 
good at that, is it?
    Mr. Spears. At times it can be, but at times there is the 
idea that they know a little bit more than you do and that, 
when you say, ``Do I have all of the information,'' you get the 
impression that if we had a need to know, it would be shared 
with us.
    The federal government is--
    Chairman Rockefeller. Just like the chief--take me through 
an example of that. Take me through an example of that.
    Mr. Spears. As we are uncovering a bomb lab in Morgantown, 
West Virginia, we alert the federal officials to that bomb lab. 
As we tell them and provide for them all of the information 
that they request, as we uncover the information, as we bring 
them into the investigation of it, we provide the information 
to them. But what information do we get back?
    When you ask for the results, they don't explicitly say, 
``Well, you don't have a need to know,'' but you do not 
necessarily or explicitly get back the results.
    If you look at the intelligence cycle, as was mentioned 
earlier--collection, analysis, dissemination, evaluation, 
feedback and action--we're very good at both the local level 
and federal level at collection. In the next step of analysis, 
the federal level is very good. We at the state level have 
difficulty in having trained, skilled intelligence analysts.
    At the dissemination level, the federal government is not 
necessarily that good. They have the analysts, but they decide 
what's going to be disseminated and to whom--even, as the chief 
said, when it could be of direct consequence in their 
particular area of concern.
    So, as we go to--
    Chairman Rockefeller. Mr. Gannon, how do we get away from 
that? How do we solve that?
    Mr. Gannon. I think you have to have a much more 
interactive relationship.
    Chief Lanier. Possibly a local presence in the NCTC might 
be a good start.
    Mr. Gannon. Yes. I think it isn't just about passing 
information in building a constructive intelligence 
relationship. It is about interaction. You've got to have much 
more of a dialogue back and forth where you can actually work 
together--the local folks bringing what intelligence they have 
and what problems and requirements they have, and the federal 
side being much more interactive and responsive than has been 
the case thus far.
    Chairman Rockefeller. Well, lots of people have said that, 
even some today. The question I ask is, how do you do that? Who 
do you have to inspire?
    Mr. Gannon. Well, I would say that what we need to do is 
build a model of that interactive relationship that is, 
frankly, something on a scale less than 50 states.
    I think, in the case of Charlie Allen in the Department of 
Homeland Security, what we're doing is essentially setting a 
great man up for failure, because what we heard today, I think, 
are some of the complaints to Charlie from one state. As this 
process continues, that cackle is going to become a cacophony 
of complaints. He doesn't have the resources, he doesn't have 
the authorities to address the legitimate requirements of our 
first responders on the state, local and tribal levels. That is 
my judgment.
    Chairman Rockefeller. So you're saying that Charlie Allen 
doesn't have the resources to do that?
    Mr. Gannon. I'm saying Charlie Allen has the will and the 
capability. He does not have the resources or the authorities 
to do the job that is being legitimately demanded by the state 
and local first responders.
    Chairman Rockefeller. Now, we do have a budget problem in 
this country, and I won't get into my usual diatribe on that, 
but Homeland Security is sort of the first responsibility of 
government, it strikes me. I won't get into wars anywhere, but 
I think that's the job of government, is to secure, under the 
Constitution, to make sure your people are safe and secure.
    So it just is very startling for me to hear that anybody by 
any name who has the position to make things happen doesn't 
have the resources with which to expedite what he needs. That's 
what you're saying.
    Mr. Gannon. I am saying that, but I--
    Chairman Rockefeller. But he didn't say that. Was that 
because his testimony is--
    Mr. Gannon. Sir, when I was staff director for the Select 
Committee, which became the Homeland Security Committee, in the 
House, we held 66 hearings and we pointed out any number of 
times--or Members pointed out any number of times--that their 
judgment was that various programs lacked resources. Not a 
single time did I hear the department say it needed more 
resources.
    Chairman Rockefeller. Okay. Now that brings me to my usual 
point, where all the other members of the Committee leave in 
frustration.
    When you speak, when the chief speaks--when you speak, 
you're free to say whatever's on your mind. When he speaks, 
when Charlie speaks, when John speaks, their testimony has to 
be reviewed and vetted by the Office of Management and Budget, 
does it not?
    Mr. Gannon. This is true. I don't know if it goes that far; 
it certainly would have to be reviewed by their own seniors.
    Chairman Rockefeller. No, I think it's by the Office of 
Management and Budget.
    And that, in fact, is any witness that we have--this is one 
of the absolute frustrations of sitting here--that no one can 
really tell us what they need, particularly in the way of 
money, because they are not allowed to unless it comports with 
the budget that the Administration either has printed or is 
about to print and distribute and pass out in February, so that 
they can't say that.
    They're not allowed to say that. They can feel it with 
every cell on their body, but they cannot say it.
    Mr. Gannon. Sir, for 24 years, when I was in the 
intelligence community, that was correct with regard to myself. 
