[Senate Hearing 111-568]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 111-568
 
                     NOMINATION OF CARYN A. WAGNER 

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                                 of the

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

 NOMINATION OF CARYN A. WAGNER TO BE UNDER SECRETARY FOR INTELLIGENCE 
           AND ANALYSIS, U.S. DEPARTMENT OF HOMELAND SECURITY

                            DECEMBER 3, 2009

                               __________

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

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

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           JOHN McCAIN, Arizona
MARK L. PRYOR, Arkansas              GEORGE V. VOINOVICH, Ohio
MARY L. LANDRIEU, Louisiana          JOHN ENSIGN, Nevada
CLAIRE McCASKILL, Missouri           LINDSEY GRAHAM, South Carolina
JON TESTER, Montana                  ROBERT F. BENNETT, Utah
ROLAND W. BURRIS, Illinois
PAUL G. KIRK, JR., Massachusetts

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















                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Collins..............................................     3
    Senator Kirk.................................................     4
Prepared statements:
    Senator Lieberman............................................    17
    Senator Collins..............................................    20
    Senator Kirk.................................................    22

                                WITNESS
                       Thursday, December 3, 2009

Caryn A. Wagner to be Under Secretary for Intelligence and 
  Analysis, U.S. Department of Homeland Security:
    Testimony....................................................     5
    Prepared statement...........................................    23


