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                                                        S. Hrg. 108-835

           REFORM OF THE UNITED STATES INTELLIGENCE COMMUNITY

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

                                HEARINGS

                               BEFORE THE

                    SELECT COMMITTEE ON INTELLIGENCE
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                  AUGUST 18 2004 AND SEPTEMBER 7, 2004

                               __________

      Printed for the use of the Select Committee on Intelligence


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                    SELECT COMMITTEE ON INTELLIGENCE

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

                     PAT ROBERTS, Kansas, Chairman
          JOHN D. ROCKEFELLER IV, West Virginia, Vice Chairman
ORRIN G. HATCH, Utah                 CARL LEVIN, Michigan
MIKE DeWINE, Ohio                    DIANNE FEINSTEIN, California
CHRISTOPHER S. BOND, Missouri        RON WYDEN, Oregon
TRENT LOTT, Mississippi              RICHARD J. DURBIN, Illinois
OLYMPIA J. SNOWE, Maine              EVAN BAYH, Indiana
CHUCK HAGEL, Nebraska                JOHN EDWARDS, North Carolina
SAXBY CHAMBLISS, Georgia             BARBARA A. MIKULSKI, Maryland
JOHN W. WARNER, Virginia
                   BILL FRIST, Tennessee, Ex Officio
                     HARRY REID, Nevada, Ex Officio
                              ----------                              
                      Bill Duhnke, Staff Director
               Andrew W. Johnson, Minority Staff Director
                    Kathleen P. McGhee, Chief Clerk


                                CONTENTS

                              ----------                              

                                Day One

                                                                   Page

Hearing held in Washington, DC:
    August 18, 2004..............................................     1

Witness Statements:

    Boyd, General Charles G., USAF (Ret.), President and CEO, 
      Business Executives for National Security..................    22
        Prepared statement.......................................    25
    Kay, Dr. David, Senior Research Fellow, The Potomac Institute 
      for Policy Studies.........................................    13
        Prepared statement.......................................    18
    Zegart, Dr. Amy B., Assistant Professor, Department of Public 
      Policy, School of Public Affairs, University of California.     6
        Prepared statement.......................................     9

Supplemental Materials:

    Fact Sheet: Key Bush Administration Actions Consistent with 
      9/11 
      Commission Recommendations.................................    44

                              ----------                              

                                Day Two

                                                                   Page

Hearing held in Washington, DC:
    September 7, 2004............................................    81

Witness Statements:

    Kean, Hon. Thomas H., former Chairman, National Commission on 

      Terrorist Attacks Upon the United States...................    89
    Hamilton, Hon. Lee H., former Vice Chairman, National 
      Commission on Terrorist Attacks Upon the United States.....    90

    Lehman, Hon. John F., former member, National Commission on 
      Terrorist Attacks Upon the United States...................    88
        Prepared joint statement.................................    94

Supplemental Materials:

    Letter dated September 7, 2004 from Bob Kerrey, President, 
      New School University......................................    88
    CRS Report for Congress: Proposals for Intelligence 
      Reorganization 
      1949-2004, September 8, 2004...............................   135

 
           REFORM OF THE UNITED STATES INTELLIGENCE COMMUNITY

                              ----------                              


                                DAY ONE

                       WEDNESDAY, AUGUST 18, 2004

                      United States Senate,
           Senate Select Committee on Intelligence,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:41 p.m., in 
room SH-216, Hart Senate Office Building, Hon. Pat Roberts 
(Chairman of the Committee) presiding.
    Committee Members Present: Senators Roberts, Hatch, DeWine, 
Bond, Snowe, Hagel, Chambliss, Rockefeller, Levin and Mikulski.

             OPENING STATEMENT OF HON. PAT ROBERTS

    Chairman Roberts. The Committee will come to order.
    Today the Senate Select Committee on Intelligence meets in 
open session to continue our examination of intelligence reform 
issues. Since the Congress adjourned on July 22, 11 committees 
have held or intend to hold a total of 21 hearings on the topic 
on intelligence reform. I welcome my colleagues on other 
committees as they begin to examine the issues with which this 
Committee has wrestled for over 27 years.
    As anyone who is familiar with the intelligence community 
well knows, it reaches across many government agencies and 
disciplines. So it is appropriate that other committees within 
the Senate and House take an interest in the facets that touch 
upon their respective areas of responsibility. We agree with 
that.
    There is, however, one committee whose jurisdiction and 
mandate encompasses every facet of this topic, and that is the 
Senate Intelligence Committee. It is this Committee that must 
weigh not only the interests of the national users of 
intelligence, but also the military users. We must, by 
necessity, balance the needs of each without presuming the 
primacy of either.
    As this Committee has attempted reforms over the years, 
many of which were intended to accomplish the same goals that 
we are discussing today, we have found that other committees of 
jurisdiction often hold the keys to success. It is with that in 
mind that we intend to work very closely with our counterparts 
on the other committees to ensure that they have the full 
benefit of this Committee's long history and experience and 
also professional staff expertise.
    As I stated publicly on Monday before the Government 
Affairs Committee, we are working to draft legislation that we 
will share with the appropriate committees when we have reached 
general agreement among our own ranks. I believe we can 
accomplish that within a relatively short, short period of 
time.
    Our goal is to address the major concerns outlined by the 
9/11 Commission to implement their goals as well as those of 
the joint and Senate-House inquiry into 9/11, and our report on 
prewar intelligence on Iraq and this Committee's experience 
over the past two decades. Translating those important ideas, 
some of which are long overdue, into legislative language is 
very complicated, however. As they say, the devil is in the 
details.
    As members of this Committee well know, the missions of the 
intelligence community are as diverse as the 15 intelligence 
community members themselves. While counterterrorism rightly 
stands foremost among our concerns, we must not legislate 
reform that hardwires an intelligence community to fight a 
single threat, as we did with the cold war.
    Terrorism will not be the last threat that this Nation 
faces. Therefore, we must provide a legal framework and provide 
ample resources to allow the executive branch the flexibility 
required of the demanding and changing threats. Congress should 
then be prepared to provide its required oversight. Our ability 
to do so effectively should also be examined closely, as 
recommended by the Commission.
    In this discourse on reform, many of the terms used to 
craft the ``lanes in the road'' and justify the missions of any 
particular agency are ambiguous, even to the experts, and some 
may even be obsolete. I would challenge anyone to clearly 
define the boundary between national intelligence and military 
intelligence or where the strategic intelligence ends and the 
tactical intelligence actually begins.
    The light infantry forces fighting us in Vietnam were a 
tactical concern. The light infantry forces fighting us in Tora 
Bora in Afghanistan are of national interest in our global war 
on terrorism. The small boat that killed 18 of our sailors on 
the USS COLE may have been a tactical concern to the commander 
but it was of great strategic concern to our national 
policymakers. How we consider tactical elements both as 
consumers and collectors of intelligence, and vice versa, for 
national entities is central to much of this debate.
    We must also seriously discuss whether the constructs of 
the past have any meaning for the future. By this, I am 
referring to the primacy of the Department of Defense vis-a-vis 
the defense agencies, such as the National Security Agency, the 
National Geospatial-Intelligence Agency, the National 
Reconnaissance Office, and the Defense Intelligence Agency.
    Why would a national intelligence director with actual 
budget and line authority over these agencies be any less 
responsive to the needs of the Department of the Defense than 
the Secretary of Defense? They both must answer to the same 
President and achieve jointly the same goals. I suspect the 
answer lies in realizing that easy separations are no longer 
feasible. This will provide even further impetus to breaking 
down institutional structures, biases, and cultures. We often 
refer to those as stovepipes.
    These divisions exist not only between agencies, but 
between the concepts of strategic versus tactical and national 
versus military. Reflecting these ambiguities and divisions are 
intelligence budgets which are often similarly very vague. The 
National Foreign Intelligence Program, or NFIP, funds all non-
DOD intelligence activities as well as four national entities 
that reside within the Department of Defense.
    The Joint Military Intelligence Program, or JMIP, funds the 
DOD-level activities of interest to more than one service or 
the unified commands. The military services Tactical 
Intelligence and Related Activities, or TIARA, fund their 
individual intelligence activities. Yet JMIP and TIARA monies 
also help fund national agencies. Budget lines are often as 
fuzzy as functional lines.
    As we deliberate granting further NFIP budget authorities 
to a national intelligence director, we must be certain to 
understand the often-nuanced ramifications to the Department of 
Defense's other intelligence budgets, the JMIP and also TIARA. 
We must also clearly understand what budget authority means and 
how we intend to distinguish it from the authorities already 
granted the Director of Central Intelligence in the National 
Security Act of 1947. I would repeat that: already granted the 
Director of the Central Intelligence in the National Security 
Act of 1947.
    Underlying actual statutory authorities is a bureaucratic 
and political dynamic and, as General Myers said yesterday 
before the Armed Services Committee, a corporate culture that I 
believe we will never be able to legislate away. In other 
words, we should be realistic in what we can expect even if we 
make significant changes and how long it will take for those 
changes to work their way down to the working level, i.e., to 
the warfighter or that intelligence agent or that intelligence 
analyst.
    The fact that such changes will take time to effect is, 
however, only more reason for Congress to act quickly. One 
thing is certain: We are in a window of opportunity that should 
not be squandered. Rarely does the President and the entire 
Congress focus on a single issue with such intensity.
    If the elected officials of the executive and legislative 
branches of government are once again unable to change the 
bureaucracies that they manage and oversee, respectively, we 
have done a grave disservice to the people who bestowed this 
high honor upon us. I hope that today's hearings will 
illustrate that necessity and provide further insights into 
these very difficult issues.
    So today we welcome Dr. Amy Zegart, Dr. David Kay and 
General Charles Boyd. All have extensive backgrounds in 
national security and intelligence issues. All bring different 
experiences and views of these same issues. Because none are 
currently serving in the government, all are what we call 
disinterested parties with a great deal of expertise.
    The members have full bios for each in their binders. Those 
are at tabs B, C and D, I would tell my colleagues.
    Dr. Amy Zegart is currently an assistant professor at the 
UCLA School of Public Affairs and author of the book, ``Flawed 
By Design: The Evolution of the CIA and the JCS and the NSC.''
    Dr. David Kay is a very well-known witness to this 
Committee, as an expert on counterproliferation issues, most 
recently as the head of the Iraq Survey Group. I should mention 
that both Dr. Kay and Ms. Zegart were profiled by the National 
Journal as key experts in the ongoing debate for intelligence 
reform.
    General Charles Boyd, United States Air Force, retired, 
brings his valuable experience as the executive director of the 
Hart-Rudman Commission, as well as hard-won experience from 35 
years of active duty service, which included 2,488 days as a 
prisoner of war.
    Let me say this on behalf of General Boyd. We've had the 
Bremer Commission, we've had the Gilmore Commission, we've had 
the CSIS study, we've had the Aspin-Brown Commission and we 
have had the Hart-Rudman Commission. General Boyd somehow--
somehow--with a magical ability to bring people together, got 
Julian Bond, Newt Gingrich, Warren Rudman and Gary Hart all to 
work together. This is no small achievement.
    We thank our witnesses for being here today. Before I turn 
to our witnesses for any opening statement they wish to make, I 
recognize my distinguished colleague and friend, Vice Chairman 
Rockefeller.

            STATEMENT OF HON. JOHN D. ROCKEFELLER IV

    Vice Chairman Rockefeller. Thank you, Mr. Chairman. My 
remarks will be brief and deal more with process.
    I also welcome our witnesses today, one of them back for 
the third or fourth time, and I honor their service and their 
experience. Dr. Zegart, you were on the National Security 
Council, weren't you?
    Dr. Zegart. Yes.
    Vice Chairman Rockefeller. See, that's not necessarily--if 
you're a UCLA law professor, people don't make the quick jump 
to NSC, but that becomes a very important part of your 
expertise, so there's some questions I want to ask you.
    The Chairman I think has been very good in making sure that 
we get started on this. We got started on this actually before 
we went out of session, we had a hearing on reform. I think, 
like all of my colleagues, we have looked over the 9/11 
Commission book, read it, looked at the reform proposals, and I 
think probably for the most part agree with many of them, 
making up our minds about some of them and listening to experts 
like yourselves to help us get closer to the rest.
    We've also looked at proposals offered by Senator 
Feinstein, Senator Snowe, Representative Harman, and others 
both inside and outside the government. Our hearings and those 
held by other committees have been invaluable to looking at 
those relative merits in terms of the 9/11 recommendations.
    So in terms of process, as the Chairman has indicated, over 
the days and weeks that are before us, I'll be working with the 
Chairman, also with members on both sides, committee members, 
to pull together what we achieved in our first report, which 
was a bipartisan consensus, which doesn't happen very often 
around here, but did happen on WMD, which was not necessarily 
an easy subject.
    We had a 17-to-nothing vote because we just got together 
and decided we were going to put other interests above whatever 
small disagreements we might have.
    We have to restructure. We have to strengthen our 
intelligence community. We know that.
    I've already shared with the Chairman, for my part, my 
views--written views--as well as my colleagues on the 
democratic side--my views on what the 9/11 Commission's are 
like: Do I say, ``yes'', ``no'', ``maybe''; yes, but modified; 
no, but modified, to list those out, to give a sense of at 
least how I come down on some of them so far.
    I know that the Chairman also is in the process of writing 
or has written either a bill or a list of principles and 
recommendations. I look forward to getting those soon so that I 
can see where our views are common and we can continue our 
discussion.
    But it's not just a discussion between the Chairman and the 
Vice Chairman. It's a question in that the Intelligence 
Committee has general responsibility for oversight. It's what 
do all of our colleagues think. This is a process that clearly, 
in order to achieve a bipartisan consensus, we have to go 
through and take very seriously. The Chairman and Vice Chairman 
have certain things they can do, but one of the things that we 
cannot do is make decisions on behalf of our colleagues, and we 
don't wish to because we want to have a bipartisan consensus on 
this.
    So we have to bring our collective expertise and judgment 
to the ongoing reform debate in the Senate and to the Congress 
as a whole.
    The Senate leadership, as the Chairman pointed out, asked 
the Government Affairs Committee to take the lead in drafting 
reform legislation. I've talked with both Susan Collins and Joe 
Lieberman, and pledged to them--twice, actually, now--and 
pledged to them our assistance as this legislative process 
moves forward, because we want to be helpful. We want to help 
shape the debate. We are a part of the debate formally by 
resolution and also, obviously, by the expertise of the 
Committee. Both agreed that our Committee has a very strong 
place at the table during these discussions.
    I'm hopeful, and I believe that the Chairman shares my 
hope, that our Committee will be in a position to share with 
the Government Affairs Committee the fruits of what we 
collectively, as a committee, think when the Senate reconvenes 
next month, or shortly thereafter. That's easier said than 
done. There's a convention coming up. People are still away in 
some cases. So there's a lot of pressure on us to bring 
ourselves together.
    I think it's not going to be actually as difficult a 
process as I would have expected. The Chairman and I agree on a 
great deal. We've already found that out. I think that there 
will be a lot of agreement, and then there will be some 
argument.
    But the bipartisan consensus is very, very important to 
both the Chairman and myself. It's what allows things to stand 
out around here. And tasking ourselves, you know, if the 
Congress and the President can't reach agreement on meaningful 
reform, then what are we here for?
    Some people say, ``Well, we're trying to make a show of it 
in August.'' Yes, we're making a show of it in August. But it's 
more than a show; it's laying a predicate. When you take 
actions by holding committee hearings, by inconveniencing folks 
like yourself to come and testify before us, we prepare 
ourselves for this, we do our commission homework, which is 
basically what we've been doing.
    I didn't even go to our national convention, but just 
stayed home and worked on the 9/11 Commission, because I 
thought it was--not more important, I guess--but yes, more 
important, maybe, in that the outcome in one is fairly certain 
and the outcome in the other is relatively uncertain.
    So we have to do our job or we will have failed the 
American people. That is not something that Chairman Roberts 
and I choose to do.
    I thank the Chairman.
    Chairman Roberts. Let me just say that I want to thank my 
colleague. I think we burned the phone lines down in the last 2 
weeks and we've met individually. I appreciate his summary in 
regards to what the 9/11 Commission has suggested and polling 
his membership. I've shared that with our side.
    I might add that we are also working with the 
administration, and that is a work in progress. Our national 
security director, Ms. Rice, has indicated there will be 
mechanisms that will be made public, and we've urged her to do 
that. We have shared sort of an idea, in regards to what we 
both believe, with the administration. We have done that with 
the leadership. As the Vice Chairman has pointed out, we have 
done that with Senator Lieberman and Senator Collins and the 
Government Affairs members.
    We're also doing that in reaching out to the staff members 
of the 9/11 Commission and that of the families. While there 
are a lot of, I guess I would say, players or moving parts here 
that have to come together to fit what we hope is realistic and 
credible and practical intelligence reform, we are reaching out 
as best we can.
    We're doing so because we know we have 22 excellent 
professional staffers and we have a history in regards to the 
prewar intelligence report on a 17-0 vote. We think we can get 
this job done, and we think we can be a positive influence in 
this business.
    With that, we would like to recognize first Dr. Zegart and 
then Dr. Kay and then General Boyd.
    Dr. Zegart, welcome to the Committee.

       STATEMENT OF AMY B. ZEGART, ASSISTANT PROFESSOR, 
         DEPARTMENT OF PUBLIC POLICY, SCHOOL OF PUBLIC 
         AFFAIRS, UNIVERSITY OF CALIFORNIA, LOS ANGELES

    Dr. Zegart. Thank you, Mr. Chairman, Senator Rockefeller, 
distinguished members of the Committee. It is an honor to be 
here today. This Committee has done extraordinary work in 
highlighting critical problems in the intelligence community 
and in leading the path toward reform.
    I am an assistant professor at UCLA. I have been 
researching and writing about the intelligence community for a 
decade now. I have written one book on organizational problems 
in the CIA and I am currently writing a book about why the 
intelligence community adapted poorly to the rise of terrorism 
after the cold war. As Senator Rockefeller mentioned, I worked 
on the National Security Council staff as a consumer of 
intelligence.
    Mr. Chairman, I have submitted more extensive written 
remarks. Today I would like to briefly touch on three main 
points. The first is, as you mentioned, the fleeting 
opportunities for reform, the second is the need for structural 
overhaul, and the third is the critical importance of cultural 
change. The bottom line is that structural reform of the 
intelligence community is crucial, long overdue and not enough.
    Mr. Chairman, as you so astutely mentioned in your opening 
remarks, major overhauls to our national security apparatus are 
extremely difficult and rare. The National Security Act of 1947 
took 4 years to pass and succeeded against overwhelming 
opposition and great odds. The New York Times called it a 
brass-knuckle fight to the finish.
    Reforming the Pentagon, as you know, took nearly 40 more 
years, despite the grave stakes we faced during the cold war 
and the fact that critical organizations were well known. As 
Secretary Powell once put it when I spoke to him, the 
performance of the JCS before its reform in 1986 could only be 
described, and I quote, ``as barely adequate.''
    As you know, in the past 57 years, despite the great 
efforts of this Committee and more than 40 different studies of 
the intelligence community recommending reform, no President 
and no Congress has succeeded in overhauling our intelligence 
system.
    History's lesson is to make the most of reform 
opportunities when they arise because they do not arise often 
and they do not last long. We have one of those rare windows of 
opportunity now. If the past is any guide, there will not be 
another chance for a generation. These realities mean that 
reforms should be sweeping, because they will be lasting. The 
choices you make will be with us all for decades to come.
    Mr. Chairman, let me turn briefly to structure. Stacks of 
intelligence studies over the past 50 years have examined a 
number of diverse issues but have reached stunning consensus on 
one point: The director of central intelligence needs help.
    The National Security Act of 1947 gave the DCI two jobs, as 
we know--running the CIA on the one hand and managing the 
entire community on the other. But it did not give him the 
power to do both of these jobs effectively. Now there has been 
great debate about whether fixing this problem is best done by 
allowing the DCI to keep his two hats and bolstering his power 
or by creating a new director of national intelligence, 
separate from the CIA.
    Let me put three thoughts on the table.
    First, Mr. Chairman, as you mentioned, the devil lies in 
the details. For either approach, success hinges on giving 
either an empowered DCI or a new director of national 
intelligence much greater budgetary authority, greater 
personnel authority and the staff and systems capabilities to 
make use of these legal authorities. These are must-haves for 
reform.
    Second, no organizational structure is perfect. Grappling 
with the weaknesses inherent in each approach is crucial, not 
only for selecting a new intelligence structure but for 
maximizing its effectiveness as well. Anticipating problems is 
one of the best ways of avoiding them. Knowing that your car 
tends to veer off course helps you keep it on the road.
    In particular, I believe that separating the community head 
from the CIA has drawbacks that may be less obvious than the 
benefits. One concern is that a director of national 
intelligence who is not tied to the CIA will be more likely to 
view intelligence needs and assets through tactical lenses.
    Now let me be clear. Tactical intelligence that supports 
the warfighter should always be a priority; I think everyone 
can agree about that. The question is, how much of a priority? 
Our system has a natural gravitational pull toward providing 
tactical intelligence, a pull that has only grown stronger in 
recent years with the marriage of intelligence and precision-
guided weaponry as we've seen in Iraq and Afghanistan.
    But in light of our strategic intelligence failures related 
to 9/11 and Iraq, we need to consider seriously whether a DNI, 
a director of national intelligence, will be able to strike the 
right balance between national intelligence and military 
intelligence.
    A third consideration, and I believe this is an important 
one, is that both of these solutions offer a vast improvement 
to keeping the current flawed structure intact.
    Let me turn briefly to culture. Organizational culture is 
the silent killer of innovation. Building new organizational 
arrangements with more people and more power will not make us 
safer if intelligence officials still view the world through 
old lenses and hoard information in old stove pipes. Fixing the 
cultural pathologies that have crippled our system is hard, but 
it is not impossible. Legislation can help.
    Two good first steps would be to change training and career 
incentives. The FBI faces a daunting cultural challenge: 
transforming its crime-fighting culture into an intelligence 
one. Our nation's best-known law enforcement agency must 
somehow teach itself not to think like one. Training programs 
are crucial in this effort. Today, however, counterterrorism 
training constitutes only 2 weeks out of the 17-week new agent 
course at Quantico. Now, that's more than it used to be, but it 
is still less time than new agents get for vacation in their 
first year.
    Then there is the unspoken 11th commandment of 
intelligence: Thou shalt not share. Here, too, a large part of 
the problem is cultural. As this Committee knows well from its 
investigation of our analysis in Iraq, reluctance to pass 
information across agency lines is deeply ingrained, based more 
on habit and values than policy or organization charts. Here, 
too, training is key. Creating a one-team approach to 
intelligence requires developing trust and building informal 
networks between officials in different agencies.
    Now, this is best done by cross-agency training programs 
early in officials' careers, before they become good and 
indoctrinated into the stovepipes. By current policies, 
however, most intelligence professionals can spend 20 years or 
more without ever experiencing a community-wide training 
program. Institutional bridges will always be hard to build and 
information always hard to share when one side does not trust 
or understand the other.
    Now, several past reform studies have recommended improving 
information sharing by requiring the rotation of personnel 
across intelligence agencies. This has not happened. Several 
years ago, DCI Tenet issued a directive requiring that 
officials do a rotational tour in another intelligence agency 
to get promoted. According to senior intelligence officials, 
every single agency in the community, including the CIA, 
ignored that directive.
    Taking temporary assignment in another agency is still 
viewed as a career-limiting move. Here's what one senior 
intelligence official told me: ``I often think of writing a 
vacancy notice for temporary detailees to the agency that says 
only stupid people doing unimportant work need apply.''
    Now, the 9/11 Commission has recognized the seriousness of 
these problems, but has recommended a solution that I believe 
will not solve them. It has proposed that the new director of 
national intelligence set policies for education and training 
and facilitate assignments across agency lines. Now this is 
good in theory. In practice, however, it leaves too much work 
for a new official whose other job responsibilities include 
advising the President, managing the entire community, creating 
a unified intelligence budget and overseeing new national 
intelligence centers. It does not take much to see which duties 
will come first.
    Instead, intelligence reform legislation should explicitly 
require the establishment of community-wide training programs 
early in officials' careers and legislation also should make 
rotational assignments to other intelligence agencies a 
requirement for promotion.
    I cannot stress this enough. As the 9/11 Commission and so 
many others have concluded, a similar provision in the 
Goldwater-Nichols Act transformed the culture of the Defense 
Department from a service-first attitude to a truly joint 
outlook.
    Mr. Chairman, successful intelligence reform must change 
more than the organization's structure. It has to change the 
minds of those who work inside it.
    Thank you.
    [The prepared statement of Dr. Zegart follows:]

                Prepared Statement of Dr. Amy B. Zegart

    Mr. Chairman, Senator Rockefeller, distinguished Members of the 
Committee, it is an honor to be here today to discuss reform of our 
nation's intelligence system.
    My name is Amy Zegart. I am an Assistant Professor in the School of 
Public Affairs at the University of California, Los Angeles (UCLA). For 
the past decade, I have been researching and writing about the 
Intelligence Community. I have written a book about organizational 
problems in the CIA and other agencies called Flawed by Design: The 
Evolution of the CIA, JCS, and NSC (Stanford University Press, 1999). I 
have worked as a consumer of intelligence on the National Security 
Council staff. And I am currently writing a book about why the 
Intelligence Community adapted poorly to the rise of terrorism after 
the Cold War ended.
    Mr. Chairman, my remarks cover three main points:
     The fleeting opportunities for reform;
     The need for structural overhaul; and
     The importance of cultural change.
    The bottom line is that structural reforms are crucial, long 
overdue, and insufficient.
         intelligence reform opportunities are few and fleeting
    Major overhauls of national security agencies are difficult and 
rare. The National Security Act of 1947, which created the CIA, 
National Security Council, and unified the military services under a 
single Department of Defense and Joint Chiefs of Staff, took 4 years to 
pass and succeeded against great opposition and long odds; The New York 
Times called the political battles between the military services a 
``brass knuckle fight to the finish.''
    Completing the job at the Pentagon took nearly 40 more years, 
despite the grave stakes we faced during the Cold War and the fact that 
critical organizational problems were well known. Although Democrats 
and Republicans alike issued major studies and repeated calls for 
reform, it took four decades of pressure and the convergence of a 
number of extraordinary circumstances--including a string of rapid-fire 
operational problems in Iran, Beirut, and Grenada; the unprecedented 
push for reform by two sitting JCS members; and a determined campaign 
by key Congressional champions--to win passage of the landmark 
Goldwater-Nichols Defense Reorganization Act of 1986.
    As you know, in the past 57 years no President and no Congress, 
despite the great efforts of this Committee and more than 40 studies 
recommending reform, has succeeded in overhauling our intelligence 
system.
    This is no accident. Problems in national security agencies are 
extremely hard to fix, even when they are clear, stakes are high, and 
danger is imminent. Three reasons explain why.
(1) No Organization Changes Easily On Its Own
    Even businesses, which are blessed with few management constraints 
and the knowledge that they must adapt or die, fail to respond to 
shifting environmental demands at surprising rates. Nearly a third of 
the 5.5 million businesses tracked by the U.S. Census over a 4-year 
period in the 1990's did not survive.\1\ In the past 3 years, more than 
200 major corporations have declared bankruptcy, including United 
Airlines, K-Mart, Global Crossing, and Bethlehem Steel.
---------------------------------------------------------------------------
    \1\ Howard Aldrich, Organizations Evolving (London: Sage 
Publications, 1999), p.262.
---------------------------------------------------------------------------
    Government agencies are even less able to make internal changes. 
The Army kept a horse cavalry until World War II. Compared to firms, 
government agencies have more limited resources, less managerial 
discretion, and are hardwired to perform routine tasks in standard ways 
rather than nimbly responding to changing demands.\2\ For example, this 
Committee's Joint Inquiry learned that the CIA failed to watchlist 
Khalid al-Mihdhar, one of the September 11th hijackers, for 18 months 
before the attacks, even though the agency suspected al-Mihdhar was an 
Al Qaeda terrorist and knew he held a multiple entry visa to the United 
States.\3\ The simplest explanation for this failure is that the CIA 
was not in the habit of watchlisting terrorists. For 50 years, Cold War 
priorities, thinking, and procedures were not geared to keeping foreign 
terrorists out of the country. When the principal threat to American 
national security changed, the Intelligence Community was naturally 
slow to change with it.
---------------------------------------------------------------------------
    \2\ See in particular Joel Aberbach and Bert Rockmart, In the Web 
of Politics: Three Decades of the U.S. Federal Executive (Washington, 
D.C.: Brookings, 2000); James Q. Wilson, Bureaucracy: What Government 
Agencies Do and Why They Do It (New York: Basic Books, 2000).
    \3\ Eleanor Hill, ``The Intelligence Community's Knowledge of the 
September 11 Hijackers Prior to September 11, 2001,'' testimony to the 
Senate Select Committee on Intelligence and House Permanent Select 
Committee on Intelligence, September 20, 2002, p.6.
---------------------------------------------------------------------------
(2) Rational Political Interests Do Not Favor Reform
    By rational political interests I do not mean coldhearted 
calculations or selfish intentions. Rather, the idea is that sober-eyed 
elected officials who want to maximize the benefits they provide to 
their constituents do not have strong incentives to expend the enormous 
amount of time, energy and political capital that intelligence reform 
requires.
    Presidents have good reason to consider the effectiveness of the 
Intelligence Community. The problem is that Presidents are short on 
time, have only so much political capital, few formal powers, and long 
agendas. In fact, no President since Truman has tackled major 
intelligence reform and only one, Eisenhower, ever took the lead in 
seeking a major restructuring of the Pentagon. Instead, Presidents have 
tried to mitigate the worst organizational problems they face in lower-
cost ways, by creating new agencies through unilateral Executive 
action. The National Security Agency, and more recently the Terrorist 
Threat Integration Center, both were created in this fashion. 
Unfortunately, this approach may only make coordination problems worse. 
As Nobel laureate Herbert Simon noted, the more organizations there are 
on the scene, the harder it is for the entire system to change. Tight 
coupling between government agencies means that changes must occur in 
multiple places at once to produce results.\4\
---------------------------------------------------------------------------
    \4\ Herbert Simon, ``Public Administration in Today's World of 
Organizations and Markets,'' John Gaus Lecture, American Political 
Science Association Annual Meetings, September 1, 2000, reprinted in 
PS: Political Science and Politics, Vol. 33, No. 4 (December 2000), p. 
753.
---------------------------------------------------------------------------
    As you know far better than I do, legislators do not win landslide 
elections by delving into the arcane details of intelligence agency 
design. Intelligence reform is a burning issue for a dedicated few like 
yourselves. But the fact is, intelligence reform is not usually a 
burning issue for Congress as a whole. And in the past, it has been 
stymied by opposition from members of the Armed Services Committees who 
seek to defend their Committees' jurisdictions and the autonomy and 
power of the agencies they oversee.
    Bureaucrats, finally, fight against changes even to agencies 
outside their own because they see reform as a zero-sum game for agency 
autonomy and power. There is nothing quite like intelligence reform to 
trigger the antibodies of affected agencies.
(3) The Fragmented Federal Government Makes Reform Difficult
    Ironically, some of the most cherished features of American 
democracy, such as separation of powers, work against agency 
effectiveness. This is because the political process requires 
compromise for legislation to pass, and compromise allows opponents to 
weaken agency design at the outset. These same features of the 
political process make subsequent legislative fixes an uphill battle.
    History's lesson is to make the most of reform opportunities when 
they arise, because they do not arise often and they do not last long. 
We have one of those rare opportunities now. If the past is any guide, 
there will not be another chance for a generation. These realities mean 
that reforms must be sweeping because they will be lasting; the choices 
you make today will be with us for decades to come.

                STRUCTURAL OVERHAUL: THE DCI NEEDS HELP

    Stacks of intelligence studies over the past 50 years have examined 
a number of diverse issues but have reached a stunning degree of 
consensus about one thing: the Director of Central Intelligence (DCI) 
needs help. The National Security Act of 1947 gave the DCI two jobs--
running the CIA and managing the rest of the Intelligence Community--
but did not give him the power to do both jobs effectively. This is no 
accident. The historical record shows quite clearly that when the CIA 
was created, it was deliberately hobbled by existing intelligence 
agencies in the Departments of State, Defense and Justice, which sought 
to maintain their own autonomy and power. Together, these agencies 
worked diligently to strip the National Security Act of provisions that 
would have created a truly centralized Central Intelligence Agency. The 
most lasting legacy of this design is the yawning gap between the DCI's 
wide-ranging responsibilities and his circumscribed power. The proposed 
remedies to this problem have varied, but the diagnosis has not.
    There has been great debate over the years about whether fixing 
this problem is best done by allowing the DCI to keep his two hats and 
bolstering his power, or by creating a separate Director of National 
Intelligence to oversee the entire Community. Let me put three thoughts 
on the table:
     First, the devil lies in the details. For either approach, 
success hinges on giving an empowered DCI or a new Director of National 
Intelligence much greater budgetary authority, stronger personnel 
authority, and the systems and staff capabilities to use such 
authorities effectively. These are must-haves.
     Second, no organizational structure is perfect. Grappling 
with the weaknesses of both approaches is crucial--not only for 
choosing a new intelligence structure, but for maximizing its 
effectiveness as well. Anticipating problems is one of the best ways to 
avoid them. Knowing that your car tends to veer helps you keep it on 
the road.
    In particular, I believe that separating the Community head from 
the CIA has drawbacks that may be less obvious than the benefits. One 
concern is that a Director of National Intelligence who is not tied to 
the CIA will be more likely to view intelligence needs and assets 
through tactical lenses. Let me be clear. Tactical intelligence that 
supports the warfighter should always take priority. The question is 
how much of a priority. Our system has a natural gravitational pull 
toward tactical intelligence, a pull that has only grown stronger with 
the successful marriage of intelligence and precision weapons in 
Afghanistan and Iraq. But especially in light of our strategic 
intelligence failings related to 9/11 and Iraq, we need to consider 
whether a DNI will be able to strike the right balance, whether a level 
playing field among the 15 intelligence agencies would create a level 
approach to intelligence.
     Third, both of these solutions offer a vast improvement to 
keeping the current flawed structure intact.
    Good structure is not a cure-all, but bad structure can have 
debilitating effects on organizational performance. Structure is not 
about boxes. It is about power. Structure determines who answers to 
whom, whose memo goes on top, and what formal powers organizational 
leaders have.

                CULTURE: THE SILENT KILLER OF INNOVATION

    Although any meaningful reform must start with structure, 
structural changes alone will not be enough. Building new 
organizational arrangements with more people and more power will not 
make us safer if intelligence officials still view the world through 
the same old lenses and hoard information in the same old stovepipes. 
Organizational culture is a silent but deadly innovation killer.
    Fixing the cultural pathologies that have crippled our intelligence 
system is hard but not impossible. Two good first steps would be to 
change training and career incentives.
    The FBI faces a daunting cultural challenge: transforming a crime-
fighting culture that prizes slow and careful evidence gathering after-
the-fact and works each case separately into an intelligence culture 
that takes fast action and follows leads across cases to prevent future 
tragedies. The nation's best-known law enforcement agency somehow must 
teach itself not to think like one. Training programs are crucial to 
this effort. Today, however, counter-terrorism and counter-intelligence 
training constitute only 2 weeks out of the 17-week required course for 
all new agents. That is more than it used to be, but still less time 
than new agents get for vacation.
    Then there is the unspoken 11th Commandment of intelligence: Thou 
Shalt Not Share. Here, too, a large part of the problem is cultural. As 
this Committee knows, the reluctance to pass information across agency 
lines is deeply engrained, based more on habit and values than policy 
or official organization charts. And here, too, training is key. 
Creating a ``one team'' approach to intelligence requires developing 
trust and building informal networks between officials in different 
agencies. This is best done by cross-agency training programs early in 
officials' careers, before they become indoctrinated in the stovepipes. 
By current policies, however, most intelligence agency professionals 
can spend 20 years or more without a single Community-wide training 
experience. Institutional bridges will always be hard to build and 
information hard to share when one side does not trust or understand 
the other.
    Several past reform studies have recommended improving information 
sharing by requiring the rotation of personnel across intelligence 
agencies. This has not happened. Several years ago DCI Tenet issued a 
directive requiring that officials do a rotational tour in another 
intelligence agency to get promoted to senior ranks. According to 
senior intelligence officials, every intelligence agency including the 
CIA ignored him. Taking a temporary assignment in an agency outside 
one's home is still viewed as a career-limiting move. Instead of 
encouraging the best and brightest within each agency to venture out 
and build institutional bridges, career incentives encourage them to 
stay right where they are. The result is that while agencies post 
openings for temporary detailees, these positions all too often get 
filled by weak performers. As one senior intelligence official 
lamented, ``I often think of writing a vacancy notice [for temporary 
detailees to the agency] that says, `only stupid people doing 
unimportant work need apply.' ''
    The 9/11 Commission recognized the seriousness of these problems, 
but has recommended a solution that will not solve them: it has 
suggested that the proposed new Director of National Intelligence set 
policies for education and training and facilitate assignments across 
agency lines. This is good in theory. But in practice, it leaves too 
much work for a new official whose other job responsibilities include 
advising the President, managing the entire Intelligence Community, 
creating a unified intelligence budget, and overseeing new national 
intelligence centers. It does not take much to see which duties will 
come first.
    Instead, intelligence reform legislation should explicitly require 
the establishment of Community-wide training programs early in 
officials' careers. Legislation also should make rotational assignments 
to other intelligence agencies a requirement for promotion. I cannot 
stress this enough. As the 9/11 Commission and many others have noted, 
a similar provision in the Goldwater-Nichols Act transformed the 
culture of the Defense Department from a ``service first'' attitude to 
a truly joint outlook.
    Mr. Chairman, successful intelligence reform must change more than 
the organization chart. It must change the minds of those who work 
inside it.
    Thank you.