But it didn't have to go as far as OMB. You had to be cleared 
in what you were going to say to a congressional committee. And 
you could not go beyond the guidance you had on resources; 
that's true.
    Chairman Rockefeller. See the frustration of that? Whether 
it's veterans, whether it's Leave No Child Behind, whether it's 
environmental this or education that, you can say no more than 
OMB says that you can say so that this hearing process is, in 
fact, sort of a kabuki dance.
    And if we go behind closed doors, which we usually are--
we're not behind closed doors because I'm trying to say that we 
make ourselves available to the public. My colleagues are 
obviously enthusiastic about that.
    But, nevertheless, they can't say what they think.
    Now, it is the United States of America, and I understand 
discipline. I understand following orders. But if you hire a 
Secretary of the Treasury, you hire a V.A. director, you hire 
assistant or an assistant to an assistant of the V.A. director 
and the V.A. director cannot say what he needs or she needs, 
that's kind of a kabuki dance, isn't it? We don't have that in 
West Virginia, do we?
    Mr. Spears. No, sir.
    Chairman Rockefeller. Anybody can argue for whatever they 
want. We have the same requirements, much more stringent 
requirements for a balanced budget, but that does not muzzle 
people from saying what they need. We're muzzled here. We're 
not. They are. It's frustrating.
    Do you have other things that you want to say, John?
    Mr. Gannon. It was one of the great periods of my career 
when I got to work with first responders in the Homeland 
Security Committee and prior to that in the White House 
Transition Planning Team when we stood up the Department of 
Homeland Security.
    Most of my career, of course, was at the national 
intelligence level, where I managed analytic programs, and it 
is from that perspective that I'm speaking today.
    I have seven basic points to make to you, and these are 
recommendations that flow from the experience I had as an 
intelligence officer and through the period of the Homeland 
Security Act of 2002 and then being around on the Hill when we 
drafted the Intelligence Reform and Terrorism Prevention Act of 
2004.
    First, I would hope that Congress would not introduce new 
intelligence legislation now as new leadership is coming into 
the major agencies. We need leadership, not legislation. I have 
had experience with Bob Gates, who is now the Secretary of 
Defense and Jim Clapper, who is proposed as USD/I, Mike 
McConnell, who is proposed at DNI, and Mike Hayden, who is the 
CIA Director. I think this is as close as I have ever seen the 
intelligence community come, in leadership terms, to a dream 
team.
    And we'll probably never get the opportunity we have now to 
have these leaders fill in some of the gaps in the legislation 
and to fix some of the problems that I, very quickly, want to 
talk about.
    Further on leadership, in my experience in the community we 
worked to establish technical systems and info-sharing 
protocols. That's not enough. We had technical capability and 
protocols, MOAs. They were honored in the breach. You 
absolutely have to have leadership that monitors and wants 
particular kinds of information shared and particular kinds of 
needs met.
    Leadership is critical. I think there is a historic 
opportunity now to fix some of the problems. I would urge all 
the members of this Committee and this Congress as a whole to 
pull back on legislation and to hold the new set of very 
talented and capable leaders accountable.
    Secondly, I would also urge a halt to structural buildup in 
the intelligence community. I think from the period of 2001 
until today we, in establishing new structures like the NCTC 
and a lot of other units, have stretched resources absolutely 
to a breaking point.
    I recall in my dialogue with this Committee and with the 
HPSCI that we determined that it takes the better part of ten 
years to develop a fully capable intelligence analyst. Yet we 
have introduced so much demand for new resources that we've 
actually stretched the resources, dispersed expertise and 
divided accountability, which I saw as I, as a committee staff 
director, asked for briefings. And I think we have also robbed 
a new generation of analysts of a capable corps of branch 
chiefs to train and mentor them.
    And I would emphasize that training and analysis doesn't 
occur by sending people off to two- or three-week courses. It 
happens in the workplace, as you deal with issues and you are 
taught by people who know the system, know the community, and 
know the intelligence business.
    Thirdly, we absolutely need to deal--and I think this is a 
leadership issue--we have to deal with the confusion of roles 
and responsibilities across government agencies. I observed it 
as I was leaving the Hill. I still see evidence of it today.
    I think there has been a counterproductive tension between 
the USD/I and the DNI. It absolutely needs to be resolved. I 
have great faith that, with Bob Gates--and if Jim Clapper is 
confirmed--that issue will be resolved rather quickly. I don't 
think this is an issue for legislation.
    But also issues with regard to DOD, the Northern Command, 
intersecting with DHS, DHS and its responsibilities for state 
and local, FBI, and DHS, in my observation, there was constant 
tension there and confusion. That can be resolved, but I think 
leaders have to really get on top of it.
    Fourth, with regard to DHS, I am absolutely convinced that 
10, 15, 20 years from now, with all the problems that the 
Department of Homeland Security has had, we are still going to 
say that we need and we will continue to need an agency that 
can create national systems, national systems that integrate 