                     NOMINATION OF CARYN A. WAGNER

                              ----------                              


                       THURSDAY, DECEMBER 3, 2009

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

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. The hearing will come to order. Good 
morning and welcome to this hearing at which we will consider 
the nomination of Caryn Wagner to be Under Secretary for 
Intelligence and Analysis at the Department of Homeland 
Security (DHS).
    Although Ms. Wagner's nomination has been referred by the 
Senate to the Select Committee on Intelligence, S. Res. 445 
gives committees with jurisdiction over the departments where 
nominees will serve the right to also hold hearings and 
interviews on the nomination--a right that we assert today.
    We do so because the development of the Intelligence and 
Analysis Directorate (I&A) has been a high priority for this 
Committee since the passage of the Homeland Security Act in 
2002.
    When the Act was being debated on the Senate floor, I said 
the provision that established the Information Analysis and 
Infrastructure Protection Directorate ``goes to the heart of 
the weaknesses that have been exposed in our Nation's homeland 
defenses since September 11, 2001--and that is, the lack of 
information sharing related to terrorist activities between 
intelligence, law enforcement, and other agencies.''
    In 2007, this Committee was privileged to lead efforts in 
the Senate to pass the second 9/11 Act, the unfinished 
legislative business that came out of the 9/11 Commission, 
which clarified and expanded the responsibilities of the I&A 
Directorate and DHS and established the position for which Ms. 
Wagner has been nominated.
    Under the leadership of her predecessors, former Under 
Secretary Charlie Allen and current Acting Under Secretary Bart 
Johnson, the Department of Homeland Security's Intelligence and 
Analysis Directorate has, I think, taken important steps 
forward to clarify its duties, to implement its 
responsibilities both within the Department and the 
intelligence community and with its many stakeholders outside 
of the community. And I think the American people clearly are 
safer as a result.
    But this is unfinished work, and Senator Collins and I have 
talked with Secretary Napolitano about it, and I think she has 
a vision that is consistent with the vision that created this 
Directorate, which is not to duplicate what other parts of the 
intelligence community are doing, but to add value, to add 
something unique.
    The two most obvious, it seems to me, areas in which the 
I&A Directorate can add value is in the integration, 
coordination, and expression--sharing--of the intelligence 
brought forth anyway by components of the Department of 
Homeland Security, including, for instance, Customs and Border 
Protection or the Transportation Security Administration or 
Immigration and Customs Enforcement or the Coast Guard. That 
was required under the 9/11 Act, and I think it is still a very 
important function.
    These components of DHS each possess intelligence-raising 
capacity and intelligence products related to travel, 
immigration, and individuals' access to critical infrastructure 
that, if brought together, really can enhance investigative and 
intelligence efforts to protect our homeland and our people 
here at home.
    The importance of this work was demonstrated most recently 
and, I think, most impressively in the terrorism investigations 
that led to the arrests of Najibullah Zazi, David Headley, and 
Tahawwur Rana.
    The Department of Homeland Security formed a Threat Task 
Force within itself to coordinate its support of these FBI-led 
investigations and provided critical information to the Federal 
Bureau of Investigation (FBI) as the investigations proceeded 
and suspects were subsequently arrested. I think the Department 
should be very proud of these efforts, which represent exactly 
the kind of coordination that we hoped for when DHS was 
created.
    The second and an increasingly significant role played by 
the Department and by I&A particularly, in conjunction with the 
FBI, is to serve as the interface between the national 
intelligence community, through the DHS, and State, local, and 
tribal law enforcement and intelligence agencies.
    The Department's efforts to support and sustain fusion 
centers around the country are critical to our homeland 
security, and I am pleased by the steps that Secretary 
Napolitano has taken to better coordinate these efforts.
    I presume that as Under Secretary for Intelligence and 
Analysis, if you are confirmed, you will play a very critical 
role in implementing this vision and ensuring that the 
Department is helping to build a well-integrated and effective 
national network of fusion centers. In both these ways, 
coordination of intelligence assets within the Department will 
create interfacing between your Directorate and State, local, 
and tribal law enforcement and intelligence; you will really 
coordinate this effort and be an important part of what is not 
only our constant desire, but necessity to improve our 
intelligence capabilities against the terrorists, who we know 
are plotting every day to attack us here at home again.
    I appreciate the record that you bring to this, Ms. Wagner. 
You have a very strong background both in the intelligence 
community and strong management experience, serving in the Army 
Signal Corps, at the Defense Intelligence Agency, and with the 
Office of the Director of National Intelligence at the time of 
its creation. It makes me very proud that this Committee can 
say that we have created the opportunity for you to have the 
last two jobs you have had. It is our small part in increasing 
employment in America.
    She has served also on two occasions on the staff of the 
House Permanent Select Committee on Intelligence, including 
most recently as the committee's budget director. So you come 
to this job with some very relevant and important experience.
    I thank you for being here, and I now would call on Senator 
Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you, Mr. Chairman.
    The nomination of Caryn Wagner to serve as the next Under 
Secretary for Intelligence and Analysis, as well as serving as 
the Chief Intelligence Officer at DHS, comes at a time when our 
understanding of threats to our security is rapidly evolving.
    Recent events serve to remind us that the threat of 
terrorist attacks no longer comes only from countries half a 
world away, but also from within our borders. The arrests of 
plotters like Najibullah Zazi in New York, the indictment of 14 
individuals in Minneapolis connected with recruiting Somali-
Americans to fight with a terrorist group in Somalia, and the 
shooting rampage at Fort Hood have underscored a key finding of 
this Committee over the course of a 4-year investigation--that 
is, that the threat of violent Islamist radicalization 
occurring in this country is real, and it is happening now.
    Detecting and responding to this threat does not fall to 
the FBI alone. An effective response requires a coordinated 
effort backed by the support of the hundreds of thousands of 
State, local, and tribal law enforcement officers on the front 
lines every day. The Office of Intelligence and Analysis plays 
a critical role in that effort.
    Over the course of the last several years, the Office has 
provided vital support to our law enforcement community. State 
and local fusion centers have benefited from I&A-developed 
training programs. DHS intelligence analysts have been detailed 
to fusion centers, serving alongside their State and local 
partners. I&A has disseminated numerous classified and 
unclassified intelligence products to help Federal, State, 
local, and tribal officials and the private sector prepare for, 
prevent, and respond to homeland security threats.
    Ms. Wagner, as the Chairman has pointed out, possesses 
considerable experience in managing the budget and analytic 
products of intelligence community elements. I am concerned, 
however, that she appears to lack experience working with State 
and local law enforcement, and that is an area that I will want 
to pursue today. It is an important responsibility of the Under 
Secretary. To meet the intelligence requirements of State and 
local law enforcement officials, who are among I&A's most 
significant intelligence customers, will require a sustained 
and focused commitment from the next Under Secretary.
    To continue to improve I&A and to integrate the DHS 
intelligence enterprise, the next Under Secretary will also 
need to address several significant challenges:
    Information sharing has improved, but there remains 
resistance to the culture of sharing that must exist across the 
Department, within the intelligence community, and between I&A 
and its Federal, State, and local partners. Important 
information is still not getting into the hands of those who 
need it at a level of classification where they can use it, 
plus we have seen what appears to be a failure of information 
sharing in the Fort Hood case.
    I&A must continue to focus on improving the quality of its 
analysis--producing timely and actionable information for its 
intelligence customers, not merely repackaging or forwarding 
analysis that is done elsewhere.
    I&A continues to rely too heavily on contractors to perform 
its work. While contractors can be an important force 
multiplier and provide a ``surge capacity'' on unique topics, 
I&A needs a strong base of Federal employees. Contractors 
currently make up approximately 63 percent of the I&A 
workforce. The new Under Secretary must correct this imbalance.
    I&A must adapt to the changing nature of the homegrown 
threat. As this Committee has found, self-radicalizing ``lone 
wolf '' terrorists are hard to detect and to deter. I&A and the 
entire intelligence and law enforcement community will have to 
develop new ways to respond to the growing threat of homegrown 
terrorism.
    I look forward to discussing these and other issues with 
Ms. Wagner today. Thank you, Mr. Chairman.
    Chairman Lieberman. Thanks very much, Senator Collins, for 
that very thoughtful statement.
    Senator Kirk, normally we limit the freedom of expression 
of Members of the Committee besides Senator Collins and myself 
at the outset so that we can get to the witnesses, but since it 
is only the three of us, would you like to make an opening 
statement?