    Chairman Roberts. Dr. Zegart, thank you very much. Your 
full statement will be made part of the record.
    We welcome now Dr. Kay.

STATEMENT OF DR. DAVID KAY, SENIOR RESEARCH FELLOW, THE POTOMAC 
                  INSTITUTE FOR POLICY STUDIES

    Dr. Kay. Thank you very much, Mr. Chairman.
    I have submitted for the record a full statement. I will 
try to briefly summarize what I think are the key points. I 
certainly thank you and the Committee for the opportunity to 
appear before you and to address the important issues of the 
future organization, shape and role of the intelligence 
community.
    I think I agree very strongly with Amy. This is a chance 
that comes along largely once a generation. If you don't get it 
right now, we will live with the consequences until the next 
disaster.
    I also understand that in the minds of many outside this 
room, the subject boils down to creating a national 
intelligence director. Maybe the only open question is what 
powers that person should have. There have been at least 20 
that I know of commissions, panels, studies in the last 20 
years of the intelligence community. They have almost all been 
uniform in their conclusion of the necessity of reform, of the 
shortcomings and the failures. Yet, by and large, nothing has 
happened.
    Indeed, as Chairman Porter Goss, before his nomination for 
CIA director, said, ``Nobody in their right mind would create 
the architecture we have in our intelligence community today. 
It's a dysfunctional community.''
    Therefore, there is little wonder that many would say it's 
time for a czar, or more, in my Texas dialect, off with the 
heads, in the face of such inaction over the years.
    This may be the right answer, although, if so, it would be 
the first time in the history of the U.S. Government that the 
creation of a czar to deal with organizational failures and 
inadequacies has been successful. This is a record that is very 
much without sustained success.
    I therefore remain agnostic on the wisdom of creating a 
national intelligence director in the absence of knowing five 
things. First, do we agree on the failures and shortcomings 
that the post should address; the power of the post itself, and 
power in considerable detail that is to have the wider 
executive branch national security structure within which that 
post is to operate; the legislative oversight, authorization 
and budgeting appropriation structure that will vitally 
determine whether such an individual actually has the 
authorities and endurance to be successful; and finally, I 
would really say most importantly, a demonstrated willingness 
by both the Congress and the executive branch to hold people 
and organizations responsible when they massively fail to live 
up to their responsibilities. I think that is the single 
greatest failing that sustains the inadequacy of the system 
today.
    I should add that my agnosticism does not reflect in any 
way a lack of the enduring grief that I know the families of 9/
11 and the Nation feels for the failures to prevent 9/11 from 
occurring. It certainly doesn't reflect any lack of 
appreciation that I have for the outstanding work of the 9/11 
Commission.
    I am concerned, however, that simply creating a national 
intelligence director, even one that seems to have and we think 
has real powers, realizing that in Washington we exist 
somewhere between 10,000 and 100,000 feet in looking inside 
bureaucracies and we think budget and personnel authority is 
real power, we will not end up addressing the real problems 
that led to the long string of failures that conclude with 9/11 
and the WMD findings in Iraq. I think this is particularly true 
if we continue to say everyone is at fault and therefore no one 
is at fault.
    Let me turn to what I know best, although I must say I know 
this Committee knows probably better than I do the reasons we 
failed to adequately assess the actual State of Iraq's WMD 
program. Let me do it very quickly, just in headline form. I 
think there were nine principal failings here.
    There was a broken culture and management within the CIA.
    There was a breakdown in CIA analytical tradecraft;
    The lack of any U.S. human clandestine collection after 
1998--and damn little before 1998;
    A failure to seriously examine and question non-American-
controlled sources of information on WMD, which we came to rely 
on;
    Abuse of the control over information to prevent others 
even in the CIA, and certainly many outside the CIA from seeing 
the real problems with the available data concerning 
conclusions the CIA reached and assertions as to the current 
status of Iraq's WMD program;
    A real absence of scientific, analytical capability within 
the Directorate of Intelligence, and a refusal to even use the 
scientific excellence that existed in other parts of the CIA 
and certainly that existed in other parts of the U.S. 
Government to understand the existing status of Iraq's WMD 
program;
    Multiple security systems and information systems that both 
within the CIA restricted access to vital elements of 
information, and certainly outside the CIA did this;
    A complete lack of competitive analysis that led to stale 
data and findings being passed completely unchallenged to 
policymakers, to you in the Congress and ultimately to the 
American people as being the product of current, up-to-date 
collection and knowledge;
    And, finally, a national intelligence collection process 
that was unproductive of real assessments and had, quite 
frankly, misled rather than informed, and misled the executive 
branch, the Congress and the American people.
    The remarkable thing, as I examine this record and read the 
outstanding 500-plus pages of this Committee's report on Iraq, 
is that the origin of most of these factors lies within the CIA 
itself. Iraq was an overwhelming, systemic failure of the 
Central Intelligence Agency. Until this is taken onboard and 
people and organizations are held responsible for this failure, 
I have real difficulty seeing how a national intelligence 
director can correct these failings.
    Indeed, I would argue that, unless the newly appointed 
director of central intelligence takes on as his first 
responsibility correcting the obvious failures that you have so 
thoroughly documented, that the national intelligence director 
has no hope of success.
    If you will indulge me in something that is not in my 
statement--I've spent a lot of time before this Committee--
there have been a lot of pointed questions. But there's one 
question that no one ever asked me, and that is what was my 
most frustrating moment in Iraq. If you don't mind, Mr. 
Chairman, I'd like to share that with you.
    There was a period after I was here in October and 
testified before you and I went back. I had been back about a 
week and I had one of the CIA lead analysts come into me and 
say, ``David, the analysts are really unhappy and some are 
thinking of going home.'' Of course, the thought crossed my 
mind, what have I now done to destroy morale.
    She quickly said, ``No, no, it's not anything you've done. 
We've just learned that the performance bonuses given for the 
analytical work done in the CIA before, in the lead-up to the 
war, have given way more money to the nuclear team than it has 
to the chem-bio analysts.''
    At that point, I was glad my Glock was unloaded, because 
let me tell you, we had discovered that the nuclear team, as 
you have documented more thoroughly than has been done any 
place else on the public record, that is a record of abuse of 
authority, a failure to use expertise. There is nothing in that 
record that deserves a performance bonus. Nor in fact, quite 
frankly, was there much to deserve a performance bonus in the 
chemical and biological area.
    Instead of holding people responsible, we reward them for 
failure. Unless you change that part of the culture, 
organizational shuffling of deck chairs has no hope of being 
successful.
    Mr. Chairman, having started out declaring my agnosticism, 
I would like to conclude by sharing with you what I believe, if 
you go ahead with the creation of a national intelligence 
director, are the essential 10 elements that must be included 
in the powers and related to that authority if there is to be 
any hope of success.
    First of all, I think you explicitly have to place all 15 
of the intelligence organizations under the authority of a 
national intelligence director. You have to define that 
authority to include the design and monitoring of national 
intelligence strategies, responsibility for the execution of 
those strategies and all other powers deemed necessary to carry 
out and ensure the effectiveness of U.S. intelligence 
activities.
    Secondly, giving the director of national intelligence not 
just budget approval authority, which is largely meaningless, 
but the real budget power, which is detailed budget 
formulation, approval, release and reprogramming authority for 
each of the 15 agencies. Without that, saying that I have or 
anyone has the right to approve the final budget at a final day 
is saying I have no power. If you look at the history of past 
czars, you'll see that it's uniform across those.
    Thirdly, giving the national intelligence director not just 
the responsibility for approving the heads of the 15 
intelligence agencies--this is largely a meaningless power--but 
the responsibility for ensuring that the personnel policies and 
practices, some of which Amy, I think, has ably, both in her 
testimony here and in her other writings pointed to, ensuring 
that these practices across all the intelligence agencies 
operate in a manner that support the effective execution of the 
national intelligence strategies and the responsibility and 
power to remove personnel at all levels who do not adequately 
perform.
    Fourthly, I think the National Intelligence Council must be 
moved from the authority of the DCI to the national 
intelligence director and charged with ensuring that all the 
resources of the intelligence agencies are brought to bear in a 
way that provides the Nation with the best possible analytical 
products.
    I also think the responsibility for what is now called the 
PDBs, the Presidential daily briefings, should be moved to this 
reformed National Intelligence Council operating under the 
national intelligence director, and it should have the 
responsibility and access to all the collection and analytical 
assets of the community in briefing the President.
    It is vital to this Nation that we ensure that diverse 
analytical views within the intelligence community are allowed 
to contend on a level playing field, and that policymakers 
understand the differences in conclusions and views of various 
agencies.
    The national intelligence director, and particularly a 
reformed National Intelligence Council, has that responsibility 
and must be held to task for that responsibility, ensuring that 
diversity of views are encouraged and that the diverse views 
that occur are in fact brought to the attention of the Congress 
and of policymakers.
    Now, while diversity in analysis--and I would say not just 
diversity. I revel in contention when analysts disagree. We 
need to encourage that and create an atmosphere where that 
occurs. But I think we need much more than we have had in the 
past, and certainly than we have now, common, shared and more 
efficient collection agencies.
    Collection, after all, data is what is the feedstock of 
analysis, even when the analysts may reach different 
conclusions. I think you need to place the national 
intelligence director in charge, charged by you, Congress, with 
ensuring that all of the collection assets of this government 
work to support the national intelligence strategies and 
priorities.
    A post that allowed in the past individual collection 
agencies to identify their own customers and ignore directives 
of the DCI--and this is, I think, well documented in the 9/11 
Commission report, as well as those of us who have spent any 
time in the system have seen at first hand--must be stopped.
    I would say also, by the same token--and I think this is 
something that the oversight powers of Congress have spent less 
time on than they should have--we've allowed the national 
collection agencies in their various forms to set their own 
technological acquisition agenda without any relation to a 
common strategy.
    The result has been that we have acquired technologies that 
are not always relevant to agreed strategies and goals and 
problems we face as a nation. That must stop. There's not 
enough money and, more importantly, we will not get the 
collection we need if we allow that to continue.
    Let me say, seventhly, even if perfect collection, and 
that's a goal that I've never seen achieved, it may have and 
someone may know of it, an excellent analysis is worthless 
unless it is effectively disseminated, both within the 
communities and between the agencies. The 9/11 Commission has 
adequately documented, as has your own report, the failure to 
do this, including abuse of authority in the nuclear area, 
certainly. You know, we have called attention at least since 
1992, with the Aspin-Brown panel, called attention to this 
glaring weakness. Yet, nothing has been done.
    The national intelligence director must be given the 
authority, the responsibility and held accountable for ensuring 
that this chaos ends. We need to ensure that the ultimate 
responsibility, particularly for security systems, e-mail, data 
base, the whole schmear, operates in a way that supports 
collaboration across everyone involved in intelligence and the 
customers that intelligence is designed to serve.
    Eighthly, we must charge the national intelligence director 
with providing the President and Congress, I think, within 12 
months of its creation, and every 3 years after that, with 
analysis and recommendations of the adequacy of the 
organizational structure and the resources necessary to support 
national intelligence needs.
    Let me say, I believe 15 agencies are way too many. It's a 
product of the cold war, a different environment. But as you 
are probably more aware of than I am, the difficulty of getting 
rid of agencies once created is far greater than the problem of 
even creating new agencies. That needs to be addressed. It is a 
flaw in the system that daily impedes effective collection and 
analysis across the system.
    Ninthly, you've got to recognize that unless Congress puts 
its own house on a footing to support and provide the essential 
oversight of the performance of the intelligence community, the 
powers of the national intelligence director will ultimately be 
carved up. The Senate and the House must find ways that do not 
allow diverse authorizers and appropriators to carve up and 
undermine this authority.
    I hope you can come up with that scheme. I confess--and 
it's probably a product of my age--I continue to be drawn back 
to the early days of the Joint Atomic Energy Commission, which 
in fact was responsible for creating, when we did create, the 
essential undergridding of our deterrent strategy in the 
nuclear area and performed, I think, outstandingly, certainly 
in its early years.
    Finally, and probably most contentious of all, or at least 
will get me in greatest trouble, let me say, just as I believe 
Congress needs to reshape its oversight structure if a new 
national intelligence director is to have any chance of 
success, so must the President with regard to his own national 
security structure.
    The dog that did not bark in the case of Iraq's WMD 
program, quite frankly in my view, is the National Security 
Council. Where was the National Security Council when 
apparently the President expressed his own doubt about the 
adequacy of the case concerning Iraq's WMD weapons that were 
made before him?
    Why was the Secretary of State sent out to the CIA to 
personally vet the data that he was to take to the Security 
Council in New York and ultimately left to hang in the wind for 
data that was at least misleading, and in some cases absolutely 
false and known by parts of the intelligence community to be 
false? Where was the NSC then?
    Now, presidents over time have had various ways to run 
their truth tests. When I first came to Washington, which 
really is dating myself, the President tended to rely on 
informal consultations with Members of Congress, even Supreme 
Court judges, and probably worst of all, journalists and 
academics. Those times have gone. In more recent times, he's 
had to depend on the National Security Council. But the one 
thing I think you will all understand, the President must have 
the ability to run truth tests on information that is brought 
to the Oval Office, across all areas of the government.
    This is true of welfare reform, agriculture, environmental 
policy, as it is true of foreign and domestic policy. I do not 
believe that it is appropriate that the national intelligence 
director be sucked into the political process of the White 
House. I think that would be a disaster.
    But equally, it is true, we must recognize that the 
President needs his own ability both to express his 
requirements and his direction and his policy with regard to 
intelligence and broader national security policies and to run 
those truth tests. I think that is absent. I think we ignore 
that at our own risk.
    Mr. Chairman, as I know you no doubt have concluded, that 
in view of my expressed agnosticism about the creation of a 
national intelligence director, it hasn't stopped me from 
sharing in some detail, and I suspect you are quietly now 
saying a Marine's prayer that you're glad that I wasn't 
enthusiastic about creating the national intelligence director, 
because I really would have gone on at great lengths.
    But I share with many the views that the U.S. intelligence 
community is in a crisis. This crisis is so grave that it 
weakens an essential underpinning of both our diplomatic and 
our national military security capabilities and their ability 
to support U.S. national interest.
    If this crisis is to be resolved, it will require an effort 
at least as great as that that went into creating the 
intelligence community in the most dire part of the cold war. 
Remedying this crisis cannot be simply achieved by naming a 
national intelligence director. What is necessary is vision and 
an unswerving commitment to serving the Nation beyond the 
political and policy interests of any one particular 
administration, an ability to listen, to communicate, to lead 
and to execute, and probably most importantly of all, an 
ethical center that recognizes and understands the values of 
truth and the values of speaking truth to power.
    This task will be neither easy nor will it be quick. It's 
actually more of a journey, in my view, than a one-step 
solution. It will certainly not be, and we should not mislead 
anyone, a quick fix.
    Let me conclude by this, because it actually is, I think, 
for me the most essential point. Intelligence reform without 
accountability will not achieve the objective we all share--
that is, avoiding the clearly avoidable tragedies of 9/11 and 
the equally avoidable tragedies of a botched assessment of 
Iraq's WMD capabilities.
    If you are to go ahead with the creation of a national 
intelligence director--and I believe you will--I think that you 
must ensure that such a structure is vested with all the powers 
necessary to be successful and that the Congress and the 
President have the organizational capabilities and acceptance 
of responsibility to ensure that, as new structure moves 
forward, accountability goes hand in hand with reform.
    Mr. Chairman, I thank you and the Committee for letting me 
go on at the length about what to me is a very important topic.
    [The prepared statement of Dr. Kay follows:]

                   Prepared Statement of David Kay\1\

    Mr. Chairman, I thank you and the Committee for the opportunity to 
address the important issues related to the future shape, organization 
and role of the U.S. intelligence system that you are focusing on in 
this series of hearings.
---------------------------------------------------------------------------
    \1\ Senior Research Fellow, The Potomac Institute for Policy 
Studies. The views expressed in this statement are solely the 
responsibility of the author.
---------------------------------------------------------------------------
    I understand that in the minds of many outside this room the 
subject boils down to creating a National Intelligence Director, and 
the only open question is what powers such an individual should have. 
At least 20 Commissions, panels and other bodies over the last 20 years 
have reviewed the intelligence system, documented serious shortcomings, 
called for reforms, examined intelligence failures and generally 
concluded, as Representative Porter Goss has recently said, ``Nobody in 
their right mind would create the architecture we have in our 
intelligence community today. It's a dysfunctional community.'' After 
so many warnings and so little action it is little wonder that many 
would say it's time for a Czar, if not, ``off with their heads''.
    This may be the right answer although, if so, it would be a first 
in the U.S. Government's many attempts to address organizational and 
performance failures by anointing czars endowed with symbolism and 
little real power and even less enduring executive or Congressional 
support. I remain agnostic on the wisdom of creating a National 
Intelligence Director in the absence of knowing:
     Whether we agree on the failures and shortcomings the post 
is to correct,
     The power of the post itself,
     The wider executive branch national security structure 
within which it is to fit,
     The legislative oversight, authorization and budgeting 
structure that will vitally determine its authorities and endurance, 
and
     Most importantly a demonstrated willingness by both the 
Congress and the President to hold people and organizations responsible 
when they massively fail to live up to their responsibilities. [The 
Committee might ask the Congressional Research Service to provide a 
report on the total number of officials ever ``fired'' by all the 
previous ``Czars'' that have been pushed forward to deal with other 
organizational failings in the U.S. Government.]
    I should add that my agnosticism does not reflect in any way a lack 
of enduring grief for the shared tragedy of the families and the Nation 
that resulted from the failure of the U.S. intelligence and law 
enforcement system to prevent the disaster of 911. And it certainly 
does not reflect a lack of appreciation for the outstanding work of the 
911 Commission.
    I am concerned, however, that simply creating a National 
Intelligence Director, even one with what may seem like real powers--
and we should all recall that at the 100,000 feet level that we 
generally address such questions in Washington this boils down to 
budgets and very senior personnel--will end up not addressing the real 
problems--particularly if we continue to say ``everyone is at fault 
therefore no one can be held responsible''--that led to the long string 
of recent intelligence failures that concluded with 911 and the failure 
to find Iraqi WMD.
    Let me turn to what I know best--although probably not as well as 
this Committee itself--the reasons we failed to adequately assess the 
actual State of Iraq's WMD program. In headline form, I would identify 
the major factors that contributed to this failure as:
    1. A broken culture and poor management within the CIA;
    2. A breakdown in CIA analytical tradecraft;
    3. The lack of any U.S. clandestine human collection against the 
Iraq WMD target after 1998;
    4. A failure to seriously examine and question the accuracy of data 
and reports that came from non-U.S. sources;
    5. Abuse of control over information to prevent others in the CIA 
and other parts of the intelligence community from seeing the real 
problems with the available data concerning Iraq's WMD and consequently 
the CIA's assertions as to the status of Iraq's WMD program;
    6. A real absence of scientific analytical capability within the 
CIA's Directorate of Intelligence and a failure to use even the 
scientific excellence that existed elsewhere in the CIA much less 
elsewhere in the U.S. Government to understand the current State of 
Iraq's WMD program;
    7. Multiple security systems and information systems that both 
within the CIA and between the CIA and other parts of the intelligence 
system restricted access to vital elements of information necessary for 
accurately understanding Iraq's WMD program;
    8. A complete lack of competitive analysis that led to stale data 
and findings passing completely unchallenged and being offered up as if 
they were based on current collection and knowledge;
    9. A National Intelligence Council process that was unproductive of 
real assessments and that misled, rather than informed, the 
policymakers, the Congress and, ultimately, the American public.
    The remarkable thing to me as I re-examine my own experience and 
look at the excellent report of this Committee on Iraq's WMD is that 
the origin of these factors is almost entirely within the CIA. Iraq was 
an overwhelming systemic failure of the CIA and until this is taken on 
board and people and organizations are held responsible for this 
failure I have real difficulty seeing how more far reaching reforms 
have any chance of real success. It really should not take a National 
Intelligence Director to correct these failings. Indeed, I would argue 
that if the next DCI does not take on board as his first task the 
renovation of the CIA beginning with ensuring that these failings are 
finally effectively addressed then a National Intelligence Director has 
little hope of success.
    Mr. Chairman, having started out by declaring my agnosticism on the 
creation of a National Intelligence Director let me conclude with what 
I feel are the essential powers and conditions that, at a minimum, must 
be given to a National Intelligence Director if this new ``czar'' were 
to have a decent chance of not sliding into the irrelevance of our 
other ``czars''. At a minimum these are:
    1. Explicitly placing all 15 intelligence organization under the 
authority of the National Intelligence Director and defining that 
authority to include design and monitoring of intelligence strategies 
to support the national security of the United States, responsibility 
for the execution of that strategy and all other powers deemed 
necessary to ensure the effectiveness of all U.S. intelligence 
activities;
    2. Giving the National Intelligence Director not just budget 
approval authority, but the real budget power which is detailed budget 
formulation, approval and release and reprogramming authority for each 
of the 15 intelligence agencies;
    3. Giving the National Intelligence Director not just the 
responsibility for approving the heads of the 15 intelligence 
agencies--a largely meaningless power--but the responsibility for 
ensuring that the personnel policies and practices of all the 
intelligence agencies operate in a manner to support the effective 
execution of the national intelligence strategies and the 
responsibility to remove personnel at all levels who do not adequately 
perform.
    4. Move the National Intelligence Council from the DCI to the 
National Intelligence Director with the charge of ensuring that all the 
resources of the intelligence agencies are brought to bear in providing 
the Nation with the best possible analytical products. Responsibility 
for production and briefing of the PDBs should be moved to this 
reformed National Intelligence Council, and it must have access to all 
the collection and analytical resources of the U.S. intelligence 
community.
    5. It is vital to the Nation to ensure that diverse analytical 
views within the intelligence community are allowed to contend on a 
level playing field and that policymakers understand these differences. 
The National Intelligence Director, and particularly a reformed 
National Intelligence Council, must have this as one of its highest 
responsibilities.
    6. While diversity and even contention is to be prized in analysis, 
a much more common, shared and more effective system is required in the 
collection of intelligence data--the common feedstock for even 
differing analytical views. The National Intelligence Director needs to 
be charged by Congress with ensuring that all of the collection 
resources of the U.S. intelligence community work to support the 
national intelligence strategies and priorities. A past that allowed 
individual collection agencies to ignore the priorities of the DCI and 
follow their own understanding of the priority needs of ``their'' 
customers must come to an end. By the same token the past practice of 
letting collection organizations establish their own technology 
requirements and investment plans independent of overall Nation 
intelligence strategies or requirements must end. The National 
Intelligence Director must assume the responsibility for ensuring that 
the various collection services meet the information needs of the 
intelligence community, and this means setting collection priorities 
and strategies and ensuring that investment resources are used wisely.
    7. Even perfect collection--a goal almost never reached--and 
excellent analysis is worthless unless it is effectively disseminated, 
first within and among intelligence agencies but even more importantly 
to the ultimate users throughout the Government. Too many examples of 
failures in communication abound in the cases of 911, Iraq's WMD and 
almost every other of the multitude of recent intelligence failures. 
Incompatible e-mail systems and data bases within agencies and between 
agencies have been tolerated when almost every study since at least 
1992 has called attention to this glaring weakness. The National 
Intelligence Director must be given the authority and requirement to 
end this chaos. In the same token, the myriad security systems and 
authorities no longer add to security--in fact they detract from it--
and serve more to protect turf and prevent determinations of 
accountability. The National Intelligence Director must be given by 
Congress the ultimate responsibility for security systems through out 
the intelligence community and be held responsible for shaping a 
security system that truly protects what is vital while allowing 
information to be shared and accountability to be assessed.
    8. Charge the National Intelligence Director with providing the 
President and the Congress within 12 months of its creation and every 3 
years afterwards with analysis and recommendations on the 
organizational and resource requirements necessary to support the 
intelligence requirements to ensure U.S. national security. Fifteen 
intelligence organizations--and there are actually more--is surely the 
wrong number and reflect more the needs of the Cold War and the will 
documented difficulty of the Government to eliminate organizations 
after the requirements that led to their creation has passed.
    9. Recognize that unless Congress puts its house on a footing to 
support and provide the essential oversight of the performance of the 
intelligence community and the National Intelligence Director this 
innovation is doomed to failure. The Senate and House must find a way 
that does not allow diverse authorizers and appropriators to carve up 
and undermine the authority of the National Intelligence Director.
    10. Just as Congress needs to reshape its oversight structure if a 
new National Intelligence Director is to have any chance of success, so 
must the President's national security apparatus. The dog that did not 
bark in the case of Iraq's WMD is the NSC. When the President 
apparently expressed concern about the adequacy of the briefings he was 
receiving on WMD where was the NSC? Why was the Secretary of State left 
to spend several days reviewing CIA data of Iraq's WMD and ultimately 
left to twist in the wind when the data he went forward with to the 
U.N. Security Council proved false and misleading? Where was the NSC 
process that ensures that data being given the President and other 
senior decisionmakers represent what it is said to represent? The 
National Intelligence Director should not be in the Executive Office of 
the White House or in the Cabinet. Intelligence must serve the Nation 
and speak truth to power even if in some cases elected leaders chose, 
as is their right, to disagree with the intelligence with which they 
are presented. This means that intelligence should not be part of the 
political apparatus or process. On the other hand, no President can 
with regard to intelligence--or any other field of government--safely 
assume that everything that comes to the Oval Office is what it is said 
to represent. Presidents have developed various means, as befits their 
personalities and the times, to run their truth tests. When I first 
came to Washington, it was common for a President to check informally 
with Members of Congress , individual judges on the Supreme Court and, 
believe it or not, even journalists and academics on the views 
presented them by their own Cabinet officers. In more recent 
Administrations, the NSC assumed this role with regard to foreign 
affairs and defense policy. Regardless of how you do it, it should be 
clear that it must be done. The National Intelligence Director must not 
be sucked into the political apparatus of the White House, but on the 
other hand the President needs to have a mechanism for both conveying 
his priorities and concerns and for ensuring that he has confidence and 
an understanding of what the intelligence community is telling him. The 
NSC seems to be the most logical place to center this role.
    Mr. Chairman, as you no doubt have concluded my agnosticism 
concerning the National Intelligence Director has not stopped me from 
sharing with you, in some detail, my views as to the shape such an 
office should take. I suspect that you are saying a Marine's silent 
prayer that I was not unreservedly enthusiastic as then my comments 
might really have been lengthy.
    I share with many the view that the U.S. intelligence system is in 
crisis and that this crisis is so grave as to weaken an essential 
underpinning of both our diplomatic and military capabilities to 
support U.S. national interests. If this crisis is to be resolved, it 
will require an effort at least equal to the effort that led to the 
intelligence community's creation and rise to strength in the most 
dangerous phase of the Cold War. Remedying this crisis cannot simply be 
achieved by naming a National Intelligence Director. Vision; an 
unswerving commitment to serving the Nation beyond the political and 
policy interests of any one Administration; an ability to listen, 
communicate, lead and execute; and an ethical center all must be 
brought to bear. The task ahead will be neither easy or quick and will 
be more a journey than a one-step solution. It will certainly not be a 
quick fix.
    I believe that intelligence reform without accountability will not 
achieve the objective we all share to avoid repeating the clearly 
avoidable tragedy of 911 and the equally avoidable failures in analysis 
that marked the Iraq WMD program. If you are to go ahead with the 
creation of a National Intelligence Director--and I believe you will--I 
think that you must ensure that such a structure is vested with all the 
powers necessary to be successful and that the Congress and the 
President have the organization, capabilities and acceptance of the 
responsibility to ensure that, as this new structure moves forward, 
accountability goes hand-in-hand with reform.
    Mr. Chairman, I thank you and the Committee for this opportunity to 
share my views with you.

    Chairman Roberts. Dr. Kay, we thank you for a very 
comprehensive statement. It is somewhat unique, I think, to 
have an agnostic list 10 Commandments in behalf of a proposal 
that he is agnostic about.
    [Laughter.]
    Dr. Kay. Senator, we Baptists are all unusual in that 
regard.
    Chairman Roberts. If we include the 10 Commandments, 
perhaps we can have you baptized, and you can see the light in 
behalf of the national intelligence director.
    General Boyd.

STATEMENT OF GENERAL CHARLES G. BOYD, USAF, RETIRED, PRESIDENT 
               AND CEO, BUSINESS EXECUTIVES FOR 
                       NATIONAL SECURITY

    General Boyd. Sir. Senator Roberts, Senator Rockefeller, 
distinguished members, I will give you back some of the time 
that David took. I feel toward David like Frank Sinatra felt 
toward Sammy Davis, Jr. He said, ``I'd hate to follow him on.''
    I've been asked specifically to discuss with you the Hart-
Rudman Commission, of which I was the executive director, in 
the context of intelligence reform. I will summarize briefly 
that effort, and then let your questions guide the discussion 
that follows. Nothing like as comprehensive a view as Dr. Kay 
has just given you, but there might be a gem in here somewhere.
    By way of refresher, the Hart-Rudman Commission was 
chartered to try to determine what kind of a world we're going 
to live in over the next quarter of a century; to devise a 
national security strategy appropriate to that world; and 
finally, to examine the structures and the processes by which 
the Nation formulates and executes its national security 
policies, and recommend adjustments and restructuring as 
appropriate.
    Fourteen prominent Americans served as commissioners, with 
analytical, research and support staff numbering approximately 
50 people. We devoted 2\1/2\ years to this effort. I believe 
there's common agreement that it was the most comprehensive 
review of our Nation's security apparatus to be conducted since 
1947.
    The Hart-Rudman Commission is primarily identified now in 
the aftermath of 9/11 for its specific work on homeland 
security, and in retrospect, it is the piece of work for which 
I am the most pleased. But for our purposes today I will ignore 
that, except where it relates to intelligence, as well as the 
40 other major recommendations that dealt with other aspects of 
national security, and stick with the section that pleases me 
the least, that having to do with intelligence.
    With our conviction that terrorism would be the method of 
choice for most of the early 21st century enemies came the 
dawning notion that the military component would decline in 
relative importance in the national security calculus; the 
economic, diplomatic and communication components would 
increase in relative value; and some, though not all, concluded 
that ultimately this type of conflict could not be won with the 
Army, Navy, Air Force and Marine Corps. Although their role 
would be important, such conflict would be won with other 
components--with law enforcement and with, most of all, 
intelligence.
    The debate about intelligence at this moment is about 
organization. But that was not the centerpiece of our work on 
this subject. Ours was on process and priorities.
    We concluded then, as had others, that the intelligence 
community had lost its focus when the Berlin Wall came down. To 
that point, since the Nation had no effective systematic 
process for establishing new national security objectives and 
strategies and was floundering in its attempt at reorientation, 
it followed that the intelligence community had nothing solid 
on which to realign its own orientation and priorities.
    The two had to be inseparable processes. So in some of the 
most important work we did, we developed models for both. I 
commend them to your attention.
    The second major area we dealt with had to do with HUMINT, 
specifically the paucity of it. We put very strong emphasis on 
this capability, well before the bandwagon for it began to 
roll. We did take note of the role Congress had played in the 
dissolution of much of that capability and the restrictions on 
the kind of people that could be involved. But I think we're 
beyond that now, and I hope we stay beyond it.
    Finally, we dealt with the issue of economic intelligence 
commensurate with the emphasis we had placed on economics as a 
component of our national security arsenal, along with science 
and technology, as a much higher priority focus area.
    We had two dogs that didn't bark. I'll talk to those. If 
there's value here, here's where it'll be.
    To the first: It's the powers of the DCI and the 
profession-
alization of the billet. In the first case, it's not that we 
didn't address it, only that in the end, we could not find 
agreeable common ground.
    Since you invited me here today and not the rest of the 
commissioners, I'll tell you what my position was and is. If 
the DCI, or now the NID or the DNI or whatever we're going to 
call him, and if indeed that's our fate, to have one, if that 
person is truly to be the director of this Nation's 
intelligence apparatus, then he or she must be able to direct 
those elements on which the broad user community is dependent.
    Here's where I would break with David. By the way, I think 
only broad user community. I'll talk to that a bit more. By 
direction, I mean, resource allocation, budgets, and, the way 
Dr. Kay defined them, manpower requirements.
    At the time we struggled with this issue, the DCI, of 
course, already controlled the CIA. But our analytical team 
thought he needed more control over that portion of the budget 
that resided in DOD. Therein, of course, came the rub. The 
argument then was based on the notion that the non-DOD user 
community was increasing for some DOD products, especially 
those of NSA. In the world we saw coming, that fraction would 
only continue to increase.
    The argument is even more obvious today. I would probably 
transfer control of NGA and the NRO, as well as NSA, to the 
NID. Purely departmental organizations, such as DIA, INR in 
State, and service intel organizations, et cetera, should stay 
right where they are.
    These were the only organizational fixes we contemplated, 
and frankly I don't believe now that reorganization will by any 
means fix what's wrong with our intelligence community. I agree 
with Dr. Faulkenrath's comment recently, and echoed here by Dr. 
Kay, that our recent failures are due to performance, not 
organization.
    My last issue is a tough one, and has not to my knowledge 
appeared in the current debate. In fact, I may be the only one 
who's worrying about it, though I think others may if they 
start to think about it. That is the professionalization of the 
President's principal intelligence adviser.
    The President's chief military adviser is a military 
professional, standing at the very top of the entire profession 
of arms. We put only professionals in that position, and in 
fact our law requires that only one who has served as a service 
chief, vice chairman or commander of a unified or specified 
command can hold the position. Not so for the person who stands 
at the top of the intelligence profession and serves as the 
principal adviser to the President for intelligence.
    After 1947--and Dr. Zegart can elaborate on this, I'm 
sure--as a professional intelligence service began to be 
developed, professionals were placed in charge. The first few 
were military professionals, since there were no intelligence 
professionals at the time.
    When Eisenhower came to office, the first civilian was 
appointed, who, though not a professional, had senior 
leadership experience in a wartime ad hoc intelligence 
organization. In the years since, with an occasional exception, 
a trend of placing nonprofessionals in the position has 
evolved--lawyers, businessmen, academics, congressional 
staffers, politicians and the like.
    Indeed, there is nothing in law that requires 
professionalism or even national security experience. The 
President can choose whomever he wants and, though your consent 
is required, I am not aware of any occasion when the Senate 
objected to a nominee on the basis of lack of professional 
credentials. But should you?
    It is not just because the intelligence discipline, the 
science, the art, indeed the craft of it, are so specialized 
and complex that, like the military, begs for depth of 
particular knowledge in the one who is to lead. But it is also 
the special ethos of the professional that helps that person 
stand apart from the political considerations that inevitably 
surround every Presidential policy choice.
    Those who serve at the pleasure of a President for an 
expected term limited to his, who comes to office precisely 
because of shared politics and political reliability, come, I 
should think, under enormous pressure or temptation to give the 
President what he wants rather than what he doesn't want, but 
needs. When that servant is responsible for selecting the 
intelligence analysis to give his President, I think I'd prefer 
a professional to a political appointee with as much 
independence and job security as possible.
    It is without impugning anyone who has ever held the DCI 
billet or is about to that I advance this idea. I will develop 
it further in the question and answer period if you wish.
    I'd be happy to take your questions.
    [The prepared statement of General Boyd follows:]

 Prepared Statement of General Charles G. Boyd, USAF (Ret.), President 
           and CEO, Business Executives for National Security