federal, state and local governments to confront national 
security threats.
    We could not have a more dynamic, harder-working, more 
capable man than Charlie Allen to lead the DHS intelligence 
effort. He doesn't have the resources to do this difficult job. 
He doesn't have the authority he needs in Washington. As I sit 
and listen to Charlie and consider where he is operating from 
on Nebraska Avenue, I don't believe he has the resources or 
authorities to manage the federal relationship with the fusion 
centers of the fifty states.
    I think we've got to reduce to a smaller scale and build up 
a really capable federal, state and local intelligence 
operation before we spread ourselves so thin that we, again, 
set ourselves up for failure.
    Fifth, on FBI, I testified before on this, as an 
intelligence officer who developed analytic programs. I think 
the FBI is doing a commendable job on improving tactical 
intelligence capability to support its criminal investigation 
mission, and it needs to do that. It's doing very well. I 
commend it. But it is not developing a national analytic and 
collection capability, and that means for the domestic 
intelligence mission there's a huge gap there that the FBI is 
not addressing.
    Chairman Rockefeller. That gets back to the point that I 
think I raised earlier when they say they have intelligence and 
they have people who do intelligence and surveillance, and they 
have people who arrest and carry yellow pads. But, on the 
computer, it refers to agents of a traditional model and then 
everything else is--
    Mr. Gannon. Right. There may be 2,000--I think that's the 
latest figure--2,000 analysts at FBI. But those analysts are 
being given minimal training and deployed into organizations 
that are managed by agents.
    If you go to the Defense Intelligence Agency or CIA, you 
have analytic structures where any analyst who is working in 
those organizations can look right up the chain of command to 
the Director, and it is all analytic managers who are reviewing 
the process and applying rigor to what is done. Ultimately, 
that analytic system can challenge the agent culture. It can 
challenge policymakers. I don't think that can ever happen in 
the FBI system as it is.
    But again I commend FBI for what it has done on the 
tactical level. The strategic or the national level is what's 
mission, and I think it is a serious gap.
    The sixth and final point is on technology. I shared with 
you a document from the Directorate of Intelligence Strategic 
Plan of 1996, ten years ago. And if you look at the summary 
page you would be impressed about what the analytic community 
and the intelligence community knew about what was coming with 
regard to technology, geopolitical change, and even to some 
degree the homeland security revolution that we are now facing.
    But the fact is, West Virginia is not the only place that 
has problems with the Internet. If you go to various agencies 
of the intelligence community at the national level, they may 
cause you to think they are much better. The fact is, you will 
find analysts who have minimal or no access to the Internet, 
even though they depend on open-source information to do their 
work. They lack the technology and the training to exploit open 
source, to use search engines effectively.
    And if you go back over ten years, with all that we've done 
with all the money that we've spent, we should be much further 
along. This is an issue I think the new leadership has to get 
on top of very quickly. I think this ultimately will have a 
long-term impact on the willingness of young, smart people to 
stay in this community and certainly on the quality of the 
analysis that they produce.
    Thanks. That's it.
    Chairman Rockefeller. You know what? I think I pretty much 
deprived all three of you your professional life today and your 
personal life today, and even hearings have to come to an end 
at some point.
    There are a lot of questions I'd like to ask, but sometimes 
just meeting people who are frustrated, who've seen various 
scenarios as the years have gone by, who are on the job and 
totally responsible, and who work with states, and just 
listening to them, understanding that there's so much work to 
be done, does that propel us in the right direction?
    There is no guarantee, but maybe it will. Maybe we'll get 
better at it. And in that I am one who believes that America is 
not going to be left alone; maybe the need for that will come 
sooner than we expect.
    In any event, I totally respect all three of you. I totally 
apologize for the various interruptions, for the length of 
time. But in this business, one has to take time. And you've 
helped, and I thank you.
    [The prepared statement of Mr. Gannon follows:]
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    [Whereupon, at 5:44 p.m., the hearing adjourned.]
                         Supplemental Material

    Subject: Final and cleared QFRs - ready for hearing record 
inclusion

    Attachments: Dove, Stephen.vcf; landA QFRs (17) - final.DOC

    The attached QFRs are final and cleared, ready for hearing 
record inclusion. Associated hearing details below:

    Authorizing Questions For the Record (QFR) Summary

    Senate Select Committee on Intelligence

    Hearing Date: January 25th, 2007

    Hearing Title: ``Intelligence Reform''

    DHS Witnesses: Chief Intelligence Officer Allen

    Total QFRs Received: 17

    Date Received: 4/18/2007

    IQ/ECT Workflow: 662941

    QFR Breakdown by Sen./Rep.: 17 questions from Sen. 
Rockefeller (D-WV)

    Stephen Dove
    Department of Homeland Security
    Office of the Secretary
    Executive Secretariat
    202 282 9890 - Office
    202 329 6721 - Cell

    6/7/2007
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