               OPENING STATEMENT OF SENATOR KIRK

    Senator Kirk. Well, thank you very much, Mr. Chairman. You 
are very kind. I will make a very brief statement in welcoming 
Ms. Wagner and thanking you for holding this hearing about her 
important nomination to an important office. And I thank 
Senator Collins for her comments as well.
    As was said, Ms. Wagner has an impressive record in 
intelligence, having served at the Defense Intelligence Agency 
(DNI), the Central Intelligence Agency (CIA), and the House 
Permanent Select Committee on Intelligence (HPSCI). She may not 
know this, I did mention it to her a little earlier, but our 
career paths are not totally unconnected since I was an alumnus 
of Fort Benning in Columbus, Georgia, where Ms. Wagner was 
born, and I am also an alumnus of Fort Devens in Massachusetts 
where she served. So we know about neighborhoods, in any event.
    My interest will be hearing this morning from Ms. Wagner 
about the relationship and the intelligence needs at the State 
and local level. That is the line of the first responders. That 
is where the action and the antennae, if you will, and the ears 
and eyes are open for suspected threats. And that relationship 
with the first responders and the training and development of 
that area is going to be vitally important, I would think, 
under your watch, if you are confirmed.
    And the second area is the area of cyberspace and cyber 
attacks, which is obviously a network where those who are 
looking to do damage to us will focus their attention. And so 
the policing of the cyberspace area and also the sharing of 
information with those at the State and local level on 
intelligence needs, intelligence products that relate to things 
on their watch are going to be important as well. So I am going 
to look forward to your statement and maybe follow up with some 
specific questions in those two areas. So I welcome you. And I 
thank you, Mr. Chairman, for allowing me to make an opening 
statement.
    Chairman Lieberman. Thank you, Senator Kirk. I appreciate 
it.
    Ms. Wagner, as you may know, our Committee rules require 
all witnesses at nomination hearings to give their testimony 
under oath, so I ask you to please stand and raise your right 
hand. Do you swear that the testimony you are about to give the 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Ms. Wagner. I do.
    Chairman Lieberman. Thank you. Please be seated, and we 
would invite and welcome an opening statement and introduction 
of any family or friends that are with you today.

  TESTIMONY OF CARYN A. WAGNER,\1\ TO BE UNDER SECRETARY FOR 
INTELLIGENCE AND ANALYSIS, U.S. DEPARTMENT OF HOMELAND SECURITY