    Senator Roberts, Senator Rockefeller, Distinguished Members of this 
Committee, it's always a special honor to be asked to participate in 
the important work of any congressional committee. My contributions, 
however modest, are offered with the highest sense of purpose.
    I have been asked, specifically, to discuss with you the Hart-
Rudman Commission--of which I was executive director--in the context of 
intelligence reform. I will summarize briefly that effort, and then let 
your questions guide the disscussion that follows. I will also give you 
a couple of personal perspectives derived from decades spent as a user 
of intelligence in the hope they will be of some use. I will leave 
spaghetti charts and wiring diagrams to others with more current 
organizational familiarity.
    By way of refresher, the Hart-Rudman Commission was chartered to 
try to determine what kind of world we are going to live in over the 
next quarter century, then develop a national security strategy 
relevant to that world, and finally to examine the structures and 
processes by which the Nation formulates and executes its national 
security policies, and recommend adjustments or restructuring as 
appropriate. Fourteen prominent Americans served as commissioners, with 
analytical, research, and support staff consisting of approximately 50 
people. We devoted over 2\1/2\ years to what was the most comprehensive 
review of our Nation's security apparatus to be conducted since 1947.
    The first phase of our work led us to a conclusion none held at the 
outset: that the security phenomenon our Nation would face in the early 
21st century, and the one for which we were least prepared, would be 
terrorism--in a variety of forms--ranging from small scale disruption 
to--quite possibly--mass casualty catastrophe of a magnitude that could 
change the very nature of the way our society works and interacts with 
the rest of the world.
    After that understanding had begun to settle into our 
consciousness, it affected, to a prevailing degree, how we would think 
about securing the base camp--our homeland--and then the effect that 
would have on all other aspects of national security, to include of 
course, intelligence.
    Hart-Rudman Commission is primarily identified now, in the 
aftermath of 9/11, for its' specific work on homeland security, and in 
retrospect it is the piece of work with which I am the most pleased. 
For our purposes today, however, I will ignore that, except where it 
relates to intelligence, as well as the 40 other major recommendations 
that dealt with other aspects of national security, and stick with the 
section that pleases me the least--that having to do with intelligence.
    With our conviction that terrorism would be the method of choice 
for most of our early 21st century enemies, came the dawning notion 
that the military component would decline in relative importance in the 
national security calculus. The economic, diplomatic and communication 
components would increase in relative value, and some--not all--
concluded that, ultimately, this type of conflict could not be won with 
the army, navy, marine corps and air force. Although their role would 
be important, such conflict would be won with the other components, 
with law enforcement, and with the most important element of all--
intelligence.
    The debate about intelligence, at this moment, is about 
organization, but that was not the centerpiece of our work on the 
subject. It was on process and priorites. We concluded then, as had 
others, that the intelligence community lost it's focus when the Berlin 
Wall came down, and, to that point, since the nation had no effective, 
systematic process for establishing new national security objectives 
and strategies, and was floundering in its attempt at re-orientation, 
it followed that the intelligence community had nothing solid on which 
to realign its own orientation and priorities. The two had to be 
inseparable processes, so, in some of the most important work we did, 
we developed models for both. I commend them to your attention.
    The second major area we dealt with had to do with humint, 
specifically the paucity of it. We put very strong emphasis on this 
capability, well before the bandwagon began to roll. I might add, much 
of the reason for the dissolution of that capability, and restrictions 
on what kind of people could be involved, came from the U.S. Congress. 
You've gotten over that now, I think, and I fervently hope you stay 
over it.
    Finally, we dealt with the issue of economic intelligence 
commensuate with the emphasis we had placed on economics as a component 
of our national security arsenal, along with science and technology as 
a much higher priority focus area.
    There were two dogs that didn't bark: the powers of the DCI, and 
professional-
ization of the billet.
    To the first--it's not that we didn't address it, only that in the 
end we could not find agreeable, common ground. Since you invited me 
here today, and not the rest of the commissioners, I'll tell you what 
my position was--and is: if the DCI, or now the NID or the DNI, if that 
is to be our fate, is truly to be the director of this Nation's 
intelligence apparatus, then he/she must be able to direct those 
elements on which the broad user community is dependent. by direction, 
I mean: resource allocation--budgets--manpower--requirements.
    At the time we struggled with this issue, the DCI of course already 
controlled CIA, but our analytical team thought he needed more control 
over that portion of the budget that resided in DOD. The argument then 
was based on the notion that the non-DOD user community was increasing 
for some DOD products, especially those of NSA, and in the world we saw 
coming that fraction would only continue to increase. The argument is 
even more obvious today, and I would probably transfer control of NGA 
and NRO, as well as NSA, to the NID. Purely departmental organizations 
such as dia, inr at state, service intell organizations, etc should 
stay right where they are.
    My last issue is a tough one, and has not, to my knowledge, 
appeared in the current debate. In fact, I may be the only one who is 
worrying about it, though I think others may if they start thinking 
about it, and that is the professionalization of the President's 
principal intelligence advisor.
    The President's Chief Military Advisor is a military professional, 
standing at the very top of the entire profession of arms. We put only 
professionals into that position, and in fact our law requires that 
only one who has served as a service chief, vice chairman, or commander 
of a unified or specified command can hold the position. Not so, for 
the person who stands at the top to the intelligence profession, and 
serves as the principal advisor to the President for intelligence.
    After 1947, as a professional intelligence service began to be 
developed, professionals were placed in charge. The first few were 
military professionals since there were no intelligence professionals 
at the time. When Eisenhower came to office the first civilian was 
appointed who, though not a professional, had senior leadership 
experience in a wartime ad hoc intelligence organization.
    In the years since, with occasional exception, a trend of placing 
non-professionals in the position has evolved: lawyers, businessmen, 
academics, congressional staffers, politicians, and the like, and 
indeed there is nothing in law that requires professionalism, or even 
national security experience. The President can choose whomever he 
wants, and though your consent is required, I am not aware of any 
occasion when the Senate objected to a nominee on the basis of lack of 
professional credentials. Should you?
    It is not just because the intelligence discipline, the science, 
the art, indeed the craft of it are so specialized and complex that, 
like the military, begs for depth of knowledge in the one who is to 
lead, but it is also the special ethos of the professional that helps 
the person stand apart from the political considerations that 
inevitably surrounds every Presidential policy choice. Those who serve 
at the pleasure of a President, for an expected term limited to his, 
who come to office precisely because of shared politics and political 
reliability, come--1 should think--under enormous pressure or 
temptation to give the President what he wants and not necessarily what 
he doesn't want but needs; and when that servant is responsible for 
selecting the intelligence analysis to give his President, I think I'd 
prefer a professional to a political appointee--with as much 
independence and job security as possible.
    It is without impugning anyone who has ever held the DCI billet, or 
is about to, that I advance this idea. I will develop it further in the 
question and answer period if you wish.
    I'll be happy to take your questions.

    Chairman Roberts. General Boyd, we thank you very much for 
your statement.
    Senator Rockefeller.
    Vice Chairman Rockefeller. Thank you all very much. I want 
to make a sort of a general observation as a way of using up my 
time, at which point I'll ask a question.
    There is, I think, a tendency as I've been to hearings and 
I've listened to them on C-SPAN and read about them in the 
papers and talked with colleagues about them, to refer to the 
30, 40, 50 attempts to reform the intelligence community over 
the years. Then, having done that, and since none of that was 
successful, then people say, ``Well, there isn't the will to do 
it'' or, ``Dr. Zegart, you have this wonderful phrase, `There 
is nothing quite like intelligence reform to trigger the 
antibodies of affected agencies.' '' I love that.
    But we've never been in a situation like this. Intelligence 
was barely paid attention to for years, even during the cold 
war and the post-cold war period, except by those who needed to 
do it--certainly not the media or the public in general. You 
were probably thinking about it, you were all living it.
    Because it hasn't worked before, it's considered to be sort 
of an undoable task. Because it's considered to be an undoable 
task, then if somebody suggests the idea of a national 
intelligence director, it's considered too simplistic, and it's 
sort of a way out, as opposed to something that might just 
possibly work, which is what I happen to believe, provided that 
that person has the budget authority and the powers and the 
tasking and all the rest, the follow-up that goes along with 
it.
    I want to make that point, that I think there's a natural 
instinct for some people to say, ``Well, it can't work because 
it hasn't worked before'' and what you're suggesting is put one 
person in charge of everything, that's what everybody does when 
there's a crisis and you've got to get a quick answer.
    Well, No. 1, we don't have to have a quick answer. We have 
to have a right answer. That will take the time that it takes. 
We're gathered here in August as sort of a statement of 
intensity, but probably not as a statement of refinement of 
position, because that will take debate, conferences back and 
forth between the executive and the legislative branch and the 
services, and all the rest of it. I just want to make that 
point.
    Another shibboleth, from my point of view at least, is the 
fact that somehow--and it has been said by several recently, 
and accepted, therefore--that if you have intelligence reform--
and it's called intelligence reform, just the word intelligence 
reform--that by some reason the interest of the warfighter is 
compromised. I want to go into that and ask each of you your 
views on that.
    There's been a lot of discussion about whether the creation 
of the national intelligence director with unified budget 
authority, would have the unintended consequence of depriving 
the warfighter of tactical intelligence. Now, that's accepted 
by a lot of people, because it's said by the people who would 
be affected by it.
    First off, it's important, I think, to remember that the 9/
11 Commission recommends that the Secretary of Defense keep 
control, as Chairman Roberts has pointed out, of the military 
intelligence programs contained in the Joint Military 
Intelligence Program, or JMIP, which is substantial, and the 
tactical intelligence, the TIARA budgets, which is the service 
intelligence capacity, which is in and of itself.
    So those immediately are not included in the equation and 
therefore, are doing nothing but helping the warfighter. They 
are left out of the national intelligence director's realm.
    Now, the 9/11 Commission is recommending giving the 
national intelligence director budget executive authority only 
over those military intelligence programs currently in the 
national--and I repeat that--in the National Foreign 
Intelligence Program budget. This shift of authority would not 
affect the Secretary of Defense's current control over tactical 
and joint military intelligence programs. I can say that 10 
times in a row. It's the truth, if we do it, if we choose to do 
it.
    Now, the argument is that a national intelligence director 
could control national intelligence systems and personnel in a 
way that might be detrimental to the best interests of the 
warfighter. There's always the question of what's going to 
affect the warfighter. As you indicated, that is the priority. 
The question is, at what level of priority. I think everybody 
agrees it is the priority, like you do.
    But on the other hand, that potential exists today in our 
current system. The dispute that might arise between the 
current DCI, the director of central intelligence, and the 
Secretary of Defense would have to be escalated today, were 
there to be such a disagreement, up toward the President, 
through the National Security Council--in the later round of 
questioning I want to talk about that, Dr. Kay, what you said 
about that--to see if it could be resolved, and if it couldn't 
be resolved at the national security level, it would be taken 
to the President for a decision.
    In the Government Affairs testimony that Chairman Roberts 
and I went to the other day, Acting DCI McLaughlin replied, and 
I think he's been there 30-plus years, that he could not recall 
this escalation ever occurring.
    So evidently, something gets worked out. Now, it may be 
because, as George Tenet said, I have a really good 
relationship with Don Rumsfeld, even as we understood that he 
was not necessarily going to be around forever. So it depends 
on personal relationships. But there's always the way out now, 
much less under what we are talking about. So this avenue of 
appeal would still exist if the NID and Secretary of Defense 
were at odds under organizational restructuring proposed by the 
9/11 Commission.
    So, two questions for our witnesses, each of you.
    First, do you believe that a national intelligence director 
would be unsympathetic to the legitimate intelligence needs of 
the warfighter? Would they be unsympathetic? Is there something 
about a DCI director that would make him or her unsympathetic? 
For that matter, has the DCI historically been insensitive to 
military requirements, particularly in times of war?
    Second and last question: If the ultimate decision on 
pressing matters of national security resides with the 
commander in chief, as it does today and it would under this 
system if adopted, is there really a danger of a national 
intelligence director forcing his will on a Secretary of 
Defense in a way that would deprive the warfighter of the 
tactical intelligence that he and she need?
    Dr. Zegart. Senator, these are both crucial questions.
    I do not believe that a national intelligence director 
would be unsympathetic to the warfighter. It's no surprise that 
the Secretary of Defense has made this argument. No sitting 
Secretary of Defense since 1947 has taken kindly to the idea of 
intelligence restructuring.
    In fact, that natural protection of the Defense Department 
was in part what led to the flawed design of our intelligence 
community that we're dealing with today. It was exactly that 
attitude that stripped the DCI of the authority to actually 
manage the community that he was charged to do by statute.
    So that's an argument that we've seen for quite some time. 
I understand where it comes from, but I do not believe that 
there is any indication that the DCI in history or that a 
national intelligence director in the future would compromise 
the warfighter.
    Quite the contrary, actually. What keeps me awake at night, 
among other things, is the idea that we will place too little 
emphasis on strategic intelligence, the kind of long-term 
assessments that we saw so lacking, with no national 
intelligence assessment on terrorism from 1997 to September 
11th; with no collectors on the ground in Iraq after 1998. 
Those are strategic intelligence questions, and I believe that 
the danger is that we give so much attention to tactical 
intelligence that we end up not providing the type of 
intelligence support that allows the President to make policy 
decisions about whether to send troops in harm's way to begin 
with.
    Vice Chairman Rockefeller. Who is it who appoints the 
national intelligence director?
    Dr. Zegart. The President appoints, with the confirmation 
of the Senate.
    Vice Chairman Rockefeller. Right. Thank you, Mr. Chairman.
    Chairman Roberts. Dr. Kay and General Boyd, do you have any 
comments?
    Vice Chairman Rockefeller. Yes, my apologies.
    Dr. Kay. I can be very brief on this one, because I 
essentially agree with Amy. I think the real danger is not that 
tactical intelligence will be devalued. In fact, the history of 
the last decade is tactical intelligence has gained at the 
expense of strategic intelligence. Chairman Roberts has started 
these hearings by saying we don't have to just deal with 
terrorism, there will be other threats. There will indeed be 
other threats, and those are the ones that strategic 
intelligence must address.
    I would add, Senator Rockefeller, it's hard for anyone to 
argue, I would think, that the present system serves the 
warfighter well. I don't know of any combatant commander who 
has suffered so poorly from knowledge about the tactical 
deployment of Iraq's weapons of mass destruction as Tommy 
Franks.
    If you read his book, he's very vocal about that. He put 
people in harm's way by going to Mach-4 gear because he 
believed and had been told that there were weapons of mass 
destruction out there that were not out there. So the present 
system doesn't serve the warfighter that well.
    What you've got is I think what Amy refers to, these 
antibodies against reform.
    Chairman Roberts. General Boyd.
    General Boyd. Easy, no and no.
    But I'll add a comment; I'm old enough to have some 
perspective. I remember as a young fighter pilot going to North 
Vietnam with 10-year-old target photos on my knee, when every 
day, U-2s and SR-71s were collecting strategic intelligence not 
available to the likes of me, shared with other intel guys, I 
guess.
    I can remember very recently, as an active duty four-star, 
being deluged with tactical intelligence far beyond any 
possible ability to consume it, use it effectively.
    I believe, if anything, what the other two respondents have 
said, and that is that I worry more now about neglecting the 
strategic sphere, something that certainly wasn't the case when 
I was a young fighter pilot.
    Chairman Roberts. Senator Hatch has to leave for a prior 
commitment. I'm going to recognize him. We are under a 5-minute 
timeframe.
    Senator Hatch. Well, first of all, let me thank you, Mr. 
Chairman. I want to thank you, Mr. Chairman, and our Vice 
Chairman, Senator Rockefeller, for holding these important 
hearings today. I also like to thank the Committee staff for 
their hard work. They've worked very, very hard over the recess 
for this hearing and working on proposed legislation that we've 
been chatting about.
    I know that when we return, the Chairman intends to hold 
the confirmation hearings for Porter Goss, with whom I met this 
morning. Of course, he's had about 10 years inside experience 
with the CIA and I believe he would be an excellent DCI. So he 
certainly, I think, knows where the bodies are and certainly 
knows how to correct some of the difficulties. We'll certainly 
try to help him at every step of the way.
    But I'd just like to ask a question. Is it Dr. Zegart? Dr. 
Zegart. Then have the other two respond, too.
    I want to personally thank you, Dr. Kay, for the service 
that you've given. You've appeared before this Committee 
before, and I thought your testimony was really tremendous 
then, as it is today.
    General, I just can't begin to tell you how much we 
appreciate you and the service you've given, the 35 years in 
the military plus the service you've given in these areas.
    But let me just ask this question. I'd like all three of 
you to answer. That is that your testimony indicates that the 
9/11 Commission doesn't go far enough in guaranteeing that 
there will be a broad cross-fertilization of personnel in the 
intelligence community.
    Now, it's my sense that communication is dramatically 
improving across agencies, but I also recognize your concern 
that unless these initiatives are formalized in legislation and 
become a routine part of professional development, that these 
efforts will be lost in the shuffle. So I'd like you to comment 
on that, and all three of you comment. I don't want this to 
become another bureaucracy or another worthless bully pulpit 
with no authority. If we're going to do this, it ought to be 
done right.
    But those two things are matters of great concern to me.
    Dr. Zegart.
    Dr. Zegart. Senator, I agree with you. I think that 
culture, first of all, is a very difficult thing to change. We 
know that.
    There are three levers that you can use in legislation to 
change culture. The first is, change how people are hired. The 
second is, change how they're trained. The third is, change how 
they're promoted, I think an issue that David brought up 
eloquently in his testimony. You have to reward good 
performance and punish bad performance.
    Now, there is a balance to be made, obviously, between 
writing too much detail into legislation that limits discretion 
of the community to change, but I think we've erred on the 
opposite side. So I do think there are opportunities for 
legislation to make inroads in making cultural changes 
throughout the community.
    As I mentioned, the two that I know the most about and that 
I think would be good places to start are age-old ideas and 
that is training programs and incentives for rotations.
    Let me just add one other thing, which is that I am struck 
by how the challenges that we are discussing today are not so 
much about developing new capabilities; they are about fixing 
old problems.
    Washington is littered with stacks of studies of 
commissions past and governmental studies past, and many of 
them have reached consensus about these issues. Training is one 
of those issues and promotion incentives.
    Senator Hatch. Thank you.
    General.
    General Boyd. I believe the issue of culture is indeed at 
the heart of the matter, and professionalism. I'm not sure how 
much legislation you can do to fix that. I think you can put 
emphasis on it in ways and help emphasize the kind of person 
that gets the job of the NID and so forth, that can have a lot 
to do with it.
    Over time, it's education, exactly professional education, 
it's inculcating these professional values and performance 
standards, a meritocracy approach that you get passed over 
twice, you're out of here buddy, you know? Upward mobility, 
accelerated for the high performer, and the slow performers go 
home. That's the way you change behavior. That has nothing 
whatsoever to do with organization.
    Dr. Kay. Senator Hatch, I think you're quite right in 
saying that there's evidence with regard to both terrorism and, 
in my immediate case, Iraq WMD. Some of the collector barriers 
have been broken down, the cultural barriers, and people are 
communicating. That's what usually happens in a system when 
you're in a crisis, you throw out the rule book and if you've 
got good people, you try to get things done.
    I think all of our concern is--and I've seen this 
personally--as the crisis is passed and things turned back to 
normal, the old habits, the old culture, the old barriers 
impede themselves.
    I will say twice in my career, with regard to Iraq, I've 
benefited from collection systems and collectors across the 
government and across agencies that have done tremendous jobs. 
I will say with Iraq--and it really is both the terrorism and 
Iraq in the current case--there are unheralded heroes out there 
who deserve it. At the top of my list is Charlie Allen, who I 
have seen Charlie Allen do absolutely marvelous things with 
collection systems across this government that people said were 
impossible to do. They served my interests greatly.
    I would like to make that the norm, and not the exception. 
I think I'd like to see people like Allen rewarded, and people 
who don't perform that well punished and their career impeded. 
The system now doesn't do that.
    Charlie stands out because he is such a golden exception in 
this. He does it under crisis. He would be the first to tell 
you, in areas that you can't break the rules, because there's a 
crisis brewing, things work their usual way, and that's not 
very well.
    Senator Hatch. Dr. Kay, you mentioned that the President--I 
think your 10th point you made of the 10 major points that you 
made in your remarks earlier--is that the President should have 
the ability to run truth tests. Can you tell us a little bit 
about how he or she might be able to do that?
    Dr. Kay. I think explaining that to a politician as astute 
as you is like telling my grandmother how to suck eggs.
    Senator Hatch. We're giving you a good chance here.
    Dr. Kay. That was never a good chance with my grandmother, 
sir.
    Look, it is foolish in the extreme to believe that just 
because you sit in any office, and that includes the Oval 
Office, that everyone who comes through that door is committed 
fully to serving your interests and only your interests, and 
what they tell you is the full truth. Every President who has 
been successful, at least that I know of in the history of this 
republic, has developed both informal and formal means of 
getting checks on whether people who tell him things are in 
fact telling him the whole and full truth.
    I think this is particularly crucial and difficult to do in 
the intelligence area. The recent history has been a reliance 
on the NSC system to do it. I, quite frankly, think that has 
not served this President very well.
    I think we need to think long and hard about how it might. 
My personal, if I were emperor for a day and not director of 
national intelligence, would be to see that there be a special 
assistant to the President for national intelligence, and 
indeed I think he should be a professional, or someone with 
professional knowledge, who in fact can run those truth tests, 
but is part of the President, the Executive Office of the 
President, not part of the NID structure. He serves the 
President and the President's interests while he's in that job.
    Senator Hatch. I think that's a good suggestion.
    Thank you, Mr. Chairman.
    Chairman Roberts. We thank you, Senator.
    Senator Mikulski.
    Senator Mikulski. Thank you very much, Mr. Chairman.
    First of all, I want to thank you and the Vice Chairman for 
holding this series of hearings on reform--before we broke, the 
Feinstein hearing, today and the ones that we will keep on 
doing. I think we're all committed to reform.
    When one reads the 9/11 Commission, they made 41 
recommendations. Sixteen the President can do through Executive 
Order. Nine the President needs our help by putting money into 
Federal checkbook, and 16 fall squarely in our lap. So I look 
forward to working with you.
    Yesterday I was with the Government Ops Committee to hear 
from the families, 60 of whom were from Maryland who perished 
on that day, and of course here today, and you call us back any 
time you want and I'm ready to be here.
    Mr. Chairman, before I ask our very able witnesses 
something, I want to bring something to the attention of the 
Committee that I think was a breach of security. Since it's in 
public document, I can do it here.
    In all my intel reading over the weekend, I thought to 
myself, why be on the Committee; all I need is a subscription 
to Newsweek. When I read the August 16 issue of Newsweek--and I 
commend it to my colleagues, called ``Target America''--there 
was this article about the arresting of a man by the name of 
Khan. That provided detailed information about his role in al-
Qa'ida, how the United States intelligence services would use 
him to find and capture other terrorists, including those in 
the United States. The arrest and capture of Khan was a major 
step in penetrating the al-Qa'ida communication network.
    He was the switchboard for bin Ladin. Reading from 
Newsweek: ``Khan had access to handwritten notes delivered by 
secret relays that came from the caves of bin Laden himself.''
    This is the intelligence find of a lifetime. Agents live 
for this time. We had the man. We had the computer. We had his 
address book. We were using his address book to e-mail 
operatives.
    According to what Newsweek did, they gave details about how 
we e-mailed operatives in the United States, the United 
Kingdom, and other places around the world. He was outed on 
August 2nd, to go to the news on August 3rd, while we captured 
13 more al-Qa'ida networks, then everything shut down.
    Dear friends, his arrest could have been the intelligence 
breakthrough of a lifetime. It's a wasted opportunity. All of 
our people working in the field, many of you know the kind of 
work that's done--our Committee knows, too--dangerous, 
requiring great risks and sacrifices. So what do we have now? 
So what do you think the guys in the cave think now? Where do 
you think they're communicating? We had in him the ability to 
do this.
    So I believe that the first reform needs to be no leaks. I 
really believe that we need to find a way to institutionalize 
this and then take strong accountability.
    Colleagues, you need to know I'm writing a letter to the 
President, asking the President to investigate this and find 
out who made the Khan information--not only his arrest, but the 
information--so public that the guys in the cave know now what 
we've got and what we've got a hold of. I believe going with 
the recommendations of Dr. Kay and General Boyd and Dr. Zegart, 
performance, and it needs to be accountability. I think we need 
to find out who did this, and I think they should be fired.
    I really commend to the Committee and its leadership, 
particularly Senator Roberts and Chairman Rockefeller, read 
this, because it's not just your regular arrest here, the 
arrest of a lifetime, and the information we knew, to see if 
the Committee wants to take any other action about it.
    Chairman Roberts. We'll be happy to work with you. I am 
familiar with the article, as is Senator Rockefeller. It is a 
matter of extreme concern. I thank the Senator for making her 
views public. We will work with you on this matter. As you 
know, we have been plagued--and I'm using the editorial ``we'' 
here, including the Committees of the Congress and the agencies 
and everything else about leaks.
    But this is especially egregious. We will work with you on 
this topic.
    Senator Mikulski. Well, Mr. Chairman, that's exactly right.
    My letter to the President is not a confrontational letter, 
nor is it a partisan letter. It's an American Senator's letter. 
I know you've taken this. But I think our Committee, both its 
members, then what also happened in the Congress and so on, I 
really do think we need--our entire government really needs to 
come to grips with the consequences of what leaks mean.
    I thank you for your indulgence. Perhaps during a second 
round I can ask our very able witnesses about their testimony.
    Chairman Roberts. I thank the Senator.
    Senator DeWine.
    Senator DeWine. Mr. Chairman, thank you very much.
    Well, this has been a very enlightening and interesting 
hearing.
    Let me if I could, just briefly summarize. General Boyd, 
your comment was that it's performance, not organization, in 
regard to this whole proposal about a national intelligence 
director.
    Dr. Kay, you're agnostic about the whole thing, in your own 
words.
    Dr. Zegart, you have a little different perspective. If I 
could quote from a transcript from National Public Radio, you 
state, ``While a proposal for a director of national 
intelligence is the most popular reform proposal right now in 
Washington, what that would essentially do is separate the CIA 
director from the job of running the community. I am probably 
in the minority here in thinking that that's not the way to go.
    ``I believe that the problem with the current DCI's 
position is not that the job is too big, but that his powers 
are too weak. We need to have a head of the community who has 
the heft of an agency behind him in order to run the entire 
community.''
    I want to ask you in a moment to explain that a little bit 
further.
    Then in your written statement and also in your oral 
statement, you said: ``In particular, I believe that separating 
the community head from the CIA has drawbacks that may be less 
obvious than the benefits. One concern is that a director of 
national intelligence who is not tied to the CIA will be more 
likely to view intelligence needs and assets through tactical 
lenses.''
    Then you go on to explain that a little bit.
    I'm not sure I understood why that would be true. So my 
second question would be would you explain that statement. Why 
would that person who's not tied to an agency, not tied to the 
CIA, be more likely to look at things from a tactical and not 
the big picture?
    Dr. Zegart. Senator, whether to create a new national 
director of intelligence or to, on the other hand, bolster the 
power of the DCI, is something that I've grappled with for 
quite some time, and I don't think it's an easy call.
    Senator DeWine. A lot of us have.
    Dr. Zegart. Right.
    On balance, however, let me make two points. First is that 
my greatest concern is that there be no structural change 
whatsoever. I think either solution offers a dramatic 
improvement to what we have today. I'm concerned that we can 
get distracted into debating which is the perfect solution, 
when neither is perfect and both are better than what we have.
    That said, I do think----
    Senator DeWine. That we understand, we appreciate. Thank 
you.
    Dr. Zegart. But I do fall in favor of bolstering the DCI's 
power, for four reasons, some of which you expressed.
    The first is that I do believe that there's a strong case 
to be made that the job is not too big, the powers are too 
weak. We've never had a DCI with the kind of powers that we're 
talking about giving the national intelligence director. Now, 
there are arguments that disagree with that.
    The second is that, in general, in organization theory, 
simpler is better. The fewer moving parts in a machine, the 
easier it is for the machine to work well. The fewer phone 
calls the President has to make to find out what's going on in 
intelligence, the better off we are--provided that one-stop 
shopping does not mean one view, which David alluded to is a 
critical problem of tradecraft today.
    Third reason actually has to do with this Committee's 
report on weapons of mass destruction in Iraq. What I see, and 
I agree with David, in that case what I see is more of a 
tradecraft failure than a structural failure.
    It's not so much that the director of the CIA cannot run 
the community. The problem was that the CIA failed to make 
appropriate use of its unique position in the community to 
provide the dissenting views and the nuance, and to provide 
one-stop shopping that informs and improves policy 
decisionmaking in the White House.
    So the CIA was created to bring together different elements 
of the intelligence community. It's the same idea behind the 
National Counterterrorism Center. Whenever you try to fuse 
intelligence in one place, you run the risk of providing only 
one perspective. I see it as fundamentally a failure of 
tradecraft rather than a failure of organization.
    Finally, to get to your point, your question about tactical 
versus strategic intelligence, I think that all agencies are 
not created equal, and that the vast majority of agencies in 
the community are housed in the Pentagon and have a Pentagon 
perspective.
    My concern is that we actually need to empower whoever runs 
this community with the ability to think about long-term 
intelligence analysis. I think there's a real danger that, 
absent the backing of our premiere strategic analysis outfit in 
the CIA, that there'll be a tendency not to do that enough.
    Senator DeWine. Well, are you saying then that there is a 
built-in Pentagon bias, then?
    Dr. Zegart. I think there's a natural gravitational pull.
    Senator DeWine. A natural gravitation that way?
    Dr. Zegart. Yes, I think there's a natural gravitational 
pull. In any endeavor that we do, there are certain things we 
put on post-its that get to the top of the pile, and supporting 
the warfighter and providing that intelligence always gets to 
the top of the pile.
    The challenge is to make sure that the things at the bottom 
of the pile don't get ignored, the long-term intelligence 
assessments that are critical for our national security.
    Senator DeWine. Any comments by the other two witnesses?
    [No response.]
    Senator DeWine. OK. My time is up. Thank you Mr. Chairman.
    Chairman Roberts. Senator Bond.
    Senator Bond. Thank you Mr. Chairman.
    I appreciate the testimony of all three of you. We've 
certainly had an opportunity to become very well acquainted 
with Dr. Kay and as usual, Dr. Kay, I appreciate your comments 
and suggestions. I welcome General Boyd and Dr. Zegart.
    Dr. Zegart, you mentioned the fleeting opportunity for 
reform, we're only going to get one bite at the apple. I think 
it's really important that we take that bite well. One of the 
things I'm concerned about is that we rush into doing something 
just so we can show that we've done something before November 
rolls around.
    But I really think there's a problem. Since we are at war, 
we have to present our intelligence community with an improved 
system while they're fighting a war, while that system has to 
continue to function, as we continue to perform what may be 
major transplantation surgery.
    I am concerned that Congress not do so much that we 
interfere with the ongoing, the tactical, if you will, as we 
prepare for the strategic.
    Several things that you said about the failure of 
tradecraft lead me to the question: Are there things that are 
being proposed for Congress to do that we ought not to be 
doing, that ought to be done?
    As you said, powers were there that were not exercised. Can 
you help us draw a distinction where we ought to keep our nose 
out of? While you do indicate that we should, for example, 
provide community training and cross-jurisdictional transfers, 
are there things that we are talking about doing that we ought 
not to do?
    Dr. Zegart. Senator, let me just say that I share your 
concern that, on the one hand, Congress act with urgency; on 
the other hand, Congress act with care. I know it's a difficult 
balance between the two. I fall on the side of urgency, in my 
mind, rules the day.
    Are there things that Congress should keep its nose out of? 
Yes. That is legislating too far into the weeds about how the 
agencies should operate.
    For example, while I think it would be certainly beneficial 
to require a rotation to other intelligence agencies, I think 
legislating the details of how long those rotations should be, 
where they should be specifically, those kinds of things should 
be left to the intelligence community to sort through, things 
that require professional judgment to sort out.
    But I err on the side of thinking that Congress actually 
can do great by providing more specific direction to the 
community rather than less.
    Senator Bond. I would like the comments of the others, but 
to General Boyd, you've done an excellent job of laying out the 
problems, that Congress inhibited the effective collection of 
HUMINT. I've long been a believer in better HUMINT. But I'm 
worried that we may try to get too far into legislating what 
kind of HUMINT. Can you give us some guidance on that and the 
other question I asked more generally?
    General Boyd. I don't know. I don't have a clear enough 
grasp, sir, of how far you really plan to go or you think 
you're headed in giving power to the NID. If I had a better 
grasp of that, I think I could answer your question better.
    I think that, if you're going to stand this guy alone, give 
him these national agencies, expect of him significant 
analytical capability, you're either going to gut the CIA to 
give him their analytical capabilities or else you're going to 
duplicate them, and that all gets squirrelly.
    Now, if you can help me understand--if on the other hand, 
what you have in mind is, if I can be just so simple, remember 
I'm a fighter pilot; it's got to be simple if I'm going to 
understand it--if you're going to change the DCI's name to NID 
and give him some significant power that he does not now 
exercise over those national agencies only, but leave him right 
there, if that's what you're going to do----
    Senator Bond. Excuse me, General. I'm about to get the red 
light, and I wanted to have Dr. Kay add his 2 cents worth. Also 
I'm fascinated to know, which of the 15 we ought to be looking 
at to get rid of? That one, I just find too juicy to pass up.
    You could always slip us a note----
    Dr. Kay. I probably should pass up, as well.
    Let me, Senator Bond, let me emphasize, the thing about 
urgency that worries me is that we will assume that we have 
really solved the problem when we do something quickly. This is 
a journey; it's not a quick fix. We didn't get in this State in 
1 year; we got in this State because of well over a decade of 
the system simply going awry and not being well-managed.
    Now, I come down--although Senator Roberts has 
appropriately tweaked me for being an agnostic that has 
commandments--I come down to this simply because I too don't 
know whether we have agreement in the executive branch and in 
Congress about what are the powers and the problems that the 
national intelligence director should address.
    If I understood that, and that we weren't simply interested 
in another symbolic czar, I think we could all answer that 
question better. That's what these hearings I know are designed 
to help you elucidate.
    I must say, I guess in balance, and it's on the last two 
pages of my written statement, I come down recognizing that 
we're going to have an NID one way or the other. I mean, I grew 
up as a poor kid on the east side of Houston, and our favorite 
game was walking rail tracks. I survived because I understood 
when to get off the tracks when the train was coming at an 
appropriate time and not stay on it.
    I know there's a train coming down there. I just want to be 
sure that we take the steps to make this an effective and a 
real reform and don't blow this opportunity and do something 
that is quick and self-satisfying for the moment, but not 
effective over the next decade.
    Senator Bond. Thank you.
    Chairman Roberts. Senator Chambliss. Who has left the 
premises, who evidently caught the train.
    Senator Hagel.
    Senator Hagel. Mr. Chairman, thank you. I wish to also 
thank our three witnesses for splendid testimony and important 
insight into a great challenge that we have before us, as you 
each have articulated so clearly.
    I was intrigued with the three of you addressing this 
intelligence community reform with heavy emphasis on 
performance, profess-
ionalization and culture. As the three of you know, and I think 
we all appreciate here, you don't legislate any three of those. 
That comes from a whole different agenda, history, tradition, 
leadership, vision.
    Now, with that in mind--and incidently, I happen to agree 
with you on those points--and in the interest in time, I would 
be very interested in getting the three of your brief comments 
on these questions: One, do we need an NID? Two, if we do, then 
what authority should you give the NID--budget, policy, line-
management--and over which of the 15 agencies?
    We've not talked today in much detail about domestic versus 
foreign intelligence. We appreciate the integration of those 
and understand the critical nature of those. We've talked about 
tactical versus strategic. Any way we come at this, it is 
difficult.
    The third part, if we could address this, what in your 
opinions, without getting into great detail, by virtue of the 
President's Executive Order power could he do now, would he 
have the power to do by Executive Order?
    Why don't we start in the same sequence of the testimony we 
heard, and Dr. Zegart, you would be first, thank you.
    Dr. Zegart. It's not often I get to go first rather than 
last. I appreciate that.
    Do we need an NID? Yes, Senator, I believe we do. I think I 
part company with David a little bit on this. While I believe 
that performance matters and culture matters, structure 
matters, too. Structure is not about moving boxes on a chart; 
structure is about power. It's about who can tell someone else 
to do what and whose memo goes on top.
    What I see in looking at the national intelligence 
community now is that we have someone who's supposed to run it 
who cannot match resources against priorities. That's a recipe 
for failure, I think. We've seen that recipe played out over 50 
years. So I think reforming the structure so that whoever runs 
the intelligence community actually can match those resources 
against priorities gives us a leg up. Will it solve the 
problem? No way. But it gets us a large step closer.
    Your second question, what authority specifically should we 
give such a director? I am not a lawyer, happily, but I am an 
organization theorist, and so I can tell you what I think that 
person needs to have on the ground, and I think there are three 
things.
    The first is the ability to match funds against priorities 
and to be able to move those in a fluid manner. It's the 
equivalent of the CEO who can actually devote the resources in 
the company to the divisions that need it. Whether that's 
through appropriations authority or whether that's through 
reprogramming authority, I don't know enough to be able to say.
    The second thing, I think, that----
    Senator Hagel. Excuse me. But make it clear, if this is 
your point, budget authority, if we have this person, is 
critical.
    Dr. Zegart. Absolutely, absolutely.
    The second critical power is personnel authority. It's all 
about money and people in organizations, as you know, and the 
ability to hire and fire and to transfer personnel across 
agencies in a seamless way--again, to match resources, in this 
case people--against critical priorities, to be able to move 
them around.
    The third component is actually to have the capability to 
make those authorities real. It's one thing to have them in 
law; it's another thing to exercise them in practice.
    What that means is, the computer systems actually operate 
together, so that there aren't different financial accounting 
systems for each agency in the community, and the personnel and 
the staff to make use of that information. There's an old 
saying in management: ``You can't manage what you can't 
measure.'' You have to be able to measure these things in order 
to manage them.
    Senator Hagel. Thank you.
    General? Or I guess we went to Dr. Kay, that's right.
    Dr. Kay. Let me try to be very quick. I think we need 
organizational reform. I could imagine a situation where it 
could be----
    Senator Hagel. Does that mean we need an NID?
    Dr. Kay. Well, let me get to that. I think I can imagine a 
situation when the appropriate answer might have been we just 
need to increase the authority and power of the director of the 
Central Intelligence Agency.
    I really don't believe that now, because of the reasons 
this Committee documented itself. The failure of the CIA in 
Iraq was so persuasive and indicative of large-scale failures 
in analytical and collection tradecraft that it is a full-time 
job repairing that agency. It must be a priority. It is the 
crown analytical jewel of our system.
    So I actually think that right now, for better or for 
worse, as agnostic as I am, that in fact we need to create an 
NID.
    That gets me to your second point, one I devoted, actually, 
most of my written statement to--the authorities necessary to 
make that NID effective. The worst thing that could happen, in 
my view, is a reorganization that creates an NID that is 
feckless, that looks like the drug czar or the cancer czar or 
the other multitude of czars that are on the ashcan of 
Washington history.
    That is fundamentally budgets, personnel, strategies and 
holding people responsible for execution even though they may 
exist in other organizations, as undoubtedly they will in some 
of these 15 or other numbered agencies that we have.
    Senator Hagel. Authority over all 15?
    Dr. Kay. I think you have authority over all 15. It doesn't 
necessarily mean that all 15 have to report fully and directly 
to the NID. I think there are creative ways to do this that 
preserves the interests of DOD and the warfighter but at the 
same time ensures that we get actual reform.
    The danger is you will skew in a way that in fact 
accommodates and guts the czar. That's what we've done before 
in almost every other czar.
    Senator Hagel. Thank you.
    General.
    General Boyd. You need--I don't care what you call it, you 
need an empowered DCI. If you want to call him an NID, that's 
OK with me. I would like for him to stay right where he is. I 
would like to have him have the powers that we've just been 
discussing.
    Senator Hagel. When you say that, excuse me, you mean at 
CIA without a new job, without a new title, or without another 
box?
    General Boyd. It doesn't matter. The title really doesn't 
matter. Maybe it shows--I mean, you know, it shows something 
new. But what's important is he ought to have those agencies 
that truly have broad user requirements, and that means the 
ones we talked about earlier--NSA, NGA, NRO and, of course, 
he's already got the CIA. He ought to have those absolutely. He 
ought to have them in budget, in manpower, just as you've 
heard, in requirements development.
    He ought to have nothing whatsoever to do with the Coast 
Guard's intelligence. I mean, they've got peculiar little 
requirements that they--and he's going to waste his time doing 
that.
    So the 15, I would give him the authority over one that he 
already has, three more, with real authorities, and let it go 
at that. That's a consolidation of collection. I would keep 
everybody else's, and let the departments draw on him, on that 
collection pool, as their departmental needs require.
    Senator Hagel. Thank you. Mr. Chairman, thank you.
    Chairman Roberts. Senator Snowe.
    Senator Snowe. Thank you, Mr. Chairman. I want to thank our 
witnesses, most especially for your honest appraisal regarding 
the challenges before us, and particularly the creation of a 
director of national intelligence.
    You know, obviously, the experience of this Committee, the 
recent experience has, of course, been our investigation on the 
issue of whether or not we had stockpiles of weapons of mass 
destruction in Iraq.
    That's basically what prompted me to support the creation 
of the director of national intelligence. Because it was clear, 
and abundantly clear, there was so much that went wrong, 
fundamentally wrong within the agency and across the 
intelligence community.
    For example, as you all know, the lack of information 
sharing. I mean, almost 3 years later, it actually would have 
been even earlier than that, because of the time period in 
which this began and the aftermath of 9/11, information sharing 
was a lesson not learned, not the sharing of the credibility of 
our sources that we use for certain analysis like biological 
weapons and chemical weapons, as we so painfully learned.
    It wasn't shared from the CIA with the other analysts and 
the other agencies. Dissenting opinions didn't sort of filter 
up to the top to the leadership of the CIA with respect to the 
aluminum tubes until very late in the process.
    In fact, it might have been 2 years since the time they 
first learned of the conflicting opinions. Probably all of this 
is very familiar to you, Dr. Kay, on some of these issues.
    The question is, it's not just change for the sake of 
change. I think we have sort of reached, you know, a turning 
point. It's a watershed moment, because we are in 
transformational times. Something has gone clearly wrong, I 
think, within the intelligence community.
    I happen to thank that it's, frankly, too much for one 
person, the day-to-day management of the CIA, at the same time 
being the principal intelligence adviser to the President of 
the United States who is not informed, by the way, of all of 
the dissenting opinions, conflicting opinions in which to 
inform the President of the United States. I mean, that is 
seriously troubling.
    Then, of course, having responsibilities of the 
intelligence discerned and things from the other agencies. We 
need a strategic, macro vision of the entire community, someone 
who's going to--ultimately, it's not just organizing and 
creating a bureaucratic chart that's different, but to force 
integration. There is nothing now to break down these barriers 
and these stovepipes to work in a horizontal fashion. I think 
that's what this is all about.
    So I would appreciate your response, Dr. Kay, and General 
Boyd and Dr. Zegart, about the whole issue of the weapons of 
mass destruction.
    We know what went wrong. Could it have been a very 
different product? Could we have had a very different product 
in the NIE, for example, if we had had changes organizationally 
that we're speaking of?
    Dr. Kay. It could have been a very different product, in my 
judgment. It would not just be organizational changes. The 
failures you documented so thoroughly were not just failures of 
organization. They were failures of tradecraft, failures of 
culture, failures of management, conscious mismanagement of the 
information flow. So these could have been quite different, if 
you addressed those.
    I agree, and the reason I ultimately come down, holding my 
breath in saying that NID is probably the thing to do, is 
because I believe the reformation of the CIA is a priority task 
and is a full-time job in and of itself.
    But let me say, again, this is--we all speak about we've 
got to get it completely right, because we have just one 
chance. I think that is where we're wrong. This is a journey, 
not a quick step.
    But to ensure that we have more than one chance--and 
Senator Hagel I think correctly held our feet to the fire by 
saying a lot of what we've talked about can't be legislated--
the thing that you can do is the full exercise of your 
oversight capability to ensure that this is a journey and not a 
step that stops as soon as you pass whatever legislation you're 
going to pass next month.
    I think that, in many ways, is probably the most important 
thing you can do. There, again, remember, I believe the failure 
to hold people responsible for poor performance over a decade 
is at the root of what you have uncovered and what I 
unfortunately had to deal with.
    Senator Snowe. I couldn't agree with you more on that 
score. I think that we need to have strong legislative 
oversight and accountability as well.
    Dr. Kay. That gives us more than one chance. There's a good 
news side of that story.
    Senator Snowe. General Boyd.
    General Boyd. Directly to your question of WMD, I don't 
think it had a thing to do with the way we were organized.
    I think that, and I covered this in my statement very 
briefly, the most important work of all I think that the Hart-
Rudman Commission did had to do with devising processes for the 
formulation of policy and for then managing the requirements of 
and prioritization of the intelligence community. It's the 
marriage of that process that is absolutely critical.
    I think that, in the case of WMD, we decided that for a 
whole variety of reasons, it was important to do Iraq, and that 
weapons of mass destruction was going to be the justification 
for it. When we did that, then all of the analysis and what 
have you that could be extracted from countervailing argument 
were marshaled to support that policy objective.
    This goes to the issue of having a professional running 
that place and in developing a professional, truly 
professional, culture there, which is a big, big job. You can 
help that with the legislation, but not this kind.
    You can help immediately in the way we organize with those 
four national agencies. But beyond that, I wouldn't fool with 
it. I would worry about that big professional cultural problem 
and the way policy is formed and integrated into intelligence 
prioritization.
    Senator Snowe. Thank you.
    Dr. Zegart.
    Dr. Zegart. Senator, this Committee and my fellow----
    General Boyd. Can I tell your staff to go look for 
recommendation number 14 and number 30 in the Hart-Rudman 
Commission and read just not just the recommendation but the 
analysis supporting both of them.
    Senator Snowe. We will. Thank you.
    General Boyd. Sorry.
    Dr. Zegart. That's OK.
    I think General Boyd and Dr. Kay and this Committee have 
far more expertise about weapons of mass destruction in Iraq 
than I do, but I've read this Committee's great report, and 
from my perspective, I do agree with David. I think it is much 
more a failure of tradecraft and culture than it is of 
structure.
    I'd look at the conclusions that this Committee made--for 
example, the reluctance to pass information on, the reluctance 
to include dissent, which is critical for informing judgments 
about how much stock to put in the judgment of an intelligence 
analyst.
    Those kinds of things are about culture and about how 
people view the world, more than organizations. I think about 
the counterfactual. What if these organizations had been 
crashed together in one giant organization. Would we solve 
these problems?
    I think the answer is likely not.
    Even if we create the national intelligence director, which 
I believe we should do, these cultural problems will take a 
long time to fix. I think David is quite right, it is a 
journey. But we can start the journey on the right foot, with 
the right legislation.
    Senator Snowe. Thank you. Thank you all very much.
    Thank you, Mr. Chairman.
    Chairman Roberts. Senator Chambliss.
    Senator Chambliss. Thank you, Mr. Chairman.
    The one overriding thing I hear from all of you is that--
and you're exactly right--we can do all the reorganizing, 
recommending and legislative changes, but if you don't have the 
right personnel in place, and the morale of those personnel is 
not what it ought to be, we're going to continue to have a 
very, very difficult time in our intel community.
    Mr. Chairman, first of all, before I ask any questions, 
there's been put together a side-by-side of the 41 
recommendations of the 9/11 Commission, and 39 of those 41 
recommendations have either been addressed by the 
administration or there is under consideration changes or 
reactions to those recommendations that may have been ongoing 
long before the Commission report.
    The only two that have not been addressed are the two 
relative to the restructuring of Congress. I would ask that 
this copy of that side-by-side be placed in the record.
    Chairman Roberts. Without objection.
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    Senator Chambliss. Thank you.
    The one thing that has really brought me 180 degrees toward 
supporting the national intelligence director is the fact that 
I have seen so many stovepipes because of my keen interest in 
this information-sharing issue over the last several years that 
simply today I think have not been broken down.
    I don't know how you're going to break down these 
stovepipes within the various institutions where everybody is 
of a mind to do whatever they can to win the war on terrorism. 
But it is just a natural fact that people tend to try to want 
to do their thing and, when they find something they think may 
be good, just naturally not to share it out there, and we have 
to get rid of that.
    The one way I think that can happen is to have somebody 
outside, a CEO, to look down and say, ``OK, all of you guys are 
responsible for getting together every day and getting your 
heads together, getting your department heads together at 
whatever level, and making sure that all of that information 
goes into that funnel.''
    I think unless we have somebody at the top--and the DCI 
simply can't do that, he has too many other things he has to 
do--but somebody has to be there to make sure that that 
information is analyzed properly and shared in real time.
    Unless we create that position, Dr. Kay, as you say, with 
full power and authority budget-wise, the ability to move 
people around, the ability to take somebody who is not doing 
their job and either get rid of them or move them to another 
position, again, we're not doing anything.
    I'm curious. Yesterday we had Secretary Rumsfeld and 
General Myers and John McLaughlin. John McLaughlin, who I have 
such great respect for, he's been a tremendous asset. I know 
you've worked very closely with him.
    I asked him the question about the change that will be 
required in the position of the director of central 
intelligence with a restructuring and the creation of a 
national intelligence director, and with the fact that all of a 
sudden, the chief intelligence officer in the country is not 
going to be the DCI, he's going to be chairman of--the director 
of Central Intelligence Agency reporting to a national 
intelligence director and what's that going to do to the morale 
of the CIA officers out in the field.
    John was quick to say he thought it would have a negative 
impact. I'd be curious, Dr. Kay, about your reaction to that 
question also.
    Dr. Kay. I quite frankly don't think the morale's so great 
right now. The morale's not great because of concern about NID. 
It's the result of failures and a recognition that those 
failures have not been addressed, and the feeling of people in 
the field and in the guts of the CIA that no one is being held 
responsible at the levels that, in fact, led to the breakdown 
in tradecraft for the mistakes that were being made.
    I think if the new CIA director comes in and is committed 
to reformation and reform, he will find a supporting and 
moralized, motivated staff, regardless of whether there's an 
NID or not.
    What they're concerned about is the corruption and 
failure--and it didn't take place in a year. This is a result 
of several decades of decay and poor direction.
    If you do that, I don't think morale is a problem. The 
morale is a problem when people don't think anyone cares about 
what they're doing, or they're going in the wrong direction.
    So I think it is certainly something we ought to be 
concerned about, but I actually think if you get the right 
person in there, it's not going to be a problem.
    Senator Chambliss. The more I've thought about it, too, the 
more I think it's an opportunity to rebuild that morale and 
have somebody as a DCI who focuses on the CIA and the real job 
of the CIA. Right now, from a HUMINT standpoint, we're in 
serious trouble.
    The next DCI has got to be focused on making sure that the 
HUMINT side is rebuilt, giving them the authority to take risks 
that they haven't been taking for any number of reasons over 
the last several years.
    One other thing, Dr. Kay. I was following your scenario of 
structure that you were talking about, and I did not hear you 
mention TTIC and the NCTC. Tell me your thoughts on what we 
would do relative to TTIC and your thought about the 
establishment of NCTC.
    Dr. Kay. This is an area that I agree very strongly with 
the 
9/11 Commission. I think TTIC and that type of process is an 
interesting innovation that needs to be followed up, because it 
offers an opportunity both for focusing on new problems in 
interesting ways and collaboration across organizational 
boundaries.
    My one concern is that we don't get into the situation--I 
think 15 agencies are too many. I would hate to come back--
well, actually, I would love to come back before you, Senator 
Roberts, 10 years from now, but I would hate to come back and 
discover that in addition to the 15, we've now got 25 TTICs, 
including some that relate to problems that are no longer seen 
as a No. 1 priority.
    The creation of special functional organizations works in 
business. It really does work. But it works because there is a 
vicious bottom line that ensures that you don't let them exist 
beyond the point at which they're adding value to your process. 
So I think we need to emphasize that. Government is not very 
good about execution in the sense of getting rid of things and 
people, once created.
    Senator Chambliss. Mr. Chairman, can I have one more 
question although my time has expired?
    Chairman Roberts. Yes, I think so. I think you can have one 
more.
    Senator Chambliss. Thank you.
    General Boyd and Dr. Zegart, one issue that has come out of 
this discussion, particularly over the last couple of days, is 
the issue of the fact that the leadership in the intelligence 
community thinks that the competition from an intelligence-
gathering and analyzing standpoint is good.
    I have some doubts about that. But I would be curious to 
know your thoughts about the thinking that we ought to promote 
competition within the intelligence community from a gathering 
standpoint as well as an analyzing standpoint. Does that tend 
to move us in the direction of more stovepipes as opposed to 
trying to break those down?
    General Boyd. Do you want me to go first?
    Dr. Zegart. It's up to you.
    General Boyd. I can address that, Senator, I think a little 
better in the context of military service. The same question, 
of course, has been on the table for years about the 
competitiveness of our services and trying to dampen that.
    I've never understood that really, in a society that puts 
such a great premium on competition. It goes to the very core 
of our values of success. But when it came to military 
services, we were somehow supposed to not be competitive and 
that would make us better. I don't think that's right. It's 
probably not right in the intelligence community either.
    I would foster--as a matter of fact, it's buried, but in 
the Hart-Rudman Commission, there is a recommendation that we 
enhance competition through budget reward. You have to have 
winners and you have to have losers. That would work at the 
problem of the defense budget going in steady fractions to the 
services over the last quarter of a century. But it would 
foster something, I believe, that would be of huge benefit.
    If you can do X task better than service B, C and D, then 
you're going to get it. You're going to get the money that goes 
with it. I think the same thing, the same principle, I would 
try to apply to the extent that there is competitive approaches 
to collection, for example.
    Dr. Zegart. Senator, I think that competition in theory is 
a good idea. The question is, how can we harvest the benefits 
of competition while avoiding the dysfunction of competition. I 
think that we've seen in intelligence that's very hard to do.
    So, while I in theory like the idea of competitive 
collection and competitive analysis, I think the challenge for 
this community is to figure out how to channel that competition 
into a useful product for policymakers. That is, I think, one 
of the key conclusions I drew from this Committee's report.
    Senator Chambliss. Thank you for your patience, Mr. 
Chairman.
    Chairman Roberts. Senator Levin.
    Senator Levin. Thank you, Mr. Chairman. Let me add my 
thanks to our panelists.
    First, I'd like to just briefly support Senator Mikulski's 
request, I guess, by an implication that the Chairman and Vice 
Chairman be supportive of her request to the President. I don't 
know if she was explicit in asking for that. But it seems to me 
this leak is so egregious that it has got to be followed up.
    What is doubly troubling to me is that if the USA Today 
article is correct, that the leak was--I shouldn't say the leak 
here, but that the name may have been disclosed on background; 
that's not technically perhaps a leak, but it's just as 
illegal. That would be unthinkable to me. I'm not going to go 
into the name of the party named here in the article. But it 
seems to me, Mr. Chairman, that it is important that this 
Committee follow up this leak for the reasons that Senator 
Mikulski mentioned.
    But there is a secondary issue here too, which is not just 
a leak, but apparently an acknowledgment, alleged reported 
acknowledgment by a named key official that a name had been 
disclosed to reporters in Washington ``on background.'' That, 
again, is just as illegal as a leak, as far as I know, unless 
the person to whom it's told has the clearance to receive the 
name. That would be up, obviously to you and the Vice Chair as 
to whether or not you take that action or not. But I want to 
join in that request.
    Let me ask our panelists a couple of specific questions 
about the powers of the NCTC head and the NID, the director of 
the proposed NID. There's been a number of recommendations of 
the 9/11 Commission report relative to those powers and I want 
to be specific on those powers.
    First, on NCTC, the 9/11 Commission says that the NCTC 
should have the power to assign operational responsibilities to 
combatant commands. Do you have any thoughts on that, Dr. 
Zegart?
    Dr. Zegart. Senator, I think in general the 9/11 Commission 
recommendations are excellent. I think the idea of having a 
national counterterrorism center that fuses not only analysis 
with collection but also with operations is something that we 
sorely need.
    I understand that there's concern about the chain of 
command. But my understanding, based on the history of the 
Joint Chiefs of Staff, is that in the military they've solved 
that problem, that there is a chain of command that runs from 
the President to the combatant commanders. The Joint Chiefs of 
Staff fulfills a very useful role and doesn't interfere with 
that command. I think that was the thinking behind this idea, 
and I think----
    Senator Levin. Except they're all inside the Defense 
Department.
    Dr. Zegart. They are.
    Senator Levin. They are in a chain of command. The NCTC is 
not in the chain of command, as proposed, and yet that is one 
of the recommended powers, that the NCTC should have--the head 
of it--the power to assign operational responsibilities to a 
combatant commander. You agree, disagree, or you don't know?
    Dr. Zegart. I do agree with it.
    Senator Levin. OK, thank you.
    General Boyd.
    General Boyd. I can't imagine it, sir.
    Senator Levin. Thank you.
    Dr. Kay.
    Dr. Kay. I basically agree with it. I think it's workable. 
I think inside the NITC you well could have a military officer 
serving, maybe as the head, certainly, maybe as the deputy, so 
in fact you don't violate the chain of command.
    Actually, as you know, that's essentially what we did with 
regard to ISG. I had some directional responsibilities over 
military officers serving, but I had Keith Dayton there to 
ensure that the chain of command was respected. We actually do 
it all the time.
    Senator Levin. OK. I will save the time for all the 
answers, but General Boyd, why can't you imagine that?
    General Boyd. The tasking, if you're going directly from 
essentially everybody to any commander, and that has command 
authority behind it, he could be overwhelmed, it would seem to 
me, in such a way that it would just be impossible to serve. If 
there's some mechanism by channeling it into a chain of 
command, then sure. But that's not what I see and understand. 
That's why I cannot imagine it.
    Senator Levin. Well, OK. I'm just reading from the 9/11 
report. I think my time is up.
    Chairman Roberts. Senator DeWine for a second round.
    Senator DeWine. Thank you, Mr. Chairman.
    First, let me just start with just a brief statement. It 
seems to me as we analyze this that it really is all about the 
money. My experience in 30 years of government is that policy 
always flows from money.
    It seems to me what you all are saying, and at least 
certainly my belief, is that as we structure the language in 
this legislation the key is that this person has to control the 
budget, not just the writing of the budget, not just the 
drafting, not just the planning of the budget, but to me it has 
to be the execution of the budget. That's a lot easier said 
than done. The devil is in the details. The task of this 
Congress is going to be to draft this legislation so it works. 
I think that's going to be very, very difficult. I think it's 
going to be very, very challenging.
    But to me it is the money. It's all about the money and who 
controls that money.
    That said, let me ask a more specific question, and it may 
be a narrow question, but we all understand that the DCI, one 
of his jobs today is to brief the President and the CIA's job 
is to prepare that report for the President every day.
    If we create this NID, whatever you want to call it, that 
is separated from the CIA, what are the ramifications of that 
as far as the daily brief of the President and the fact that 
this person with this new title, NID, will then, I assume, 
become the person who is the chief adviser to the President or 
the chief briefer to the President in regard to intelligence 
issues, not national security, but intelligence, since it was 
not actually security, but intelligence issues.
    What will that mean? Does it have any significance at all?
    Dr. Kay. It does indeed. That's one reason I suggested 
among my 10 Commandments that in fact the NIC, the National 
Intelligence Council, be transferred to the new director of 
national intelligence, and that they assume the responsibility, 
among other things, for the preparation of the PDB and the 
daily briefing of it.
    One of the problems of the director of central intelligence 
providing the daily briefing to the CIA is quite frankly that a 
number of other intelligence agencies never thought they got a 
fair shake.
    Senator DeWine. So you would look at this as a positive 
change?
    Dr. Kay. Absolutely.
    Senator DeWine. As a positive.
    General Boyd, how do you see this change, proposed change 
or hypothetical change?
    General Boyd. If he's going to be stand-alone and be 
effective, you've got to transfer a lot of resources to him.
    I was asking myself a little earlier, do you mean you're 
going to give the whole analytical capability of the--you got 
the analytical capability of the CIA with this guy. Does that 
make any sense? You're going to have redundant capabilities--
David's got an option here--but I think the vast resources that 
have got to really be refined then into that daily presentation 
to the President has to be essentially under his operational 
control.
    If you leave him where he is--he's got all that--and 
enhance his power with these other three national agencies that 
we've been talking about--I mean, it seems to me that's the 
simplest fix, without creating new capabilities and giving him 
a lot more effectiveness than he now has.
    Senator DeWine. Dr. Zegart.
    Dr. Zegart. Senator, I think there's an awkwardness to this 
solution, because it's a difficult problem to solve. The 
downside that I see, just in the interest of putting it on the 
table, is that, imagine the next terrorist attack. Who does the 
President call and where does he get his information? Is it the 
director of the national counterterrorism center? Is it the 
head of the CIA? Is it the national intelligence director?
    The answer is probably all three. I think that can be 
confusing. I think particularly in times of crisis, the more 
people you need to draw on to get basic information, the more 
difficult decisionmaking can be. So that is one of my concerns.
    Senator DeWine. I see my time is almost up, but it seems to 
me that is a challenge and a problem that this Congress has to 
face.
    You always want someone who is accountable. You always want 
someone--it seems to me in this particular case, you want 
someone who is the principal adviser to the President, where 
the buck is going to stop. You know, after the Bay of Pigs, 
there was someone who was accountable. Right or wrong, there 
was someone who was accountable, and that was someone who had 
been in the government for many, many years and who was highly 
respected.
    It just seems to me that this is a challenge, and it's not 
clear to me who that someone is going to be under this new 
proposal. They got something that Congress will have to be 
pretty well sure of before we embark down this path.
    Thank you, Mr. Chairman.
    Chairman Roberts. Senator Levin.
    Senator Levin. Thank you, Mr. Chairman.
    The next question I wanted to ask all of you had to do with 
clandestine and covert operations, the proposal being that the 
lead responsibility go to the DOD for both.
    I want to start with you, Dr. Kay. Do you agree with that?
    Dr. Kay. Senator, I don't, as formulated. It's one that 
troubled me the most. There are both legal as well as practical 
implications of asking American military officers to carry out 
things that have been traditionally carried out by CIA covert 
operations.
    I do not think that was really thought through, although I 
appreciate the argument they made that we couldn't afford both 
and we ought to do it in one and make that a very professional 
organization. I just think that's going to require a great deal 
of thought before, I think, you walk down that particular path.
    Senator Levin. I couldn't agree more.
    But General Boyd.
    General Boyd. There's a problem, I think, just stated, but 
there's a problem with carrying out covert operations in an 
area of responsibility that are not coordinated with or not 
under the command of a regional commander who's trying to fight 
a war. I would be more comfortable having those covert 
operations executed under a combatant commander, and it would 
break the link between the guy that's supporting the policy and 
doing an operation in the field.
    Senator Levin. OK. Thank you.
    Dr. Zegart.
    Dr. Zegart. Senator, this is one of the areas where someone 
in my field as an outside academic I think can't credibly 
comment as well as my colleagues.
    Senator Levin. Thank you.
    On the budget issue, currently under law, it is the 
director of intelligence that puts together the budget, 
presents the budget to the President. When it comes to the 
execution of the budget, that's where the issue really comes. 
The big heart of that goes to the reprogramming question. But 
when it comes to the production of the budget, that is, by law, 
now in the DCI's hands.
    So, when people talk about we've got to give the 
intelligence director, the NID, the legal power to do something 
theoretically, at least--and Dr. Zegart's point is good, 
because what goes on in reality can be very different from the 
theory--but nonetheless the law now puts that in the lap of 
DCI.
    But I think where the difference is going to come, really, 
is in the execution issue. There it is, an Executive Order 
which puts the execution into the lap of the Department of 
Defense now. Apparently under President Carter is was in the 
hands of the DCI. When I say ``in the hands,'' there's 
obviously consultation, coordination and so forth, but the 
responsibility is given to them.
    Do any of you have an opinion on the question of whether or 
not we could have a joint recommendation required for any 
reprogramming, by either an Executive Order or if necessary, I 
guess, by law, so that both the NID and the Department of 
Defense, when it comes to reprogramming, would have to join in 
the reprogramming request? Do any of you see pluses, minuses in 
that approach?
    Dr. Kay. Senator Levin, I see minuses. I think to the 
extent that you carve up and undermine and share out, these 
responsibilities are going to be so hard to give to a NID, you 
essentially undermine him and make him look like another czar.
    Senator Levin. Even though he has the veto?
    Dr. Kay. Look, as Secretary Rumsfeld found out early on, 
you have the responsibility for appointing the combatant 
commanders and those officers who are promoted to various flag 
ranks. If all you do is approve the recommendations that come 
to you, you don't get it done.
    One of the major renovations of Secretary Rumsfeld in the 
Department of Defense is saying, now, a want a much broader 
task. I just don't believe--I'm leery of that solution.
    Senator Levin. Then you would put that in the NID?
    Dr. Kay. In the NID.
    Senator Levin. Into the NID. OK.
    General Boyd. I think you probably have addressed this 
issue----
    General Boyd. You already know.
    Senator Levin. You would leave that where it is.
    Dr. Zegart, you would put that in the NID, as well?
    Dr. Zegart. Yes, I would.
    Senator Levin. OK.
    Any problem with that being done by Executive Order, being 
shifted by Executive Order? Since it's in the hand of the DOD 
now by Executive Order, any problem that you see by just having 
that done through Executive Order back to the way it was under 
the Carter administration?
    Dr. Kay. Well, the one problem I see resides here on the 
Hill, if you're talking about reprogramming authority. That is 
a responsibility that, regardless of where you are in the 
executive branch, you don't exercise without congressional 
oversight and agreement.
    Senator Levin. Right. That's not affected by what I'm 
talking about. It's still there.
    Dr. Kay. It could be affected if, in fact, it's currently 
under the Armed Services Committee, for example, and the NID 
has to suddenly discover he's going to----
    Senator Levin. If the Executive Order addresses where the 
reprogramming is.
    Dr. Kay. That's correct.
    Senator Levin. General Boyd, do you have any thoughts?
    General Boyd. I don't.
    Senator Levin. OK. Dr. Zegart?
    Dr. Zegart. Senator, I do. One quick point, which is that I 
think that the problem with Executive Orders in this is, if 
reprogramming authority is that important, in my mind it needs 
to be in legislation. It should not be left to the discretion 
of individual Presidents to move it in or out of the NID.
    Senator Levin. Thank you. My time is up. Thank you.
    Chairman Roberts. Senator Snowe.
    Senator Snowe. Thank you, Mr. Chairman.
    Just an additional question. Dr. Kay, one of the arguments 
against the creation of a director of national intelligence is 
the idea that somehow it will stifle competition of ideas and 
analysis within the intelligence community. In fact, that was 
one of the witnesses's testimony before this Committee in July.
    Could you speak to that, as to whether or not you think it 
would encourage or discourage competitive analysis? Obviously, 
what we discovered in our investigation is there was no 
competition of thought and group think was the entire approach, 
essentially, on the NIE and on the weapons of mass destruction 
stockpile in Iraq.
    Dr. Kay. Well, I mean, you've essentially given my answer. 
Certainly, the present system does not encourage diversity of 
analysis or competitive analysis. I think the NID actually 
encourages it, because he represents the whole. Everything is 
under him. In fact, the reason you encourage competition when 
you're at the top is because you want the best possible outcome 
that will make you and the Nation look the best possible.
    So, in fact, I think if you get the right person there and 
you create the right authorities, it should encourage it. Here 
again, I come back to oversight. I think having discovered 
that, this Committee has a right to demand that there be 
competitive analysis. I actually think the proper place to 
foster that is the National Intelligence Council moved to the 
NID, who has that responsibility, because it is broader than 
any one agency.
    It is very difficult, as you showed, to get competitive 
analysis out of a system whose leader is viewed as a partisan 
leader of a single agency within a broader system.
    Senator Snowe. Yes. I appreciate that.
    Dr. Zegart, do you have any comments?
    General Boyd, on that question?
    Dr. Zegart. I agree with what Dr. Kay said.
    Senator Snowe. General Boyd?
    General Boyd. I do, as well.
    Senator Snowe. Thank you.
    One final question of you, Dr. Kay. As head of the Iraqi 
Survey Group, obviously you were a user of tactical and 
strategic intelligence that had to be disseminated to both the 
operators and the policymakers. What was your experience based 
on that? Did you have difficulties at all in any way?
    Dr. Kay. Did I ever have difficulties. Look, the Defense 
Intelligence Agency and the CIA use incompatible reporting 
systems, isolated communication systems. The DIA officials 
could not go in CIA spaces. You could not directly easily reach 
from a CIA computer. In fact, what you did, is you created 
multiple CPUs within the same space.
    The format of reporting, of disseminating intelligence is 
entirely different. The DIA one looks like the old fashioned 
telegraph, all caps, very hard to read, not edited. The CIA one 
is, actually, a much more polished and policy-friendly one.
    Look, there are multiple systems. There is one of the 
collection agencies that I lost count of how many e-mail 
systems they have, and that's NSA, because they could not reach 
from one to the other themselves. When I had to ask for 
information, there again, Charlie Allen more often than not 
saved my bacon because he could figure it out back here because 
he was at the heart of the collection system.
    This is a serious problem. It seems silly for anyone who's 
existed in the commercial world, but it exists to, in my view, 
protect turf and deny accountability and responsibility or 
assessing accountability and responsibility.
    Senator Snowe. Thank you very much.
    Thank you all. I appreciate your willingness to testify 
here today. Thank you.
    Chairman Roberts. Senator Rockefeller.
    Vice Chairman Rockefeller. Quick ones. In the Balkans and 
Afghanistan, in Iraq and North Korea, you know, you start 
adding up all the possibilities, we're stretched thin on the 
military side. We're also stretched thin on the intelligence 
side. If it does take 5 to 10 years to really train an analyst 
well--and 10 may be excessive, but 5 isn't--you could, I would 
think, have an intelligence reserve corps, which actually made 
itself available right after 9/11. People who'd retired some 
years ago came roaring back and the number of applications went 
up tremendously. Well, that's not quite a reserve corps, but it 
gets close to it.
    But I like the idea of institutionalizing that for surges, 
because I think 9/11 has created a sense that we're in this for 
a long period of time and that the stakes are very high, and 
that people have to be able to or want to be able to sacrifice 
their time for their country. An intelligence reserve corps 
attracts me. I just wanted to say that. I know you all agree.
    Secondly, one of the things that I disagree with in the 9/
11 Commission--and Carl's referred to it already, but I want to 
do it, because I feel strongly about it--is the cessation of 
paramilitary activity by the Central Intelligence Agency.
    What everybody points to is the Northern Alliance 
experience. Some people say it was a good one. Some people say 
it was a bad one. But it was, in my judgment, a very good 
cooperative effort between the CIA and the Defense Department.
    There have to be times when you have plausible deniability, 
when you're doing things which are not entirely the most 
publicly relatable in the world. You have to have people who 
aren't in uniform who do have a kind of I won't say an 
entrepreneurial spirit, but you understand what I mean, who 
would get out there and get it done.
    They're either going to be our people who look like their 
people or they're going to be our people who are their people, 
and they do it well. They do it in ways that are different. 
They do it in ways that are outside, I believe, the DOD 
culture.
    So, to me, the idea should be jointness, that you allow 
each to do what they do best, and that that be allowed to 
continue. If you want to respond.
    Dr. Kay. I agree.
    General Boyd. So do I.
    Vice Chairman Rockefeller. That was just an observation 
about the general discussion going on, classic Washington. 
Somebody comes up with a reform idea, and I go back to that 
brilliant ``triggers the antibodies of affected agencies.''
    Dr. Zegart. I'm going to make sure to use it in my book.
    Vice Chairman Rockefeller. Put it right on the front cover. 
It's classic behavior. We have a 20, 30, 40--I don't know how 
long it's going to take us to connect with the Islamic world 
and other radical groups, and then Africa will come in for a 
whole different set of reasons, of poverty and hatred, and 
hatred of their government, and then South America, China, who 
knows what.
    But we're in for a long one. We keep looking. We get the 
picture. Let's say 9/11 comes together, and they do spend a 
good amount of time putting together a commission. We find 
holes in it. Then we go right after those holes and say, ``See? 
Can't do what they say.''
    Denying the possibility that America is full of people, 
even some in Congress, who are capable of rational and pro-
national security thought, and who would plug those holes and 
would see things that should not be done or change of command 
that could not work will not happen. I mean, this isn't the 
Bible.
    Where's your copy, Carl?
    Senator Levin. A copy of what?
    Vice Chairman Rockefeller. The report.
    This isn't the Bible. It's just a rather closer one on 
intelligence matters than we've had in some time on the scope 
that it takes on. So I would just say I hope that, as we go 
through this process, we will not sort of pick out that thing 
which affects an agency which we may be working with in a way 
which detracts from it and then decides that the whole thing is 
going down the wrong track. It's so easy to do.
    You say, I'm not capable of doing that. Then you do it. I 
think that the people gathered around this table and other 
tables are capable of making right decisions which are in the 
best interests of national security, which protects from 
mistakes that may come out of this. There are a number of 
things which this didn't address. There are things which they 
addressed, I think wrongly, saying that I don't agree with the 
fact that the NID should be inside in the White House. I think 
it should be outside the White House.
    So what? We make that decision. You know, it's a matter of 
looking at the whole question, of the next 40 years, of the 
terror, and angst, and budget expenditures, and homeland 
security, 90 percent of which goes to aviation security and 
only 10 percent to everything else, and saying, ``We've got a 
big job to do and we've got to do it as well as we've can.''
    So if you legislate a NID, does that mean that you close 
down the system because one person isn't perfect or will be 
biased? You make the assumption. You're telling me that there 
aren't somewhere in the United States of America 15 to 25 
people who could do this job absolutely brilliantly? Of course 
there are.
    I think that ought to be our approach. Then we work what 
has to be worked out. That's what we're for.
    Chairman Roberts. Senator Levin, did you have an epilogue?
    Senator Levin. No, just a few more questions, if I could, 
Mr. Chairman.
    Chairman Roberts. Certainly.
    Senator Levin. Dr. Kay, you made reference that the 
national intelligence director should not be in the Executive 
Office of the White House or in the cabinet because 
intelligence must serve the Nation and speak truth to power.
    Dr. Kay. Yes, sir.
    Senator Levin. What in your experience prompts you to make 
that very vital point? You made a similar point here today, 
that some of the problems that we had with this intelligence 
was there was a conscious mismanagement of information flow.
    Dr. Kay. Quite frankly, on that particular issue, I was 
drawing on what I think is an extraordinarily good piece of 
work done by the Committee with regard to the aluminum tubes, 
which I saw from the other side, but I must say you have 
details that I didn't have knowledge of, of how that was 
mismanaged and the expertise and the data was kept away from 
people who had superior expertise and should have been 
involved.
    Senator Levin. Who was not speaking truth to power and why?
    Dr. Kay. The why is the more interesting and more 
difficult, and I look forward to your second report in that 
regard.
    Senator Levin. But what's your opinion? Do you agree with 
the general, what he said here today?
    Dr. Kay. My experience is always to agree with a general.
    Look, I think what happened here is that it's a combination 
of things. I think the most important issue that led to the 
distortion of our opinion about Iraq WMD is that, for about 14 
years, the essential thing that kept a--and this crosses 
administrations--the essential thing that kept a coalition 
together, allowed us to keep a coalition, that kept sanctions 
in place, was Iraq WMD.
    Therefore, data and information that might indicate there 
was not a WMD program there had such a high bar that it had to 
pass before it was considered useful or should be passed, 
whereas information that supported the argument that there was 
WMD seemed to have almost no bar to jump over, and we got into 
what the Committee calls ``group think'' and a train moving 
ahead in which everyone jumped on board.
    Now, in my view, the responsibility for ensuring that does 
not happen in an intelligence community is the ethical center, 
and honesty, and the desire to manage that system so, 
regardless of what the issue, that does not occur. The closer 
you are to power--and I think we should speak frankly here on 
this regard, and if you don't mind, I will.
    The most recent director of central intelligence came in 
after two disastrous DCIs, one of whom never met the President 
of the United States. In fact, the joke around Washington is 
the small plane that crashed into the White House was Jim 
Woolsey trying to get an appointment with the President of the 
United States. John Deutsch had much the same experience.
    The decision was, manage the relationship, understand the 
customers--and this, quite frankly, actually, if you look at 
the history of the CIA, and Amy's done a far better job about 
this, more thorough than I have, you will see the creeping in 
during the Bob Gates era, in which the decision is, we've got 
to serve our customers, we've got to keep our customers happy.
    I think, quite frankly, that is the greatest falsehood to 
penetrate the intelligence community. The job of the 
intelligence community outside the tactical arena, but in the 
strategic arena, is not to serve the customers by telling them 
what they want. It's to tell the customers what you see, what 
you believe, what your collection and analytical systems see 
are the problems, objectives. I think we lost that perspective 
and it took about two decades to lose that and believe we've 
got to serve the customers.
    That is, I think, if you move forward on NID legislation, 
is going to be the hardest thing to communicate, that the NID 
must serve the Nation and the national security objectives of 
the Nation, and he serves whoever is the President best by 
giving him the unvarnished truth, which will often not be 
welcomed.
    Senator Levin. Well, that's frankly what I'm most 
interested in, in this legislation. The details are obviously 
important. We're going to work through them. Everybody's 
interest is the same, to add to the security to the Nation. I 
don't think there's one member of the Senate that does not have 
that as their goal.
    A lot of talk about turf, but I think everybody is equally 
sincere. I have to attribute the same sincerity to everybody 
else that I hope and feel I have, that that is the goal of 
everybody, is to try to come up with a structure and 
responsibilities that add to the security of the Nation.
    But I've got to tell you, what you just said resonates with 
me, what the general has said in his testimony here today, and 
in his written testimony, as well, resonate very, very much 
with me. When the general says that we have people who are in 
the current intelligence structure that are under enormous 
pressure or temptation to give the President what he wants and 
not necessarily what he doesn't want, but needs.
    We've got to talk about independence of that person. When I 
read in a book of Bob Woodward that we had a director who said 
something was a ``slam dunk'' when it wasn't a slam dunk, let 
me tell you, folks, that to me is more important than 
structure, as important as structure is. But I've got to try to 
figure out if there are ways that we can promote that 
independence and that objectivity and that unvarnished opinion 
that you just talked about, Dr. Kay.
    One way, surely, is not to put this person, if we create a 
new position, in the Executive Office of the President. My time 
is up, but would you all comment as to whether you agree?
    Dr. Kay. I agree completely.
    Senator Levin. General.
    General Boyd. I love what you just said.
    Senator Levin. Pardon?
    General Boyd. I love what you just said.
    I think it is hugely important. I talk to people, like 
David has just mentioned, and they talk to me the coin of the 
realm being access to the President and social events and so 
forth. The coin of the realm ought to be his distance from the 
President, his independence of the President, his 
professionalism and be respected as such.
    George Marshall corrected his President when his President 
tried to call him George and said, ``Call me General 
Marshall.'' He didn't want any personal relationship with his 
President. He wanted to be treated like a professional. He 
wanted to give professional advice and not any buddy-buddy 
relationship with his President, and not be tempted to tell his 
President what the President wanted and what he didn't need.
    You can do this. I mean, you can write that legislation. 
You wrote it in the legislation that appoints the chairman of 
the Joint Chiefs. He's got to be a professional. You don't 
allow it otherwise.
    What would you think if the President of the United States 
appointed a congressional staffer as the chairman of the Joint 
Chiefs if we didn't have that law? What would the military 
think? How could they be professional? How could they have this 
ethic without that? I mean, it's inconceivable to me.
    I realize how hard it would probably be to get a President 
to agree, but at the very core, this is--I've been dealing with 
these guys my whole life and particularly the senior part of my 
life. The professionalism in the CIA is not even close to what 
it is in the military.
    Now I think there's a direct connection to being led by 
amateurs, having their analyses torqued to please a President's 
policy objectives. I think that's crucial in the development of 
where we are. If you're going to change it, you're never going 
to have a better time to change it than right now.
    Senator Levin. Dr. Zegart, do you have anything to say on 
that?
    Dr. Zegart. Yes, I would just add one thing, which is that 
I think we typically think of independence and trust as 
mutually exclusive when it comes to the head of the 
intelligence community. I think one actually serves the other. 
The more the head of the community has independence and is seen 
as speaking truth to power, the more trust he will earn from 
the President. So, I don't think they're mutually exclusive at 
all.
    Senator Levin. Thank you all.
    In defense of our staff here, by the way, I must say that 
we do have many staffers who do speak truth to power regularly, 
tell us what we don't want to hear, and we are usually grateful 
for that. I don't want to say always grateful, because that may 
unleash something here which would be unfair to our Chairman 
and our Vice Chairman.
    Thank you all.
    Chairman Roberts. Well, sometimes the pressure is really 
just overwhelming.
    General Boyd, were the members of the Hart-Rudman 
Commission, even though they were politicians in the finest 
sense of the word, former Members of Congress, were they 
professional?
    General Boyd. Not professional in the sense that we're 
talking about. But they rose to, not at the beginning, but over 
time, they rose to a standard of non-partisanship that was 
truly remarkable. I think it occurred as they saw and thought 
more about the gravity of the problem they were dealing with. 
They were out of office, and they weren't being pulled by a lot 
of the pressures that would have otherwise, I suppose, affected 
them.
    Chairman Roberts. So, a former Member of Congress would 
have a tendency then to have less political pull and be more 
independent and more professional perhaps?
    General Boyd. I think that the professionalism has to do 
with a lot of other things. It has to do with a lifetime of 
service in that profession, an accumulation of that kind of 
special knowledge and esoteric expertise that goes with 
something like the intelligence profession or the military 
profession.
    I don't think you get that from some very early service in 
the Army as a sergeant and then most of your productive life 
serving in the Congress. Does that mean he's not a good man or 
he's not honest or he's not--that doesn't have anything to do 
with that. But it has to do with how he will ultimately be 
viewed as a professional by other professionals.
    You can get used to dealing with amateurs as your boss if 
you have to do it forever, but it's going to affect your own 
attitudes about professionalism.
    Chairman Roberts. Kean, Kerrey, Lehman and Hamilton. Now 
they're--at least one is not, but the other three are Members 
of Congress, former Members of Congress, politicians. It was 
Mark Twain that said, ``there is no criminal class in America, 
except, of course, the Congress.''
    The reason I'm bringing this up, and I'm being sort of a 
pest about it, is that we had somebody who's been testifying 
quite a bit and is one of the method actors on television who 
is an expert on intelligence who made the comment that he 
didn't think any Member of Congress could be professional, or 
independent, or somehow rid themselves of the partisanship 
that, I guess, comes along with the job.
    I took umbrage at that. That this Committee voted 17-0 with 
strong differences of opinion to issue a report that I'm very 
proud, occasionally, we do rise to the occasion. I thought it 
was lumping everybody in the same category, much as some people 
in this country lump, unfortunately, people of color, or people 
of sex, or people of gender, or people of age, or people of 
geography or whatever.
    I just have a feeling that, you know, when the right time 
comes, when we have an opportunity like this, I think, despite 
our differences, I think despite all of the Committee 
jurisdiction, I think despite the fact that the Administration 
hasn't come forth with the specifics yet because they're still 
working through it, I think despite the 9/11 emotionalism, 
which is perfectly understandable, I think we can get this 
done.
    I really do think we can get this done. We have to get it 
done because the status quo is unacceptable. Now, you can 
either go full NID, half NID, 75 percent NID, put independence 
or whatever, and you've all three made excellent suggestions, 
but I really do think we can get it done, despite the fact that 
we are ``politicians.''
    I thank you all for coming. The hearing is adjourned.
    [Whereupon, at 5:35 p.m., the hearing adjourned.]