    Ms. Wagner. Thank you, Senator Lieberman. My husband, Chad 
Lash, is here, and a friend, Hope Headley.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Wagner appears in the Appendix on 
page 23.
---------------------------------------------------------------------------
    Chairman Lieberman. Good.
    Ms. Wagner. I am honored to appear before you as the 
nominee for Under Secretary for Intelligence and Analysis at 
the Department of Homeland Security. I would like to thank 
President Obama and Secretary Napolitano for having the 
confidence in me to nominate me for this position.
    I believe this position occupies a unique mission space 
between the national intelligence and law enforcement 
communities and the State, local, tribal, and private sector 
entities that are the front lines of homeland security. There 
is nothing more important than forging and fostering these 
connections. If confirmed, I believe I have the right skills to 
continue building on the foundation laid by Pat Hughes, Charlie 
Allen, and the current acting Under Secretary, Bart Johnson.
    As Senator Kirk mentioned, Mr. Chairman, I began my 
intelligence career as a signals intelligence officer in the 
U.S. Army, serving 8 years on active duty. In the years since, 
I have spent 7\1/2\ years at the Defense Intelligence Agency, 5 
years on the staff of the House Permanent Select Committee on 
Intelligence, 3 years in the private sector, and 3 years with 
the Office of the Director of National Intelligence. I have had 
a mixture of staff and line management positions, including 
leading a 2,000-person analytic organization within the Defense 
Intelligence Agency.
    I have also had a great deal of experience in the 
interagency environment, and I am familiar with all facets of 
the intelligence community. As Senator Collins noted, however, 
my experience with law enforcement has been more limited. I 
have had significant exposure while working at the DNI and in 
Congress to the capabilities and contributions of national law 
enforcement and homeland security agencies. I know I still have 
a lot to learn about State, local, and tribal law enforcement, 
which is why, if confirmed, I am eager to get started with the 
help of Principal Deputy Under Secretary for Intelligence and 
Analysis, Bart Johnson, who is a highly respected and decorated 
veteran of the New York State Police Force and who has done an 
outstanding job as Acting Under Secretary for the past 6 
months.
    I have had the opportunity to observe the Office of 
Intelligence and Analysis from the outside while I served in 
the Office of the DNI and on the HPSCI staff, and I am aware of 
the challenges that the organization still faces. Since my 
nomination, I have learned more about I&A's statutory mission, 
its ongoing activities and programs, and the Secretary's vision 
about where she would like to take the Department. I have 
formed some preliminary views on what needs to be done to 
enhance I&A's support to its customers and the Department and 
to improve its standing within the Intelligence Community and 
with its congressional overseers.
    If confirmed, I plan to focus my initial efforts in three 
main areas: First, creating a true homeland security 
information-sharing enterprise through a greater focus on the 
State and local fusion centers; second, creating a DHS 
intelligence enterprise as the Chief Intelligence Officer for 
the Department; and, third, putting in place the management 
processes necessary to improve the morale, efficiency, and 
professionalism of I&A as an organization.
    The unique niche that DHS I&A occupies, as defined by the 
Congress, is best defined by its responsibility to share 
information with State, local, and tribal authorities and the 
private sector on the full range of threats to the homeland--
often referred to as ``all threats, all hazards.'' First 
responders at the State and local levels are the Nation's first 
line of defense. They are uniquely able to identify anomalous 
or criminal behavior that could have a terrorist nexus. It is 
critical to educate them on terrorist indicators and behaviors 
as they are identified, to capture information that is lawfully 
obtained while strictly adhering to privacy, civil rights, and 
civil liberties regulations, and to share it with the larger 
intelligence and law enforcement enterprise. This is a 
multifaceted challenge that requires adapting analytic 
methodologies and product lines, a great deal of training at 
all levels of the enterprise, and information technology (IT) 
and information-sharing solutions to enable two-way information 
flow. It also requires an approach that is tailored to the 
different threat and operational realities of the individual 
fusion centers. If confirmed, I intend to develop a 
comprehensive, multi-year strategic plan for supporting the 
State and local fusion centers that can be used to guide 
resource and analytic planning.
    The role of Chief Intelligence Officer for the Department 
was created to empower the Under Secretary for Intelligence and 
Analysis to create a DHS intelligence enterprise that was more 
than the sum of its parts. DHS's operational components have 
intelligence elements that support their individual missions, 
and they also have data and expertise that can be leveraged by 
I&A in support of departmental priorities or national, State, 
local, and tribal clients, again, while strictly adhering to 
privacy, civil rights, and civil liberties regulations. In 
addition, the components may have intelligence or information 
requirements that are not adequately being met. I&A can help to 
meet those requirements by leveraging the rest of the 
intelligence community on their behalf, producing tailored 
products for or with them, providing analytic training and 
mentoring, and serving as an advocate for increasing their 
organic capabilities. By leveraging both the components' and 
I&A capabilities, we can build on the recent progress that you 
mentioned, Senator Lieberman, to create a true intelligence 
enterprise that enables I&A and the Department to achieve their 
full potential and best serve their customers. If confirmed, I 
will view the role of Chief Intelligence Officer for the 
Department as one of the most important of my missions and 
functions, and I will put in place a staff structure to manage 
it.
    In the management arena, I&A is still a young organization, 
and several recent studies have suggested that it suffers from 
a lack of institutionalized processes and poor morale. If 
confirmed, one of my biggest priorities will be developing and 
formalizing internal processes for planning, programming, and 
budgeting, performance measurement, and human capital 
management, which will include taking a hard look at 
contractors in the organization, what they are doing and 
whether it is appropriate, and trying to reverse that ratio 
that Senator Collins mentioned in her opening statement. I 
believe that communicating clear mission guidance, implementing 
fair and transparent processes for hiring, promoting, and 
rewarding people, and developing a structured and inclusive 
process for building the budget will go a long way toward 
improving morale. If confirmed, I also plan to make training a 
centerpiece of my agenda. I have already mentioned the 
importance of training to building information-sharing and 
intelligence enterprises, but it is equally important for 
professional development and morale within I&A. If confirmed, I 
will focus on ensuring that I&A analysts receive the training 
and tradecraft that they need.
    Finally, if confirmed, I will work hard to establish and 
maintain constructive partnerships, particularly with the 
Office of the DNI, the National Counterterrorism Center (NCTC), 
the FBI, and the Congress. If confirmed, I pledge to keep you 
fully informed of I&A's progress and activities. Thank you.
    Chairman Lieberman. Thank you very much. That was an 
excellent opening statement. Obviously, you know about this 
area and have thought some about it.
    We will have 7-minute rounds of questioning. I am going to 
start with the standard questions we ask of all witnesses.
    First, is there anything you are aware of in your 
background that might present a conflict of interest with the 
duties of the office to which you have been nominated?
    Ms. Wagner. No.
    Chairman Lieberman. Do you know of anything, personal or 
otherwise, that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated?
    Ms. Wagner. No.
    Chairman Lieberman. And, finally, do you agree without 
reservation to respond to any reasonable summons to appear and 
testify before any duly constituted committee of Congress if 
you are confirmed?
    Ms. Wagner. Yes.
    Chairman Lieberman. Thank you.
    Let me begin with just a few baseline factual questions 
that I thought about as you were delivering your opening 
statement. Do you know how many employees there are in the I&A 
Directorate now?
    Ms. Wagner. Senator, I believe there are between 600 and 
700 employees.
    Chairman Lieberman. That sounds right, yes. So it has grown 
in the years since it was created. Incidentally, I want to make 
an apology on the record to Pat Hughes. How quickly we forget. 
I mentioned Charlie Allen and Bart Johnson, but Pat Hughes got 
this started and, as part of a long career of service to our 
country, did a really great job.
    To the best of your knowledge--and maybe you have knowledge 
of this particularly from your time at DNI--what is the way the 
Under Secretary for I&A interfaces regularly with the rest of 
the national intelligence community? Are there regular 
meetings?
    Ms. Wagner. Yes, Senator Lieberman, there are regular 
meetings, and they take place at all levels of the 
organization. As the Under Secretary, if confirmed, I would 
attend Executive Committee (EXCOM) meetings hosted by the DNI, 
along with all the other members of the intelligence community, 
on topics ranging from the budget to current intelligence 
problems. I know that members of the I&A organization meet 
regularly with their counterparts on such things as 
establishing collection priorities and ensuring that they are 
communicated to the elements of the intelligence community (IC) 
that can answer them.
    There is also a lot of interaction between the analysts and 
the Deputy Director of National Intelligence for Analysis and 
the analytic ombudsman.
    Chairman Lieberman. Just in an informal, ongoing way.
    Ms. Wagner. Some formal meetings and a lot of informal 
coordination on analytic tradecraft, on the analytic guidelines 
that have been established in the wake of the Intelligence 
Reform and Terrorism Prevention Act. And there is a lot of 
interaction with the National Counterterrorism Center, of 
course.
    Chairman Lieberman. I was going to ask that. Does I&A have 
a representative there?
    Ms. Wagner. I&A has something called the Interagency Threat 
Assessment and Coordination Group (ITACG) that was created in 
legislation. It is made up of State and local law enforcement 
officials headed by an I&A employee who reports to Michael 
Leiter as the Director of the National Counterterrorism Center.
    Chairman Lieberman. So you are plugged into the National 
Counterterrorism Center, or I&A is, on a 24/7 basis.
    Ms. Wagner. Yes, Senator.
    Chairman Lieberman. So before I get to a couple of 
substantive questions, let us say that somebody in the 
Immigration and Customs Enforcement intelligence section sees 
something that is suspect of potential terrorist activity. In 
the normal course, how does that make its way up and through 
the rest of the intelligence community and to the law 
enforcement community?
    Ms. Wagner. In the normal course of events, in the course 
of executing their legal authorities, if they identify any 
information in accordance with those authorities, they would 
enter them into appropriate databases and notify the 
appropriate person. And I am not 100 percent sure at this point 
in my nomination to know exactly how that works, and I would 
expect to become familiar with that very early, if I am 
confirmed.
    The idea of identifying suspicious behavior and reporting 
it upward is something that I think is being addressed as part 
of the Suspicious Activity Reporting Initiative, which would 
apply much more broadly than just to components of DHS. And 
that would be, based on what I have read and learned, a very 
structured, formal process to ensure that the information is 
reported in a way that is useful and, again, consistent with 
privacy, civil rights, and civil liberties.
    Chairman Lieberman. Right. Is that process being initiated 
by the DNI?
    Ms. Wagner. I believe it is being initiated from the White 
House with the cooperation----
    Chairman Lieberman. Through John Brennan.
    Ms. Wagner [continuing]. Of multiple elements of the 
Executive Branch.
    Chairman Lieberman. Yes. Well, this is really important, 
and I am going to go now to a question about what happened at 
Fort Hood with Major Hasan. Again, hindsight is always clearer, 
but it was really about a judgment call made by the people at 
the Joint Terrorism Task Force (JTTF) who looked at the e-mails 
apparently between Hasan and the radical imam in Yemen and what 
decision they made about whether to share that or not. So this 
heightened sensitivity, very difficult, I understand, because 
the data flowing by people and all the components of the 
Department of Homeland Security and intelligence divisions 
every day is large, but how to sensitize them to err on the 
side of caution when they see something that worries them, I 
think without prejudging, is going to be one of the conclusions 
we are going to make about the Hasan case and the people at 
JTTF who happen to be looking at those e-mail transcripts. Do 
you agree? I am not asking for a judgment on the Hasan case, 
but just generally about the handling of suspect data.
    Ms. Wagner. Yes. Generally, I would agree. I am not, as the 
nominee, briefed on all the details of the Hasan case.
    Chairman Lieberman. Understood. This Committee, as you 
probably know, has launched an investigation into the terrorist 
attack at Fort Hood by Nidal Hasan. I&A plays an important role 
today with respect to radicalization and violent Islamist 
extremism, producing analytic reports and disseminating them 
often at the ``For Official Use Only'' (FOUO) level to key 
partners in State and local law enforcement.
    For instance, and of real interest, I&A issued reports at 
the FOUO level to State and local law enforcement in September 
2008 and January 2009 on Anwar al-Awlaki, the radical Yemeni-
American imam who, according to media reports, was involved in 
this e-mail correspondence with Hasan.
    I want to ask you what you believe I&A's responsibility 