           REFORM OF THE UNITED STATES INTELLIGENCE COMMUNITY

                              ----------                              


                                DAY TWO

                       TUESDAY, SEPTEMBER 7, 2004

                      United States Senate,
           Senate Select Committee on Intelligence,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:38 p.m., in 
room SH-216, Hart Senate Office Building, Hon. Pat Roberts 
(Chairman of the Committee) presiding.
    Committee Members Present: Senators Roberts, Hatch DeWine, 
Lott, Snowe, Hagel, Chambliss, Warner, Rockefeller, Levin, 
Feinstein, Wyden, Durbin and Mikulski.

                 STATEMENT OF HON. PAT ROBERTS

    Chairman Roberts. The Committee will come to order. The 
Select Committee on Intelligence meets in open session to 
continue its discussion of intelligence community reform.
    To explore this issue, we have a very distinguished panel. 
Our witnesses today are three members of the National 
Commission on Terrorist Attacks upon the United States: 
Chairman Thomas H. Kean, who is president of Drew University 
and former Governor of New Jersey; Vice Chairman Lee H. 
Hamilton, who is president of the Woodrow Wilson International 
Center for Scholars and former chairman of the House Committee 
on International Relations; and also Commissioner John F. 
Lehman, who is Chairman of the J.F. Lehman and Company and 
former Secretary of the Navy.
    Gentlemen, the Committee thanks you for your service to 
this country and for being here today.
    Three years ago this week, on September 11, 2001, America 
was attacked by 19 terrorists who were financed and trained by 
Usama bin Ladin's al-Qa'ida network. Armed with knives and box 
cutters and mace and pepper spray, these terrorists 
successfully hijacked four airplanes. Two were flown into the 
twin towers of the World Trade Center, one was flown into the 
Pentagon, and one was forced down in a western Pennsylvania 
field after its passengers very heroically attempted to retake 
the aircraft.
    Nearly 3,000 Americans died on that fateful day. There 
would have been more were it not for the heroism of those in 
that flight over Pennsylvania. I might add that some of us here 
sitting on this dais might well not be here.
    The al-Qa'ida network was well-known to American 
intelligence prior to 9/11. It had a track record of prior 
attacks, including the 1993 bombing of the World Trade Center, 
the 1998 bombings of the U.S. embassies in Kenya and Tanzania, 
the attempted attack known as the ``Millennium Plot,'' the 
October 2000 attack on the USS COLE, also involvement in 
regards to Somalia.
    Consequently, after the attacks of 9/11, a stunned American 
public rightfully asked why our government and specifically the 
intelligence community had been unable to detect and also deter 
this plot. To address this question, the Senate and House 
Intelligence Committees launched an investigation which became 
known as the Joint Inquiry. Following a year-long 
investigation, the Committees determined that systemic failures 
were the primary causes which did prevent the intelligence 
community from detecting and deterring these attacks.
    To further the work of the Joint Inquiry and to examine the 
governmentwide performance related to the attack, in 2002 
Congress passed legislation establishing the 9/11 Commission. 
Ably led by Chairman Kean and Vice Chairman Hamilton, on July 
22nd the Commission did release its comprehensive report on the 
failures that hindered our ability to discover and stop the 9/
11 disaster.
    On behalf of the Committee, I would like to thank Chairman 
Kean, Vice Chairman Hamilton, Mr. Lehman and all the members of 
the 9/11 Commission for setting aside partisan differences and 
releasing a unanimous report. Senator Rockefeller and the 
members of this Committee and I know how difficult that can be.
    The report does provide a historic examination of the 
terrorist threat to the United States and makes recommendations 
for intelligence community reforms to help prevent any future 
terrorist attack. The release of the Commission's 
recommendations also combined with this Committee's recently 
released report on the intelligence community's flawed pre-war 
assessments on Iraq--more especially the WMD programs--have 
created a unique window of opportunity for enactment of real 
and lasting reform.
    This, however, is not the first time that intelligence 
reform has been tried. Back in 1949, only 2 years after the 
1947 National Security Act actually created the Central 
Intelligence Agency and the position of the Director of Central 
Intelligence, Congress also then created a commission to 
consider the question of intelligence reorganization and 
reform. Since then, intelligence reform has been the subject of 
literally dozens of additional congressional and executive 
branch commissions and reviews. Since the 1950's, many of those 
reform efforts have focused on increased authority and 
responsibility for the director of the intelligence community.
    It is no surprise that the creation of a strong central 
leader of the intelligence community with increased budget and 
personnel authority was recommended by both the joint inquiry 
and the 9/11 Commission.
    Three years after September 11th, a decade after the end of 
the cold war, and over 50 years since the enactment of the 
National Security Act of 1947, we can no longer wait to 
implement lasting reforms of the intelligence community. The 
time to act is now. Simply put, the structure of the U.S. 
intelligence community is defective. The so-called Director of 
Central Intelligence, or the DCI, lacks authority, in statute 
and in practice, to effectively manage the intelligence 
activities of the United States.
    The organization of the intelligence community, with a 
substantial portion falling under the direct control of the 
Secretary of Defense, prevents the DCI from exercising even 
those authorities granted under the National Security Act.
    The DCI does not effectively control the creation of the 
National Foreign Intelligence Program budget. He lacks the 
ability to transfer or dismiss intelligence community 
personnel. He cannot unilaterally direct the transfers of 
National Foreign Intelligence Program funds. He cannot mandate 
intelligence sharing, data fusion or the creation of a 
community-wide information technology infrastructure.
    This flawed design has contributed greatly to past 
intelligence failures and prevents responsible parties from 
being held accountable.
    We know what the problems are. However, fixing them has 
always been a bridge too far. The Joint Inquiry, the 9/11 
Commission and numerous Members of the Congress have now 
submitted proposals. I expect that the President will also 
submit a reform proposal to compliment the Executive Orders 
which were promulgated just this past month.
    Drawing on my 8 years of experience on this Committee, 
there are a number of principles which I believe we must adhere 
to if we are to have real reform of our intelligence apparatus. 
These principles include: a setting aside of turf battles and 
institutional interests in favor of our national interests; the 
creation of a strong, empowered national intelligence director 
who is separated from the day-to-day management of the Central 
Intelligence Agency; the creation of a structure that does 
accommodate the diverse activities of the various agencies and 
gives direct responsibility and control of the primary 
intelligence disciplines and corresponding agencies to a truly 
empowered national intelligence director and his assistants; 
the realignment of agencies and their elements to create clear 
chains of command within the primary intelligence disciplines; 
statutory creation of a national counterterrorism center with 
operational planning responsibilities; the ability to create 
other national intelligence centers to direct collection, 
analysis and operations in other mission areas, such as 
counterproliferation and counterintelligence; the creation of 
an inspector general and an analytic review unit which will 
mandate the use of mechanisms such as red-teaming, a concept 
that is championed by the distinguished Vice Chairman, so that 
we can ensure that intelligence analysis is objective and 
competitive and independent of political considerations and 
hold agencies and individuals accountable for failures; and 
finally, reform of congressional oversight of intelligence 
activities.
    I believe that these principles address both the 
counterterrorism concerns of the 9/11 Commission as well as the 
significant flaws which this Committee has uncovered during its 
Iraq inquiry and its 27-year history of oversight.
    If we are willing to set aside turf battles and 
organizational self-preservation and focus on what is best for 
our nation's security, we can truly reform our intelligence 
community in the bold manner which has been required for over 
50 years. Taking on entrenched and bureaucratic and 
jurisdictional interests is not easy. It is hard work. It is, 
however, what we must do.
    If we fail, I fear the result will be incomplete half 
measures which will result in the perpetuation of an already 
dysfunctional intelligence community. If we don't make the hard 
choices now, I fear that after yet another series of 
intelligence failures we may be right back in this hearing room 
listening to the national intelligence director testify that he 
still lacks real authority to control budgets, to manage 
personnel, to transfer funds and mandate intelligence-sharing 
procedures and technology for our nation, which will be at war 
with Islamic terrorists for the foreseeable future.
    This is an unacceptable outcome. We need to do real reform, 
and we need to do it now.
    I look forward to hearing the testimony of our witnesses on 
these issues. But, before we do so, I would like to recognize 
the Intelligence Committee's very distinguished Vice Chairman 
for his remarks.
    Senator Rockefeller.

            STATEMENT OF HON. JOHN D. ROCKEFELLER IV

    Vice Chairman Rockefeller. Thank you, Mr. Chairman.
    Actually, one of the great challenges of the day is to 
figure out how to thank you for your service to this country 
and to the world, in fact, in ways that others have not chosen 
to try to do that. It's impossible to do it. So let me just 
simply say that what the Chairman has said, what people have 
said all over this Capitol Hill and all over the country, that 
your work is extraordinary, and that the time that you've given 
up, what it has done to your personal lives, I can't even 
imagine. But what it's doing for America, I think I can imagine 
and I can see. I think it's great. I thank you very much for 
that.
    The Senate leadership wants very much to set a target of 
October 1 for the passage of legislation on our part. I just 
wanted to say that that may not leave us enough time to both 
complete all of the action that we need to on the floor, but 
also, most importantly, to conference with the House on a very 
delicate matter, as the Chairman said, ``complicated matter'', 
and then adjourn before the election.
    I just want to say right out front, hoping that others will 
hear, that I'm very worried about this. September has to be 
devoted entirely to intelligence reform. We cannot get into 
other issues if we're going to do the right thing for our 
country. The Chairman said, ``This is too important to delay''. 
Of course, he is right.
    Like my colleagues and others that have spoken at you 
before giving you a chance to talk to us, I've very, very 
carefully read several times, all of your materials. On August 
22nd, I wrote Senator Collins and Senator Lieberman as the 
Committee having jurisdiction in this matter. I outlined seven 
principles that I consider essential to reforming our 
intelligence system. Most of them comport with what the 9/11 
Commission has recommended and some do not. Part of what I say 
will be a predicate for questions, which will follow.
    First, as the Chairman indicated, we should establish the 
national intelligence director. That's easily said, but that's 
been suggested so many times and not done so many times, and 
also, separated from day-to-day management of the Central 
Intelligence Agency and with the authority over the budget and 
the personnel, which is all important, the all-important 
consideration of intelligence reform that comprise our national 
intelligence program.
    Second, I think the national intelligence director should 
have deputies to oversee the foreign, domestic and defense 
intelligence agencies. These individuals should be dual-hatted. 
Those individuals would be the director of the CIA, as you 
indicate in your report, the intelligence director of the FBI 
and the Undersecretary of Defense for intelligence.
    Third, we should create a national counterterrorism center, 
as you've suggested, to bring together all U.S. 
counterterrorism efforts, foreign and domestic. The head of 
this center should have authority to bring to bear all 
capabilities, whatever is necessary--intelligence, law 
enforcement, diplomatic, homeland security and, with certain 
restrictions, military resources--to counter the terrorist 
threat, which is all-consuming for us. I think this is 
absolutely critical, that they have this capacity.
    Merging foreign and domestic efforts in the national 
counterterrorism center is a monumental change from the way 
we've done business in the past. We are not England, which has 
gotten accustomed because of the IRA, Northern Ireland 
problems, to being videoed and everything all day long. We're 
very different. We've taken CIA, you're overseas; FBI, you're 
internal, but you shall never meet.
    What we're doing, and what you've suggested--and I think 
properly so--is the merging of the foreign and the domestic 
efforts in the national counterterrorism center. We have drawn 
artificial distinctions in the past. But I don't want to 
suggest I think this is going to be an easy thing for the 
American people to accept. But I do want to suggest that I 
think it's a very important matter for our people to understand 
that if this is going to work, in that terrorists are 
transnational, don't respect borders, there's no such thing as 
domestic or international to them, that we have to organize 
ourselves to fight them and to understand them in the same way.
    So I'm hopeful that Americans will recognize and accept the 
need for this change. I think it's a superb, bold, strong idea 
on your part, and I congratulate you for it.
    Fourth, we should establish the national intelligence 
centers that the Chairman also spoke of to focus and coordinate 
both on collection and analysis of intelligence on other 
important national security issues. You mentioned 
counterproliferation. It could be something on China, something 
on North Korea, Iran. Whatever it is that's out there, we have 
to be aware of what that's going to be.
    These centers, like the national counterterrorism center, 
will break down the intelligence collection stovepipes that now 
drive the system and inhibit the effective sharing of 
information and also, frankly, which hold back the ability of 
people to look out into the future, because everything is of 
the moment. Well, everything isn't of the moment until it 
becomes of the moment. If you can look out ahead, that's what 
this will do.
    Fifth, I think we have to take steps to ensure independent 
objectivity, accountability in the intelligence community. Not 
to say that it's not there, but we have to make sure that it 
always will be.
    We can do this in a variety of ways. I recommend 
establishing an ombudsman and an inspector general for the 
intelligence community and creating a permanent red team group 
to conduct what I would call contrarian analysis under the 
national intelligence director, to look at all major reports, 
to make sure that national intelligence estimates, all of this, 
that everything has been--that the intelligence group, which 
isn't as large as some of the bigger ones but had very contrary 
views on very important subjects, where they have real 
expertise, that they're heard, and so that these things are 
honestly brought together.
    I also must say that I oppose placing the national 
intelligence director and the head of the national 
counterterrorism center inside the Executive Office of the 
President. I won't discuss this at length. But I think it's not 
really so much a question of structure. I think it's more a 
question of how are these two men or women or man and woman, 
how are they going to get along. What is the chemistry going to 
be? I don't think the bureaucratic structure will dictate the 
relationship between the President and the NID.
    I think the bureaucratic structure could, however, tie the 
NID too closely to the policymaking process--I worry about that 
enormously--and risk further, I would say, politicizing of 
intelligence.
    Sixth, we must reform ourselves, which you strongly took 
on, and the intelligence oversight process. We absolutely must 
remove the term limits on Committee members. We must also find 
ways to streamline the process for authorizing and 
appropriating the intelligence budget and declassifying the 
aggregate budget, something the President, in fact, could do 
without legislation, would be an important first step. We 
should organize our own Committee much better in relevant 
subcommittees so that we can be more cogent.
    Finally, recognizing the intelligence community will 
continue to face unanticipated crises, surges, we should 
create, in my judgment, and intelligence community reserve 
corps.
    I was amazed after 9/11 at the number of people who were 
applying from the Silicon Valley, people who had retired from 
the CIA and other intelligence agencies a number of years ago 
but still had the analytical tools, et cetera, who simply came 
back, walked in the door and said, ``We're here. We want to 
help.''
    I think we need this on a permanent basis, because there 
will be surges. The military is stretched thin. The 
intelligence community is stretched then. It will continue to 
be stretched thin. Then under the war on terror, it will be 
stretched the most thinly. So I think we now have to rely on an 
intelligence community reserve corps as we rely on the National 
Guard and Reserves in the military.
    Now, these are concepts that I consider essential to any 
comprehensive efforts. I think one can say why have they never 
been adopted. I think the answer is that there has never been a 
9/11 before.
    These ideas have been suggested for years. But they came 
together in this brilliant compendium that you put in your 9/11 
Commission. I think now it's the vehicle, it's the gold 
standard. It doesn't mean we have to agree with everything. But 
we have that now. We have the momentum. We can't lose the 
chance.
    It's a very complicated matter, also, which the Chairman 
indicated. People think it's a sort of an easy thing to fix and 
it isn't. The nuances involved in it are just extraordinary.
    The reason that most of the intelligence collection is done 
by agencies within the Defense Department, which the Chairman 
mentioned, is because the military has always been the largest 
consumer of intelligence. They use intelligence to guide 
everything they do now, from deciding what weapon systems to 
buy, where troops should be deployed, to planning, executing 
specific combat operations, carrying them out.
    But now it's different. It's beginning to be different and 
will become much more different. The greatest threat facing our 
Nation is not from another country's military, but it's from 
amorphous groups of international terrorists who don't wear 
uniforms and don't particularly have allegiance to any one 
country or another, who have no respect for human life, operate 
around the world without regard for national borders, and 
they're not deterred by military might. They're not afraid of 
military might.
    It's time to realign our intelligence, I think, our 
structures to deal with the threat.
    Now, final point. As we make these changes, we cannot 
short-change the needs of our military forces, and this is one 
point in which I would disagree with what the Commission has 
suggested. I propose a structure where the national 
intelligence budgets, personnel and tasking are controlled by 
the national intelligence director and tactical programs that 
support the troops on the ground are controlled by the 
Secretary of Defense.
    Under this structure, the Secretary becomes co-equal as a 
manager with the NID of the national intelligence assets within 
the Department of Defense during wartime--during wartime. When 
the men and women of our armed forces are involved in combat, 
the Secretary should carry sufficient weight on intelligence 
matters--and that's what I'm talking about, intelligence 
matters--to fulfill his responsibility.
    We can't take the chance of not having the Secretary be 
able to do that, and then if there's a conflict, take it up 
through the NSC and the President. But, as John McLaughlin 
said, in his 32 years, he'd never heard of anything that had 
gone up there.
    So that is something I think is very important. We have to 
find a way to ensure that the Secretary of Defense has an 
appropriate voice in these programs, and I would suggest in 
that fashion.
    I disagree on the paramilitary thing, but I'm not going to 
go into that because my statement has become too long. But I do 
think that the CIA has to continue to do that simply because 
it's a very discreet, extremely covert as opposed to 
clandestine operation. You want to have plausible deniability. 
That's a harder thing for the military to do; it's something 
that the CIA does do.
    Mr. Chairman, again thanking the three commission members 
before us, I think we're ready to go ahead on this and debate 
it, if we will do it. I hope we will.
    Thank you.
    Chairman Roberts. I thank the Vice Chairman. Before we turn 
to our witnesses, I want to mention, we invited Senator Bob 
Kerrey to join his fellow commissioners here today. Senator 
Kerrey is obviously a very well-known and a very respected 
former member and vice chairman of this Committee.
    Unfortunately, due to prior commitments as the New School 
University's president, he is not able to be with us today. He 
did, however, write a letter expressing his regrets and some 
additional thoughts on the issues before us. I ask unanimous 
consent that it may be made a part of the record.
    Without objection, it is so ordered.
    [The information referred to follows:]

                                     New School University,
                                       New York, September 7, 2004.
Hon. Pat Roberts, Chairman,
Senate Select Committee on Intelligence,
211 Hart Senate Office Building,
Washington, DC 20510-6475
    Dear Senator Roberts: I regret I am not able to testify in person 
today before you, Senator Rockefeller and other members of the 
Intelligence Committee. As a former member of the Committee, I would 
have liked to have been able to be there--were it not for the conflict, 
which prevents my attendance. Had I made the trip, I would have needed 
to leave early and you know how much fun leaving an important meeting 
can be in our nation's capitol.
    As to the details of your bill, I will leave all such questions to 
our Chairman and Vice-Chairman. Governor Kean and Congressman Hamilton 
are by far the best witnesses the 9-11 Commission has to offer.
    I write to present one observation which might be useful to the 
Committee:

          If you fail to unite behind a single committee bill, the 
        national intelligence community as a whole will be weakened. 
        You are their most important advocate and ally. As we learned 
        again with your recent attempt to put language in the 
        intelligence authorization bill, which would make this 
        Committee permanent, the SSCI has, by Senate Resolution, been 
        weakened relative to the Armed Services Committee.

    Senator Spector and I learned that lesson well in 1996 following 
the Aldrich Ames spy case. With Congress and the American people up in 
arms and demanding change, we thought the relatively small changes 
recommended by the Aspin-Brown Commission would be a piece of cake to 
pass. We were wrong.
    After passing out of the SSCI easily, the bill was sent to the 
Armed Services Committee. All the changes, which strengthened the 
Director of Central Intelligence relative to the Secretary of Defense, 
were stripped from the bill. The only reason we were able to give the 
DCI new authorities was that we were willing to have the SSCI take the 
Defense Authorization bill on sequential referral from the Armed 
Services Committee. This action--which meant we were threatening to 
prevent final passage of the Defense Authorization bill just as final 
passage of this year's Intelligence Authorization bill has been 
jeopardized--was our only means of enacting very modest change.
    The 9-11 Commission is asking Congress to make much more 
substantial changes in the laws that govern our national intelligence 
agencies. I know how hard fought this battle will be. I know the 
opposition will be just as determined.
    It is with knowledge of this reality clearly in mind, that I 
express my hope that the Committee will rally behind a single bill. 
Your bill is an excellent first step. I hope that the Committee will 
find a way to take the necessary remaining steps to ensure that the 
bill arrives on the floor of the Senate as a unified proposal.
    Thank you for the opportunity to express my perspective via letter.
            Very truly yours,
                                                  Robert J. Kerrey.

    Chairman Roberts. Governor, please proceed. Know that you 
can summarize your statement and every golden word, sir, will 
be made part of the permanent record.
    We welcome you. And we thank you, again.

                STATEMENT OF HON. THOMAS H. KEAN

    Governor Kean. Thank you very much, Chairman Roberts, Vice 
Chairman Rockefeller. Thank you both for very articulate, 
forceful and constructive statements. That was very, very 
helpful, and I want to thank you both.
    Distinguished members of the Senate Select Committee on 
Intelligence, we are honored to appear before you today. We 
want to thank you and the leadership of the U.S. Senate for the 
very prompt consideration that you are giving to the 
recommendations of the Commission, and we thank you all very 
much for your support.
    The Commission's findings and recommendations were, as you 
know, strongly endorsed by all commissioners, even though we 
come from very different backgrounds, even though we're five 
Republicans and five Democrats. But we do share a unity of 
purpose, and we hope that the Congress and the Administration 
will display the same spirit of bipartisanship as we 
collectively, together try to make our country and all 
Americans safer and more secure.
    I want to begin by reviewing briefly the road we've 
traveled since July 22nd, and that was the day that we as the 
Commission presented you our report. We believe we've made very 
important progress. From the outset, we have had statements of 
support from the President and from Senator Kerry. We've 
testified now 16 times during the summer recess. We appreciate 
how unusual it is for Congress to hold hearings in the month of 
August, and we welcome the opportunity to speak with respect to 
the whole array of recommendations that we have made. We thank 
the Congress, because it's given us an opportunity to explain 
our report to the American people.
    Mr. Chairman, we recognize that several Senators and 
Committees are now working to draft legislation to address 
commission recommendations, and we are deeply grateful for 
their work.
    Mr. Chairman, you put forward a proposal a few weeks ago 
entitled ``The 9/11 National Security Protection Act.'' We 
commend you for your leadership. You have reflected on the work 
of the Commission. You have been unflinching in your own 
examination of the intelligence community. We commend you for 
preparing a far-reaching, ambitious proposal for reform.
    Mr. Vice Chairman, you have conveyed your own views on 
reform to the Senate Governmental Affairs Committee. We have 
studied your suggestions. We have found them to be important, 
thoughtful and constructive. We see a clear convergence in 
these proposals toward the creation of a powerful national 
intelligence director with control over the budget and with 
hire-and-fire authority, the creation of a national 
counterterrorism center, and the creation of additional 
national intelligence centers.
    Both you and we find the status quo unacceptable. We've 
studied the 9/11 story. We explained in chapter 11 of our 
report the significance of management issues, both large and 
small. Our basis premise is that good strong management of an 
enormous enterprise so central to countering terrorism is 
absolutely necessary.
    Good management opens the way for many particular reforms, 
including improved collection of human or signals intelligence 
and certainly improved analysis. The results of good management 
cannot be specified with precision in advance. Innovation and 
creativity can't always be legislated, but good legislation can 
create the conditions where better things can happen.
    You have the benefit not only of our work but also the 
superb report of this Committee on intelligence assessments of 
weapons of mass destruction in Iraq. We saw your work on Iraq, 
actually, and read it before we completed our report. It 
reinforced our conviction that this is a time for fundamental 
change.
    We know that there are some differences between the 
Commission's proposals and some of those that you put forward. 
We'll be glad to discuss some of those specifics with you. We 
welcome the refinements of the legislative process. But what 
impresses us most is at this point we believe there is a 
consensus for change. We want to work with you. About once in a 
generation comes the opportunity for real reform. I suspect 
that this is it.
    We know that organizational changes are not a cure-all. The 
quality of the people is more important than the quality of the 
wiring diagrams. Good people can overcome bad structures. But 
why should they have to? Americans should not settle for 
incremental, ad hoc adjustments to a system designed 
generations ago and designed for a world that simply does not 
exist anymore.
    On August 27th, the President issued four Executive Orders 
and two homeland security Presidential directives. President 
Bush has come a long way. As the White House said, these orders 
``have strained the limits'' of Presidential authority. The 
White House has stated plainly that its actions on intelligence 
reorganization and on the national counterterrorism center can 
thus only be interim measures and that they await further 
reports and further work by the Congress.
    For example, in its briefings on August 27th, the White 
House spokesman emphasized, in very strong terms, that the 
national intelligence director must be an office separate from 
the head of the CIA, but only Congress can take that step.
    We appreciate the hard work that is now the task of you all 
in the Congress. We appreciate that the Commission did not 
address every detail, that the Commission does not have a 
position on every question. Some of your questions will go 
beyond, I suspect, what the Commission has decided. Several 
matters, of course, we have to leave to your discretion and 
your good judgment. But we want to return to some key themes. 
We want to make clear here what we support and what we don't 
support. For that, I'd like to turn now to my friend and 
mentor, Lee Hamilton.