should be with respect to analysis of radicalization and 
violent Islamist extremism and how should those 
responsibilities be distinct from the FBI or, in another 
sense--less relevant, but relevant--the National 
Counterterrorism Center.
    Ms. Wagner. Thank you for that question because I have 
actually given that some thought.
    Chairman Lieberman. Good.
    Ms. Wagner. I think that I&A plays an important role both 
before and after and, to a lesser extent, during these kinds of 
investigations. And certainly analysis of radical and violent 
extremism is an appropriate mission, with the emphasis on the 
violent part.
    I expect that they would coordinate closely with analysts 
who are working on this issue at NCTC and other elements of the 
community to ensure that the products are meeting the needs of 
their specific State, local, and tribal customer sets. Where 
they do not, I would expect I&A to try to fill those gaps and 
tailor those products or take them to the next level since the 
goal is to leverage that knowledge and expertise to provide 
actionable, useful information that the first responders/
preventers can use to identify these behaviors early on and 
potentially stop any terrorist plots from going on.
    So before something would happen, you would expect, exactly 
as you said, that I&A would be putting out products to provide 
situational awareness and, wherever possible, specific 
indicators and actionable intelligence for use for the fusion 
centers to pass on in their areas of jurisdiction.
    During an investigation, they would support the FBI by 
ensuring that all of the information that resides within the 
DHS components and that they have gleaned from State, local, 
and tribal sources would be brought to bear to support the 
investigation. And afterward, they would participate in any 
after-action lessons learned and, again, try to translate that 
into useful, actionable products that could be put out to 
State, local, and Tribal law enforcement.
    Chairman Lieberman. Thanks. I appreciate the answer. It is 
clear you have thought about it. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Ms. Wagner, you have talked about the reports and products 
that I&A produces. Obviously, it is critical that those 
products be of high quality. Earlier this year, I&A produced a 
report on right-wing extremism in the United States that was 
widely panned. It was considered to be poorly written and 
inadequately sourced. It needlessly offended a number of 
veterans organizations such that Secretary Napolitano had to 
make apologies for the Department.
    It is also of concern to me to learn, when we looked into 
this, that the Office of Civil Rights and Civil Liberties had 
not concurred with the release of the report, and yet it was 
released. The Office of General Counsel had not reviewed the 
report, and yet it had been released.
    Have you read this report?
    Ms. Wagner. Yes, Senator Collins, I have.
    Senator Collins. What is your judgment of the quality of 
the analysis in the report?
    Ms. Wagner. I believe that the report showed some serious 
shortcomings in tradecraft and in concern for privacy, civil 
rights, and civil liberties.
    Senator Collins. Do you believe that the Department, and 
I&A in particular, has now adopted a sufficient process to help 
ensure the quality of future reports and prevent poorly sourced 
and poorly written reports such as this one from being released 
in the future?
    Ms. Wagner. I know that they have taken steps to put in 
place a process for vetting, review, and release of products to 
ensure that the tradecraft is rigorous and that the appropriate 
concerns for privacy, civil rights, and civil liberties have 
been accommodated in the products. If confirmed, I will 
certainly review that process to make sure it is adequate, and 
I intend to focus a great deal, along with Dawn Scalici, who is 
the new Deputy Under Secretary for Analysis and has worked at 
the National Counterterrorism Center, to ensure that we are 
inculcating the analysts with the appropriate tradecraft, 
providing them mentoring, taking advantage of the analytic 
ombudsman at the DNI, and everything we need to do to raise the 
level of tradecraft in I&A.
    Senator Collins. The Homeland Security Institute recently 
reviewed the activities of the Office, and among its findings 
was that it concluded that I&A had not clearly defined the 
value that it adds to the products that we just discussed that 
are distributed to stakeholders. Clearly, our vision was that 
I&A would do more than simply disseminate intelligence reports 
prepared by other components of the intelligence community. 
That, too, is important, but what do you see as I&A's role in 
adding value to analysis that may be prepared elsewhere to make 
sure that it meets the needs of your customers?
    Ms. Wagner. Senator Collins, I think it has to start with 
ensuring that we have the best understanding of what the 
requirements of the customers are, and part of that is going to 
involve sending more I&A people out to the fusion centers to 
live that life for a while and possibly even bringing some of 
those folks back for a mutual exchange of perspectives.
    I am going to rely a lot on Bart Johnson to help me as I go 
out to the fusion centers to understand what should we be 
providing, and then I think what I&A needs to do--and will do 
if I am confirmed--is examine how do you best meet those 
requirements. In some cases, you can meet it by using the 
analysis produced by other elements of the community with a few 
changes. In others, you are going to have to tailor that or, 
again, take it that next step, sort of like what the ITACG 
folks do at NCTC where they can sometimes find a paragraph 
within a highly classified report that is classified at a much 
lower level, but includes a nugget of really useful information 
on a terrorist methodology that you can then extract out, 
package, add whatever needs to be added, and get out to the 
customers.
    In some cases, we may find that the intelligence community 
is not producing the information we need to meet those 
requirements, and then I&A would have to determine whether they 
want to establish their own ability to do that kind of original 
analysis or leverage a task on the intelligence community.
    So I think the answer is to figure out the best way to meet 
the need and get it done, and it will be a combination of 
tailoring an original analysis and levying requirements on the 
rest of the community.
    Senator Collins. You mentioned in your opening statement 
that although you have a great deal of experience on Capitol 
Hill and in certain intelligence agencies, you have not worked 
closely with State and local law enforcement and tribal law 
enforcement, and that is a critical role that the Department of 
Homeland Security plays.
    Other than relying on and learning from Deputy Secretary 
Johnson, who, I agree, is a tremendous asset to you, how do you 
intend to compensate for that gap in your experience? What will 
you do beyond turning to your Deputy?
    Ms. Wagner. I intend to travel to some of the State and 
local fusion centers and basically meet the people, talk to 
them, and try to understand what it is that they need and what 
they are looking to I&A to provide. And I will, obviously, read 
as much as I can. I will try very hard to learn as much as I 
can as quickly as I can.
    Senator Collins. Thank you. Thank you, Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Collins. Senator Kirk.
    Senator Kirk. Thank you, Mr. Chairman.
    This is in part a follow-up to Senator Collins' question, 
and it has to do with what I will call the local, State first 
responders and so forth who are the front line of this effort 
and so many others. And I know that the Department is making 
some strides to, shall we say, increase progress on its 
information sharing and that you particularly, if confirmed, 
hope to do more in that area.
    One of the things that you may hear as you travel around 
and visit is that the intelligence products are sometimes not 
relevant or helpful to those at the State and local level, that 
they may be just not useful and too dense and so forth. So one 
of the things that perhaps you could speak to this morning is, 
if you have enough knowledge at this point, what you might do 
about it, is how you intend to improve and strengthen 
information sharing, and I am especially interested in how you 
would provide tailored intelligence products so they are more 
relevant and useful on the front lines.
    Ms. Wagner. Thank you, Senator Kirk. I do think that there 
is somewhat of a parallel--not an exact parallel, but somewhat 
of a parallel--to work that I have done in the past in the 
military. When I was at the Defense Intelligence Agency (DIA), 
one of the functions of the analytic organization that I led 
was to provide actionable and useful intelligence to deployed 
forces in theater. And it was a similar exercise of, is this 
just sort of academic information that is not necessarily going 
to help them, or is this something that they can actually use 
and act on.
    There is also a long tradition in the military of being 
able to put out information at lower classification levels 
without sources and methods that then can be acted on by 
tactical forces. And so I think there are some parallels in my 
experience.
    But I will focus on looking at what is the bottom line of 
these products. If I read it, do I see that there can be some 
action taken, some training provided, something that will 
actually move the ball down the field, if you will. And I know 
that Bart Johnson is focused on that as well, and he and the 
ITACG have actually already started, I think, a very nice 
product line called the Roll Call Release, which is a one-pager 
designed for the local police forces to use during their roll 
calls. And those are the kinds of things I think we need to 
focus on.
    Senator Kirk. The other aspect of this is the collection of 
information at the local level. In some areas, it has been 
suggested that, as the information is collected and then 
hopefully shared, training would be more helpful so that those 
on the front line could be more sophisticated perhaps in how 
and what to do with that information. Do you have some thoughts 
about that and how you might be able to help on the training 
aspect of the front-line folks again?
    Ms. Wagner. I think training is absolutely critical. The 
State and local fusion centers are State-run entities. They do 
not belong to the Federal Government, and they are part of an 
enterprise. They need to be mutually reinforcing, and we need 
to support them, and they are providing information back to us.
    One of the things that I&A and the Department can do to 
help them is to help train the people that are there, both the 
I&A people and the other folks at the fusion centers, so that 
they understand the legal frameworks within which they are 
collecting information and the requirements for safeguarding 
that information, how long it can be stored, and that is 
definitely something that, if I am confirmed, I will focus on, 
trying to ascertain what training is needed and start providing 
it to anybody actually who is interested.
    Senator Kirk. If I may, I am just going to thank you for 
that. I wanted to switch now, if I could, to the cyberspace 
issue, and, again, it is the collecting and disseminating of 
cyberspace information and possible threats from the local 
level to the sharing entities and also the training of local 
folks within the cyberspace area because that, it seems to me, 
in this age and moving forward is going to be a potential 
battleground, if you will, that we need to protect. So any 
thoughts that you want to offer with respect to that?
    Ms. Wagner. Well, I agree with your assessment of the 
cybersecurity threat. I believe that right now I&A's efforts in 
cybersecurity are focused on critical infrastructure 
protection, and there is an analytic effort that is taking 
place as part of the joint threat vulnerability analysis for 
critical infrastructure. I do not know yet whether that is 
sufficient, and if confirmed, one of the things I intend to do 
is to meet with Phil Reitinger, who is the Deputy Under 
Secretary for Cybersecurity within the Department, and find out 
ways that I&A can team with him to provide more analytic 
support to what is going on as the cybersecurity effort ramps 
up. And one of the key areas that I will discuss with him is 
the information-sharing piece and what role I&A should play in 
that. And I will do everything I can to support the 
Department's efforts to ramp up that capability consistent with 
the overall Administration's approach.
    Senator Kirk. And just perhaps a final follow-up, if I may. 
Tell me, if you know, what the Department's role in information 
sharing is with the private sector, and particularly I am 
thinking, obviously, about our electric national grid system 
and utilities and the danger or threat that might pertain with 
the kidnapping of key products or the dismantling of certain 
transformers and the impact it might have on the Nation's 
communications system and other aspects of electric-based 
transmissions.
    Ms. Wagner. I believe the Department has a very robust 
information-sharing effort with the private sector in all of 
the key domains for critical infrastructure protection. I&A's 
role in that is working with the critical infrastructure 
protection folks to assess the threat to the infrastructure, so 
I&A teams with the analysts who are looking at the 
vulnerability, and they bring the threat component, and those 
products are produced jointly and they are shared with the 
private sector components of each of the domains that they deal 
with.
    Senator Kirk. I am beyond my time, but I would only repeat 
that, if you are confirmed, it seems to me that in the age in 
which we live and to which we are headed, that is a very 
sensitive and potentially threatening area of technology that 
we need to protect for the purpose of the security of our 
homeland.
    Ms. Wagner. Yes, Senator, I agree.
    Senator Kirk. Good. Thank you very much, Ms. Wagner. Thank 
you, Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Kirk.
    I have one or two more questions. Obviously, my colleagues 
are welcome to ask questions, too. We just will do a quick 
second round.
    I want to come back to these two great areas of potential 
for value-added through the Intelligence and Analysis 
Directorate. We always, after September 11, 2001, use the 
metaphor of connecting the dots on the board, and it seems to 
me that in your role you have the ability to bring quite 
relevant dots to the board from within the Department of 
Homeland Security and from State and local.