               STATEMENT OF HON. LEE H. HAMILTON

    Mr. Hamilton. Thank you very much, Governor Kean, Chairman 
Roberts, Vice Chairman Rockefeller, distinguished members of 
the Committee, it's been a high privilege of course to work 
with Governor Kean whose extraordinary leadership has enabled 
us to have the impact I think we've had. It's a pleasure to be 
with one of our very distinguished commissioners, John Lehman.
    We strongly believe that the national intelligence director 
should be created by statute, should be a Senate-confirmed 
position. The Executive Order strengthening the current 
Director of Central Intelligence, in our view, is not 
sufficient for the task.
    We believe that the national intelligence director should 
not be the head of the CIA. It's an impossible task for any 
single individual to run effectively both the CIA and the 
agencies of the intelligence community. The head of the CIA 
should report to the national intelligence director as one of 
his deputies.
    The national intelligence director must have clear legal 
authority over budget, personnel, information technology and 
security procedures within the intelligence community, as I 
spell out in more detail in the statement. We cannot solve the 
problem of information sharing within the intelligence 
community unless there is a national intelligence director with 
legal powers to compel sharing and to create the structures so 
that sharing can take place.
    The national intelligence director needs these authorities 
if he is going to be able to transform the intelligence 
community to meet the challenges of the 21st century. If the 
national intelligence director does not have these strong 
authorities, then we oppose the creation of such a position.
    We believe strongly that the director of the national 
counter-
terrorism center should be a Presidential appointee, confirmed 
by the Senate. The Director should be a high-ranking official 
at the Deputy Secretary level, executive level 2.
    We do not believe that the national counterterrorism center 
can carry out its mission successfully if it is part of the CIA 
or part of any existing Cabinet department. In this regard, we 
believe the Executive Order making NCTC subordinate to the CIA 
is a mistake. The responsibilities of the national 
counterterrorism center include actions across the government. 
They are not confined to any single agency.
    The director of the national counterterrorism center should 
report directly to the national intelligence director on 
everyday issues and intelligence matters. On policy matters 
beyond intelligence, the director would report to the President 
and the NSC.
    The national counterterrorism center needs strong authority 
to influence relevant intelligence collection. It should have 
primary responsibility for net assessment and warning. The 
operational planning responsibilities of the center should not 
be limited to broad strategic plans. They should extend the 
daily oversight of particular joint operations and explicit 
authority to monitor implementation of joint plans.
    Vice Chairman Rockefeller's letter to Senators Collins and 
Lieberman offered a constructive suggestion, to be sure, that 
the Secretary of Defense retained his proper place in the chain 
of command for military operations. The Vice Chairman's 
suggestion is consistent with the Commission's approach.
    The national counterterrorism center should have 
authorities giving it influence over budget planning and 
leaders of the government-wide counterterrorism effort. The 
national counterterror-
ism center should be able to hire its own personnel and not be 
totally dependent on detailees from other agencies. We believe 
the creation of the national counterterrorism center must rest 
upon a firm legal foundation, and new legislation is necessary 
for that purpose.
    Our report emphasized that no single agency can construct 
the network capabilities needed to bring all of the agencies 
together and extend information sharing beyond the Federal 
Government. We commended the work of the Markle Foundation Task 
Force, which has recently offered suggestions to this and other 
committees about how to translate these ideas into legislation. 
We also wish to re-emphasize that our recommendations for 
intelligence reorganization will enable action on this front as 
well.
    Mr. Chairman, we strongly believe that the overall budget 
of the intelligence community, as well as the top-line budget 
numbers for the component agencies of the intelligence 
community, should be declassified. Making these numbers public 
will improve accountability. There is much skepticism, even 
cynicism about the intelligence community among the American 
people. Declassifying the budget is a step toward increased 
public understanding of the challenges facing the intelligence 
community and the manner in which they are addressed. We 
believe making these numbers public will help the Congress in 
its oversight responsibilities.
    Oversight doesn't get any harder than it does on the 
question of intelligence. Nobody else has access to the 
information. You do not have the media to help you. You don't 
have watchdog organizations. Opening the door, even a little, 
will help spark public interest, engagement and support for you 
and the difficult work you must conduct. Opening the door will 
also enhance the kind of hard-headed cost-benefit analysis that 
is necessary to ensure that the intelligence community uses its 
resources effectively.
    For the balance of the statement, I turn to Commissioner 
Lehman.

                STATEMENT OF HON. JOHN F. LEHMAN

    Mr. Lehman. Thank you. Mr. Chairman, Mr. Vice Chairman, 
distinguished members, thank you for including me in this 
important testimony this afternoon.
    As you know, we on the Commission were very critical of 
congressional oversight in our report. In fact, we all feel 
that it is of equal importance to reform in the executive 
branch. But let me make it clear, this criticism is by no means 
directed at this Committee. You, Mr. Chairman, Mr. Vice 
Chairman, and the members of this Committee have labored very 
long and seriously with a great background and experience that 
you bring to these issues, and no one could fault the effort 
that you have put in over these past years to making us safer.
    But the system under which you work, we feel, is as 
dysfunctional as the system that we have criticized in the 
executive branch. You need a better environment within which to 
work. We have recommended two models--the Joint Committee on 
Atomic Energy, model, which frankly many of us would recommend 
as our first choice; and, if that is not practical, then the 
model of unifying appropriations and authorization in each 
house.
    We feel very strongly that oversight is not just 
overlooking and checking what the executive branch does; it's a 
partnership. Senator Warner well knows, and other members, like 
Senator Feinstein and Senator Levin, that the oversight that 
was provided during my tenure as Secretary of the Navy was 
really a partnership.
    I had an analysis done of the time I spent when I was in 
Washington during the 6 years I was Secretary. For the first 
half of each year, 35 percent of all my time was spent up here 
on the Hill. It was in a very coherent, although I didn't 
always think so at the time, system of oversight with the Armed 
Services Committee, having a Sea Power Subcommittee, and the 
Appropriations Committee having a cadre of naval expertise. So 
there was a real pattern to this partnership.
    The result of our naval program during that period was as 
much the product of the dialog up here on the Hill, both in 
formal committee hearings and as important in the back hidey-
holes in the Capitol and in the Senate offices. Frankly, this 
was one of the most satisfying parts of my responsibilities. It 
was successful. It worked the way the founding fathers 
envisioned it.
    We certainly have not seen that same kind of oversight, by 
any means, in the investigations that we conducted over 20 
months. This Committee does not have the power, the longevity 
and the direct coupling with the appropriations that would 
enable a true partnership with the executive branch 
intelligence community in making and carrying out successful 
policy on intelligence.
    While, as our Chairman has said, ``good people can make any 
system work'', I think that the attitude that has emerged over 
the years in the intelligence agencies calls that into 
question, because the general attitude has been that if the 
intelligence agency can't get the right answer they want out of 
this Committee, they have only to go shop to other committees 
to undo.
    Our examination of your record of legislative initiative 
has shown that you have done impressive work, innovative work, 
imaginative ideas and reallocations of emphasis. Yet, there 
seems to have been only a random record of these ideas reaching 
final implementation at the end of the legislative process.
    So we urge you to put as much emphasis in the changing of 
the oversight, of totally reforming the way you conduct this 
oversight here in Congress, as you do to the already good 
initiatives, excellent initiatives you've undertaken in a very 
short period of time to carry out our recommendations in the 
other sections.
    Finally, let me just conclude by saying and re-emphasizing 
we're under no illusion that by moving around these boxes on 
your organization charts or the executive branch organization 
charts that this will solve the problem. Our purpose in making 
these organizational recommendations is really a secondary 
purpose. It's to create an environment that will enable good 
people to be creative, to take risks in intelligence analysis 
and recommendations and collection, and to carry out their 
responsibilities free of the underbrush that binds them to 
layers of bureaucratic process, the stovepipe of obstacles of 
originator control and compartmentalization and all of the 
barnacles that have attached to our intelligence hull over 
these many decades.
    The time for reform is now and I think that you've made an 
excellent start, but we want to emphasize what is done up here 
to change the way you conduct oversight is just as important as 
what you do to the executive branch.
    Thank you very much. We'd be happy to take your questions 
now.
    [The prepared statement of Governor Kean, Mr. Hamilton and 
Mr. Lehman follows:]

   Prepared Statement of Governor Thomas H. Kean, Vice Chair Lee H. 
   Hamilton and Commissioner John F. Lehman, National Commission on 
                Terrorist Attacks Upon the United States

    Chairman Roberts, Vice Chairman Rockefeller, distinguished members 
of the Senate Select Committee on Intelligence: We are honored to 
appear before you today. We want to thank you and the leadership of the 
U.S. Senate for the prompt consideration you are giving to the 
recommendations of the Commission. We thank you for your support.
    The Commission's findings and recommendations were strongly 
endorsed by all Commissioners--five Democrats and five Republicans. We 
share a unity of purpose. We call upon Congress and the Administration 
to display the same spirit of bipartisanship as we collectively seek to 
make our country and all Americans safer and more secure.

                    REVIEWING THE PAST SEVERAL WEEKS

    We want to begin by reviewing briefly the road we have traveled 
since July 22nd, the day the Commission presented its report.
     We believe we have made important progress. From the 
outset, we have had statements of support from the President, and from 
Senator Kerry.
     We testified 16 times during the summer recess. We 
appreciate full well how unusual it is for Congress to hold hearings in 
the month of August. We welcome the opportunity to speak with respect 
to the whole array of recommendations we have made.
     We thank the Congress for the opportunity to explain our 
work to the American people.

                          LEGISLATIVE EFFORTS

    Mr. Chairman, we recognize that several Senators and Committees are 
now working to draft legislation to address Commission recommendations, 
and we are deeply grateful to them for their work.
    Mr. Chairman, you put forward a proposal a few weeks ago entitled 
the ``9-11 National Security Protection Act.'' We commend you for your 
leadership. You have reflected on the work of the Commission. You have 
been unflinching in your own examination of the Intelligence Community. 
We commend you for preparing a far-reaching, ambitious proposal for 
reform.
    Mr. Vice Chairman, you have conveyed your own views on reform to 
the Senate Governmental Affairs Committee. We have studied your 
suggestions. We found them to be important, thoughtful, and 
constructive.
    We see a clear convergence in these proposals toward:
     The creation of a powerful National Intelligence Director, 
with control over the budget, and with hire-and-fire authority;
     The creation of a National Counterterrorism Center; and
     The creation of additional National Intelligence Centers.
    Both you--and we--find the status quo unacceptable. We studied the 
9/11 story. We explained, in chapter 11 of the report, the significance 
of management issues both large and small.
    Our basic premise is that good, strong management of an enormous 
enterprise so central to countering terrorism is necessary. Good 
management opens the way for many particular reforms, including 
improved collection of human or signals intelligence and improved 
analysis. The results of good management cannot be specified with 
precision in advance. Innovation and creativity cannot be legislated. 
But good legislation can create the conditions where better things can 
happen.
    You have the benefit not only of our work, but also the superb 
report of this committee on intelligence assessments of weapons of mass 
destruction in Iraq. We saw your work on Iraq before we completed our 
report. It reinforced our conviction that the time has come for 
fundamental change.
    We know that there are some differences between the Commission's 
proposals and those you have put forward. We will be glad to discuss 
some of those specifics with you. We welcome the refinements of the 
legislative process. What impresses us most is that there is a 
consensus for change. We want to work with you to seize this 
opportunity for reform.
    We know that organizational changes are not a cure-all. The quality 
of the people is more important than the quality of the wiring 
diagrams. Good people can overcome bad structures. But why should they 
have to?
    Americans should not settle for incremental, ad hoc adjustments to 
a system designed generations ago for a world that no longer exists.

                    EXECUTIVE ORDERS AND DIRECTIVES

    On August 27th, the President issued 4 Executive Orders and 2 
Homeland Security Presidential Directives.
    President Bush has come a long way. As the White House said, these 
orders have ``strained the limits'' of the President's authority. The 
White House has stated plainly that its actions on intelligence 
reorganization and on the National Counterterrorism Center can thus 
only be interim measures, and that they await further work by the 
Congress. For example, in its briefings on August 27, White House 
spokesmen emphasized, in very strong terms, that the National 
Intelligence Director must be an office separate from the head of the 
CIA. But only Congress can take that step.
    We appreciate that the hard work ahead is now the task of the 
Congress. We appreciate that the Commission did not address every 
detail, and that the Commission does not have a position on every 
question. Some of your questions will go beyond what we as a Commission 
decided. Several matters we must leave to your discretion and good 
judgment.
    We want to return to some key themes. We want to make clear here 
what we support, and what we do not support.

                   THE NATIONAL INTELLIGENCE DIRECTOR

    We believe strongly that the National Intelligence Director should 
be created by statute, and should be a Senate-confirmed position. An 
Executive Order strengthening the current Director of Central 
Intelligence is not sufficient to the task.
    We believe that the National Intelligence Director should not be 
the head of the CIA. It is an impossible task for any single individual 
to run effectively both the CIA and the agencies of the Intelligence 
Community. The head of the CIA should report to the National 
Intelligence Director as one of his deputies.
    The National Intelligence Director must have clear legal authority 
over budget, personnel, information technology, and security procedures 
within the intelligence community.
     He must have the authority to prepare and execute budgets.
     He must have reprogramming authority.
     He must have hire and fire authority over the key senior 
officials within the Intelligence Community.
     He must have the authority to set uniform standards for 
security and classification.
     He must have the authority to create common standards and 
the application of new network capabilities to foster information 
sharing.
    We cannot solve the problem of information sharing within the 
Intelligence Community unless there is a National Intelligence Director 
with the legal powers to compel sharing and create the structures so 
that sharing can take place. The National Intelligence Director needs 
these authorities if he is going to be able to transform the 
Intelligence Community to meet the challenges of the 21st century.
    If the National Intelligence Director does not have these strong 
authorities, we oppose the creation of such a position.

                  THE NATIONAL COUNTERTERRORISM CENTER

    We believe strongly that the Director of the National 
Counterterrorism Center should be a Presidential appointee, confirmed 
by the Senate. The Director should be a high-ranking official at the 
Deputy Secretary level (Executive level II).
    We do not believe that the National Counterterrorism Center can 
carry out its mission successfully if it is part of the CIA or part of 
any existing Cabinet Department. In this regard, we believe the 
Executive Order making the NCTC subordinate to the CIA is a mistake. 
The responsibilities of the National Counterterrorism Center include 
actions across the government; they are not confined to any single 
agency.
    The Director of the National Counterterrorism Center should report 
directly to the National Intelligence Director on everyday issues and 
intelligence matters. On policy matters beyond intelligence, the 
Director would report to the President and the National Security 
Council.
    The National Counterterrorism Center needs strong authority to 
influence relevant intelligence collection. It should have primary 
responsibility for net assessment and warning.
    The operational planning responsibilities of the Center should not 
be limited to broad strategic plans. They should extend to daily 
oversight of particular joint operations and explicit authority to 
monitor implementation of joint plans.
    Vice Chairman Rockefeller's letter to Senators Collins and 
Lieberman offered a constructive suggestion to be sure that the 
Secretary of Defense retained his proper place in the chain of command 
for military operations. The Vice Chairman's suggestion is consistent 
with the Commission's approach.
    The National Counterterrorism Center should have authorities giving 
it influence over budget planning and leaders of the governmentwide 
counterterrorism effort. The National Counterterrorism Center should be 
able to hire its own personnel and not be totally dependent on 
detailees from other agencies.
    We believe the creation of a National Counterterrorism Center must 
rest upon a firm legal foundation. New legislation is necessary to 
achieve this purpose.

         DESIGNING NETWORK CAPABILITIES FOR INFORMATION SHARING

    Our report emphasized that no single agency can construct the 
network capabilities needed to bring all the agencies together and 
extend information sharing beyond the Federal Government.
    We commended the work of the Markle Foundation task force, which 
has recently offered suggestions to this and other committees about how 
to translate these ideas into legislation.
    We also wish to reemphasize that our recommendations for 
intelligence reorganization will enable action on this front as well.

                      DECLASSIFYING BUDGET NUMBERS

    Mr. Chairman, we strongly believe that the overall budget of the 
intelligence community--as well as the top-line budget numbers for the 
component agencies of the intelligence community--should be 
declassified.
    Making these numbers public will improve accountability. There is 
much skepticism, even cynicism, about the intelligence community among 
the American people. Declassifying the budget is a step toward 
increased public understanding of the challenges facing the 
intelligence community, and the manner in which they are addressed.
    We believe making these numbers public will help the Congress in 
its oversight responsibilities. Oversight doesn't get any harder than 
it does on the question of intelligence. Nobody else has access to the 
information. You don't have the press to help you. You don't have 
watchdog organizations.
     Opening the door--even a little--will help spark public 
interest, engagement and support for you in the difficult work you must 
conduct.
     Opening the door will also enhance the kind of hardheaded 
cost-benefit analysis that is necessary to ensure that the intelligence 
community uses its resources effectively.

                        CONGRESSIONAL OVERSIGHT

    Mr. Chairman, we have been critical of the Congress on the question 
of oversight. Let us be clear here. You, the Vice Chairman and Members 
of your Committee have worked hard and long on intelligence questions, 
with great devotion to the nation's security. The current structure of 
Congressional oversight has made your work more difficult.
    We believe that the Congress needs to change its structures so that 
they help you, not hinder you, in the conduct of oversight.
    We are encouraged by the creation of a bipartisan working group on 
congressional reform by the Senate leadership, and we commend them for 
that important step.
    We believe that the Intelligence Committees need to be strengthened 
considerably in the performance of their oversight work. We suggested 
the option of a joint 
Senate-House Committee. We also suggested, as an alternative, the unity 
of the authorization and appropriation process for the Intelligence 
Committees. We note that Senator Rockefeller endorsed this option in 
his recent letter.
    The point here is a straightforward one: Whatever course the 
Congress chooses, we believe the committees of Congress charged with 
oversight of the Intelligence Community must be made stronger, with 
power over the purse strings.
    Each of you knows that the Intelligence Community resists providing 
you information. Each of you knows that when the Intelligence Community 
doesn't like the answer they get from you, they go to another committee 
for another answer.
    We advocate a strong National Intelligence Director. We believe 
that stronger executive branch powers must be balanced by stronger 
Congressional oversight. The case for stronger Congressional 
oversight--already powerful--becomes overwhelming once a new National 
Intelligence Director is created.
    The Commission is asking the Congressional Committees to do a lot 
to make the Intelligence Community better. We are asking you to provide 
the long-term oversight in order to improve management and analysis. We 
are asking you to provide oversight over the improvement of human 
intelligence, especially the development of a diverse workforce with 
knowledge of the regions, language and cultures that we must 
understand.
    We recognize that you cannot do the many things we ask you to do, 
unless you have the tools to do the job. The committees charged with 
oversight of the Intelligence Community need, above all, control over 
the money. If you control the money, then we believe you can get the 
job done.

                            CLOSING COMMENTS

    Mr. Chairman, we do not want to get too fixated on charts, on boxes 
or the location of boxes. We believe that the creation of a National 
Intelligence Director and a National Counterterrorism Center are 
important. Indeed, our testimony this afternoon is about why these 
reforms are so important.
    Yet reforms of executive branch structures, in the absence of 
implementing the other reforms and recommendations in our report, will 
have significantly less value than the value of these reforms as a 
complete package.
    Reforms in Congress, as well as the many recommendations we did not 
present in detail this morning--on foreign policy, public diplomacy, 
the cooperative threat reduction program, border and transportation 
security, and national preparedness--can make a significant difference 
in making America safer and more secure.
    In short, we welcome each step toward implementation of our 
recommendations. But no one should be mistaken in believing that 
solving structural problems in the executive branch addresses 
completely, or even satisfactorily, the current terrorist threat we 
face.
    The first part of our recommendations dealt with substantive 
policy--the ingredients of a global strategy. We hope those suggestions 
will get some fraction of the attention that has understandably been 
given to our ideas to reorganize the government. Our purpose in 
reorganizing the government is so that we can implement the ambitious, 
long-term substantive agenda spelled out in our Report.
    We thank you again for the opportunity to testify before this 
distinguished Committee.
    We should seize the moment and move forward on reform.
    With your counsel and direction, we believe that the Nation can, 
and will, make wise choices.
    We would be pleased to respond to your questions.

    Chairman Roberts. We wish to thank the panel.
    Mr. Lehman and Mr. Hamilton, more especially Lee, I want to 
thank you for coming before the Committee and asking for our 
very frank and candid advice and counsel on how we can improve 
our oversight capabilities and responsibilities.
    We have been very favorably impressed that you have 
basically recommended a lot of what we told you. I think you 
recognized at that time the frustration that the Vice Chairman, 
myself and the members of the Committee have in regards to your 
recommendation that the Intelligence Committee should be the 
one that, at least in terms of congressional oversight, be the 
most independent, have the most clout and the most power in 
recommending policy.
    Yet, because of the fractionalized way that Congress finds 
itself evolved into, if that's the proper way to put it, we are 
the least. So there's a great deal of frustration on the 
members of this Committee, who work very hard in achieving what 
you achieved in the 17-0 vote in reference to our pre-war 
intelligence. We'd like to think that we spend a great deal of 
time--I know we do--on these matters with a sense of 
responsibility.
    So I want to thank you for coming to the Committee and 
asking first, and at least agreeing with us on a great many 
issues. I could get into that and I think I'll pound my gavel 
in regards to the fact that many of our recommendations end up 
on the cutting room floor or are simply ignored, and then we 
simply do the business by supplemental appropriations. The Vice 
Chairman and I have made many speeches on that, I shouldn't be 
making one now, but thank you for your comments.
    I am now going under regular order, and turn to Senator 
Rockefeller for a first round of questions.
    Senator Rockefeller.
    Vice Chairman Rockefeller. To be limited to 5 minutes, Mr. 
Chairman, right?
    Chairman Roberts. That is correct.
    Vice Chairman Rockefeller. I just want to take advantage of 
Vice Chairman Hamilton's statement to sort of see if I can nail 
this one down. Because it is one that I worry about, and that 
is the perception that the emphasis on intelligence is going to 
somehow put the warfighter at risk.
    We know from your document and your report that you leave 
the Joint Military Intelligence Program and the tactical 
intelligence intact and others under the control of the 
Secretary of Defense and his intelligence Undersecretary. But I 
think people worry--and it may, in fact, be one of the reasons 
that this kind of reform hasn't passed in past years, is the 
worry of the military that somehow they're being moved in on, 
and their powers are being taken away.
    Now, one of the things--and Vice Chairman Hamilton spoke to 
it and I thought he spoke to it in a favorable and accepting 
way, but I don't want to take anything for granted.
    You want, I think, to give the Secretary of Defense, when 
you are in a situation of being at war, a joint position, an 
equal position to the national intelligence director, on all 
matters of intelligence. Technically, if they disagreed, as I 
indicated in my opening statement, they could take that to the 
NSC and to the President. But you don't want that to happen.
    You've got a group of insurgents coming up one side of the 
hill and we're coming up the other side of the hill, you don't 
have time for that. John McLaughlin said this never happened.
    But I want to try to pin down that there is still a concern 
that the NID might manage the national intelligence systems in 
a way that could be detrimental to the warfighter. We don't 
want that to happen in times of war. We do not want that to 
happen.
    So is the idea of making the Secretary of Defense co-equal 
to the NID and that they would agree on approaches on 
reflecting intelligence matters in time of war, is that one 
upon which you look favorably?
    Mr. Hamilton. Senator Rockefeller, we do not think that's 
inconsistent at all with what we have recommended in the 
Commission report. I want to be very clear here that we never 
suggested, for one moment, diminishing support for the 
warfighter. We agree with the Vice Chairman on the importance 
of that support. We think in the organizational structure that 
we have put forward, that support is assured.
    There is another equity here that has to be looked at. I 
don't think anybody wants to reduce the quality of intelligence 
that goes to the warfighter. We all recognize the importance of 
that. The other equity is the American people. The American 
people have to be protected too against a 9/11-type attack. You 
do that by providing effective, strong intelligence, national 
intelligence, strategic intelligence to the national 
intelligence director.
    I believe the way we have structured it, and I think it's 
consistent with what you have said, the Deputy National 
Intelligence Director, who would be the Under Secretary of 
Defense, would certainly be sitting at that table to be alert 
to every possible bit of information that would be helpful to 
the warfighter going to the war fighter. And we fully support 
that.
    What you have suggested kind of reinforces that. I think 
it's consistent with what we say.
    Vice Chairman Rockefeller. Thank you, Vice Chairman 
Hamilton. My time is virtually up.
    Chairman Roberts. Senator Warner.
    Senator Warner. Thank you, Mr. Chairman.
    Mr. Chairman, I wish to join my colleagues in commending 
each of you for your further public service. Really, in my 
judgment, there is a long history of Presidential commissions 
and congressional commissions. I think you have reached the new 
high watermark and bring credibility to that procedure. I 
commend each of you.
    Secretary Lehman, I remember well when we worked together, 
when you were Secretary of the Navy, and I want to commend you. 
You remember the Goldwater-Nichols Act, which many have 
referred to as a precedent for what we are undertaking here in 
the Congress today. I remember you were very active in that 
piece of legislation.
    Gentlemen, my first question comes to the Chairman, the 
distinguished Chairman. There's been some speculation that with 
Executive Orders and what took place prior to the issuance of 
your report, that, of the 41, a very high percentage of your 
recommendations have been implemented, are being implemented. 
Do you have any base of fact there as to your own opinion of 
where we are today in connection with the implementation of 
those 41?
    Governor Kean. There's no question we've made progress on 
some of them, and some of them even before we came out with the 
report.
    What we would call the major recommendations have not yet 
been dealt with.
    Senator Warner. Not one.
    Governor Kean. There are a whole series of recommendations 
involving things like transitions and emergency response and 
public foreign policy, a whole series of things that we still 
think we have to work on.
    Senator Warner. Now, Congressman Hamilton, I'm going back 
to your testimony before the House Armed Services Committee. 
You indicated the Commission's understanding of the importance 
of tactical military intelligence, and you used these words, I 
believe, had ``evolved since the report was published and that 
some of the Commission's thinking on this subject needed to be 
refined.''
    Can you amplify on that, I think, very perceptive 
observation on your part?
    Mr. Hamilton. Well, I think, Senator, we've learned as 
we've gone along, and making a sharp division between tactical 
and strategic, which I think we did in the report, the clear 
bright line may not be as clear and as bright as we thought. 
There are a number of intelligence assets that can have both a 
military and a strategic value to them. So I do think our 
thinking has been refined, as we have talked with our friends 
in the Defense Department and in the CIA, with regard to this.
    I believe, as a pragmatic matter, it can be worked out. It 
helps me to think in terms of specifics. You take an asset like 
the U-2. The U-2 clearly has military applications, but 
likewise it gives us important political information.
    Senator Warner. I think that's helpful.
    I want to refer to your chart here. My concern is, and I go 
back to one word that you had, which I found very interesting 
in the report, the lack of imagination. To me, imagination is 
the direct product of competitive analysis in many respects.
    Where in here is the ability of the President to receive 
views other than that held by the national intelligence 
director? For example, Secretary Lehman, we put in Goldwater-
Nichols the ability of any member of the Joint Chiefs to have 
access to the President. Do you envision that the President 
will receive differing views from many of the substructure 
here? Or how does he receive the differing views?
    Mr. Hamilton. Senator Warner, first of all, we want to see 
competitive analysis. We're not against competitive analysis. 
We think our proposal, and I'll spell this out, gives us more 
competitive analysis.
    We think the status quo did not give us competitive 
analysis, not only with regard to 9/11, but with regard to the 
report this Intelligence Committee made the other day on 
weapons of mass destruction. So we think the status quo fails 
to foster competitive analysis. But beyond that, the whole 
concept we have is sharing information across the various 
agencies of the intelligence community.
    The more you share information, the more ideas, the more 
competition for ideas you're going to have.
    Senator Warner. I agree with that. I'm thinking in that 
Oval Office, when that NID comes in and states a proposition to 
the President, does the President have the benefit of other 
views?
    Now, presumably, the Deputy NID for defense intelligence 
can energize the SecDef. Likewise, the Deputy NID for homeland 
can exercise that Cabinet officer. I'm not sure exactly how the 
survivor of the CIA gets in there and the DIA. That's what 
concerns me here. As we work through it, I can assure you this 
Senator is going to make certain that there is some ability for 
others to have access to the President----
    Mr. Hamilton. All of the departments of government we don't 
make any change. State has their intelligence. Energy has 
theirs. Treasury has theirs. Each of the armed services has 
their intelligence. None of that is changed. So that 
competition from those areas would be the same as it has been 
in the past. We think there are other steps we've taken that 
strengthen that competition.
    I think the point you are raising is enormously important. 
You and all of us need to be satisfied that whatever we have 
permits a maximum amount of competitive analysis.
    Senator Warner. Last, a group of us have been invited--I 
think, basically the Chairman and Ranking Mmember of the 
several committees involved in the intelligence business, to go 
and visit at the White House tomorrow, presumably given the 
opportunity to express our views and to receive perhaps their 
initial thinking on draft legislation that will be coming to us 
eventually.
    Do you have any pre-knowledge of what the disposition is 
for the White House as to the legislation? If not, in the 
course of that legislative proposal being made available to the 
Congress, are you in a position and will you comment on it such 
that the Congress can have the benefit of your ideas on such 
White House proposals, legislatively, as would be forthcoming?
    Governor Kean. We've had no communications from the White 
House as to what their proposals may be. We would be glad to 
work with this Committee as you consider them in any way which 
you deem appropriate.
    Senator Warner. My time is up, Mr. Chairman. Thank you.
    Mr. Hamilton. May I observe, Senator, that I think the 
Executive Orders of the President have been a constructive step 
forward.
    Senator Warner. As do I.
    Mr. Hamilton. When they say that they've gone as far as 
they can go with an Executive Order, I think that's about 
right. Now, they don't go as far as we recommend, as you 
recognize.
    We think there are some important changes. But the 
Executive Orders support the national counterterrorism center. 
They support a national intelligence director. They believe in 
strengthening the management of the intelligence community. 
They believe that more sharing has to take place. All of these 
things are positive and constructive. We want to build on them.
    Senator Warner. Thank you.
    Thank you, Mr. Chairman.
    Chairman Roberts. Senator Lott. Senator Lott is no longer 
here.
    Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    First question is for you Mr. Hamilton. The report of the 
Commission documents extensive intelligence and aviation 
security failures. You talk about the failure to put dangerous 
people on the watchlist, to take the Phoenix memo seriously, 
the failure to get the warrant against Mr. Moussaoui. The list 
goes on and on.
    Yet, no one was ever reprimanded, demoted, transferred or 
fired anywhere in our government because of the mistakes that 
contributed to the attacks.
    Now, I'm not saying that the attacks could have been 
prevented. But I am very troubled about the lack of 
accountability in the intelligence community. I'm struck by how 
different it is with the military community. For all practical 
purposes, in the military community, there is strict liability. 
When something goes wrong, somebody gets held accountable. It 
doesn't seem to be that way in the area of intelligence.
    I'd like you to say what you all found as you looked to the 
question of why nobody was reprimanded, demoted, transferred or 
in any way faced any consequences because of the failures that 
you take--you all take almost 10 pages to document the 
management failures. They go from around 350 to 360. Why, in 
your view, was nobody ever held accountable?
    I ask that of you, Mr. Hamilton.
    Mr. Hamilton. Senator Wyden, you can look back and you can 
find mistakes that were made. This person didn't check the 
passport carefully enough. That person didn't look at the visa 
applicant carefully enough. The ticket-taker at the airport 
wasn't careful enough about people boarding the airplane. You 
can go on and on and on. We can list 50 of those people.
    But we really saw no value to pointing out one person here, 
one person there and giving you a list of 25 people or 50 
people. What good is that going to do?
    The fundamental problem we saw was systemic, not personal. 
That's what we focused on.
    Senator Wyden. Well, I share your concern. But it also 
seems to me that no organization can succeed if, at some point, 
failure isn't acknowledged and people held accountable. So 
we'll have further discussion about this. But I will tell you, 
I'm struck by how different intelligence is from the military 
area where there really is strict liability.
    Mr. Hamilton. One of the things we did find was that the 
military did do, after 9/11, after-action reports. That has not 
yet been complete, as we understand it, in the CIA. The Justice 
I.G. has completed a report. So some of this is being done.
    Senator Wyden. Governor Kean, my next question's for you. 
Senator Lott and I have introduced comprehensive legislation to 
overhaul the way government documents are classified.
    It seems to me that a problem that was serious years ago 
has gotten more and more so. You said during the course of your 
review, this is a quote from you, ``Three-quarters of what I 
read that was classified shouldn't have been.''
    I can tell you, Senator Lott and I are going to use that as 
exhibit A for making the case for our legislation, but I'm 
interested in having you amplify a bit on why you found that to 
be the case, and in particular whether an official faces any 
repercussions at all with respect to overclassifying a 
document.
    It seems to me what we have is a system where somebody just 
sits there with a big old stamp and marks ``Secret,'' and there 
are never any consequences. I and Senator Lott would like to 
shake that up. I'm very pleased that one of our sponsors, 
Senator Snowe, is here as well. If you could tell us why you 
found that to be the case, I think that would be very helpful.
    Governor Kean. Well, congratulations, Senator. You and 
Senator Lott, unlike my two colleagues here and most of the 
other members of the Commission--I had never seen a classified 
document before. So this was my first time, and so I was very 
eager to read after I got my security clearances.
    What amazed me, I remember the first time document I read, 
it was about 300 pages from the FBI. I read the whole thing 
very carefully, and I looked at my watch, turned to the FBI 
agent that was there and said, ``I know all of this. I've read 
it in the newspapers. Why is it classified?'' He said, ``But 
you didn't know it was true.''
    Now, that is not a reason for classification. As I read 
more and more documents, there were more and more things that I 
already knew, and things frankly the American people deserve to 
know. I mean, they weren't anything to do with sources or 
methods or anything which in my mind as a citizen jeopardized 
the security of America or the lives or occupations of any of 
the people who work so hard in the security area.
    It happened to me again and again and again and again. I 
think all of my fellow commissioners shared exactly the same 
feeling. You talk about incentives, the incentive is the other 
way around. So I talked to a number of people, and they said, 
``the incentive is you don't get into any trouble if you put 
that stamp on it. You're safe''.
    It's the other way around. If you don't put the stamp on 
it, maybe there's some way you can get in trouble. So I 
congratulate you on that.
    Senator Wyden. Mr. Chairman, can I ask one other question 
on this classification matter? I know my light is on.
    Chairman Roberts. Certainly.
    Senator Wyden. Thank you, and I'll be very brief.
    For Mr. Lehman, as you know with respect to your proposal 
that the overall amount of money being appropriated no longer 
be kept secret, I'd be interested in having you tell us how 
you'd respond to critics who say that declassifying that 
information is in some way going to harm national security. 
We've been hearing people say western civilization is going to 
end if somehow this overall number is printed.
    It seems to me you're right, they're wrong. But how would 
you respond to the critics on that question with respect to 
declassification?
    Mr. Lehman. Well, frankly I think the biggest damage that 
would be done would be the shock that our enemies would have at 
seeing how irrational we are at allocating resources, if they 
really knew how little we spend on translators and on human 
intelligence sources compared to what we spend on hardware, 
redundant hardware and so forth.
    Obviously there's a level of granularity that needs to be 
protected. We don't want to tell them exactly how much we're 
spending on infrared satellites or particular SIGINT assets.
    But the American public would be shocked if they knew the 
misallocation of resources between HUMINT and other aspects of 
our intelligence budget. They need to know that. How can you 
carry on a debate on the floor of the Senate without talking 
about those kinds of gross numbers?
    So we feel very strongly that certainly the top line and 
the rough allocation of resources between different parts of 
the community, not necessarily in fine, and certainly not down 
to the problematic level--but we have not heard a compelling 
argument for maintaining overall classification. It's silly 
that you, when you go out and speak, have to quote Tom Clancy 
and can't discuss in a rational way.
    Senator Wyden. Thank you, Mr. Chairman.
    Chairman Roberts. I'm not sure we all quote Tom Clancy. 
There are other people we could quote.
    [Laughter.]
    Chairman Roberts. Let me just say that the Committee is 
taking very seriously the proposal by Senator Wyden, Senator 
Lott, and others. It is a matter of the highest priority.
    Senator DeWine.
    Senator DeWine. Thank you, Mr. Chairman.
    Let me just thank the three of you for a magnificent job on 
the Commission. All of us appreciate it very, very much.
    Mr. Secretary, thank you for your very perceptive and 
eloquent comment about the institutional problem this Committee 
has in doing oversight. I don't think I've heard it expressed 
any better. I think you have touched on a real problem that we 
have, and I hope we can change that.
    Let me talk a minute, and then ask a question about a 
reform challenge I think that we face that affects both our 
branch of government as well as the executive branch. That has 
to do with the supplemental budget and the fact that we rely 
more and more to fund our intelligence community on the 
supplemental budget.
    It seems to me that this is a problem. I guess you could 
look at it from a positive point of view. Thank heavens we have 
had the supplementals. I don't know where we'd be without them, 
as far as funding the intelligence community for the last few 
years. But it is a problem. It makes, I would think, for 
executive branch and for the different agencies planning very, 
very difficult.
    They never know from one year to the other whether they are 
going to have the supplemental. What will happen some year if 
we don't have a supplemental? This really needs to be made a 
part of the permanent budget, needs to be part of the baseline 
budget. It presents a problem, I think, for Congress as well, 
because, as has already been pointed out here today, when the 
money is in a supplemental, it really doesn't go through this 
Committee and we don't have the opportunity to have any say 
about it, or any effective say.
    So I wonder if I could get your comment about this, because 
it seems to me that when we're talking about reform--and you've 
talked about many things in regard to reform--this is one area 
of reform that we're going to have to face up to.
    If I could start with Congressman Hamilton.
    Mr. Hamilton. Senator DeWine, I agree with you. The 
supplemental appropriation process shuts you out of the game 
and it shuts out most of the other Senators. In the House of 
Representatives, which I know a little better, it shuts out 
most everybody except a very few people, not all of whom are 
elected members. A few key staff people and a few key 
appropriation players, they're the only ones in the game.
    We all know how supplementals work around here. The fact of 
the matter is they work in such a way that ordinary members of 
the Senate and the House cannot impact it.
    The other point you make I think is terribly important. 
From the standpoint of the intelligence community, it's an 
awful way to run the institution. They don't know what their 
budget is going to be, oftentimes until well into the fiscal 
year. They cannot plan ahead.
    So I think from your standpoint and from the executive 
branch standpoint, supplementals are just awful. They're an 
abomination in terms of process. They seriously undercut 
deliberation, seriously undercut contributions that other 
members can make.
    What do you do about it? Well, one of the things we 
suggest, I think you probably are going to have to have to 
restructure the intelligence budget and maybe have a separate 
intelligence budget--today it's part of the defense budget--and 
try everything you can to avoid the supplemental process. But I 
very much agree with your observations.
    Senator DeWine. Governor.
    Governor Kean. I couldn't agree more. Everything I know, 
which is about a quarter of what Lee Hamilton knows or less, 
makes me agree very much with your point.
    Senator DeWine. Mr. Secretary, you have had a lot of 
experience in budgeting on Capitol Hill and being up here.
    Mr. Lehman. Well, you know, when I was Secretary of the 
Navy, we used to view that, in those years that it got crowded, 
as a mixed blessing because it basically freed us up from any 
oversight. We could do whatever we wanted.
    Senator Warner. And you did it too.
    [Laughter.]
    Mr. Lehman. I have reformed, Senator.
    But I couldn't have said it better than Lee. It is just 
really totally disruptive and frustrating of the whole process.
    Senator DeWine. Well, I just think it's just a huge, huge 
problem that we really have not concentrated enough on or 
thought about enough or talked enough about. You know, the 
average American obviously doesn't have a clue about this and 
wouldn't be expected to understand all the intricacies of this.
    But you lose, it seems to me, the input of the people who 
Congress expects on a daily basis to be paying attention--lose 
their input. But equally important, as Congressman Hamilton 
said, you lose the ability, it seems to me, for each agency to 
have the assurance that this is in the baseline, that they can 
plan ahead, that they have the assurance that they're going 
year to year to year to year.
    Government budgeting is tough enough the way we do it every 
year, anyway, coming in later and later, and all the problems. 
We get the feedback from every agency.
    But to have so much tied up in the supplemental year after 
year, it seems to me, it would just be a horrible, horrible way 
to have to do business in an area that is so vital, so vital to 
the defense of this country and to the protection of the 
American people. We just have to do something about it.
    I thank the Chairman.
    Chairman Roberts. Senator Chambliss.
    But I might point out before the distinguished Senator 
starts, that the Senate has passed the Defense Appropriation 
Act, which includes money for the intelligence community, but 
has yet to pass the Intelligence Authorization Act. I'm not 
quite sure what to call it, but that's not the way that we want 
to run the railroad.
    Senator Chambliss.
    Senator Chambliss. Thank you, Mr. Chairman.
    Lee, those supplementals also tend to get loaded up with 
members projects, as you well know, and we spend too daggone 
much money on them.
    One of the recommendations of the Committee is to move the 
NID into the Executive Office of the President. There are 
several of us who have already noted publicly that we have some 
concern about that from a political standpoint.
    I tend to look at the national intelligence director--I 
think which we all are basically agreed on now we need to move 
toward--that that individual ought to be more in the form of a 
CEO of a major corporation who is overseeing the whole 
intelligence community and separate them as much as we can from 
the political atmosphere and the political world. How integral 
is that recommendation to your committee's overall 
recommendations?
    Mr. Hamilton. I think we've learned from our contacts with 
you. It's my understanding that that's not a well-received 
recommendation for the very reason you stated. We accept your 
judgment about it.
    We think that the authority is much more important than the 
box. We really do think the authorities of the national 
intelligence director are crucial. But where you put him in the 
White House or as a freestanding office I don't think is 
crucial.
    Mr. Lehman. Frankly, one of the reasons why we recommended 
the Executive Office of the President was we are all very 
sensitive to not creating another bureaucratic layer. Exactly 
the example that you use of a well-run large corporation with a 
very small CEO staff with real powers is what we wanted. The 
Executive Office of the President already has the 
administrative bureaucracy, the treasurer, if you will, and the 
human resources person and the admin side.
    So we thought it would be much easier, probably a good way 
to reduce some of the billets that would be needed for the NID, 
if we just used the existing bureaucracy. But it is not really 
essential, and the objections to it that have been raised in 
this Committee are very legitimate ones. So I think we all 
agree that that's fine, to take it out of the EOP.
    Mr. Hamilton. Senator Chambliss, if I may add, our concern 
would be that the NID, the national intelligence director, not 
be subordinate to a Cabinet person. The reason for that is that 
the national intelligence director is going to be not only 
collecting all of the information, intelligence information, 
but is also in charge of operational planning to deal with 
counterterrorism.
    Now, what that means is you've got to be able to work with 
all of the departments of government that have a role in 
counterter-
rorism strategy. That's almost everybody. It's diplomacy, it is 
military, it's CIA, it is Treasury. It is all of them.
    So we think it would be a mistake to put the national 
intelligence director under somebody, because he or she is 
going to have to be giving orders to a lot of other people in a 
lot of different areas of government. You cannot have an 
effective counterterrorism strategy unless you integrate many 
departments and agencies of government. It takes all of it to 
be effective. You've got to have good diplomacy. You've got to 
have the Treasury working to stop the financing. You've got to 
have good law enforcement. You've got to have good military. 
You've got to have good covert action. You've got to have good 
public diplomacy. It goes on and on. The importance then is 
that the national intelligence director has to oversee all of 
that.
    Senator Chambliss. Looking at the combat support agencies 
within the Department of Defense, your recommendation is that 
those agencies stay within the Department of Defense. The 
Chairman's proposed legislation that he has out there now moves 
those three agencies out of the Department of Defense and 
reorganizes them by function.
    I think there are good points and bad points to both of 
them, both those particular concepts. But does the Committee 
feel strongly about the fact that those agencies ought to 
remain within the Department of Defense, answerable to the 
Secretary of Defense, as opposed to being answerable directly 
to the NID?
    Mr. Hamilton. We did not consider those changes that the 
Chairman put into his bill. We do believe that the national 
intelligence director has to control the budgets of the NSA and 
the NGA and the NRO. They have to obviously work very closely 
with the Secretary of Defense to do that.
    We did not pull those agencies out of the Defense 
Department. We didn't recommend that. We do agree with the view 
expressed in the Roberts bill that the deputy for military 
support has the responsibility of making sure that the needs of 
the warfighter are met, but we did not consider the changes 
that the Chairman recommended.
    Senator Chambliss. Thank you, Mr. Chairman.
    Chairman Roberts. Senator Levin.
    Senator Levin. Thank you, Mr. Chairman, and I thank our 
witnesses for their major contribution to the security of this 
country. Their personal commitment of time and energy is really 
outstanding. It's a role model for citizens in this country.
    The debate over intelligence reform is a critical debate, 
obviously, but whatever we do in terms of moving around boxes 
on an organizational chart, whatever authorities we decide to 
give to a national intelligence director, I believe that we 
cannot ignore one of the fundamental problems that we see with 
intelligence, and that is the shaping of intelligence to 
support policy.
    We saw it in the Vietnam war when McNamara cited secret 
intelligence to support the Gulf of Tonkin Resolution. We saw 
it in Iran-Contra, when intelligence was misused by a CIA 
Director, according to the Iran-Contra report, to achieve a 
policy goal.
    This is what the Iran-Contra Committee said about this 
issue. It's an issue which I think is a critical issue and one 
which is not directly addressed by your report, but which is 
impacted by your report, because you create a more powerful 
national intelligence director.
    Before I'm comfortable creating a more powerful national 
intelligence director, I've got to be comfortable that we are 
taking steps, significant, real steps, to achieve objective, 
independent intelligence assessments. Too often in the past, 
that has not been the case. It was not the case before Iraq. 
This Committee had a 500-page report that showed the failures 
of intelligence prior to Iraq.
    Although we haven't gotten to phase two relative to the use 
of intelligence, every single case that was pointed out in that 
report where the public statement about what the intelligence 
showed by the CIA Director differed from the classified 
information, it was pointing toward a greater, more sharp, 
threat on the part of Iraq, which clearly had but one impact, 
which was to support a policymakers' direction.
    Now, whether you agree with that or not, I would hope that 
we would all agree that we have got to take steps to assure 
that we're going to get independent, objective intelligence.
    Would you agree with that? Governor?
    Governor Kean. Yes.
    Senator Levin. OK. Is there any disagreement that we have 
got to take steps, whether we create a more powerful NID, or do 
it in some other way, to the steps that we're able to take to 
make sure we get the most objective independent assessments of 
threats from the intelligence community?
    Mr. Hamilton. Senator Levin, I obviously agree with what 
you have said. Organizational structures don't politicize 
intelligence; people politicize intelligence. I don't know of 
any organizational structure that you can draw that would give 
you assurance.
    Senator Levin. We'll be proposing some changes in law which 
will help to promote that goal, if you agree with the goal. I'm 
not asking you to comment on them now because we're working on 
them. The question is the goal.
    Senator Levin. Secretary Lehman, you agree with that?
    Mr. Lehman. I agree completely, and it's closely related to 
an earlier question about maintaining competitive analysis.
    Senator Levin. I think it does, it does indeed.
    Mr. Lehman. That's crucial.
    Senator Levin. Let me just read one thing from the Iran-
Contra Committee report: ``The gathering and reporting of 
analysis should be done in such a way that there can be no 
question that the conclusions are driven by the actual facts 
rather than by what a policy advocate hopes these facts will 
be.''
    Let me go to a second question, which relates to the budget 
power. Under current law, the CIA Director does have the 
authority to present the budget. I believe, in the exact words 
of the law, he's responsible to develop the budget for the 
entire intelligence community and to present it to the 
President. So the power to put the budget together already 
exists in the CIA Director.
    I think what the issue is is when it comes to budget 
implementation once there's an appropriation, what power do we 
want to give to various people to seek reprogramming in that 
area? I think that's what the real issue is.
    But we've got to be careful about controlling the budget, 
those kind of words. Because right now, under law, the CIA 
Director has the power, the responsibility, as a matter of 
fact, to present and develop that budget.
    My question to you relates to the budget. It's similar to 
Senator Wyden's question about personnel and holding people 
accountable, but slightly different because I'm asking about 
budget. Did your commission find evidence that Director Tenet 
tried to change the CIA budget when he presented it and 
developed it, in ways in which he was thwarted?
    Mr. Hamilton. My only recollection there--and I don't know 
if it's responsive--Director Tenet complained to us about his 
inability to reprogram the money in the budget.
    Senator Levin. Well, then, I'll ask the same question. Do 
you have examples of--if none of you have examples of where he 
tried to come up with a different budget going forward, then 
let me ask you on the reprogramming side. Do you have specific 
examples of where Director Tenet sought to reprogram money 
where he was thwarted from doing so?
    Mr. Hamilton. Well, we had a report in the paper just the 
other day----
    Senator Levin. No. I mean in terms of the Commission 
report.
    Mr. Hamilton. Well, I cannot recall one in the Commission 
report. But the news reported just a few days ago that Acting 
Director McLaughlin came before Senator Collins and complained 
that it took him 5 months to reprogram money because of 
congressional restrictions.
    Senator Levin. I was there when he made that statement. 
This has to do with congressional restrictions on 
reprogramming, not who has the executive authority to put 
together the request.
    But your report doesn't have, as I understand it, any. If I 
could ask one last question, Mr. Chairman, I think I may be 
over as well.
    I'm over. I'll withhold. Thank you.
    Chairman Roberts. Senator Snowe.
    Senator Snowe. Thank you, Mr. Chairman. Again, I want to 
thank our witnesses here today for the extraordinary work and 
leadership that they've provided on the issue of national 
security to our country, and taking the Commission report one 
step beyond, a major step beyond, and that is galvanizing 
action on the part of the President and Congress and not only 
testifying on 16 different occasions, which is exceptional in 
and of itself to withstand that before the U.S. Congress, but 
also traveling the country to ensure that action is taken on 
the Commission's report and recommendations.
    To that point, on the question of timeliness, as you know, 
there has been somewhat of an undercurrent questioning whether 
or not Congress should take action this fall on these 
initiatives and any others that have obviously been 
recommended, because it would result in ill-considered 
measures.
    Not that that doesn't have merit, that some people conclude 
rightfully, and we have given ample credence to that, that we 
can't be both thoughtful and timely, but I think in this 
instance it's an important issue to address, because there have 
been a number of reports over time to recommend changes. Of 
course, we just concluded our investigation on the stockpiles 
of weapons of mass destruction in Iraq and came to many of the 
same conclusions that you have reached with respect to the 
intelligence community, that it does, in fact, require a major 
transformation to provide the catalyst for change.
    How important is it that this change occur this fall before 
we adjourn? I say this because as you well know, in the 
deliberation part, if we say we need more deliberation then it 
becomes a prescription or a rationale for procrastination.
    Governor Kean. This, obviously, has been of tremendous 
worry to us on the Commission. If we don't act now, does it go 
over into a lame duck? Does it go over past January? When does 
action happen? Because our concern is that we're not the first 
commission who has made thoughtful recommendations in this 
area. I mean, this has been going on for 25, maybe 30 years.
    A number of the recommendations we've made have synthesized 
things from people like Scowcroft and a number of others who 
have made similar recommendations. Those recommendations have 
not been implemented.
    We believe that if our recommendations are not implemented 
in a timely fashion that the American people won't be safe, 
that our recommendations are designed, each and every one of 
them, to make people safer, and that, God forbid, you know, 
something happens again, and we're 6 months from now and 
recommendations that could have made the American people safer 
have not been implemented.
    That is our great worry, and that is our concern as 
commissioners. That's why we recognize we want due 
consideration, we want thoughtful consideration; that's what 
the Senate is all about.
    But we also want timely consideration. That's why we were 
so happy with the hearings that were scheduled in August. We 
think the sooner these recommendations or the variation of them 
that the legislature in its wisdom chooses to make, the sooner 
that's done, the safer our constituents are going to be.
    Mr. Lehman. In the 1947 Act, there were at least three 
major fine-tunings in the subsequent years. The basic framework 
was passed as one package, but it was recognized there was more 
that needed to be done or refining what was done in the 
original Act.
    So I think we all feel strongly that it's important to have 
the intellectual debate about the framework. If we can get the 
framework passed, then the flesh can be put on the bones 
further down the road.
    There are some things, for instance, which and how many of 
the national intelligence centers--nonproliferation and Middle 
East and whatever--that should await an NID getting his feet or 
her feet on the ground and help, working with Congress over the 
next couple of years, to flesh out the organization.
    But if we don't put the framework in place now, it is, I 
think, undue delay that extends our vulnerability without 
question. Because al-Qa'ida is not going to give any further 
due deliberation. They know what they're doing.
    Mr. Hamilton. We believe it's urgent that these 
recommendations or a variation thereof be adopted.
    Now, you have a long list of problems in front of you. It 
may be a bit presumptuous of us to say this is the most 
important. From our perspective, we think it's the most 
important thing on your agenda. But you have a lot of very 
tough problems to resolve, in--I read in the paper this 
morning--19 days or so before the election. So we put it before 
you as an urgent matter. You're the policymakers, and I think 
you have to make the judgments.
    Senator Snowe. Congressional reform, I know, Secretary 
Lehman, you referred to that, and I know the recommendations 
within the report said it was equally important. How critical 
is it for that congressional reform to be in tandem with the 
executive branch reform?
    Mr. Lehman. I think it's absolutely critical, because it's 
one hand clapping if you only do the executive branch this 
year.
    Senator Snowe. Thank you.
    Chairman Roberts. Senator Hatch.
    Senator Hatch. Well, I want to thank all three of you and 
the whole Commission for all of the very heavy lifting you have 
done. This has been not only time-consuming, but intellectually 
exhausting as well. Then of course, you have had so many 
hearings and so many people you have chatted with.
    But let me just more specifically ask you just a couple of 
questions. What parts of any of these reforms specifically will 
improve our ability to understand, penetrate and neutralize 
armed groups? I mean, just add a little bit to that, is an 
organizational redrawing of the community enough to address our 
weaknesses in facing these armed groups?
    Just one other aspect, what needs to be done to strengthen 
or rehabilitate our capabilities in the field? Do any of these 
bills address our needs in those areas?
    What further initiatives can be proposed by Congress that 
in your opinion do not rely on organizational fixes?
    Those are four questions that I think relate to each other; 
that's why I ask them all together.
    Governor Kean. To give you a very brief answer, Senator, we 
believe that good management will enable everything else, that 
if you don't have good management over the agencies or 
structures that are a problem, then all the other things you 
want to do in the area of intelligence are going to be 
problematic, and have been. I think a lot of the failures are 
because of those problems.
    There are a number of recommendations in our report, some 
of them outside intelligence. For instance, we know that the 
terrorists are most vulnerable when they travel. Well, that's 
why we have a whole series of recommendations in that area 
about biometric----
    Senator Hatch. There's a lot of people that argue that we 
have had good management in the past and what changes to make 
this so much more effective. I personally believe you are 
right, but I just would like to--
    Mr. Lehman. See, that's the illusion, if I could just 
interject. We talked earlier about the CIA director having 
authority to put together the budget. That's not true at all. I 
mean, it's true in form, and people believe that that's the 
case, but it's not true in substance. All the DCI does is 
collate the submissions of 15 different agencies and put it 
together--put it on top of the stack and move it forward.
    Senator Hatch. He doesn't even do that, does he?
    Mr. Lehman. Somebody does.
    Senator Hatch. You've got maybe some consideration over 20 
percent of the budget in the CIA Director. A lot of people 
didn't know that.
    Mr. Lehman. The problem here is--and you are putting your 
finger on the key--it's operations.
    Why didn't we penetrate these cells, not only in 
Afghanistan, but here? It's because process and bureaucracy has 
superseded output and human initiative and judgment. Time and 
again during our investigations, we found that the response--
why didn't you, or why wasn't this carried out or why wasn't 
that carried out?--it was because they had to get a legal 
brief, a legal document to allow them to enter into 
discussions, et cetera, et cetera. It's form over substance.
    Senator Hatch. There is a lot of interagency conflict, too.
    Mr. Lehman. A lot of interagency conflict with nobody to 
arbitrate, with nobody to have the authority to say, ``OK, 
we've heard from CIA and DIA and we've heard from NSA, but 
here's how we're going to do it'' and removing the obstacles 
that we talked about that were raised earlier about over 
classification and compart-
mentalization and nobody has the authority to do it. It links 
very closely to the question of why nobody was held 
accountable, because there was nobody to hold them accountable. 
The FAA, you could make a case that a dozen people should have 
been sacked there, but who was going to sack them? There was 
nobody to provide that central accountability and authority, 
and hence the NID is the missing link.
    Governor Kean. There are so many cases, Senator, we find in 
our report. Moussaoui is maybe the most famous, because that 
information came up, discovered by the FBI, found out by the 
CIA, Director Tenet figured it was an FBI matter, so he did 
nothing. It never got up to the head of the FBI, and we ran out 
of time.
    Another example is 1998 when Director Tenet got it. He 
said, ``All of a sudden, these people are really after us'', 
and he declared war in a statement. He declared war on bin 
Ladin and al-Qa'ida and nobody knew it. Nobody knew it in any 
other intelligence agency. Nobody knew it even inside the CIA.
    Senator Hatch. That was only one illustration.
    Mr. Chairman, if I could just ask one other short question?
    Chairman Roberts. Surely.
    Senator Hatch. Section 301 of Chairman Roberts' bill is an 
idea that has been promoted by our colleague, Senator 
Feinstein, and that is having an intelligence university where 
we train people outside of these respective agencies, perhaps, 
but nevertheless where we have a training ground to begin to 
train our agents in the new doctrines and practices to combat 
armed groups in particular.
    Shouldn't we do more than just ask for a study on this idea 
of an intelligence university? What are your feelings on that?
    Governor Kean. Obviously, that's a good idea. We didn't 
talk about it in the Commission, but it's a good idea. I 
believe, frankly, as a university president that as you all 
look in the education area, we've got to encourage people to 
train people in other languages, in other cultures.
    When you can't find people who speak Arabic, when you can't 
find people who understand the cultures in these various 
regions when you're trying to hire them, that doesn't help us 
very much. We've got such a wonderfully diverse population.
    Senator Hatch. We do that now, but by having a university 
you could really coordinate that.
    Governor Kean. I think a university is a good idea, but we 
already have a number of great universities and I think 
spending a little money pushing some of these areas that are so 
important would be helpful.
    Senator Hatch. Well, thank you all. I appreciate your 
responses today.
    Chairman Roberts. Senator Feinstein, who will now speak on 
behalf of her university.
    [Laughter.]
    Senator Feinstein. Not quite, but thank you very much, Mr. 
Chairman. Thank you very much for your service, commissioners.
    I wanted to react to something you said, and maybe in my 
reactions, then ask you to comment. The first was this timely 
consideration in view of the fact we have 19 legislative days 
left. We're in the heat of a Presidential election. Our 
President has taken a very specific view on this subject, which 
you describe as ``coming a long way.''
    Be that as it may, Senator Hagel wrote an op-ed piece, with 
which I very much agree. I think we have one chance to do this, 
one moment in time, and we had better get it right. It would be 
worse to rush and get it wrong. I have been with this idea of a 
national intelligence director for a long time--actually, the 
first one. Every year I learn more. Every year I see more. 
Every year I realize how much more complicated it is.
    You have brought the Congress along, and in that respect 
you are really to be congratulated because it was a very lonely 
world for a long, long time.
    Something, Congressman Hamilton, you said, in reaction to 
Senator Warner's inquiry about the organization chart, I don't 
agree with, respectfully--and I have great admiration for you--
and that is that the Deputy NID for defense is not inconsistent 
with the ability to directly report to the President.
    I don't see that in your organization chart. I don't see 
that line of authority at all. It raises the question that, if 
we were to go with the three Deputy NIDs, whether it would make 
sense to take the Deputy Defense Intelligence NID out of that 
box, put him in a separate box, and draw it more clearly to the 
Secretary of Defense.
    My concern has been the Secretary of Defense controls 80 
percent of the budget. The head of the intelligence community, 
whoever that is, DCI, NID, whatever you want to call him, has 
to deal with that consistently. Therefore, reprogramming, by 
its very nature in that structure--and we're talking 
structure--is made much more difficult.
    So my thinking, just looking at this and just listening to 
you, would be to take that one position outside that box, so 
you have foreign intelligence, you have homeland intelligence, 
and you have the direct link between the Secretary of Defense 
and the defense-related agencies.
    Now, let me tell you why. Senator Levin, I thought very 
eloquently, pointed how, you know, policy and intelligence 
follows. The defense intelligence agencies weren't wrong about 
virtually anything in this that I can pinpoint, but the human 
intelligence structure, wherever there was a conflict, they 
took position over the land, so to speak. I think that 
organizationally is a big, big problem.
    Now, I also think the only way you're going to have an NID 
that is not beholden to the top of the chart is if that 
individual has a long-term appointment, and that's something we 
have to come to grips with, because whether it's Gates, or 
McNamara, or Tenet, they all are subject to the owner of 
intelligence, who is the President of the United States.
    It's a very powerful thing. I talked to enough people now 
to know that they pick up vibrations of what is wanted. You 
cannot separate that unless you have a completely separate 
identity, in my view.
    So I think, also, the best--this is just my view--the best 
chance for a bill is, frankly, if this Committee can come 
together with a bill. You've got chairman of the Defense 
Committee, the ranking member of Armed Services, ranking member 
of Armed Services. That's a real problem. If you have Armed 
Services vote against any bill, you're not going to get a bill 
through.
    Under the surface of this thing, there are a lot of tides 
and eddies running, and we all know that. I think we've got to 
handle this question of defense, the Secretary of Defense and 
the defense-
related agencies in a different way than you have on this 
organizational chart.
    Mr. Hamilton. Senator Feinstein, the chart before you 
indicates that the Deputy NID for defense intelligence does 
report up to the national intelligence director. What the chart 
doesn't show is that the Deputy for defense does have a direct 
line to the Secretary of Defense. That person is dual-hatted, 
in effect, and that's the very thing that Senator Rockefeller 
had suggested.
    Senator Feinstein. Well, let me ask you, then, could I 
request that you submit--because there are more dual hats--
could you submit a new organizational chart, as you would see 
that?
    Mr. Hamilton. I understand how you might be misled just by 
looking at this chart, because this chart just explains the 
national intelligence director and the deputies under him and 
so forth.
    But our intent would be that the Under Secretary of Defense 
for Intelligence would serve as the Deputy National 
Intelligence Direc. He or she would report to the National 
Intelligence Director, but also report to the Defense Secretary 
as well.
    Mr. Lehman. This is a precedent that has worked well in my 
experience in the Navy Department, as Senator Warner would 
attest. The director of naval reactors is always a four-star 
admiral, since Admiral Rickover's time. He's also a line Deputy 
Assistant Secretary of Energy. The dual-hatting has worked very 
well for safety issues, for nuclear waste, for quality control, 
for training.
    He reports directly in a not dotted but solid line to the 
Secretary of Energy. But 98 percent of his time and his 
responsibilities are to the Secretary of the Navy. That is what 
we envisioned here with this recommendation. The Deputy for 
Defense Intelligence would be spending most of his time doing 
his defense responsibilities and implementing the agreed 
national policy on intelligence, and the NID would rule by 
exception. It's a distinction that is an important one, but the 
precedents are there and can work very well, we believe, in 
this case.
    Senator Feinstein. Then I would respectfully request that 
you submit an organizational chart----
    Mr. Hamilton. Very good point.
    Senator Feinstein. That properly reflects this, because if 
I might say this, respectfully, it is not believed by a lot of 
members.
    Mr. Hamilton. That's a very good point. Thank you.
    Mr. Lehman. That's a very good point.
    Chairman Roberts. Senator Mikulski.
    Senator Mikulski. Thank you very much, Mr. Chairman.
    To the members of the Commission, I too want to thank you 
for your service and that of the staff. As we come up, now, on 
the anniversary or commemoration of September 11th, I think 
about my own Marylanders who passed away that day. Sixty from 
Maryland died that day, mostly at the Pentagon. The people of 
Virginia suffered far greater losses.
    In my own state, 24 came from one county, Prince George's 
County. They were primarily African-American and primarily 
women who happened to be in a financial clerical service unit 
that day. So we think about them, and we think about what we 
could do differently.
    Your report, I just have to say, you did it with integrity, 
independence and intellectual rigor. Your staff and the way 
they wrote the narrative, is compelling. The fact that you're 
No. 1 on the New York Times best seller list says how much the 
American people want to know something about this and do 
something.
    Now, I've looked at the 41 recommendations, and what I 
could see is there are 16 the President can do right now by 
Executive Order. Nine the President can do with funding through 
appropriations, like aid to Pakistan, stabilize Afghanistan.
    When the President meets with his team and the Congress 
tomorrow, we can work on our appropriations now and do that. Of 
the 16 that require congressional action, I think we can do it.
    Senator Rockefeller and Senator Feinstein asked many of my 
questions about the organization chart. I'm going to go to 
congressional reform since they did that pretty much on the 
lines I would ask. If we would take the organizational chart--
and, colleagues, this goes to congressional oversight. I know 
Frist and Daschle have appointed a committee, but they're going 
to appoint a committee when they don't know what the executive 
branches are going to be. If you don't know what the executive 
branches are going to be, you don't know where it's going to go 
in authorizing.
    So my recommendation would be along these lines.
    One, whatever is adopted through the executive branch, we 
then say whatever has been adopted now becomes the Intelligence 
Committee. We just take this, and this becomes us. Are you with 
me? That's the diagram on page 412 with the amplification that 
Senator Feinstein recommended.
    This then goes to money. You had two recommendations: 
atomic agency or giving us also appropriations. I'm an 
appropriator. I know the senior leadership in appropriations. 