    In the 9/11 Act of 2007, as I am sure you know, we gave the 
Under Secretary strong authorities with respect to the 
management and integration of intelligence components within 
the various agencies of DHS, including authorities to develop a 
consolidated intelligence budget for the intelligence 
components of the Department. I wanted to ask you if you have 
thought about how you would use that authority and others to 
harmonize policies, standards, and processes within the 
Department in a way that would not only enhance integration but 
make it more likely that you would bring dots up from within 
the Department to put on the board to be connected.
    Ms. Wagner. Yes, Senator, I have thought about that. I do 
not know that I have an answer at this point, but I think that 
it is a very powerful tool that you have provided to the Under 
Secretary, and I would expect that it could be very useful in 
helping to evaluate the capabilities of the intelligence 
elements of the components of the Department to ensure that 
they are providing optimal support to their components and also 
to put in place the infrastructure to make sure that we can get 
the information and expertise that resides there to bring to 
bear on other problems, both to support other components and 
other parts of the community.
    So I think it is a useful tool. I also think that 
potentially there needs to be sort of a staff element within 
I&A that is focused on administering this effort. And that is 
something that I have been thinking about and, if confirmed, I 
will certainly explore.
    Chairman Lieberman. Good. The final question is about the 
other part of it, which is State and local, and we had the 
exchange with Senator Kirk about information sharing. There is 
greater access--but not as great as it should be--to databases. 
Now, I know there have been a couple of cases at least that I 
know of where a local or State police officer stopped someone, 
had a suspicion, plugged into a terrorism watchlist, and 
actually apprehended people who turned out to be planning 
terrorist activities and were charged with violations of law.
    It seems to me that the other part of this may be to try to 
train, in some sense educate, the hundreds of thousands of 
State and local law enforcement officers and tribal law 
enforcement officers we have across the country to think of 
themselves as not just first responders but first preventers 
and to see themselves as intelligence gatherers. A police 
officer walking along the beat has a responsibility to that 
neighborhood, etc. But he or she may see something that has an 
intelligence aspect to it, and to educate them to report on it 
is, I think, an important tool. I have no idea what is going on 
in this regard. I do not know whether you do, but I wanted to 
mention it to you.
    Ms. Wagner. Well, I agree. They are absolutely critical. 
They are the first line of defense. And I think the kind of 
product that I mentioned earlier, the Roll Call Release that 
you can send out to all of the local police departments so that 
they can brief their folks, is a good step in that direction, 
and also training, obviously.
    I think there will be a great deal of training that is 
going to be associated with the Suspicious Activity Reporting 
Initiative. When that moves from the pilot project to be more 
broadly implemented, it will be absolutely key for that to 
happen so that what you are getting is quality information.
    So I agree with you, and I need to explore, if I am 
confirmed, the ways to make every first preventer aware of the 
kind of information that would be useful if it was passed back 
up the line.
    Chairman Lieberman. Good. Thank you. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Just one final question. I&A has significant human capital 
issues. It has a very lengthy hiring process that often 
discourages highly qualified applicants so they get snapped up 
by other agencies at other levels of government. It also has 
problems in providing a career path for individuals who are 
hired, and thus, I&A has individuals working there with low 
morale and with a lot of turnover. And that has led to an 
overreliance on contractors, which in turn limits opportunities 
for people who are working there as Federal employees. So it is 
a vicious circle in many ways.
    In 2007, the Government Accountability Office (GAO) did a 
review and discovered that DHS had a particularly high number 
of contractors who were performing inherently governmental 
functions, and that should not occur. We held a hearing on that 
GAO report, and to see a couple of years later that I&A still 
has a workforce that is made up of more than 60 percent 
contract employees is very disturbing because it shows that no 
one is taking this problem seriously.
    How do you intend to address the workforce needs of I&A? 
Obviously, we need to have long-term career employees at I&A 
that will help to improve the quality and the quantity of the 
products that they are producing, so it is an important issue. 
So what steps would you take to reduce the reliance on Federal 
contractors and build a highly qualified cadre of Federal 
employees?
    Ms. Wagner. I will rely on the guidelines that exist from 
the Office of Management and Budget (OMB) and the DNI on the 
use of contractors to inform what I do. But I also intend to 
basically, if I am confirmed, look across the board at who is 
doing what and map out a strategic human capital plan that says 
how many people we think we need for these functions.
    There are some functions that are on a growth path, like 
potentially cybersecurity analysis, and others that potentially 
may not need all the resources currently devoted to them. We 
will try to reallocate. We will try to look at making sure that 
contractors are being used in an appropriate way consistent 
with the DNI and OMB guidelines.
    And as for the hiring, I had a similar challenge in DIA, 
and what I will do initially is map out the entire hiring 
process and try to find out where the problems are. There is 
always going to be a percentage of that process from when you 
think about hiring someone to when they walk in the door that 
you do not control. But when you map it out, you actually find 
out that you control a lot more of it than you thought. And the 
things that I can affect, if I am confirmed, I am going to make 
a matter of my management leadership emphasis to try to bring 
some new blood and some new people into those billets.
    Senator Collins. Thank you.
    Chairman Lieberman. Very good. Thanks very much. Thanks for 
appearing before the Committee. Thanks for your service to the 
country up until now, and if you are confirmed, obviously, we 
look forward to working with you as you develop this very 
important function of the Department, over which we have an 
oversight responsibility, to yet greater levels of its 
potential.
    Without objection, the record will be kept open until 12 
noon tomorrow for the submission of any written questions or 
statements, and we will try our best to see if we can get you 
confirmed as soon as possible.
    Ms. Wagner. Thank you, Senator Lieberman and Senator 
Collins.
    Senator Collins. Thank you.
    Chairman Lieberman. Thank you very much. The hearing is 
adjourned.
    [Whereupon, at 11:02 a.m., the Committee was adjourned.]














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