Just like DOD would resist, so would the appropriators.
    Mine might be a third way, which is that we have a 
subcommittee on intelligence in appropriations to reflect the 
authorizing. We have 13 subcommittees. We have one on the 
District of Columbia. We have one for agriculture. Certainly, 
we could have a subcommittee on intelligence, many of which 
would also be from the authorizing committee itself.
    There is precedent. For example, the State Department is 
under Commerce, State, Justice. But Foreign Ops has its own 
subcommittee. So all of the foreign aid has its own 
subcommittee even though we fund State differently. Right now, 
as we all know, this goes through DOD, some slivers in State, 
Justice, Commerce, here and there with the FBI.
    I can tell you, over there in appropriations, there is one 
person, while they're working on $400 billion or $300 billion, 
looking at this. So you have one staffer with all that other 
responsibility going on at DOD Approps, which is enormous, and 
then there is this.
    So we're like microchips to them. So I wonder what you 
think of the idea, perhaps, of exploring a subcommittee on 
appropriations, that the authorizing committee reflect whatever 
changes are made.
    Let's just say for conversation, it's this diagram. That, 
then, becomes the Intel Committee, and then there's an Intel 
Appropriations.
    Governor Kean. I think that would be very much, in my mind, 
within the spirit of our recommendations. What we're after, 
basically, and we recommend ways to do it, but you know better 
than we do, and that is to centralize authority within the 
Congress so you get real oversight, so that the people who are 
looking at intelligence have the knowledge and the power to do 
it properly.
    It's the only area--you know, everybody else is overseen, 
because of the press. They keep the pressure on. They're part 
of the oversight. Intelligence, the press can't get in on it. 
So you are the only game in town. You're the only real 
oversight the intelligence area has. I think the kind of 
recommendation you make is very much in the spirit of what 
we're saying, ``centralize it and give it power.''
    Senator Mikulski. Well, and then, failing that, for it to 
become part of this Committee, it would be unprecedented. But I 
think I was shocked when I came on the Committee--and I came on 
specifically as a reformer when signals intelligence, which is 
in my state, the National Security Agency, often didn't get 
very much attention--that 80 percent was in DOD and that we had 
very little to say. And it was a shock.
    So anyway, that would be one of the third ways that I would 
have that we could accomplish reform. But failing that, I would 
think that we would have to really consider some other way that 
this Committee would exercise greater control over the 
appropriations to deal with many of the issues that were raised 
by Senator DeWine. So that was that recommendation.
    I see my time is up.
    But, you see, what we want to do is provide oversight and 
not get stymied in our own turf and entangled in it. You know, 
the reforms that fail the most are the ones of ourselves.
    But thank you again. Because the three Rs that come out of 
the Commission: Let's reform, let's put the money in the 
Federal checkbook with resources and then, let's be relentless 
about it. Am I right?
    Chairman Roberts. Senator Hagel.
    Senator Hagel. Mr. Chairman, thank you.
    Gentlemen, I wish to add my thanks to you and the 
Commission for the excellent work that you have done, the 
contributions you have made to our country, which will be 
lasting. We recognize that, as you have heard today and you 
have heard many times up here on the Hill, how much we 
appreciate it.
    I believe we do need to seriously restructure our 
intelligence community. Your additions to this debate, 
recommendations, have been important and will continue to be as 
we craft something here meaningful, relevant and realistic. I 
know you have thought through this carefully, but actions 
always produce reactions, and they also produce unintended 
consequences.
    That's why my colleague, Senator Feinstein, noted my op-ed 
in The Washington Post a couple of week ago about caution, 
because this is too critical to allow it to become hostage to a 
political process, to the momentum of politics. I know you all 
share that.
    I think you also believe, as I do, that as serious as an 
organizational structure is, as accountable and important as it 
is, just moving around an organizational structure and boxes is 
not going to make America safer.
    Now, with that as the prelude, I have three specific 
questions, specific to your recommendations. I would like to 
hear, first, how much consideration you gave when you produced 
your recommendations to the culture and professionalism that is 
really the essence of any organization. Management is 
important, absolutely. Structure is important, absolutely.
    But you don't put top professionals in place overnight. You 
don't just create them. You produce them. You develop them, as 
all of you know. So culture, professionalism, people, budgets 
to work that, it takes years. Very important.
    Second, as you have thought through this, at a time when 
our intelligence is as important to this country than at any 
time since World War II, if we go ahead and implement radical, 
fundamental changes in our intelligence community, what impact 
will that have on the day-to-day responsibilities of our 
intelligence gathering, sharing, analysis that we must rely on 
every second of the day? Will it inhibit it? Will it hurt it? 
will it jeopardize it?
    The third area that I want to ask you about in regard to 
the previous comment: Terrorism is a very important dynamic of 
our intelligence process today, but it is not the only part of 
our intelligence process. It is still vitally important to the 
security interests of this country for our intelligence people 
to understand what's going on in all corners of the world, in 
geopolitical areas, military, economic, energy.
    Terrorism is a big part of it, but it is not the only part. 
So how much consideration did you give that when you were 
thinking about restructuring and coming forward with 
recommendations?
    Thank you very much.
    Governor Kean. I'll take a crack at a couple of them and 
then my fellow commissioners will give more intelligent 
answers. We gave a lot of thought to the culture and 
professionalism and talked a little bit in the report about the 
need for that, particularly human intelligence, the need to 
develop.
    I was appalled, as an outsider in a sense looking at this 
for the first time, when Director Tenet testified before us and 
told us it would take 5 years to rebuild the CIA. You know, 
then you think immediately, do you have 5 years? But we 
recognize how difficult that is.
    We believe that under our reforms the CIA, for instance, 
that giving the CIA Director that job, instead of the other two 
jobs that he now has to do as well, will enable that to happen 
faster. We'll have a better CIA because of it.
    We considered the culture a lot and worried about the 
culture because some of the culture in these agencies is a 
culture of secrecy and a culture of secrecy even among 
agencies. So the fact that the impulse was not to share, rather 
than share, was part of the culture.
    We worried very much about the culture of the FBI, because 
the old Edgar Hoover culture was break down doors. In law 
enforcement, you know, it wasn't the kind of thing we need now 
from the FBI, in addition to what they do already, which is 
really trying to do investigations to disrupt these terrorist 
plots, and we worried and talked about that on the Commission.
    We believe that there will be some disruption when you make 
changes. But we also believe, as a commission, that what is 
really unacceptable is not to make changes, because what we 
have got going now is not satisfactory in my mind and anybody's 
point of view.
    We interviewed, you know, hundreds and hundreds of people 
who have some expertise in this area. Nobody was satisfied with 
the status quo. Everybody said you had to do change. You can 
argue a little bit about what some of those changes ought to 
be. But everybody wants change. Nobody wants to keep the status 
quo.
    The third point was----
    Mr. Hamilton. Well the third point--I can remember one. You 
remembered two, Mr. Chairman.
    The third point is other threats, other than terrorism. Of 
course, that's why we create these other centers. You have a 
national counterterrorism center. We think the big national 
security threat for a long time is terrorism. We put a lot of 
attention on that.
    But we also recognize that the need for sharing of 
information, the need for operational planning exists with 
regard to weapons of mass destruction, narcotics and whatever 
the President and the National Security Council would identify 
as the major threats to the United States.
    If I may make a comment on the culture, that's a very tough 
one and a very important one. I was thinking, as you were 
asking your question about the intelligence community. There 
you really need to emphasize diversity. We talk all of the time 
about the importance of human intelligence. I think all of us 
agree on the need to strengthen that. But in order to penetrate 
the al-Qa'ida cells, you're going to have to have a totally 
different kind of intelligence agent.
    You cannot send a fellow from Nebraska or Indiana and 
expect him to penetrate Usama bin Ladin's cell. No matter how 
fluently you might speak Arabic, you can't do it. Those cells 
are too small. They are too disciplined, family related and all 
of the rest of it.
    So the culture has to change in many ways. It has to become 
more professional. But it also has to become more diverse.
    When I went to college, people studied German and French, 
and then, a little while later, they studied Russian. Well, 
those languages aren't going to do us any good with regard to 
al-Qa'ida. You've got to speak 15 or 20 other kinds of 
languages. We need people who can speak those languages 
fluently and penetrate those cells. So culture is enormously 
important and we have to think of it in different ways.
    Mr. Lehman. The third, the one of disruption or your second 
issue, yes, there will be some disruption, but we're not 
talking about firing everybody in the intelligence community. 
People will continue to do their jobs every day. The satellites 
will still go around, the take will come down, and the analysts 
will continue to analyze.
    But people will be, you know, thinking about who is their 
next boss, what new opportunities there are, because the 
purpose of this is to create a new culture, a culture of more 
entrepreneurial rather than more bureaucratic approaches to 
intelligence. Bureaucratic approaches lead to group-think. A 
more entrepreneurial environment creates a culture of more 
creativity, imagination, the imagination that was lacking for 
9/11.
    So, yes, there will be disruption, but I think, net, it 
will be good disruption, the kind of disruption that will 
create positive ferment.
    Senator Hagel. Thank you.
    Mr. Chairman, thank you.
    Chairman Roberts. Senator Durbin.
    Senator Durbin. Thank you, Mr. Chairman.
    Again, thank you all for joining us. I won't repeat all of 
the lavish praise; just trust that it was part of the record 
before and remains my feeling that you have done a great 
service for the American people.
    This long march of the members of the 9/11 Commission 
before 17 different venues on Capitol Hill is proof positive of 
two things--your endurance and the enduring commitment of 
Congress to create overlapping, often muddled oversight when it 
comes to important issues like intelligence.
    Secretary Lehman, I think you were right on when you 
suggested that if we set about this awesome task of reforming 
the executive branch and ignore reforming our own Congress and 
the way we deal with oversight, it is one hand clapping. We've 
ignored the obvious. We're pretty good at recommending changes 
for another branch of government. We're not quite as good at 
recommending our own branch of government be reformed. So I 
hope we can meet that task.
    I want to address two issues, one which is somewhat self-
critical and the other which I believe may raise a question 
about the Commission and the way it handled its business.
    Let me ask you about, first, the softer side of this 
report. People have really focused on the wiring diagrams and 
the hard business of fighting terrorism, but there is another 
side of this report which I think has been genuinely downplayed 
and often overlooked, and it should be taken very seriously.
    You understood your mission and directive. It included some 
discussion of diplomacy, what the United States needed to do in 
the world. One of the areas that you talked about was how we 
are viewed by the Arab and Muslim world, and you were very 
specific. Though we've seen in the last week that the face of 
terrorism in Russia includes people who may or may not be 
associated with al-Qa'ida, you say in your report: ``The enemy 
is not just terrorism, some generic evil. This vagueness blurs 
the strategy. The catastrophic threat at this moment in history 
is more specific. It is a threat posed by Islamist terrorism, 
especially the al-Qa'ida network, its affiliates and its 
ideology.''
    Then you talk about, to use a metaphor here, how we should 
focus not only on draining the swamp but in trying to make 
certain that less water is flowing into the swamp, that there 
are fewer terrorists being recruited in other parts of the 
world. How do we do this? There have been some suggestions.
    Now, let me ask you about your commission's work, though. 
Because you had 19 public hearings and 160 public witnesses 
identified in your book here. The best we can establish, of the 
160, only three witnesses who appeared before the 9/11 
Commission could be characterized as either Arab or Muslim. Now 
that you have focused it in and said that our terrorist threat 
is an Islamist threat, do you feel you should have been more 
open to hearing from the Arab community and the Muslim 
community about the real challenge that we face?
    Governor.
    Governor Kean. We could always have heard from more people. 
I believe if you take the whole list of people we interviewed, 
including people we interviewed in Saudi Arabia and the Arabian 
Peninsula, in Afghanistan, in Pakistan, that the numbers of 
people who are Muslim or of Arab nationality will increase 
dramatically. I would have to look at all the witness lists 
because we interviewed over 1,000 people.
    But your point is very well taken. We've got to study these 
people, we've got to understand them. The point we made that is 
so very important is that--and Secretary Rumsfeld made it, 
actually. He said, ``You know, we can't do it with the 
military,'' he said, ``not if we're creating these people 
faster than we can kill them.'' In order not to create them 
we've got to change, we believe, the way the United States is 
viewed. We've got to change a number of our policies.
    We have to use public diplomacy in a much more realistic 
way. We have to start educating our own citizens, particularly 
those, again, who are going to deal in this area.
    Senator Durbin. Well, again, I'm not being overly critical.
    Governor Kean. No. I think your point is well taken.
    Senator Durbin. I think the burden falls on the Commission 
as well as Congress to understand that in the world of using 
intelligence as our first line of defense against terrorism, we 
have to view Arab-Americans and Muslim-Americans as potentially 
our most important allies instead of assumed adversaries from 
the start. I think that that is a message which comes through 
in your recommendations.
    Governor Kean. Senator, I just want to comment, because I 
told this story to somebody else today. I had a cab driver in 
New York who recognized me and started talking about the 
problem. He was more articulate than most of the witnesses we 
had had from government, because his family had been Afghan 
immigrants 16 years ago, believed in this country, loved this 
country and was frustrated because he didn't think we 
understood Afghanistan and moving in the right way. We have 
those assets. We are the most diverse country in the world. 
We're not using them.
    Senator Durbin. Our Chicago cab drivers are pretty good 
experts, too.
    [Laughter.]
    Senator Durbin. Now, since the Chairman is not listening, 
I'm going to try to sneak in another question here, if I might.
    One of the things you talked about----
    Chairman Roberts. Without objection.
    Senator Durbin. Thank you very much, Mr. Chairman. I knew 
you would be there.
    One of the things you talked about here were civil 
liberties, which is the other side of this balance sheet, to 
give government the power it needs to protect us, but no more 
power than necessary. You, I think, strike the right balance, 
saying it's the burden of the government to establish why we 
should give up our freedoms.
    Now, the President in one of his Executive Orders has 
created, on August 27, a board on safeguarding American civil 
liberties. The board is housed at the Justice Department, 
chaired by the Deputy Attorney Ggeneral, the vice chair being 
the Department of Homeland Security Under Secretary and members 
of all high-ranking government officials, the vast majority of 
them political appointees.
    Let me ask you, the obvious criticism is why would we take 
people within government who are being given this authority, or 
using this authority which may go too far in infringing on our 
civil liberties, to be the referees or officials to determine 
whether or not the government has gone too far? Does this meet 
the spirit of your recommendation of, as you say, a board 
within the executive branch to oversee adherence to the 
guidelines we recommend and the commitment the government makes 
to defend our civil liberties?
    Governor Kean. What the President did is inform a response 
to the Commission's recommendations, but we said in the report 
we didn't believe the board should be comprised exclusively of 
administration officials drawn from the agencies the board was 
created to oversee.
    Instead, we envisioned a board with members appointed 
directly by the President, with the aim of including 
outstanding individuals who can provide a more disinterested 
perspective, perhaps, on that vital balance. Such a board may 
also, by the way, need explicit authority to obtain access to 
relevant information, including, by the way, an understanding 
of classified information and the ability to look at it. But we 
left a lot of the details, obviously, up to you to structure.
    Senator Durbin. I understand why you did. Your broad 
recommendations are very important. I would just say, in 
follow-up, that I think there should be more independence on 
this board, so that instead of having as its chairman someone 
who is in the Justice Department and may be the subject of some 
review, it should be a more independent source.
    Thank you again for all that you've done. Thank you.
    Governor Kean. I don't think we have any argument with 
that, Senator.
    Chairman Roberts. Senator Warner.
    Senator Warner. Thank you, Mr. Chairman. Does the Chair 
wish to have a few questions in here?
    Chairman Roberts. I'm going to mop up.
    Senator Warner. Well, I think we have had a very good 
hearing.
    Chairman Roberts. I thank the gentleman. I thank the 
distinguished chairman of the Armed Services Committee.
    Senator Warner. Thank you, sir.
    I want to just sort of ask a couple of questions here 
against this background. We're fortunate as a Nation not to 
have experienced anything approaching the catastrophic 
consequences of 9/11, so you have to assume that what's in 
place today is doing a reasonable job. The mission before the 
legislative branch, the Congress, and the executive branch is 
to try and make improvements without degrading what's working 
correctly. Is that a basic assumption, gentlemen?
    Governor Kean. Absolutely.
    Senator Warner. I think each of you have said that the 
President--and you have joined myself and many others in 
commending him for taking the steps with Executive Orders and 
implementing a number of things even before your commission 
report came out. So the exclusive branch is moving out.
    Now it falls upon the Congress. It's far too early to 
discern any consensus. We've got the Chairman's bill, you've 
got other bills that will be coming in. So we're going to have 
quite a lot of activity here, but in due course, you begin to 
get a synthesis of views.
    But I'd just kind of in simplistic terms like to ask my old 
friend and colleague, Secretary Lehman, what's left if you take 
away all the budget authority from DOD, all the hiring and 
firing authority, and yet he is the largest consumer of 
intelligence--he or she, whoever the Secretary of Defense may 
be. Is the Secretary of Defense left as just a payroll clerk?
    Mr. Lehman. We're recommending that, first of all, the 
budget authority be done in conjunction with the Secretary of 
Defense for the department----
    Senator Warner. It's a partnership, much like it's being 
done now? I mean, from the way in which it's being done now----
    Mr. Lehman. Well, yes, it's not that big a change from what 
the theory of what's being done now is, but the practice is 
very different. I mean, in theory, the DCI is submitting the 
budget and doing the budget for the whole----
    Senator Warner. Correct.
    Mr. Lehman. But that has never in my memory been the actual 
case. What happens is that his clerks in the community 
management staff go around and collect up the books and stack 
them up and send them to the Hill. There is virtually no real 
give and take and argument about priorities and so forth. We 
are not by any means recommending that budget authority and 
certainly not execution be taken away from the defense 
agencies. We're talking about sharing so that there is real----
    Senator Warner. Would the word be partnership?
    Mr. Lehman. Partnership that if there is a real 
disagreement, it goes to the President. Similarly for dual-
hatting. While you were gone, I used the example of your 
relationship with Admiral Rickover and mine with his successors 
as a condominium. I think probably the successors are a better 
example for my case.
    Senator Warner. I'm not going to get on that, because all 
my time would be gone.
    Mr. Lehman. That's a dual-hatting.
    Senator Warner. You don't intend to leave the SecDef just 
as a payroll clerk?
    Mr. Lehman. No. Certainly not.
    Senator Warner. So there's a strong voice in the budgeting.
    Now how about the hiring and firing?
    Mr. Lehman. Hiring and firing, the Secretary of Defense 
must agree--they must agree on a new candidate, but we would 
recommend that either one can fire. Both are needed to hire, 
each separately to fire, but it is a definite sharing of----
    Senator Warner. Now let's shift, then, to the CIA. I must 
say, I am like you. When I came into the building 30 years ago 
that was my initiation with the CIA. I have a very high 
personal regard for their work through the years. You know as 
well as I that those agents in various places in the world are 
taking risks commensurate with any individual in uniform in 
terms of the execution of their missions.
    I am for, frankly, strengthening the director of the CIA so 
that it can be another voice in here that the President can 
hear if, for some reason, he wants to get views other than the 
NID. So we'll see how that works out.
    But under the current proposition that you put forward, 
what's left of the director? He's clearly downgraded in his 
role within the greater intelligence circles. Am I not correct?
    Mr. Lehman. He is, first of all, not really downgraded. We 
are recommending he stay as a level two, not be downgraded to 
level three, that we believe and it's our very strong view that 
the job of revivifying both analysis and collection covert 
operations and the trade-craft of intelligence of recruiting 
and training, which the most recent DCI said would take another 
5 years, that's a full-time job.
    To try the to manage the rest of the community just doesn't 
make sense. So it's a very important job. I think it would make 
a lot of sense to put what you put in for the chiefs and the 
service secretaries, the right of access to the President.
    Senator Warner. Thank you for mentioning that, because I am 
contemplating doing that. I think there has got to be direct 
access to the President when the second tier, as it is in your 
chart, feels very strongly about a point. I'm going to look 
into that.
    Lastly, gentlemen, each of you have a familiarity with 
government. We cannot give here in this opening hearing the 
total numbers of people involved in intelligence, but it's well 
over 100,000. I think we all recognize that. Eighty percent of 
that now is in the DOD. Eighty percent of those people are 
actually on the Secretary of Defense's payroll.
    If you start moving them around, that's a lot of churning 
in terms of the individual lives, getting adjusted to a new 
reporting system, new framework of management. At the same 
time, this Nation is actively engaged in war with the overall 
terrorist network, specifically in Iraq, specifically in 
Afghanistan, and we hopefully will maintain such peace as we 
have on the Korean Peninsula.
    But we cannot have too much internal turbulence at the same 
time that this country has got to keep moving along. Now, how 
would you like to see this phased in, over what period of time?
    Maybe you, Congressman Hamilton.
    Mr. Hamilton. Well, we think the big risk is if you keep it 
like it is, because keeping it like it is didn't work.
    Senator Warner. I don't come from that standpoint. Let's 
take that off the table, keeping it like it is.
    Mr. Hamilton. Yes.
    Senator Warner. We are going to move toward--well, the 
President has already taken a number of initiatives. I'm 
confident the Congress will be able to. Hopefully within this 
short legislative session, we can do some things.
    I have always felt we can achieve some things in the 
balance of this Congress, and we may have to leave to the next 
Congress other parts of it.
    Mr. Hamilton. I think the line we want to try to draw, 
Senator, is that the Secretary of Defense should have control, 
budget, personnel, over all of the intelligence that is 
necessary for the military. But he should not have control over 
national or strategic intelligence. Now, I understand that the 
line between those two is not always clear.
    Senator Warner. It never will be. It's not that someone is 
trying to fuzz it.
    Mr. Hamilton. No. I think where we come down on the report 
is that, in looking back, we feel that the Defense Secretary 
has control over an awful lot of intelligence that is not 
really military intelligence just because of his budget control 
and the personnel control that he has.
    So in a sense, we want to try to balance that a little 
better. It's not just a matter of protecting the military--
that's terribly important--but we feel that the American people 
were not protected as well as they should have been because of 
the way we have structured our intelligence community. We did 
not get to the policymaker the kind of intelligence the 
policymaker needs to protect the American people. I think we 
want to be reasonable about this. We recognize it's a genuine 
problem and a difficult one. But that's our, at least, broad 
point of view.
    With regard to the transition, the change, any time you 
make major changes, you create some risks. We are at war, so we 
have to be very, very careful in creating change. But we also 
have to be careful that we not be frozen and not make any 
changes that are necessary.
    Senator Warner. Can this be a two-stage process, stage one 
within this Congress and a new Congress comes in this January 
to----
    Mr. Hamilton. We have put forward a huge number of very 
important recommendations. I would be surprised, frankly, if it 
were all done in one sweep.
    Senator Warner. I thank you for that. I share that view.
    Thank you, Mr. Chairman.
    Chairman Roberts. Senator Rockefeller.
    Vice Chairman Rockefeller. Thank you, Mr. Chairman. I just 
wanted to get you on record about three quick things and then 
ask one more question.
    I mentioned the intelligence reserve corps, and I don't 
want to just leave it hanging out there. We are in a position 
in the intelligence community where we have to shift people 
from South America, or Afghanistan, or whatever, to go suddenly 
to do another job. The intelligence reserve corps, I think, is 
a very sensible suggestion of having a back-up in time of surge 
needs. I would just be interested if the Commission would be 
willing to consider that.
    Mr. Hamilton. Well, Senator, we didn't address it. The 
idea, frankly, is new to me. I can only give you a personal 
feeling. My personal view is that both that and the university 
idea make a lot of sense.
    Mr. Lehman. This is one of the reasons we've strongly 
recommended that the NID have overall personnel policy 
authority, because if you look at the services, for instance, 
Naval intelligence reserve covers virtually all of the 
stateside command centers on weekends. They augment whenever 
there is a fleet exercise. There are many of them working in 
the intelligence centers over in Iraq today. They bring a 
leavening. They bring a different background. There are doctors 
and lawyers and Indian chiefs that are constantly coming in and 
fertilizing and taking new ideas. They have a different 
attitude.
    Every service chief, service secretary, would tell you that 
the intelligence reserves have been tremendously valuable to 
the service intelligence effort. It makes all of the sense in 
the world to do the same thing in the civilian intelligence 
community. Open the windows up. Bring more lateral entry. Bring 
more scholars and Silicon Valley people in for 1-year, 3-year, 
5-year, short tours----
    Vice Chairman Rockefeller. Or people who have simply 
recently retired.
    Mr. Lehman [continuing]. ----to join the reserve corps and 
do their weekends like they do in the military reserve.
    Vice Chairman Rockefeller. Right.
    Mr. Lehman. It makes a lot of sense.
    Vice Chairman Rockefeller. Thank you. My second had to do 
with the question I know Senator Levin is interested in, and 
that is trying to make sure that independence, lack of 
politicization really is implanted--not just a theory, but is 
implanted.
    That, my suggestion would be, would be through an 
ombudsman. We know in the CIA that that ombudsman indicated 
that the pressure that was put upon analysts who came to him in 
the buildup to the prewar WMD and all of that was greater than 
anything he had seen in his 32 years.
    So an ombudsman obviously is somebody that people will go 
to and say, ``I am being pressured, or I am being asked to 
change, or I am being whatever,'' or say, ``Look, you just go 
back and do your job and be strong and don't give in,'' 
depending upon what the nature of the request was.
    But the ombudsman is important. It's somebody who is 
objective, who people can go to, to protect objectivity and the 
integrity of the intelligence-gathering and intelligence-
analyzing process. Is that something you would be willing to 
consider?
    Governor Kean. Again, we didn't talk about that.
    Vice Chairman Rockefeller. I know.
    Governor Kean. It's in the spirit of our recommendations. 
Nothing, though, can substitute for the character in the 
individual who is appointed to this position. Because if it's 
not somebody of real stature, everybody on down isn't going to 
be that much----
    Vice Chairman Rockefeller. That would have to be assumed.
    Governor Kean. Yes. So that's why we wanted it Senate-
confirmed, that's why we wanted it such an important position, 
because your consideration of that individual and a really 
thorough confirmation process may be the best guarantee of 
all----
    Vice Chairman Rockefeller. Excellent.
    Governor Kean [continuing].----of avoiding the kind of 
problems----
    Vice Chairman Rockefeller. Excellent.
    The last is the idea of the permanent red team, and that 
just strikes me as important, again, on the business of it's 
really important for the national intelligence estimate, 
frankly, it's really important to make sure that the State 
Department's INR or the DOE's intelligence gets in on aluminum 
tubes or whatever it might be, and they're left out because 
it's controlled by a CIA process.
    A red team, which would be used generally under the NID to 
have a contrary view, not to be negative, but to have a 
contrary view, to question, to say, ``Well, what did the State 
Department say about it? What did INS say about that?,'' would 
that idea be something which you could contemplate?
    Mr. Hamilton. We always have to draw the distinction here 
between what the Commission did and did not consider, and what 
it did and did not recommend. The Commission did not consider 
the question of a red team.
    The Commission is very sensitive, I think, to the question 
of politicization and is open to recommendations like the red 
team or the ombudsman which try to institutionalize the 
nonpoliticization of intelligence. It makes sense from that 
standpoint.
    Vice Chairman Rockefeller. Thank you. My time is up.
    Chairman Roberts. Senator Levin.
    Senator Levin. Thank you, Mr. Chairman.
    I want to go back to the question of accountability because 
to me it's critical. We had the situation that you investigated 
and that the Joint Intelligence Committees looked at, the pre-
9/11 failures. We saw that the CIA people failed to notify the 
INS or the FBI that two al-Qa'ida people, that they knew were 
al-Qa'ida and they knew had attacked the USS COLE and that they 
had tracked to an al-Qa'ida meeting had entered the United 
States.
    That is just clearly a failure inside of the CIA by CIA 
personnel. When I challenged the CIA Director at a public 
meeting, if anyone was going to be held accountable here, his 
answer was, ``I bear responsibility,'' which means nobody bears 
responsibility. It's very rhetorical, but it doesn't mean much.
    Now, that's not a problem of one part of the intelligence 
community not doing--the failure to have one person on top of 
the intelligence community take action; that's a failure inside 
the CIA.
    Same with the FBI. In the Moussaoui case, the report goes 
to the national headquarters that is supposed to be tracking 
al-Qa'ida, tracking bin Ladin. The desk--I don't have to tell 
you, folks, you just wrote it up. We wrote it up. You have the 
Phoenix folks sending memos to the national office. Nothing 
happens. They fall in a crack. That's not a problem of nobody's 
there to impose accountability on the failures of people to do 
their job. That's inside their own agency. That's the point 
which Ron Wyden was making.
    So we can talk about having someone in charge who can 
impose accountability. We have someone in charge of the FBI. 
There has been no accountability. We have someone in charge of 
the CIA. Inside their own agency there has been no 
accountability.
    So it's fine to do what you're proposing. I don't have any 
great problem in giving greater powers, by the way, to a 
director of national intelligence. I don't have any systemic 
problems or any big issues with it if we do it right, if we 
take the time to do it right.
    But I do have problems when you say that it's the failure 
to have that person in place that resulted in the people who 
didn't do their jobs before 9/11 being held accountable. I 
can't buy that. I just don't buy it. If anything, we can make 
it worse, because if you have one person above the FBI Director 
or CIA Director to whom they can buck the issue of 
accountability, you can actually duck responsibility.
    See, I hold the CIA Director for holding accountable the 
people inside his agency who didn't do their job. I can look 
right at him, and I did in public. I said, ``No one has been 
held accountable in your agency.'' And I did the same thing 
with the FBI Director.
    But if you have someone above them to whom they can buck 
the issue, I'm not sure that you focus accountability 
particularly. But nonetheless, I disagree with the implication 
that you've got to have someone above them to hold folks 
accountable where it's inside an agency where the failure to 
hold people accountable is.
    Mr. Lehman. Since I made the statement, could I withdraw 
it? I think you said it much better.
    Senator Levin. Well, thank you.
    On the budget issues, too, nobody's been able to identify 
where the inability to control the budget led to the failures 
before 9/11. No one's been able to do that. I know that Tenet 
said we're at war.
    Well, according to law, he develops the budget. Now you can 
say that that's not the practice, all they do is staple things. 
That's pretty discouraging when you tell lawmakers that all 
people do is staple someone else's budget when we've assigned 
him by current law, the CIA Director, the responsibility of 
developing the annual budget for the National Foreign 
Intelligence Program.
    That's his responsibility. If he wants more money for 
HUMINT or anything else, he can make that argument. I don't 
know how you can write a law clearer than that. You folks want 
to give a national intelligence director the budget power. He 
at least has it when it comes to producing it at this point, 
unless we add the words, ``We really mean it.''
    Mr. Hamilton. Senator, on your first point, you drafted our 
statute. You gave us the mandate. The mandate was to do two 
things--No. 1, tell the story of 9/11; and No. 2, make 
recommendations for the future.
    Senator Levin. Right.
    Mr. Hamilton. In the mandate was not the question of 
holding individuals accountable.
    Senator Levin. Except that accountability was pointed out 
in your report as a critical issue.
    Mr. Hamilton. We followed the mandate that was given to us 
by the statute.
    Senator Levin. All right.
    Mr. Hamilton. If you had wanted us to make a list of the--
--
    Senator Levin. No, we don't, we don't.
    Mr. Hamilton. Well, that's what I'm hearing from you.
    Senator Levin. No, no. That nobody's been held accountable 
is important. We're not saying you should say who should be 
held accountable. The fact that there has been no 
accountability, it seems to me, is critically important.
    Mr. Hamilton. No accountability of people?
    Senator Levin. Yes, anyone being held accountable. It's not 
up to you to say who should be held accountable.
    Mr. Hamilton. OK. Well, we're in agreement there, then.
    Governor Kean. Senator, we asked some of the same questions 
you're asking, and we were told that senior management is still 
looking at the IG findings.
    Senator Levin. Thank you. Well, the FBI is done with 
theirs, though.
    There is one other issue, and that's the NCTC, and I want 
to get to that issue, because under your recommendations, you 
propose that the national counterterrorism center not only 
should perform joint planning, but in your words the plans 
would assign operational responsibilities--operational 
responsibilities--to lead agencies such as State, CIA, FBI, 
Defense and its combatant commands.
    I've got real problems with that. I think Senator Warner 
raised this issue earlier today, although I wasn't able to 
listen very carefully, and I wish I had, to what his statement 
was. But I think he made reference to this.
    Whether he did or not, I have real problems with any 
national intelligence director being able to assign an 
operational responsibility to a combatant commander. That is an 
act of war. An operational responsibility could be we want you 
to capture somebody or kill somebody in a foreign country. That 
is a huge change in our law.
    Mr. Hamilton. That is not just a military question, 
however. If the order is to capture Usama bin Ladin or to kill 
him, it certainly has military implications to it. But it is a 
huge question with regard to counterterrorism policy overall.
    Senator Levin. I agree. I agree with you.
    Mr. Hamilton. It is a decision that ought not to be made 
just by the military authorities. That is a political decision 
of the highest order.
    Senator Levin. I couldn't agree with you more. That's where 
it is now. It's a political decision of the highest order right 
now. But under your proposal, you would give the head of the 
national counterterrorism center the power to assign an 
operational responsibility. It's not just planning you're 
talking about. It's an operational responsibility to a 
combatant commander, and I think that's way beyond----
    Mr. Lehman. Well, it's more to an agency rather than a 
specific element of the agency.
    Senator Levin. It says ``and its combatant commands.''
    Mr. Lehman. Well, the combatant commands, of course, would 
be under the command of the Secretary of Defense. There is no 
effort to undermine the authority over that combatant commander 
of the Secretary of Defense.
    One of the cases that was in mind was, of course, the issue 
of the armed Predator, where it was a hot potato being tossed 
back and forth. Neither Defense nor CIA wanted it. They didn't 
want to pull the trigger. They didn't want trigger authority. 
There was nobody there to say, ``You've got responsibility for 
the armed Predator.'' It's that kind of case. Everything that 
we're recommending here is to be done under the existing 
authorities of Title 10 and Title 50.
    We certainly don't want an NID going to war with an 
operational commander. That is not the intention.
    Thank you.
    Mr. Hamilton. Remember that the operational plan is 
developed by the national intelligence director, but the chain 
of command, of course, goes to the President. The President 
would approve those things. The execution of the plan would 
remain, in your case, with the Defense Department.
    Senator Levin. It was the assignment of responsibility.
    Mr. Hamilton. I understand that. That's part of the overall 
operational planning. I can see your difficulty there. But I am 
pointing out that that's not the final level. It goes up.
    Mr. Lehman. Yes, and it's also the analogy to the Joint 
Staff. I mean, the Joint Staff kind of decides to recommend to 
the Secretary of Defense who is going to be the operational 
commander. This is not line authority by any means. This is 
planning authority.
    Senator Levin. It sounds like more than planning authority. 
But thank you for clarifying.
    Mr. Lehman. Well, it could be clarified, certainly.
    Senator Levin. Thank you.
    Chairman Roberts. Has the Senator finished?
    Senator Levin. Yes. Thank you very much.
    Chairman Roberts. I have about four questions that I think 
either person can answer. Rather than going down and doing a 
question, then you respond, I think I'm just going to make this 
a rambling rose and then you can make any comment that you 
might.
    I think this idea about the Director of Central 
Intelligence and authority has provided some confusion. I said 
in my opening comment, simply put, ``the structure of the U.S. 
intelligence community is defective''. The so-called Director 
of Central Intelligence--not CIA Director--lacks authority, in 
statute and in practice, to effectively manage the intelligence 
activities of the United States. The organization of the 
intelligence community, with a substantial portion falling 
under the direct control of the Secretary of Defense prevents 
the DCI from exercising even those authorities that are granted 
under the National Security Act.
    Now, I'm not trying to perjure anybody here, whether it's 
the Department of Defense or whether it is the Director of 
Central Intelligence. But he does not effectively control the 
creation of the National Foreign Intelligence Program. He lacks 
the ability to transfer or dismiss the intelligence community 
personnel. He cannot unilaterally direct any transfer of 
National Foreign Intelligence Program funds. He cannot mandate 
intelligence sharing, data fusion or create a community-wide 
information technology infrastructure.
    I think this is a flawed design. Now, you've recommended 
keeping the day-to-day control of the intelligence community 
agencies right where they are today, in the heads of the 
agencies that will continue to report to the same Secretaries 
the day after the reorganization is initiated.
    The only operational agency that would change in terms of 
leadership is the CIA. In a management layer on top of the 
agencies, the Commission places dual-hatted deputies designed 
to mirror where or how intelligence is gathered and processed. 
This comes under domestic and foreign and defense.
    Now, I think that the distinctions between the domestic, 
foreign and defense intelligence just do not exist as of 
today's world. In fact, I think these concepts sometimes cloud 
what the real dividing line in the world of intelligence is, 
and that's national intelligence and tactical intelligence or, 
put another way, military intelligence.
    Now, under your recommendation, the control of national 
intelligence, other than budgetary and personnel decisions, 
would fall to the same entities and reinforce the alleged 
distinctions between domestic, foreign and military 
intelligence. I would just say if you're not in charge you're 
not going to have any accountability.
    Would organizing the intelligence community along 
functional lines--you take collection, you take analysis, you 
take research and acquisition, and, yes, you take tactical--
under a national intelligence director who not only controls 
the budget and personnel of the community but also control the 
day-to-day operations of agencies through empowered assistants 
also meet your recommendations for a strong national 
intelligence director?
    Obviously, I would hope the answer would be yes. Now, I 
said I was going to ask, after this rambling rose, you to 
respond. That's one of the questions you might want to respond 
to.
    Now, if the national intelligence director is given full 
budget authority from budget creation to execution but he 
cannot control the actual operations of the National Security 
Agency, the National Geospatial-Intelligence Agency, the 
National Reconnaissance Office and other intelligence elements, 
will he be able to effectively exercise that budget authority?
    By the way, the NSA and the NGA and the NRO only have 
really one consumer, and that is the military. They are going 
to produce for that consumer, regardless, in regards to the 
line authority that they have.
    I'm concerned because this Committee's history of oversight 
suggests that without real operational control over the 
intelligence agencies, the national intelligence director will 
have budget authority that can only be exercised on an annual 
basis.
    How do we give the new national intelligence director real 
authority and control over the intelligence agencies without 
really giving him actual line management and control? That is 
basically the same question I asked you as No. 1, so really 
that's just the same question.
    If a national intelligence director does not have authority 
to actually direct the day-to-day operations of the CIA, the 
National Security Agency and the FBI's Counterintelligence and 
Counterterror-
ism Divisions or other intelligence collection agencies, who is 
in charge of implementing the tasking orders of the National 
Counter-terrorism Center?
    If the National Counterterrorism Center and the national 
intelligence director must rely on the heads of the 
intelligence community agencies to implement their decisions to 
task collection and analysis as well as execute operation, is 
budget and personnel control the only means by which they can 
control operations? How is this different from the current 
management construct where the DCI must ``beg, borrow and 
steal'' to ensure that his directives and his policies are 
implemented?
    That's why we planted the flag in regard to a bill that has 
been deemed by some as radical and others as bold, not as many 
bold as radical, but we're gaining on it.
    You do it by function. You do it by collection, by analysis 
and also by the research and the acquisition and then by 
tactical. Under the tactical you obviously have the Under 
Secretary of Defense to be the Secretary's person to safeguard 
that tactical intelligence. Then you have a four-star to be the 
liaison with the NID.
    So all of those questions are more or less the same. My 
real concern is, if you just give it budget control and 
authority without the operational control, you are dual-hatting 
again, and we are right back in the same situation.
    Now, feel free to take that rambling rose and snip it off 
at the head and see what's wrong with it. Because the NID train 
is coming. It's on the track. It's what kind of a NID that we 
have. Now, I don't know if it's going to Fulsom Prison or it's 
an orange-blossom special.
    [Laughter.]
    Chairman Roberts. It better be an orange-blossom special 
for full control of the NID, or you're not going to get the 
control to make the decisions that we're trying to get that NID 
to make.
    Mr. Hamilton. Well, Mr. Chairman, you have raised some very 
difficult questions, and I guess my plea would be that we have 
an opportunity to look at them a little more carefully. You 
create here the assistant national intelligence directors along 
functional lines.
    Chairman Roberts. That is correct.
    Mr. Hamilton. You described it yourself. It's a very bold 
move. It's a lot bolder than we made in the Commission.
    Chairman Roberts. When we did that, I said--and pardon the 
interruption. You know, I never really thought we would go 
right up to the vote, but that's what we are doing at 5:30. I 
apologize, especially for your patience and your perseverance, 
But I asked people to step back from the forest. I said, ``all 
right, don't pay any attention to agencies. Don't pay any 
attention to turf. Don't pay any attention to committees. Don't 
pay any attention to boxes.''
    What is wrong, then, with trying to create a national 
intelligence service by function?
    Those people who do the collection, you're under straight-
line authority. Those people who do the analyzing, same thing. 
Those people who do the research and acquisition, same thing. 
Those people on tactical, obviously, that stays over in the 
Defense Department. I might add with a $400 billion budget, 
that certainly gives the Secretary of Defense more authority 
than being a payroll master.
    By function, those that do it best, and time after time, 
they have come before this Committee and said, ``We do not have 
the authority,'' or ``We need the priority changes that we 
really ask you for.''
    Because of the fractured way that we operate up here those 
don't happen until you get a supplemental. So why not then go 
by function and let the very best people who do collection do 
that, the very best people who do the analytical job do that 
and also the research and the acquisition, and then do what the 
Secretary of Defense does best in terms of tactical, but under 
an assistant NID that does give them full-line authority?
    Mr. Hamilton. I understand the point. You pull out all of 
these agencies from the DOD, and you stick them under the 
national intelligence director.
    Chairman Roberts. To serve the DOD and enable them to do 
the job better in doing it. The same thing with the CIA. We are 
enabling the CIA to do a better job than they are currently 
constructed. We don't demolish the CIA, we enhance their 
ability, the people that work for the CIA, God bless them, to 
do a better job, because then they have the authority they have 
been asking for ever since I have been on the Committee.
    Mr. Hamilton. Maybe the question is how much change can the 
system tolerate. I don't know whether it's correct to say 
consciously, but we certainly kept in mind throughout that we 
wanted our recommendations to be achievable and pragmatic.
    Now, you instructed your staff in a very different manner, 
ignoring a lot of these turf questions, as it were, according 
to your comments a moment ago. The quick answer is, we simply 
didn't consider the kinds of changes that you put into your 
bill with regard to the National Security Agency and the NGA 
and the NRO and all the rest of them. We just didn't look at it 
that boldly.
    What we said was that the NID needs to control the budget 
of these groups, and we thought that that was sufficient. We 
did not recommend pulling these agencies out of the DOD because 
we thought that was too much of a change.
    Chairman Roberts. But at the same time, I think the public 
statements by General Clapper and General Hayden, indicating 
they would not be ill-served by a national intelligence 
director and that basically their product will go to the basic 
consumer, which is the DOD, all we're doing is re-ordering from 
an organizational standpoint line item authority that everybody 
has been asking for for 8 years and hasn't got it.
    I'm afraid if you just give it budget authority, you're 
only half-way there. It's going to be dual-hatted, and we're 
going to be right back here, I don't know what timeframe, 
saying how come this doesn't work.
    Now obviously, I am making strong views because we decided 
to move the debate, if we could, over to what I think is real 
reform. But that is also subject to a lot of debate and a lot 
of maybe definition.
    I don't see anybody else. Senator Rockefeller, do you have 
anything else to say after my rambling rose?
    Vice Chairman Rockefeller. I can't top it.
    Chairman Roberts. I think the answer was no.
    I don't know if anybody else wants to respond to my 
comments or not. If not, we want to thank you for your 
patience, your perseverance and your leadership. We're going to 
persevere; we're going to get this done.
    I might add that this bill that we're going to introduce, 
you know, myself and the other seven, it is not written in 
stone. Nobody's coming down from, you know, ``Mount 
Intelligence'' with a tablet saying that this is written in 
stone. We are very flexible, and we are working with the 
Governmental Affairs Committee and the Armed Services Committee 
and the administration, and we want to work with you as well.
    Vice Chairman Rockefeller. Mr. Chairman.
    Chairman Roberts. Yes.
    Vice Chairman Rockefeller. Can I just ask one last request 
of the three distinguished panelists in front of us?
    More than anything--and the Chairman and I have discussed 
this, and he agrees with me on this and I agree with him--more 
than anything, what I really feared when I opened up my 
statement saying I hope we get right down to it in September, I 
fear that because of the season that we're in, that we're going 
to have a series of what I would call dilatory constitutional 
amendments and votes on you know what which are going to take 
up our time in September. You know, in October we get out. 
Seventeen more legislative days to go. This can be done.
    It is very interesting to me that when you said that--I 
think it was you, Chairman Kean, when you said that people have 
a right to decide how they're going to vote--let's make it just 
generally--based upon what the Congress does, that's going to 
have a lot to do with what it is that we're spending our time 
on in September. I just say we had better be spending our time 
on intelligence reform, not on rehashing constitutional 
amendments and things and votes which we've taken many times.
    Chairman Roberts. I might only add in regards to Mr. 
Lehman's comment on one hand clapping--sounds like a rap song 
or something--we've got a 22-member task force to try to figure 
that out. Now, I'm not sure 22 senators could even decide when 
to adjourn let alone do this.
    You're talking about a sheep-and-cattle war. You're talking 
about Zane Grey, to the last man. You're talking about 
authorizers and appropriators. You pull that string on the 
Appropriations Committee, Lee can tell you, wow, that's really 
something. I hope we can fix this, and I do thank you for 
asking us prior to your report on what we think.
    But we have 22 people working on that. Jay and I have 
promised--pardon me--the distinguished Vice Chairman and I have 
promised that we will try to make this Committee, which under 
your recommendation is supposed to be the most independent, 
strongest voice for congressional oversight on intelligence, 
but which now has the least amount of power, a player. We thank 
you for that.
    Governor Kean. Thank you.
    Mr. Hamilton. Thank you.
    Mr. Lehman. Thank you very much.
    [Whereupon, at 5:33 p.m., the hearing adjourned.]
     


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